The new (ab)normal

 Note- This article was first published on Linkedin.com by me on 7th June 2020. The second wave had been much deadlier for many countries including India. We are already witnessing impact of many of the fears like impact of climate change, PPE waste coming true presently.

The new (ab)normal

As I am writing this article, number of corona cases in world have already crossed 66.6 Lacs (6.66 Million) mark and is inching towards 70 Lacs (7.00 Million) cases. Though the positive news is that rate of recovery has been good and death related cases are less. There is lot of emphasis being put on social distancing as new normal but if not implemented judiciously, it will cause more harm to the environment and mankind as whole. Here are few reasons :-

1)Rise in Air pollution and carbon emission- We may witness increased number of two wheeler and cars as substantial chunk of population may shun the public transportation system. Consumer finance companies along with automobile manufacturers may push for attractive financial loans for consumers to push for automobile sales , majority of which will be using petrol and diesel. Use of electric vehicles is yet to gain traction and lack of infrastructure for charging facilities will also act as dampener. This scenario will definitely going to increase the carbon emission across the globe than precovid era.

2) Pollution due to increased usage of throw away cutlery - As consumer choices will be more inclined towards hygiene and safety, restaurants and cafes will have to turn to single use cutlery and plate sets, instead of traditional steel and washable material . Commonly used plastic, Styrofoam plates and cutlery may further increase the pollution level in sea and water bodies as majority of them may not go for recycle.

3)Pollution due to inadequate disposal of PPEs- Personal Protective Equipment or PPE consist of hand gloves , masks , face shield and overall body suit. Baring face masks where one has option of using mask made from clothes , rest of the equipments are made up of plastic or complex polymers which will require adequate disposal system, preferably incineration. This disposal method may not be followed religiously in developing countries or to some extent in developed countries as well.

4)Climate care may take a back seat as economics take the driver seat- Covid -19 ,has pushed the world into near recession situation. The unemployment rates across the world are on rise as with the number of covid cases. Lockdowns have impacted global economies negatively and has made a dent in government's earning through taxes. Governments may become soft in their approach towards climate change and emission norms as main focus will be on revival of economies and generation of jobs. Capital Expenditure on major clean infrastructure projects may get delayed too.

5)Mental Health and Anxiety- Many psychologists have indicated the ill effects of prolonged lock down on mental health of people and we may witness more rise in these effects as elderly persons and young children are still being asked to remain indoors (atleast in India). Prolonged disconnect with society may set in a differential mind set and reduced social skills of kids . It may also increase insecurity and anxiety among senior citizens.

All I can say , that the new (ab) normal due to covid 19 is here to stay with us for a long time and it will require both public and political will to align the new normal to normal our planet deserve.

Source:- for covid 19 data - WHO Coronavirus disease dashboard (6th June 2020) https://covid19.who.int/

All pictures have been taken from www.pexels.com and belong to respective owners.

Note - The views presented over here are my personal view and are not directed towards a particular society or government bodies.

Be Empathetic and Listen !!

 “Congrats, wishing you a very happy marriage anniversary, you guys are absolutely made for each other”,

“that’s a great family picture!!, I am happy for you”

“Wow, did you make that by yourself ?? You are great learner”

“Hey buddy, though I am undergoing some issues myself, but I want you to know that I am always there for you”.

Above were lines from my communication with 3 different persons who had suicidal thoughts at some point in their live times and who accidentally come in touch with me in last 10 years, during my MBA studies, work life and all I did was shown empathy (15%) , asked their wellbeing (15%) and listened (70%)

I am glad that these people are doing well now though I may not be able to gauge their satisfaction but the conversation with them gives appearance that they are much better than what they were feeling earlier.

Often we hear, from motivation gurus and read quotes like your circle defines who you are , you have to stay away from “still” people who don’t have goals or personal ambitions , time heals everything etc.

And I feel that this is sometimes lead to further demotivate people thinking they may not be able to make through the cut or gel well along with others and may provoke them to take extreme step to end their lives.

