Nykaa and the hedgehog concept

I used an entire hour on the flight to clean my whatsapp. Delete images from the groups, exit unwanted groups, delete chats that were no longer relevant, blocked some spam messages etc. That was like Diwali cleaning my whatsapp. As the aircraft touched the ground and the network was back, there were umpteen messages again, mostly of Diwali greetings and then there was this one, a special one: 

The sender had a couple of queries regarding the forward thinking course SHIFT and had messaged me through the website contact page. The concerns I heard and yet didn’t help her with answers, were her own doubts related to age/work experience and if her profile was fit enough to attend a forward thinking course. To clear someone’s self-doubt, one can help only by showing the path, but the bridge has to be crossed by the person herself. That is what I did, I showed the path and left the conversation. By evening, she had paid for the upcoming course cohort starting 19th November. She had crossed the bridge herself and seeing that I smiled, ‘Tum hi ho nayaka’. (You are the heroine of your story)

It is not my line, it is a beautiful line borrowed from Nykaa’s ad1

Kahani koi bhi ho, tum hi ho nayaka 

As the nayaka of her own unique story, each woman in the film charts a journey fraught with challenges to achieve her own success. The film journeys through hardships of women like a biker who tries stunts, a mountaineer, a rapper in hijab, an entrepreneur and some more. This is what the lady, who had signed up for the course did- she created her own storyline. 

Nykaa got its name from the word Nayaka, the heroine. But if I had to relate Nykaa to an animal today, it would not be a beautiful, strong, graceful animal but it would be a small animal with a cone-shaped face, short legs and body that is covered with porcupine-like quills, the hedgehog, the one that remains focussed on its mission. In today’s Habits for Thinking, let me introduce you to a ‘Good to Great Companies’ concept by Jim Collins, called the Hedgehog Concept.  That is what Nykaa is, a hedgehog. 

The Hedgehog Concept is developed in the book Good to Great. A simple, crystalline concept that flows from deep understanding about the intersection of three circles: 1) what you are deeply passionate about, 2) what you can be the best in the world at, and 3) what best drives your economic or resource engine. Transformations from good to great come about by a series of good decisions made consistently with a Hedgehog Concept, supremely well executed, accumulating one upon another, over a long period of time.

The hedgehog concept

Are you a hedgehog or a fox? In his famous essay “The Hedgehog and the Fox,” Isaiah Berlin divided the world into hedgehogs and foxes, based upon an ancient Greek parable: “The fox knows many things, but the hedgehog knows one big thing.” 

Those who built the good-to-great companies were, to one degree or another, hedgehogs. They used their hedgehog nature to drive toward what we came to call a Hedgehog Concept for their companies. Those who led the comparison companies tended to be foxes, never gaining the clarifying advantage of a Hedgehog Concept, being instead scattered, diffused, and inconsistent. 

Here are three circles of the Hedgehog concept explained: 

1. What you can be the best in the world at

(and, equally important, what you cannot be the best in the world at). This discerning standard goes far beyond core competence. Just because you possess a core competence doesn’t necessarily mean you can be the best in the world at it. Conversely, what you can become the best at might not even be something in which you are currently engaged. 

Example: Gillette – could become the best at building premier global brands of daily necessities that required sophisticated manufacturing technology. Notes: Gillette ability to manufacture low cost, high tolerance products, ability to build global consumer brands. 

NYKAA: Could become the best in cosmetics shopping. 

Just some of several initiatives that the company has taken to become the best:  a) understand the customer cosmetics shopping journey- customers like to read blogs, reviews etc. before buying a product. Nykaa has focussed on creating content both on its platform through customer reviews and outside on the internet space through influencers, videos etc. Nykaa has a strong ecosystem2 which includes Network, TV, Beauty Book, Army among others. There are >1,350 influencers; YouTube based platform has >1m subscribers; 3.1m members are in the peer-to-peer community.  b) catering to the sachet market: Nykaa understands the market and has made available samples and mini product sizes for sampling and consumption. 

2. What drives your economic engine?

All the good-to-great companies attained piercing insight into how to most effectively generate sustained and robust cash flow and profitability. In particular, they discovered the single denominator—profit per x—that had the greatest impact on their economics. (It would be  cash flow per x in the social sector.) 

Example : Gillette-Shift from profit per division to profit per customer reflected the economic power of repeatable purchases e.g. razor cartridges.

