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Archive for January, 2011

Rebuilding a Global Brand

Mahindra Satyam BPO’s CEO Mr. Vijay Rangineni, leverages more than 20 years of global operations and leadership experience in the service industry, to rally the entire organization towards the objective of undertaking wing-to-wing ownership of key customer relationships.  With an equally strong belief in employees as key drivers of customer value, Vijay devotes substantial time on the operation floors, engaging with and motivating associates to stay focused on deliverables. A firm believer in the language of metrics, Vijay guides teams in the creation of frameworks to evaluate their performance and undertake consistent process improvement initiatives.

Prior to Mahindra Satyam BPO, Vijay led a successful career with Fortune 100 organizations such as American Express, Morgan Stanley and GE, focusing on critical assignments and turnaround stories ranging from Delivery to Technology and Business Process Reengineering.

Vijay is an alumnus of Kellogg School of Management and also holds a Master’s degree in Industrial Engineering from University of Texas. He has addressed many international industry forums and seminars on Operational Excellence.

India@Kellogg discussed Mr. Rangineni’s role in rebuilding an Indian Brand, Mahindra Satyam BPO.

Tell us more about your role at Mahindra Satyam. What do you think are the major challenges that you face at the helm of a new organization?

As the CEO of Mahindra Satyam BPO, I am responsible for positioning the company as a leading BPO among several stakeholders including investors, customers, associates and society.  In addition, I have to hire the right talent to service these communities appropriately.  It has been 2.5 years since I took on this role as CEO and we are going through the most exciting period in the organization.  There has been rapid and visible growth both, from an organic and inorganic perspective.  There has been a strong focus on governance, quality, and ensuring that the entire management and company are aligned with our key areas of focus:

  • Consistent quality
  • Engage leaders of the parent company about proactively meeting customer needs
  • Mahindra & Mahindra, Tech Mahindra, and Mahindra Satyam BPO are properly linked in decision making in shaping the future of the business
  • Communication with key communities including analysts, media, advisors, and customers with frequent interactions about the vision and offerings

In 2010, we renewed contracts which increased business by 120% with the same customers.  Mahindra Satyam also acquired 44 new customers and continues to expand its global footprint in multiple geographies such as South America and South Africa. 

This year the company was awarded as ‘India’s Most Customer Responsive BPO’ at the ‘Customer Responsiveness Awards 2010”, organized by AGC Networks, The Economic Times, Ernst & Young, and Nielsen.

Do you think that there were specific lessons that you learned at Kellogg that were useful when you faced this ‘brand challenge’?

My ‘Entrepreneurship’ and ‘General Management’ courses have been very valuable throughout my career.  I recall discussions with professors on branding and the effort required to ensure premium on brand.  My ‘Accounting’ and ‘Finance’ courses have provided the ability to identify opportunities to turn profits – which levers one needs to move up or down for increasing profits and ensuring superior service.  My communications courses have been useful in communicating with associates and other stakeholders.  People are the biggest assets for a BPO. Ensure you have a good team to rely upon and form one that shares the same values as you and is ready to fight wars for you.  Often, teams are brought from outside but making sure internal teams are also leveraged to the fullest is important.  Overall, application of courses has led to long term sustainable growth.  Even during the crisis that the company encountered in 2009, my learnings and experiences from Kellogg, GE, Amex have been extremely useful.

Despite being in the same industries, Mahindra BPO and Satyam were still two organizational behemoths. What do you think were the main commonalities and differences in the cultures of the two entities. What steps were taken for a smooth integration of the two?

During a merger, it is important to know the synergies and differences between the two parties.  Mahindra Satyam is known for IT and Tech Mahindra for telecom.  .  Additionally, IT has longer deadlines while BPOs have to provide rapid service.  As a result, we needed to ensure several aspects in the merger.  We needed to get to know all the people involved.  We took the better aspects of both companies and infused them in the newly formed company.  Collaboration is key.  We ensured that fiscal disciplines were similar across the board.  We also want to avoid silos by forming teams of senior leaders, sharing ideas and values.  We had an excellent meeting in May 2009 to form the appropriate mission and worked together in deciding the positioning, offerings, servicing customers, meeting customers’ needs.  Tech Mahindra BPO and Mahindra Satyam BPO have synergies that will ultimately bring more offerings for all customers and can meet more needs than ever before. 