So, next time , if some one tries to open up with you, do listen with empathy , even if you don’t want to ask the questions , that may result in saving someone’s precious life.

Have a more empathetic day !!

Pic courtesy : www.vecteezy.com

#empathy #listening #humanemotions #behuman #empathetic #care

5 ways to instil personal finance discipline

28th Feb 2015- It was chilly mid night of February in New Delhi, even after switching on the heater , the table and handle of chair felt cold to Alex. He was anxious and bit agitated after receiving SMS regarding deposit of salary in his account. He had to take a drastic cut in the salary due to TDS (Tax deducted at source) by his employer, a well known multinational. It was not like Alex was not aware of his tax liabilities, he had plans for investments in tax saving instruments, plans which he kept pushing to the final 3 months of fiscal year.

Alex was a smart young executive in his early 30s having 1st class post graduate degree , earning a decent six figure salary in a Multinational giant. Alex wanted to live life to the fullest and though saving money was one of his priority but not the top priority. He had to spent some sleepless nights and run around from pillar to pillar to fulfill his tax saving obligations. With monetary help from his retired parents and friends, Alex was able to fulfill his tax saving obligations and then had to wait for refund of excess tax deducted from Income Tax department after filing up his Income Tax Return (ITR). Later on, Alex realized that he had been taken on ride by the insurance agents and he could have made better investment decisions if and only if he had time on his hands. “Oh boy, that was close”, thought Alex breathing a sigh of relief as he glanced at the encircled date of 31st March on his desktop calendar. Just then a message popped up in his mobile phone that his outstanding bills for his credit card had ballooned and he had to pay penalty at the rate of 3 % per month (that’s 36% Per Annum) !

Sounds familiar!! Aren’t most of us , resemble Alex when it comes to tax planning ,personal finance and expenses? Well let me tell you 5 most important things Alex did to make his personal finance decisions disciplined and automatic

1)  SIPs instead of Lumpsum investments

Systematic Investment Plans (SIPs in short ) are one of the most important disciplined approach one should adhere to while making investment decisions. They also ease out the fluctuations in market created by uncontrolled variables. More over with ECS mandate SIP based investments can be automated . Alex made a detailed list of his expenses, liabilities and cash flows through salary and other sources. He decided that that he can spread out his SIP deductions over entire 30 days to balance out cash flow, expenses as well as investments. He chose 5th , 15th and 25th of every month for auto debit of SIP deductions. With the predetermined days, he felt more disciplined towards his approach related with financial matters and also left with more spare cash in his pockets every month.

2)  Use Credit free period of credit card to the fullest

Credit cards are dual edged swords, if use wisely they can help you sail through your limits as well as enhance your credit ratings .However if they are not handled properly , they can burn a hole in your pocket, as Alex found out. Just like SIPs , Alex decided to give mandate for auto deduction of minimum due amount for his credit card. He negotiated with his bankers to adjust the due dates to fall next day after credit of his salary. This helped him to maintain a healthy balance of cash flow as well as allowed him to enjoy credit free period of 30-40 days without incurring interest liabilities.

3) Separate accounts for separate activities 

Alex borrowed this concept from his employer , the MNC, where specific expenses were booked under their respective General Ledgers (GLs ). The company was also following Fund based management approach where funds were released to particular cost centers/Fund centers based on pre-decided budget. Alex made separate hypothetical accounts for his activities like “Entertainment”, “Bills and Necessary expenses”, “Holiday and Outing Fund” while the real money was kept in same bank account. From April 2015 onwards, he started maintaining excel sheets to keep track of his expenses as well as to monitor fund usages. This simple activity helped him reap good relationship dividends in form of self funded family vacation for Christmas with parents and sister. It also boosted his confidence in his abilities to tweak his expenditures in more meaningful and fulfilling ways.