NYKAA: Strong Unit economics, a key differentiator3 

While most e-commerce players in India have been burning cash to acquire new customers and drive adoption/ penetration, Nykaa stands out given its strong focus on unit economics. At an Ebitda level, the company has been making steady progress with break-even achieved in FY19, and since then, Ebitda margin expanded to 6.6% in FY21. With growing scale, Nykaa also achieved PAT break-even in FY21. A high Average Order Value, good intake margins and focus on assortment over discounting are the key factors that drive Nykaa’s strong unit economics.

I remember visiting one of the first stores of Nykaa, in 2015 or so. This one was at the airport. Barely stocked with some perfumes, the store was barren of both products and customers. Over the years, not just that store but several other stores came up. Had it been a focus on profit per store, it would not have survived even a few months. Focus on unit economics has been a great strength for Nykaa. 

3. What you are deeply passionate about.  

The good-to-great companies focused on those activities that ignited their passion.  The idea here is not to stimulate passion but to discover what makes you passionate. 

Example: when Gillette executives made the choice to build sophisticated, relatively expensive shaving systems rather than fight a low margin battle with disposables, they did so in large part because they just couldn’t get excited about cheap disposable razors. “Zeien talks about shaving systems with the sort of technical gusto one expects from a Boeing or Hughes engineer.”wrote a journalist about Gillette’s CEO in 1996.

NYKAA: Customer experience:

Nykaa, from its early days and unlike other market places, initiated stocking of inventory to manage customer experience for timely, quick delivery and for authenticity of products. “We didn’t want to be a discount store,” Falguni Nayar said in an interview. “We’d rather sell the right color of lipstick at full price, than the wrong shade at half off which would make the buyer unhappy within minutes of wearing.”

This is just a suggestive hedgehog4 concept for Nykaa. It takes years for companies to find the right hedgehog alignment. When asked how do we accelerate the process of getting a hedgehog concept- Jim Collins replies- “It is an inherently iterative process, not an event. The essence of the process is to get the right people engaged in dialogues to ask right questions guided by three circles.”

The Hedgehog concept is not only applied for companies but also for individuals. It is not a strategy but it is a reflection tool that helps one understand what one can be best at. 

I feel that I was just born to be doing this/ I get paid to be doing this/I look forward to getting up and throwing myself into the daily work

 A Hedgehog Concept is not a goal to be the best, a strategy to be the best, an intention to be the best or a plan to be the best. It is an understanding of what you can be the best at. The distinction is absolutely crucial.   

Falguni Nayar, the nayaka of Nykaa, crafts the path of a success story. The Hedgehog concept, very similar to Ikigai, stands true for both companies and individuals. The framework to reflect, build, reiterate a growth path is a necessity for both an individual and companies. This is the path to growth, this is the path from good to great. 

This Diwali, this festive season, like the lady who signed up for the course, like Nykaa, remember to be the Nayaka of your own story!



  • 1Brand: Nykaa; Advertising Agency: Sideways 
  • 2,3Excerpts from Nykaa IPO: Growth and Profitability Need Not Be Mutually Exclusive by Jefferies dated 18 August 2021.
  • 4I, the author of this piece, have not spoken to anyone from Nykaa before writing this piece. The Hedgehog Concept for Nykaa is based on my years of observing Nykaa, conversations with people in the industry, secondary research that is interviews and equity analysts’ documents. 

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The MILK Crate aka Silos Challenge For Leaders

Adventure, as you and I know it, is an experience that is very unusual, exciting or dangerous. Still, it is bewildering to see, men and women, adults in their bodies, childlike in minds, taking adventure as their mode of entertainment and risking their own lives. Take the instance of the Milk Crate challenge that has become a craze in some parts of the world and in many parts of the digital world.You take up the crate challenge, make a video, post it online  and see you and your friends failing it, others get compelled to take it too. It is not like the ice bucket challenge where it was easy to put a bucket of ice over your head. In the Milk Crate challenge, plastic milk crates that are used for milk distribution and sale are stacked on top of each other in a staircase pyramid fashion. The person, who takes the challenge, has to climb up on this high podium of crates and then climb down from the other side. As the challenge started trending on social media, platforms and doctors raised an alarm on the dangerous impact of the fall. The chances of falling and failing the challenge is very high. 

Why it is guaranteed to fail? As explained in a video by Wired, unsupported columns go through a sudden horizontal movement called Buckling. 