How did Satyam’s clients react to the incidents in Jan 2009 and what did the new organization do to contain the brand damage that happened due to it?

Within 3 months of my joining the organization, Satyam was going through a crisis.  One can reflect upon it now more clearly.  This crisis was an unfamiliar territory and no one can plan for it.  My duty was clear.  First, keep customers with you.  Individually reached out each customer and brought them upto speed.  We assured them that there would be no impact to the service levels.  We continued to deliver services.  We spoke to our top 5 customers and all our associates to let them know that we are here to stay.  Our customers believed in us. 

I did not have all the answers.  However, I was on the floor twice a week with clear communications.  I engaged our people and was transparent about what was going on and where we are going from here.  The employees knew that we did not have all the answers, but more importantly knew that I was not hiding any information from them.  As a result, customers and associates believed in us. 

Today, each of the top 5 customers has extended their service agreements for 2 – 5 years resulting in an increase of 50 – 150% in our business.  I believe that all the employees and customers faced the crisis together and it all ended well. 

From a leadership standpoint, my core team of 15 leaders fought through the crisis and we are proud to have retained 13 of them.  The two that left were for personal reasons and professional opportunity, respectively. 

My team relies on me and it is important to be committed to values.

Do you think that the Indian outsourcing industry is here to stay despite the hue and cry about job losses in US and elsewhere? What do you think are some of the new niches, within the outsourcing industry that are yet to grow?

The outsourcing industry is here to stay.  Here are my arguments in favor of this statement. 

  • We are helping our customers to compete more aggressively in the marketplace.  Through our services, we are offering our customers a better expense structure.  Due to this they are able to innovate more and introduce better products in their markets sooner. 
  • In terms of service, any improvements that my company learns from customers in Australia, it can immediately apply to those in the US and UK allowing for cross functional learning and improved service to all customers.  We are enabling our customers to focus on their core business, to become lean, and leading to higher profits
  • From a growth perspective, Knowledge Process Outsourcing (KPO) is growing.  We can do significantly more analytics, increase enterprise productivity more today than was conceivable even 2 years ago. For certain customers, we have been able to consolidate 120 different markets into 1 place and reduce 22 different iterations into 4.  Due to such services, enterprise capabilities to serve their customers across the world has grown leaps and bounds.

To address job losses, I remember in 1985 when I was in the semi conductor industry in the US, there was fear of Japan taking over in this space.  However, it did not happen.  US is still the leader in this industry even though a large part of it has moved to other parts of the world.  Innovation is still happening in the US.  Similarly, we can learn from these incidents.  My advice is that the US should focus on the Obama plan of continued focus on education and innovation which will keep the US ahead.

 

What are the short term growth plans for Mahindra Satyam?

Our growth plans are to focus on closer working between Mahindra Satyam, Mahindra Satyam BPO, and Tech Mahindra.  Focus on continued business with existing customers.  We are now in 7 different countries in Africa.  There are also key verticals for growth including, telecom, pharma, travel, manufacturing.  Multiple geographies, expanding sales and delivery capabilities. 

From a product level, we have identified offerings for growth such as, advantage of dominant telecom capabilities, enterprise services capabilities, and enterprise management capabilities.

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Localization of a Global Brand – Star India

Ravish Kumar (KSM ’98), EVP and GM for Regional Channels of Star India, discusses the strategy behind Star India, a global brand’s success in India.

Ravish Kumar is currently the Executive Vice President & General Manager for Regional Channels with Star TV in India. He has 17+ years of global consumer marketing experience in building brands and managing businesses across the food, pharmaceutical and consumer packaged goods industries. His academic credentials include an undergraduate degree in Economics from St Stephen’s College and an MBA from the Kellogg School of Management.

India@Kellogg caught up with Ravish Kumar to discuss how a global brand like Star has achieved tremendous local success in India. Mr Kumar shares his strategy, key learning as a GM, and advice for students via this interview.