4) Start early then finishing late

“Early bird gets the worm”, the title of a newspaper article , caught Alex’s attention while travelling via metro to his office. Suddenly the though struck in his mind, “why wait for last few months for completion of tax saving and other investment goals, why not start with the beginning of financial year itself”. This thought energized Alex like anything , he worked out his tax saving potential , investment plans for entire year in first 2 weeks of April. Then he spread out the entire investment plan on next 12 months on proportionate basis keeping in mind his cash flows and liabilities. He made provisions for amount he may get by means of promotion at work and bonus. He also included sufficient cash and equivalents like short term bank fixed deposits to take care of contingencies and dedicated funds for term and medical insurance as well. He calculated his risk aversion and allocated proportion for equity and debt mutual funds. Alex followed his plan religiously with strict discipline for entire year. Alex was now a happy person. He needn’t run to his parents and friends asking for funds to meet his tax saving obligations. Alex was satisfied as he was paying his dues on time, he was researching the financial products thoroughly before jumping on any offerings. Alex felt content now.

5)  Buy only what you need

Heena, one of Alex’s colleague and a good friend was a happily married jovial girl in her mid 20s, who earned less than Alex but always had her ends meet with good financial discipline. She knew how to carry herself with confidence and had bowled Alex with her simplicity in terms of choices whether it was food, clothing or holiday destinations. In one of the office parties, Alex approached her to know the secret of her balanced life, Heena smiled and mentioned an evergreen quote from Investment Guru, ‘Warren Buffet’ “If you buy things you do not need , soon you will have to sell things you need”. Alex did a quick mental analysis of his expenditures; his wardrobe was full of clothes which he wore only 5-6 times in a year. He had build a stock of shoes purchased through various ecommerce sites to take advantage of “heavy discounts” but he kept on postponing the family vacation he had dreamt off , till now. Heena had shown him that he needs to reconsider the real value his purchases were bringing to him.

Note:- The characters of Alex and Heena have been fictionalised based on the self experience of author and his friends. Any coincidence with real life characters and story is purely incidental. The above article should not be used solely for making investment decisions . Author suggest readers to seek professional financial assistance before making investments in any kind of financial instruments. The images used in this blog are royalty free images taken from website and belong to their respective owners.

Maggi Come back

5 things to learn from Maggi Comeback

Nestle’s Maggi “2 minute noodles” has a fan following which can give a movie star in India run for its money. It has been ruling the taste buds of India for nearly 32 years and its recent comeback attempt whether successful or not is bound to become case studies in B schools across the world.

The past events (read: allegations for excess quantity of chemicals like mono sodium glutamate or MSG etc and subsequent sample testing of Maggi Noodles in various labs across India ) leading to large scale recall and blemishing of one of the iconic brands in Indian FMCG market. It also had a domino effect on other noodle brands as well.

Lets look at 5 things which corporate can learn from Nestle’s Welcome back campaign for Maggi

1)    Transparency - Many strategists had criticized the slow response by Nestle team to Maggi controversy.  But Nestle did the right thing by supporting the government in its inquiry and resorting to legal course of action to challenge the ban of product. As a part of Welcome back campaign , Nestle is sharing the results of the tests conducted by various labs as directed by Honorable Bombay High Court. It will be able to garner public support and build a positive reputation among consumers showcasing that “Meri Maggi” is safe. Honesty and transparency is trait respected by consumers irrespective of the product.

2)    Brand loyalty pays even in tough times- Building a strong brand loyalty is every marketer’s dream. Strong brand loyalty also translates into strong emotional attachment and ultimately defines the brand equity. Nestle has cemented its position by targeting this very aspect of Maggi. Nestle picked up the threads from its marketing campaigns couple of years back where consumers were encouraged to share their own recipes by using Maggi noodles/products as one of the ingredients. This leveraging upon past brand equity can amplify the effectiveness of come back campaigns.

3)    Purpose brand can impact the umbrella brand too– Nestle sells lots of products under its umbrella brand “Maggi” like noodles , ketchup, pasta , taste maker, etc.  The noodle controversy may impact the sales of other products too under the brand name Maggi. Even negative publicity, viral jokes , discussion on online forum highlighted Umbrella brand Maggi rather than purpose brand noodles. Nestle crisis management team will have to work extra hard to clean up the externalities generated by purpose brand on the umbrella brand.