Column buckling is a curious and unique subject. It is perhaps the only area of structural mechanics in which failure is not related to the strength of the material. A column buckling analysis consists of determining the maximum load a column can support before it collapses.

Buckling refers to the loss of stability of a component and is usually independent of material strength. This loss of stability usually occurs within the elastic range of the material. 

A simple way to demonstrate column buckling is to hold a ruler at either end and to push your hands toward one another. The ruler will buckle at the center.

In today’s Habits for Thinking, I am urging you leaders to spend some time on thinking about the presence of silos in your  organisation. Silos, or columns in the organisation, especially in large organisations are independent teams not interacting with each other.

The Silo Mentality as defined by the Business Dictionary is a mindset present when certain departments or sectors do not wish to share information with others in the same company. This type of mentality will reduce efficiency in the overall operation, reduce morale, and may contribute to the demise of a productive company culture.

Sounds like a Milk Crate challenge, isn’t it? It is true. Independent teams are great for organisations but independent, uncommunicative teams are a burden on productivity. It is an invisible force that exists to create resistance and leads to falls and failure like in the Milk Crate challenge, that can be extremely harmful for the business. Silos do not appear overnight in an organization. Organizational structures are designed to deliver key results. Organisational structures can be functional like marketing, sales, technology, delivery etc. The structure can be consumer facing if there are several product lines in a company like in banks – credit cards, consumer loans, corporate banking, SME etc. In new age technology driven businesses, the role of a product manager is to bring together consumer facing teams and backend engineering teams aligned to the business goals. The organizational structure is not designed to create columns or silos, it is designed to deliver results but yet, the teams create silos. There are primarily two reasons for it: culture and leadership teams. In today’s Habits for Thinking, I am bringing your attention to the Milk Crate Challenge in your own organisation, to look for the existence of these unsupported columns or silos, to assess the buckling load and to strengthen it. 

Accept the Challenge: 

1. The SILOS Challenge: Leadership and Unified Vision

It trickles down from the top. The pressure applied at the top leads to buckling of the column- the horizontal movement which brings a fall. It becomes critical to have a unified vision for all business heads and leaders. The integrated approach drives down the message and keeps the integration support between several teams too. A unified vision not only brings the leaders together, keeps them together too. 

2.The SILOS Challenge: Cultural brokers

To launch Times Now as the first news channel from the group, an entire new business unit was created within the Times of India group. The team, designed as an independent unit grew, moved into a new building and started rolling the business. As a beginner it needed support from the parent company across several departments.One of my functional roles was to manage and forge alliances between the old and the new business teams. Today, I would give a name to that role ‘a cultural broker.’ A cultural broker is someone who understands the cultural differences of the two teams  in an organisation and is able to forge alliances for the benefit of the two set ups. Product managers play that role between departments with an eye on the goal. 

3. The SILOS Challenge: Communicate often 

Open office space encourages a lot of informal communication within team members but what if there are separate floors for separate departments. Removing physical barriers like seating, creating watercooler moments for interdepartmental teams are some simple tools that can create frequent communication. More communication, formal and informal, leads to understanding of each other, builds empathetic inter team relationships that becomes the support for the columns. 

There are other ways of creating inter department communication opportunities.Training and learning brings people together for the common goal of the business. 

4. The SILOS Challenge: Removing data silos

Dependency on data and information to drive business decisions is critical. As data dependency grows, so does the protection and ownership of that data. Often, this creates data silos between leaders and teams. Data silos mean an incomplete view of reality. This could lead to bad customer experience, slower pace of change and roadblock to innovations.

Friction that makes teams less collaborative slows down the pace of the organisation. Data silos can be handled through software platforms which can create relevant access for different teams. 

Column buckling, the bending of a column or the failure of the column, is not related to the strength of the material. You take a steel ruler in your hand and put pressure from the top and the ruler will bend. Similarly, independent teams, in their own respective area, are very strong performing teams. But like column buckling, if teams are not supported with each other, buckling of one column or one team can crash the growth of the organisation. Organisational silos are like columns in a physical structure and can be supported by four pillars, pillars of Leadership and unified vision, presence of cultural brokers, focus on inter- team communication flow and relevant data access to teams. Invisible forces like silos are a real challenge but can be handled. 



