Quick decisions, robust processes, agile team : marketing expert lists ingredients for success
Dr Ranjan Banerjee is an expert in the fields of marketing and strategy. He consults big organizations, helping steer them in the right direction. This IIT Bombay and IIM Calcutta alumnus has worked with enterprises, including Hewlett Packard, Levi’s, BASF, Vodafone, Hutchison, Legrand, Spinneys Dubai, Club Mahindra, Shoppers Stop, Philips and Madura Garments.
YourStory spoke to him to understand his views on starting up and entrepreneurship. Excerpts:
Among the main things that Dr Banerjee shares is the evolution he has seen of startups and entrepreneurs over the years. From Sanjeev Bhikchandani of Naukri to Kishore Biyani of Future Group; they all seem to have done something right that helped these startups to grow into huge conglomerates.
Dr Banerjee offers a peek into their mindsets.
He says the role of an entrepreneur is constantly undergoing changes. How a company evolves over time also depends on the entrepreneur. “Tools and processes in a startup depend a lot on the profile of the entrepreneur. When the entrepreneur starts off, it’s an owner driven company, and people who join, just join the owner. If the owner is a good guy, with values and culture, he can demonstrate what values and culture he wants the organization to embody. He will attract people of similar values and a similar cultural profile. When a group of people demonstrate a culture by working together, the organization will ultimately be known for that culture,” explains Dr Banerjee.
Therefore, telling each employee about the culture and values of a company is possible only when there are a handful of people. But as an organization goes from level one to level two, the number of employees increases from 5-10 to 50-100; it then becomes important to have processes set in. Whether or not an entrepreneurial company can go to the next level depends on a few things : Can the owner let go? Has he put in processes? What are the values the entrepreneur has? Can he create a process to inculcate such values for new employees who come in? The HR function, internal communication processes are important enablers to move the wheel forward.
“Good entrepreneurs like Sanjeev Bikchandani and Nirmal Jain have done this very well. The owner needs to change roles after a point of time. He needs to move from being a doer, to someone who builds the second line, mentors people, creates the CEO, and gives them space and so on. Many entrepreneurs fail at this stage because either the entrepreneur doesn’t grow beyond a point, or the company outgrows the nature of the entrepreneur,” says Dr Banerjee.
The main role of a company is to constantly create, however some part of the venture is also about maintenance. If the entrepreneur is not too good at maintaining things, he should be able to find that second line guy who can maintain the company; someone who can manage so that it frees the entrepreneur to move on to the next challenge. Once the entrepreneur has put processes in place, clearly articulated his values, and demonstrated these through a strong second line of leadership, his role morphs into that of a mentor.
Dr Banerjee cites the example of Kishore Biyani of Future Group and BS Nagesh of Shoppers Stop to illustrate his point. “Shoppers Stop was very entrepreneurial. Though Nagesh was recruited by Rahejas, they gave him a lot of space and he ran it very entrepreneurially. It’s a good example of how culture can be built.”
Marketing advice for startups
Given the multiple changes that the advertising landscape has undergone in the recent past, Dr Banerjee says it is important for a startup to be careful about where he wants to park that advertising rupee. His advice to startups on ad spends is to first identify the market they are playing in. If it is a B2B business, then customer service is more important than mass media advertising, he feels. “When customers are very big and their referral is very important, then mass media advertising plays a limited role. If you can get two or three big clients, satisfy them really well, deepen your businesses with them, then word-of-mouth from these clients will be a more sustainable way of doing things at low cost to scale up your business.”
For B2C businesses, Dr Banerjee suggests exploring the go viral angle over investing crores in advertising money. Today it is possible to post something on social media that appeals to people at an emotional level and therefore goes viral. Social media has completely changed the landscape in terms of what startups can do. Dr Banerjee illustrates this point through Hector Beverage’s PaperBoat brand. “They have built a business around childhood memories and if you see their website, they continue to trigger new memories through their FB page. A lot of their videos go viral. Earlier, you would design a brand promise and then figure out how to use social media. But in today’s world new venture companies are very early on thinking, how can I design a brand and brand promise that is amenable to social media. My advice to B2C startups is to look at this space – how can you intelligently increase virality? You need to be on social media and understand it well. I don’t think LinkedIn and Facebook grew by advertising,” he explains.
Above everything else, what a startup does should be novel; the idea should be of value to a segment of consumers. If your business has a B2B side, then that aspect should be explored first because that will be the source of revenue for your business. Dr Banerjee’s advice is not to follow the bandwagon when things are just being hyped. Never mind if Big Data and IoT are buzz words, do only what you think will hold value for customers. “If you have immersed yourself in a space, through some work experience or some projects, then you have an insight into the space. If a new entrepreneur says I want to startup in Big Data, that doesn’t impress me very much. But if an entrepreneur says I worked for a Big Data company for five years, and I know there is a gap, and l know I can build an opportunity around it, then that is the right way of approaching the space,” he says.
His parting thoughts in this discussion are on how organizations fail. Big organisations fail to catch the new wave of innovation, he says. In this fast changing world, what was successful yesterday need not be successful today; therefore the more you invest in yesterday, the more difficult it will be for you to adopt something new. “Companies should be willing to cannibalise today’s revenues for tomorrow’s profits – it is not something many are willing to do. The second thing is processes. With processes comes in bureaucracy, and bureaucracy is the enemy of innovation. Putting processes in place will enable the company to move forward, but at the same time one has to be sure that processes don’t stall the progress of the company,” he advises.
Fast decision making, backed by robust processes and an agile team are some important ingredients for making a successful company.