4)    Right medium to target consumer- Welcome back campaign released by Nestle is going viral on social media. Nestle’s target consumer include kids, mothers, teenagers , students, bachelors, young working professionals living away from home. This segment is also highly inclined towards social media, so the use of Face book (Maggi has nearly 2.8 Million likes on its face book page), twitter and other social media platform may help in getting the message across the right audience. It can also provide agility to the campaign.

5)    Use of disruptive & innovative approach- Nestle being a powerhouse in FMCG sector with robust supply chain, could have tried to go solo with welcome back campaign. However, it  leveraged upon the reach and popularity of online market place “Snapdeal” to sell Maggi 2 minute noodles in specially designed pack of 12, loaded with small gift items like Calendar for year 2016, refrigerator magnet sticker using already popular flash sale model for online sales. As per the news reports , approximately 60,000 packs of special welcome back box were sold out in 5 minutes!! Flash sales model provide much needed consumer data at much faster rate as compared to traditional gathering of sales figures from POS data.  The data from flash sale can act as sample for pilot projects as the buying behaviour of consumer and depth of penetration of internet act as barriers. None the less, this approach can provide inputs to make necessary positive tweaks. Further more ,Nestle is also using omni-channel approach to make maximum impact for the campaign. It won’t be a surprise if Nestle comes up with a contest as a part of its image rebuilding exercise to offer free guided tours to few selected consumers of Maggi 2 minute noodles to its manufacturing facilities and use their testimonials as part of already ongoing viral social media posts.

Whether “Welcome Back “ campaign will be able to successfully restore the lost glory of Maggi and “2 minute noodles” and ring in the cash registers for Nestle , only time will tell but it will be a great learning lesson for brand strategist and social media marketing enthusiasts.

Disclaimer: - This article represents views of author based on his own experience and data available in public domain. Nestle , 2 minute noodles , Maggi, Snapdeal, Facebook etc. are brand names of their respective owners.

3 S of valuation

Venue: The dining hall at the venue for a VC (Venture Capital) pitching event at Ahmedabad India.

“ I still think we have overvalued the Venture A by approximately 1.5 times” , said Mr. X , picking up his plate.

“ As I always say X, we need to think beyond  projected figures, look beyond numbers and think from holistic perspective, Valuation is more of an art than just number crunching.” replied Mr. Y calmly, while picking up few pieces of apple from freshly cut fruit salad.

“Valuation is more of an art than just number crunching.”

The above conversation caught my attention immediately .I picked up courage to jump into the conversation between Mr. X and Mr. Y

“ I have often read this adage and I wonder why people say so” , I said with enthusiasm.

Mr. X (a smart looking gentleman with greyish hair and in his early 50s ) frowned at me while Mr. Y (another smart looking gentleman of-course!!) seemed quite amused.

I realised that I had not introduced myself to both of these gentle men and felt bit embarrassed.

“Oh I am sorry , allow me to introduce myself” , I said .

After exchanging pleasantries and brief introduction,I requested  Mr. Y to share his thoughts on valuation.

“Young man , I’ve a flight to catch for Mumbai in next 4 hours so it will be great if you allow me to do talking and you play a part of active listener” said Mr. Y maintaining his calm posture and smile.

What followed next was a brief session about insights of a serial entrepreneur cum investor, He shared his wisdom for valuation. I am reproducing some part of it here:-

No doubt numbers ( read critical ratios , key metrics , forecasts, etc ) play an important role in valuation process for a venture or start up but there are other aspects as well which can be clubbed as 3S for valuations :-

• Saleability – The very 1st S is saleability. In simple terms , the venture or start up should be able to sell . By selling, we don’t mean just the sales figure. It means selling in more holistic and engaging way. The venture/start-up should be able to identify their Unique Selling Proposition (USP),

1. It should be able to sell their products or services.
2. It should be able sell its vision to bankers, investors to get the funding.It should be able to sell itself as a vibrant and growing organization to acquire talent and key persons with compatible skill sets.
3. And ultimately when the challenges become overwhelming enough , they should be able to sell themselves to the potential alliances or takeovers i.e they should have a realizable exit plan.