First Laugh, Then Think

To explain a joke is to kill a joke, and to translate a joke is to mercilessly kill a joke. I am not good at either explaining or translating. How can one be, if one is the subject of the joke all the time. Just last week, I sat in the cafe I have been frequenting almost daily in the past few weeks with my son and introduced him to one of the people there as the owner. Son asked, “Really? He keeps such a low profile, Mom. Doesn’t look like he is the boss here.” “Exactly, that’s why I am showing him to you,” I whispered. The place is called Amiel Gourmet. The manager is called Immanuel. Amiel the owner, Immanuel the manager,Amiel, Immanuel…el…el so the shortcut in my head mistook Immanuel as Amiel, the owner, until I had to save Immanuel’s number in my phone when I realised my blunder. Dumb, dumb, dumb. Thank God my son had left before this realisation. So you see, if I have to translate a meme to explain to someone, I might as well feature in it. That will be more impactful.

A meme on the internet based on the actress Sara Ali Khan.

(Sara- means all/full. Aadha- means half. Dher Sara means – many.)

We don’t have fun filled twists and turns in work life, definitely not in the online world, away from colleagues, in work from home environment. It is all straightforward, rectangular boxes on the screen, sometimes just the dark rectangle with the video off (the most common excuse beingpoor network) and the ones with the video on may be sitting in knickers and jackets. Life is like that. Hidden fun. Knickers in combination with jackets. Baby starts dancing on the bed, switch off the video. Spouse comes angrily at the disturbing child, and you switch off the video. Eat food. Must switch off the video. Mess under the table but a neatly, color coordinated bookshelf behind. Small joys but hidden joys. One wonders, is it more joyful because it is unseen, undiscovered, unheard. Memes, jokes are not rocket science. Joke tellers are. With the eyes that see the unseen, ears that hear the unheard, they write lines that extend the laughing lines. They bring notice to something mundane, something not so obvious yet something that is all around. 

Like the sounds of cats- the purring, chirping, chatterting, trilling, tweedling, murmuring, meowing, moaning, squeaking, hissing, yowling, howling, growling and other modes of cat communication that Susanne Schotz brought attention to. Who would have thought that writing down a paper on cat communication would win you a prize, a prize with a name that has Nobel in it and is given by a real Nobel Laureate. Susanne Schotz with two other colleagues won the Ig Nobel Prize in Biology for analyzing cat- human communication. Quite a cat!

Whoever wrote the phrase curiosity killed the cat would fear Schotz. She took the cat to kill her curiosity. Her curiosity of how cats communicate and her research on twilling, trilling, moaning, spurring etc got her a prize, a prize that stands for awarding, not-so-obvious, curiosity. 

If you are amused, or confused or humored, that is exactly what the organisers and judges of the Ig Nobel Prize would like you to be. In today’s habits for thinking, I am bringing your attention to a secret ingredient, the joy of chuckles, smiles and impromptu laughter. The joy of humour at the workplace. 

There is nothing as coveted and revered as the Nobel Prize. To create a parody on it is a serious business. What is Ignoble prize? Ig Nobel Prize, (a play on the words ignoble and Nobel. The pronunciation used during the ceremony is /ˌɪɡnoʊˈbɛl/ ig-noh-bel, not like the word “ignoble”.) — a parody of the Nobel Prize. It is awarded every autumn to celebrate 10 unusual or trivial achievements in scientific research. While the Ig Nobels don’t necessarily address the world’s most pressing challenges, they do represent the curiosity that is an intrinsic part of discoveries.

The annual ceremony at Harvard University recognizes research that “makes people first laugh, then think,” says Ig Nobel Prize founder Marc Abrahams, who along with a panel of experts evaluates thousands of nominations each year. Theawards are presented by genuine Nobel laureates at Harvard University. 

For example, staying on the subject of cats, one of the winners was: Are cats liquid or solid? Seriously? 

Yes. ‘Can a Cat Be Both a Solid and a Liquid?’ was inspired by photos of cats tucked into glasses and buckets. The researchers used mathematical formulas to conclude that active young cats hold their physical shape longer than older felines. 

As bizarre as it can be. 

The awards are not for the best or worst, but rather to highlight research that encourages people to think in unusual ways. In 2010, Sir Andre Geim was awarded a Nobel Prize in physics for his work with graphene, thus becoming the first person to have received both a Nobel Prize and an individual Ig Nobel. 