The television media industry is the one that is highly sensitive to local preferences and tastes. Yet Star, despite being a multi-national brand has repeatedly outperformed its competition in India, including some of the home-grown channels. What do you think is Star India’s recipe for replicating its global success in India?

The television and media industry is in a perennial state of flux driven by expansion of the viewing universe, rapid changes in technology and globalization of viewer preferences among other factors. Succeeding in this environment requires companies need to be creative, adaptive and adoptive since market leadership follows thought leadership and the ability to accurately predict and continually exceed consumer expectations. Star TV has grown to be India’s largest network as a result of its constant focus on creating innovative content, taking calculated risks, leveraging consumer insights and challenging the status quo.

Can you tell us more about your role as The EVP & GM for Regional Channels at Star India and how your role helps in localization of a global brand?

As the EVP & GM for Regional Channels I am responsible for extending the Star footprint into Regional Markets and launching Regional Entertainment Channels that compete with other leading national Star Channels like Star Plus, Star One, Star Gold, Star Movies & Star World. Since the raison d’etre of a regional channel is a stronger emotional connect with consumers it is critical to understand and appreciate viewer hopes & aspirations and to identify and create content which drives both ratings and builds brand equity. I help make the strategic choices regarding positioning, programming and marketing that define how we localize the global brand and go to market.

Is going regional a part of a larger ‘niche-play’ strategy for Star? How does Star ensure that going regional does not dilute quality and therefore the overall brand image?

At Star we believe that expanding into regional markets is a logical extension of market segmentation and allows us to build equity with our viewers by offering them content that they connect with emotionally, in a language they prefer, in a setting that is familiar and which showcases sensibilities that they identify with. Before Star entered regional markets, regional channels were always seen as poor country cousins of Hindi GECs and there was a visible difference in the content and production quality between the two. With our unrelenting focus on creating outstanding content with high production values we have turned around the face of regional television and have proven that regional channels can be far more appealing, engaging and profitable than even the leading Hindi GECs. Moreover in Brand Equity studies viewers use attributes like young, innovative, modern, glamorous and stylish to describe Star Regional Channels – which is a testament to our Brand Equity.

What has been your key learning, on a personal front in this role?

I graduated from Kellogg in 1998 and since then have worked in the US and the UK. Returning to India after 12 years meant adapting to change at multiple levels and the entire journey of reconnecting with friends and family and rediscovering my cultural identity has been emotionally fulfilling and extremely rewarding. I am finally home and as the saying goes there is truly no place like it.

You successfully traversed your career from a global role in Pharma & FMCG into more regional Media & Entertainment now. What have been the key similarities and differences you experienced? What advice do you have for students who are looking to change career trajectories?

While I have worked across industries I have essentially managed brands (locally & internationally), businesses and people. In my current job I do all three i.e. manage a fast growing business by investing in building and developing talent. My advice would be to change industries only when are extremely passionate about the new industry (dream job) or when you can either bring a new and valued perspective based on your previous experience (move to allied/related industries) or when you are offered a general management role (as opposed to a functional head role).

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Ankush Patel, head of Corporate Development and Strategic Business Development at Endemol India talks to us about his career to date, Endemol’s entry into India and his reflections about the future of the Indian media and entertainment industry. Endemol is a global leader in entertainment programming and the largest independent television and digital production company in the world.

Ankush (KSM 03) is an alumnus of the University of Delhi where he has a masters in Finance & Control and is a CPA from the State of Delaware. He has experience with consulting firms as KNAV Grant Thornton and Ernst & Young. Post that, he moved into an entrepreneurial role in content production (in association with India’s leading internet entrepreneur, Anupam Mittal), then into an investment role at TimesGroup (India’s top media conglomerate) and now is currently looking at Corporate Development & Strategy for Endemol in India.

You started your career in financial services and management consulting before gradually moving over to venture capital and now media. What was the motivation for this career progression and what excites you most about working for the Indian media and entertainment industry?

I was with Ernst & Young’s Strategic Finance practice and a consultant to some media & entertainment companies. Intrigued by their working, I took a plunge and raised angel funding for a content production company in the television space in India. Post 3 years with this start-up, I transitioned out of the company and joined the investment arm of TimesGroup and am now heading the Corporate development Group at Endemol for India.