" The venture/start-up should be able to identify their Unique Selling Proposition (USP)"

• Scalability- The 2nd S corresponds to ability to scale up the venture in terms of revenue generation, customer acquisition, expansion of  product range, scaling up to new geographies, etc. Scalability allows a venture to leverage upon economy of scales as well as paves path for becoming a serious competitor in its respective area of operations. Scalability also leads to higher valuation prospects for venture. Scalability also provides an insight and clarity about the vision of entrepreneur regarding his or her venture. Scaling should be both vertical (increasing profit margins) as well as horizontal (increased product offerings to wider target customer segment without cannibalizing the existing product)

 "Scalability also provides an insight and clarity about the vision of entrepreneur regarding his or her venture"

• Sustainability – The 3rd S is the most important S in this 3 S nomenclature. Things usually don’t go as per plan, forecasts may not be get converted to realizable sales, the key recruit which was suppose to lead the new sales campaign doesn’t show up, a new competitor has come up with much better strategy and is potentially may dent your market share. These are some of the challenges which every start up or venture faces in some part of its life. Sustainability in broader term refers to resilience of organisation and ability of team (Read: Key management personals) to cope up with VUCA (Volatility, Uncertainty, complexity and ambiguity) scenarios in the market place. It also gives a hint about the flexibility and agility of organisation in key business areas.

"Sustainability in broader term refers to resilience of organisation and ability of team (Read: Key management personals) to cope up with VUCA (Volatility, Uncertainty, complexity and ambiguity) scenarios in the market place."

 “Well ,young man, I hope I was able to explain you The 3 S  of valuation effectively in such a short time, I am not that good at oratory skills”, said Mr. Y while putting his empty plate  on the table.

Mr. X who had kept looking at his watch during the entire conversation seemed to be at ease now.  “Mr. Nikhil, thanks for being a patient listener!!”, said Mr. X , “this is the first time I’ve seen someone listening patiently to Y without interrupting”.

“The pleasure was all mine, I hope you guys won’t mind if I share the same on social media”, I asked politely while shaking hands with Mr. X and Mr. Y.

“Well, you just learnt another ‘S’ which we value in a venture : Sharing”, said Mr. X giving me a wink.

“And we will discuss about this 4th ‘S’ at next VC event in Ahmedabad, I hope you will be there” said Mr. Y before a final hand shake with me.   

 

Running and Management Lessons

5 Classical management lessons learnt from running.

Date:18^th April 2015,10 PM 

Place:Surat, Gujarat, India.

Event: Surat Night half Marathon, my first half marathon.

I had previous running experiences for 10K events during early mornings but this was double the distance, that too in hot and humid night. .I had over confidence “Yeah, I can do this”. Race started and just after completing few Kilometers, heat and humidity took its toll, over confidence replaced by fear of injury and self defeating thoughts, infact, I thought of quitting in between .Finally, I pushed forward and completed the half marathon, pain gave way to self induced glory though I finished in bottom 20 percentile with a timing of 3 hours 18 minutes. Sounds familiar though in different contexts and situations? The race, the external environment, the internal mind set and the slogging in between the start and finish lines , all act as metaphor for our struggles in real life or in corporate world. So here are few lessons which I have learnt from my experiences from running various formats of races:-

One size fits all strategy can’t give optimum results

Different formats of races require different kind of preparations . e.g .- Running a hill marathon is completely different from  flat surface city marathon. Similarly running a 10 K will require more stamina and strength as compared to a 100 or 200 m dash , which  focus more on short burst of energy.

“You need to tweak your preparations and strategies as per the realistic situations”

Similarly, in business and real world, you need to tweak your preparations and strategies as per the realistic situations (i.e simulation of actual situations). A sales pitch intended towards rural customers will be quite different from sales pitch for online and social media channels.