First laugh then think

A sense of humour is beneficial because it allows for new concepts to be entertained, writes The Guardian. Today the “butterfly effect” is well understood: a small disturbance like the flapping of a butterfly’s wings can induce large consequences far away. Yet the image was meant to be a joke, dreamed up by the organiser of a conference when the father of chaos theory, Edward Lorenz, failed to come up with a title for the ground-breaking paper he was to present. Instead, one was invented and “Predictability: Does the Flap of a Butterfly’s Wings in Brazil Set Off a Tornado in Texas?” was humorously accepted.

Laughter is a serious business:

There are comic artists that have built castles on laughter of others. Itis a serious business to create memes, crack jokes, do stand-ups and deliver crackling statements. Comic columns whether Dilbert or RK laxman and many others use humour to leave a thought. 

Using humor to bring attention to something has been a serious business. Bewakoof, the apparel brand, has built an empire of more than 10 million customers who have engaged on the basis of humor based social media interactions and merchandise. 

In today’s Habits for Thinking, the attention is on the humor, the subtle humor, the not-so-subtle humor and the gargantuan laughter. Each one brings some meaning to the workplace. Like the butterfly effect in the research that earns a name by being a subtle title and the Ig Nobel Awards that are not so subtle in humor, these layers of joy add more fuel to the curiosity. 

Being foolish, being humorous and bringing humor and foolishness is a sign of intelligence, a sign of curiosity, a sign of growth. 

Steve Jobs said in his famous Stanford commencement address: 

Much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. 

On the back cover of their final issue (The Whole Earth Catalog, a magazine he loved dearly) was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: “Stay Hungry. Stay Foolish.” It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Stay Hungry. Stay Foolish.

First laugh, then think.

Managing Monkey Business through Interventions 

No, not monkey business but monkeys create actual business. A morning walk in the outskirts of Bangalore, near the airport, took me to acres of lush green grape vines sprawling a few meters above the earth trained meticulously on trellis. A peek inside the vine and you see green and dark bunches of grapes facing downwards, getting ready to be plucked in a few weeks. A glance above the vine and all you can see is meters of plastic net covering the plantation. Why? To keep it safe from monkey menace in the area. A quick Google throws up a list of vendors who have become experts for providing safety nets for monkeys, whether at farms or at balconies. A not so monkey business, a real business for many.

Monkey business, the phrase that stands for silly or mischievous behaviour, must have struck with Netflix engineers when they designed a system to play mischief with their own network system. They called it Chaos Monkey.  Chaos Monkey, Netflix’s resiliency tool  is responsible for randomly terminating instances in the network to ensure that engineers implement their services to be resilient to instance failures. Chaos Monkey, a successful tool available now since 2010 is based on the concept of Chaos Engineering.

Chaos Engineering is a disciplined approach to identify failures before they become outages. By proactively testing how a system responds to failure conditions, you can identify and fix failures before they become public facing outages. Chaos Engineering lets you validate what you think will happen with what is actually happening in your systems. By performing the smallest possible experiments you can measure, you’re able to “break things on purpose” in order to learn how to build more resilient systems.

Chaos Monkey, monkey-like randomness and mischief and the plastic net that covers grapevines are instances of interventions to prevent the systems and farming from failure, especially from monkey-like, random attacks.  Interventions to bring in behaviour change have a similar effect, prevention from wavering away from the goal.

Our work life is replete with randomness, activities and distractions that derail our performance. Most of these activities are not well defined but are as random and mischief as a monkey that destroys the productivity crop from time to time. Reasons like work overload, fatigue, communication gap with the boss, non clarity in the goal and expectation, non cohesive team etc.  could deviate from active performance. Not just external factors, individual habits and way of thinking can also be a deterrent to optimal performance. These external and internal causes and aberrations can be seen as monkeys attacking the system and can be tackled through interventions. In this Habits for Forward Thinking article, let me bring your attention to psychological interventions that help one achieve goals, personal and professional. 

What are interventions? Psychological interventions are any set of strategies that are used to change behaviors, emotions, or cognitions to produce a personal change leading to higher functional results. 

Interventions in Sports: 

Sports personalities are the ultimate example of human level performances. Here is an excerpt from a research paper of Interventions in Sports performance to help you understand the significance of interventions:  

“Psychological skills training” is a term that “was coined to describe techniques and strategies designed to teach or enhance mental skills that facilitate performance and a positive approach to sport competition”

The paper talks about, ‘When researchers and practitioners are developing psychological skills training interventions it is important that they make a clear distinction between psychological qualities, psychological skills, and psychological strategies. “Psychological qualities” are the characteristics or attributes that facilitate optimal performance, and they can be experienced to varying degrees (e.g., high and low self-confidence; Holland, Woodcock, Cumming, & Duda, 2010). “Psychological skills” involve the ability to regulate psychological qualities, such as the ability to maintain self-confidence (Holland et al., 2010; Vealey, 1988). “Psychological strategies” are the interventions or the methods used to purposefully teach those psychological skills and qualities (e.g., thought control; Vealey, 1988).