Clearly, India’s media space is a couple of years away from the innovations we see in the United States. But the quantum of investments taking place in the world’s third largest media market (in value), are phenomenal and opportunities abound for professionals from developed markets to take a piece of them into this new emerging market. Television is now seeing 20% growth rates (down from the 35% a couple of years back) but films, sports, regional language entertainment, live events are just beginning to come out on their own. Endemol is obviously excited by this trajectory of projections and we are trying to capture a piece of these pies.

As the disposable income of India grows, the leisure and entertainment industry will only exponentially grow. At these low values, India is already the third largest in total value. It is going to be an interesting ride over the next 10 years when India accelerates up the echelons of being a middle-income economy.

How has your Kellogg experience impacted your career to date?

From a mature market into the less developed one growing at a blistering pace, one can see the missing blocks and it is almost elementary to be at the top of one’s game as Professor Lys would say. Additionally, Kellogg really taught me to separate signals from the metaphorical noise.

Please tells us more about your current role as the head of Corporate Development and Strategic Business Development and the challenges and opportunities for Endemol as you entered the Indian market?

Most media companies need to be in the newer markets and have established businesses in Asia, Latin America and Africa. By that logic, we have been no different – Endemol has expanded into Latin America and Asia in the last couple of years and diversified away its risks from Europe and North America. India is a very desirable market for Endemol and forms our toehold in Asia.

The Asian markets were not used to paying for intellectual property as would be expected from lower income markets.  So, we faced the regular expected ghosts, but we have managed to educate the market of several weeks of opportunity costs involved in trying untested locally developed content. These would typically be

  • Fine tuning costs of the first ten weeks the show is on air
  • Dissatisfied show sponsors
  • Long run reputational effects with the viewers and agencies

The payments for intellectual property (format fees in our parlance) are far lower and more beneficial. It is really about riding the learning curve of various other developed markets and hitting the ground running with new television shows launched.

As we speak, we have educated the major market (Hindi language), but we are seeing sub-markets in India where we are at the early stages of this education. These would be the Telugu, Tamil, Bengali, Marathi and Kannada – language markets (5 populations with 70 million each and mutually exclusive from Hindi) and an ability to spend monies. Additionally, we are involved in the emerging sports content, digital content as well as branded entertainment markets. We are moving in early and will, hopefully, hold onto this market power.   I have ended up leveraging all the Kellogg classes on marginal costing, operations and negotiations to come out with innovative solutions while planning these productions here.

Endemol India is constantly launching new shows and recruits front-line stars, such as Shah Rukh Khan to host the Indian version of Wipeout (Zor Ka Jhatka). What are the main trends and areas of opportunity as you see them?

Indian television media content is still led by celebrity content and we have not transitioned into common people shows like in the developed world. Celebrities are important as long as viewers’ basic aspirations are still unfulfilled. And India is a mostly low income economy and, while there is a huge number of people rapidly climbing up the ladder of aspirations, there is a “larger” number entering the first few rungs of aspirations who demand celebrities of all kinds – Big Bollywood names to stars in smaller films and reality television. We expect this market to remain for about 5 -7 more years.

Looking ahead, there are several areas of potential growth:

  • Growth led by advertising revenue
    • Increased competition is demanding bigger shows, but the advertising pie is increasingly fragmented; Pricing models in the industry are changing as broadcast channels become less willing to proceed with fully funded content.
    • There will be more digital offerings, especially with the expansion of the 3G networks. However, producers are reticent to fully engage given the riskiness of this market, and the availability of less risky revenue sources.
    • Sports will continue to grow and be a lucrative market for advertisers. Until now there has been strong focus on cricket, driven by the creation of a professional cricket league. The main advertising season in India, August to December is yet without sports and yearning for either another sport or more cricket. “While this interview was on, media carried an Endemol India partnership with Rhiti Sports which also manages MS Dhoni, India’s cricket captain.”
    • Development of niches (regional language as well as consumer interest) is become increasingly viable and there are a bunch of channels launching to monetize these hitherto long tail markets
    • Additionally, the advertising market also wants us to better focus on different social economic classification (SECs) than the requirement of “one size fits all” GEC (general entertainment channel) broadcaster, our most important client today
  • Expect to see the ratio of subscription revenues to advertising revenues shift from 30:70 to a more reasonable 50:50; This will again cause a shift in the kind of content demanded from us.
  • We have launched our film division in August 2010 and looking keenly at getting pre-production.