Beginning is difficult, the middle is sloggy but the end is beautiful-amateur   

This is very true for longer races e.g. half marathons and full marathons.  Signing up for a marathon itself takes a lot of mental courage then you start the race with full enthusiasm but in the middle of preparations, it will start to wean, negative thoughts may start building up, your body will ask you to stop, but something at the back of your mind will keep telling you that you need to go on, you can do it. That’s the slog part. Once you finish the race, you get a finisher’s medal and you feel good about accomplishing a goal.

“Its very important to share holistic view of project with your team , right from inception to implementation“

This is how most of the projects work out in business world as well as in real life, in the middle of projects or process, we start thinking about why we are doing it, doubt creeps in the mind and we feel disillusioned, yet we continue to keep moving with a hope and things will start falling in places, In the end we are able to finish the projects. Its very important to share holistic view of project with your team , right from inception to implementation, else team members may feel low or confused and project may even witness high churn rate during the execution phase.

Plan, Do, Check and Act (PDCA), Repeat

PDCA is the most important aspect of running, you need to carefully plan out your preparation for the race , right from booking for travel and stay to diet plans , running schedules , routes for practicing, etc. You also need to effectively implement the same so as to achieve desired benefits. In between you need to monitor if you are actually going as per the planned scheduled , if there is any deviation, you need to act accordingly to tweak yourself back on track.

If some important situations like an early morning meeting with client or a late night party  demand your time suddenly then you need to be flexible enough to accommodate them by going back to PDCA so that your progress remain inline with your desired expectations.

“Continuous Improvement (CI) is the buzzword in corporate world and PDCA is the core for achieving CI in manufacturing as well as in service sectors”

Continuous Improvement (CI) is the buzzword in corporate world and PDCA is the core for achieving CI in manufacturing as well as in service sectors. A process needs to be monitored and tweaked in as and when required so that we can get optimum results.

Incremental steps for progress are much better than no progress

When I started running, my speed was pathetic , it was just a few milli seconds more than my brisk walking speed. Even today I am quite slow as compared to fellow runners but if I compare my performance over a year, then the timing records do corroborate the theory of incremental gains leading to impactful change over a period. The secret !! I just keep stretching my goal of decreasing my timings for same distance. Sometimes , I was able to achieve my target, sometimes I was able to even surpass it but there were times too when I was not even close to my target timings.

“It’s a cumulative sum of incremental improvement which results in significant impact over a period of time”

Some times we are not able to achieve our set goals and then we become slow by recognising success barriers. Worst case scenario is at the end, we may miss important deadlines leading to huge tangible or intangible losses. To avoid such situations, we need to continue working on projects even when there are minor set-backs. We need to take every possible measure to avoid turning situations in deadlock. It’s a cumulative sum of incremental improvement which results in significant impact over a period of time

There is no substitution for hard work when combined with smart work

Often we hear, work SMART and not hard but with my experience , I feel that this theory is quite skewed towards “perfect” situations. However, when we do realty check , we find the world is hardly perfect.

"When we do realty check , we find the world is hardly perfect."

Very often I used to get impressed with runners boasting about use of running shoes with sophisticated technology, expensive GPS based tracking gadget, taking count of each calorie intake but running only a few times in a fortnight or week. Then I found that there are runners who are more fit, in shape, and obviously fast as compared to most of us. Most of them had come from humble financial backgrounds and often used to win the races. The key to their success?? Rigorous training schedules, disciplined and simple life. They can further boost their performance if they get access to the Smart technologies.

Same is the case with corporate world, use of technology, delegating tasks to subordinates , being proactive at work etc may adhere to the management jargon of being smart but it can’t replace the hard earned experience for solving issues, conflict management , technical advice or troubleshooting. One needs to keep himself or herself tuned to hard work in the smartest possible way.

Feel free to share your thoughts on my blog : nikhil.pachauri@gmail.com

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