The psychological techniques that have been most widely used by sport psychology practitioners, and the focus of most intervention research, are imagery, goal-setting, thought management and self-talk, and physical relaxation.

Interventions in Education: 

Schools, especially ones with a focus on the mental well being of students, have a team of special educators to identify, intervene and nurture students for their optimal performance. Interventions are designed to help students that have a slower learning process than their batchmates. Interventions are also designed to make bright, gifted kids in the class to outperform his or her own achievements. Interventions are not necessarily only meant for corrections in behaviour, they are also designed to bring enhancement in performance. 

Interventions in Worklife:

Interventions, as the name suggests, is a set of sequenced and planned actions or events intended to help the organization exercise its effectiveness. Intervention purposely disrupt the status quo. As quoted in a note from McKinsey, “Many L&D functions embrace a framework known as “70:20:10,” in which 70 percent of learning takes place on the job, 20 percent through interaction and collaboration, and 10 percent through formal-learning interventions. These percentages are general guidelines and vary by industry and organization. Today, L&D leaders must design and implement interventions that support informal learning, including coaching and mentoring, on-the-job instruction, apprenticeships, leadership shadowing, action-based learning, on-demand access to digital learning, and lunch-and-learn sessions. Social technologies play a growing role in connecting experts and creating and sharing knowledge.”

 At corporate levels, interventions can be designed to work at the organization level for example- declaring a 3 day long weekend to battle fatigue of the organisation or interventions can be personalised at an individual level like a planned conversation session between two people affecting each other’s performance in a negative way. To adopt diversity and inclusion, L&D teams are strategizing interventions to bring required behaviour change at a cultural level. 

Interventions need not be addressed only by psychologists. Team leaders, managers, human resources team, anyone willing to understand the problem can identify the need for intervention. You and I, any individual, if feeling stuck in a situation can look for intervention as a measure to step out. 

There is a word of caution. Too much intervention or bad timing or a bad strategy of intervention can be harmful. In such cases, one must remember, sometimes doing nothing is an intervention too. There is a word for overdose of intervention- iatrogenics– when a treatment causes more harm than benefit. As iatros means healer in Greek, the word means “caused by the healer” or “brought by the healer.”  Healer, in this sense, need not mean doctor, but anyone intervening to solve a problem.

It is in human nature to react to a situation and take action. If the net outcome result of intervening is negative, then one must refrain from intervening. Doing nothing in some cases to keep a net positive result is an intervention too. At the same time, too much intervention is almost like putting a thick black cover instead of a net to protect the grape farms from monkeys. Thick cover will stunt the growth by stopping sunlight and air and thus kill the plants, so does wrong intervention strategy.  

Planning and designing interventions are like preparing to manage monkey menace. Some are small, some are big, some come as individuals and some come as barrels. Interventions, like the net, or chaos monkey of Netflix, prepare to become resilient and let the growth prosper, before the menace becomes the outage. 

It is not a monkey business to manage monkey menace.


Habits for Forward Thinking is your place to grow. Read more here.

The Phenomenon called Pradeep Guha

‘Etsy’ said the Facebook representative and a few heads turned towards me. It was mid-morning on a sunny October day in San Francisco, nearly a decade ago. The IAA* Indian delegation of twenty people were seated in a small room at Facebook headquarters with a bright orange wall on the backside. As a part of the delegation,I was attending a session by Facebook’s Paul Adams on building communities. It was 2012, when the words ‘digital communities’ appeared like precious jewels in our conversations, in small quantities. Building communities as a business model was new for the world and Facebook was showing the path, in action and in presentations. The speaker was then head of Facebook planning and had just released a book titled ‘Grouped’ on communities which we later received as a gift. 

Led by Pradeep Guha, IAA had organised a digital tour for the CEOs to the USA to visit and learn from the big tech companies. The 2012 digital tour was the second initiative from IAA  and I had onboarded the delegation to visit Microsoft, Youtube, Facebook, Google, Twitter.