What are the challenges ahead?

As content providers, our goal is to create engaging content that advertisers can monetize.

The key market for the “one size fits all” GEC channel is the 25-35 age group and there are few content offerings for other age groups or stand-alone niches. As soon as audiences move out of this age group, we stop catering to them since there is no vehicle to help monetize (without thinking long term valuations).

The industry is itself very young and adequate learning has not taken place for us to offer valuable content to other age groups. But now, we are seeing broadcasters looking curiously at this market of niches (food, real estate, business news, youth etc.) and we are stepping forward in enabling business models to allow for this catering. Unfortunately, in a growing economy with growth coming from various directions, we are not able to cater to all these potential niches with all of us going for the low hanging fruit. Hence, the evolution of the industry will depend on acquiring a talent pool, which can successfully cater for groups other than the 25-35 years olds. Until recently, niche programming was non-existent but there are signs of change – for instance, investors are showing more interest and we recently observed the launch of India’s first food channel, Food Food.

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Alok Mittal, discusses his views on the current shape as well as the future of entrepreneurship in India.

With a broad range of hands-on experience founding, funding and supporting early-stage technology companies, Alok Mittal joined Canaan India in March 2006.  Alok focuses on investments in digital media and mobile companies, as well as innovators in managed software services and other IT enabled businesses.

Prior to joining the venture industry, Alok co-founded JobsAhead.com, a leading web-based recruitment business, which was acquired by Monster.com, the global leader in online recruitment. He also brings strong Telecom experience to Canaan having worked for Hughes Software Systems prior to that. Alok is also a co-founder of Indian Angel Network, and on the board of TiE (The Indus Entrepreneurs) in Delhi. During the course of his association with Canaan India, he advised Canaan Partners in their investment in Bharat Matrimony, iYogi, Cellcast, UnitedLex, Chakpak and MotorExchange.

Alok earned a BE in computer science and engineering from the Indian Institute of Technology Delhi and a MS in computer science from UC Berkeley.

Great nations are built by visionary entrepreneurs. A child born today in India will graduate from college in 2030. Will he/she have the skills, drive and perseverance to become the entrepreneurial leader that future India needs? Are we supporting today’s entrepreneurs satisfactorily and laying a solid foundation for the next generation?

Entrepreneurial activity in India has a rich history; in some sense we are a nation of entrepreneurs as our infrastructure and resources have necessitated us to figure out clever ways of solving our daily problems. Examples of such innovations extend well beyond the often-quoted “Jugaad”. Almost a century ago, we perfected supply chain management to get home cooked meal to office workers through a six-sigma rated “dabbawala” service. In the 1950’s, we reconfigured old Harley’s to start the phat-phatiya taxi service. In the 1970’s we made quality eye-care affordable through the Aravind Eye Hospital. And in the 2000’s, we sent a mission to the moon at 50% of the costs of other nations. In each decade, we have examined our problems critically and worked within our means to resolve them.

On the technology side, one of our earliest innovations came with the founding of Hindustan Computers Limited (HCL) in 1976, the same time as Apple and 3 years before IBM’s PC launch. In the absence of funding or access to customers, 6 engineers quit their jobs at DCM to start a company selling teledigital calculators and channeled funds from this venture to build microcomputers. Eventually change in government regulations provided a golden opportunity, as HCL was well-poised to gain market share with the exit of foreign companies. India has been innovating since a time when almost all “essential ingredients” of entrepreneurship were absent – capital, institutional support and even well-developed markets and customers. But are things any better today?