That October morning, at the Facebook headquarters, in the middle of a talk by Facebook, I had earned a special spot in Pradeep Guha’s thoughts. Before the start of the tour, in Pradeep Guha’s Mumbai office, sitting across his large wooden table, I had requested him to include a visit to the Etsy office too. A listed company, Etsy is dedicated to building small, home grown businesses and has been building communities since its inception. Those days Etsy was not widely popular. PG was not familiar with Etsy but he took interest in my conversation on Etsy.  So as the Facebook speaker talked about ETSY as the leading example in building communities, Pradeep Guha, sitting at the centre of the table, leaned forward and gestured a thumbs up to me. And, the heads on the table turned in my direction on this rare appreciation coming from him. I was suddenly noticed. Etsy had marked a respectable spot for me in his mind. 

Pradeep Guha
Pradeep Guha at Microsoft, Seattle, 2012
IAA Team Pradeep Guha Vishakha Singh
IAA- India Chapter delegation at Big Tech Companies. 2012

In today’s Habits for Thinking, I want to bring your attention to the phenomenon called Pradeep Guha. To the unknown, you can read about Pradeep Guha in the tribute written here and a lot over the internet. 

The Curious: 

Techcrunch Disrupt is an annual event held in San Francisco for the tech startup world. It not only showcases new ideas but also the making of ideas, successes and failures. I had described the event to PG and had recommended him to attend it. One fine morning in 2019, I received a message from him on how excited he was to attend it. Curiosity fuels learning and he stayed at the top of knowledge by attending not just Techcrunch but also Singularity University and some other courses. A sharp thinker feeds his mind with new knowledge. He makes efforts to attend courses to learn and unlearn, no matter his age or designation. This is what Pradeep Guha maintained. It was not just an Etsy moment at Facebook, PG made efforts to learn the new from across fields and continents. He displayed curiosity with a proficiency that lacked any arrogance, the arrogance that becomes a second nature for being successful for a long time. 

The secret of making a phenomenon is to live a life with a growth mindset, to stay curious and to hone the knowledge. 

The Contrast:

What is the opposite of grand? Insignificant. To balance the two opposites effortlessly is a magical trait and that is what came easy to the phenomenon called PG. He always came up with a grand vision but stayed true to the most insignificant details in execution of that vision. There was never any room for error in execution of the grandest of the vision. This reflected in all aspects of his work whether it was related to media selling by designing Mastermind or in creation of landmark events or even in maintaining his relationships with the world. He effortlessly balanced the contrast of big and trivial detail. It was neither compromised nor showcased. The balancing of the contrast was a given, it came like yin and yang, always together.

The Compassionate: 

Pradeep Guha, the media stalwart passed away on 21st August 2021. On 9th August, I had a message exchange where he wrote to me saying, “All good, thank you.” The news of his passing filled me with all shades of emotions, primarily being upset. He had hidden the suffering, at the same time, he had responded. When tributes poured in, all of it had the same tone of how he made people feel very special. Losing him became a personal loss on a mass level. Another contrast. His ability to connect, support, bind with people is an ability less possessed by leaders. I was a nobody in his aura of things but from time to time I received a message, sometimes a gentle scolding for staying quiet for months. His ability to keep people in his thoughts, to make them feel important and needed is a lesson in generosity. It was a construct maintained over the years. Not just colleagues and friends, he maintained a magical vibe with celebrities too. Renowned personalities treated him like their closest pal, yet he asked for a picture to keep the podium well defined for both. 

Pradeep Guha and Nandan Nilekani. Kochi. 2019.

Pradeep Guha, the phenomenon, lit the path with his way of life, with childlike curiosity, manlike balancing of contrast and naturelike compassion for people. All we need to do is to keep the lights on.

*International Advertising Association

3 essential tools for leaders to embrace diversity

‘A hand gesture that involves rotating your wrist externally as your thumb, index and middle finger unfurl open.” Do you know what it is? 

That is the name sign for US Vice President Kamala Harris. Name signs, also known as sign names, are an important component of deaf culture. They provide deaf people with a way to identify themselves and others in conversation, while also representing “a Deaf person’s membership in the Deaf community.” 

The selection of the name sign for Kamala Harris was itself a process done by the community which was inclusive and diverse. Five women- Ebony Gooden, Kavita Pipalia, Smita Kothari, Candace Jones and Arlene Ngalle-Paryani — as Black and Indian members of the “capital D Deaf community”* — felt it was important that the selection of Ms. Harris’s name sign be the result of an inclusive and democratic process. Given that Vice President Harris was the first female vice president, as well as the first Black and Indian candidate to fill the role, they agreed that her heritage should inform that process, the women recalled in an interview using interpreters.