Access to funding is the one of the first things that comes to mind when thinking about starting a venture. Without a secure salary, how do today’s entrepreneurs finance the infrastructure and investment for their venture? The past decade has seen the emergence of angel funds such as Mumbai Angels and Indian Angel Network that provide financial assistance and advice to entrepreneurs. In true spirit of angel forums, both have consistently backed even ideas on paper, and helped entrepreneurs turn them into reality. Another recent source of seed funding has come from corporate venture funds such as One97, who provide seed funding in the mobile space. Traditional sources like personal savings, friends and family continue to dominate seed funding in India. Together these present an increasing array of avenues for entrepreneurs to get capital for their idea. Concurrently the cost of tech entrepreneurship has declined – SaaS and cloud computing have made it possible to launch new ideas without investing in server or distribution channels. These developments bode well for entrepreneurs who can today launch their ideas with limited funding, and stretch their funds over a longer period.

Though capital might seem most critical, the importance of a strong, entrepreneurial team cannot be overstated. This is especially true at the early stage, when the idea itself might not be well-developed or lacking proof of concept. The team inter-dynamics, their passion for the idea and overall vision become critical to the startup’s success. In fact many VC’s will provide funding for an OK idea being executed by a brilliant team. In the past there have been two key challenges in recruiting the best people – cultural biases and lack of incentives. Firstly there is a notion that India’s youth prefer stable, low-risk careers and thus only consider large organizations for employement. Failure has a social stigma attached to it and apart from a few enterprising communities, the fear of failing steers most people away from startups. Secondly, it is felt that Indian’s only understand the language of cash – stock options which are used extensively in the West don’t work here. While there is some truth to these, today’s generation is quickly dispelling both notions. Across the country in our top universities, entrepreneurship cells have becoming popular, as students have realized the benefits of pursuing their entrepreneurial pursuits early-on. Moreover with the recent successes of companies such as MakeMyTrip and SKS, employees have become millionaires overnight due to their stock options. Consequently more people are willing to chart their own path, which is reflected in the high caliber teams we see today – ranging from new graduates, to seasoned execs. Sharing such success stories broadly will fuel a virtuous cycle of the best talent wanting to be in startups.

Finding a viable market is the next factor that many entrepreneurs grapple with. After all, creating a good product is only half the battle. As important a consideration is figuring out if there is anyone interested in buying the product, whether they would be willing to pay for it, and how much. On the consumer side, this is closely related to infrastructure development and technology adoption.  Having a strong backbone of infrastructure and pre-existing users generates demand for new services, and provides an avenue to test and refine offerings. PC penetration continues to be low, but is increasing rapidly as cost of desktops and notebooks declines. India has about 80 million Internet users, and with the launch of WiMax/LTE and 3G services this number is sure to increase rapidly. Most importantly, with 500+ million mobile users, the mobile phone provides a high-growth market for startups to innovate in. While entrepreneurs need to acknowledge the high competitive pressure in mobile, the abundance of first-time mobile users presents a rich opportunity. Many mobile users have no preset preferences and therefore are willing to try new products and services to find for those that meet their particular needs. Customer adoption is considerably more challenging on the enterprise side – Indian companies prefer mature products and have generally shied away from testing new, unproven offerings. Moreover international firms through their Indian subsidiaries have dominated the enterprise market till now, making it challenging to experiment and innovate.

So what does the future of Indian entrepreneurship look like? What can we do to ensure that the next Tencent, Google or Baidu to come from India? I feel it comes down to welcoming new ideas, providing better support to our entrepreneurs and a more active government involvement.

In Silicon Valley in California, engineers who have tasted failure get quickly hired by other companies. Why? Because there is a belief that while “Success is a good teacher, failure can teach even better”. This mentality permeates the Valley, and consequently people are unafraid to quit their established jobs to explore a new idea. This is exactly the thinking we need in India, so that entrepreneurs don’t feel they are risking their entire lives by turning down a lucrative job offer. Angel funding in India still has a long way to go to when benchmarked against established powerhouses like the US, where angels provided $8.5 billion to 25,200 ventures in the first 6 months of 2010. Angels not only provide much needed capital, but also valuable guidance to help startups cross the chasm. The Indian investing community needs to realize that investment opportunities in the later stage are directly dependent on our efforts to nurture startups in the seed stage.  Lastly, similar to the Small Business Administration in the US, we need stronger governmental support to provide capital and resources to startups, and to ensure Indian entrepreneurs continue to start, build and grow new businesses.

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