Name sign Kamala Harris Deaf club

How did we pick this particular sign name? I want to explain briefly about Kamala Harris. She did ask people to use her name, Kamala, because it means a lot to her. “Kamala” means a lotus flower. I will explain briefly what a lotus flower means. Purity. Enlightenment. Rebirth. A lotus flower has strong roots that can bore through dirt. The flower shows its beauty when it blooms. I am making it an analogy with Kamala, who appears in the midst of a dark and divided America. She brings enlightenment and purity. Rebirth. Why do we use three fingers? It’s because she is the first Black, Indian, and female, and it is represented in the three fingers that bloom. She’s not the “first” but has “three firsts.” Kamala! 

-Explanation on the name sign

A name is an identity. It doesn’t matter which language, spoken or sign, native or acquired. A name marks the place of shared culture, of shared values. Deaf people have become more engaged in the process of selecting name signs for hearing politicians and well-known individuals. It is a way for people to acknowledge those individuals “and show alliance with them,” said the article in the New York Times. 

You create a language to stand in and not out, to come together. You create a name sign to be understood, to include diversity and in this Independence day edition of Habits for Thinking, I want your attention on embracing diversity at workplaces. Embracing diversity in a culture depends on how we think and act. 

In today’s Habits for Thinking, the focus is on leaders who are increasingly working on diversity and inclusion at workplaces, especially gender diversity. Gender diversity is being seeded through several corporate policies. The workforce is growing with more diverse recruitments, the first step in bringing in diversity. Recruitment needs to be followed by adopting diversity across the organisation as a part of regular life. Providing support facilities to attract and recruit  like extended leaves, child care support etc is the easy part of encouraging gender diversity. The tougher part is to genuinely embrace diversity as a culture of the organisation. An embraced diverse culture means everyone has a voice to share, everyone feels heard, everyone belongs to the community equally and everyone becomes responsible for the diverse culture to grow. It is only when people are heard and own a share of voice is when there can be a real growth, growth of people, growth of the organisation and growth of diversity. 

Gender Equality UN Goal 5

Diversity is accepting the diverse opinion and thoughts in a culture. But how does a culture embrace diversity? The culture, unless it is a startup venture, has been around for years, even before the diversity policy came in. To make room for diversity, the culture needs to evolve and that can only happen through a mindset shift of its people. The mindset change has good news and bad news. The bad news is that it is far tougher to achieve behavioural change  than creating support facilities. The good news is more and more people are open and ready to be guided for the shift. All it takes is a leader to walk the path of embracing diversity.  A leader shapes the culture and the culture can be chiseled through three essential tools to embrace diversity: 

1. Show, don’t tell to address diversity: 

Telling people to embrace diversity is not enough. The leader has to show the action by designing processes that bring in change. The processes that are aligned to the mission of diversity drive should be measurable. One must remember, what gets measured, gets done. Showing is not only restricted to action and processes, showing through visuals is critical too. Women are called ‘the invisible workforce’ both at home and at workplaces. In large organisations, to enable women to step up for leadership roles, it is important to create opportunities to showcase the faces behind the work. It is infectious, it inspires others to step up and makes everyone feel heard.

2. Language to weave diversity in the culture: 

The language that the leader uses acts as a moral compass for the people, influencing how they think, act and feel in different situations. An article in Harvard Business Review talks about how languages shape the organisation. The article states, “Your influence over the behavior of your people is not limited to carefully-prescribed internal communications; it lies in the daily sentiments, conversations and values you share. The best leaders understand this — like Horst Schulze of Ritz-Carlton, who shaped his employee’s decorum and conduct with “We’re ladies and gentlemen serving ladies and gentlemen.” These leaders used simple, highly motivating and prescriptive words that set the right cultural permission for their organizations. This language, carefully articulated and shared, offers rich opportunities to codify and crystallize what your company is about, and what your company seeks. 

3. Shift mindsets through nudges

Gender Diversity is a fundamental need. It is not only about following a mandated policy. It is a war against generations of societal biases that have made the gap so wide and so large that it is difficult to be ironed out. Deep rooted attitudes about the role of women in society leads to biases like availability bias where you think and react to a situation with what is available as an easy information in your mind. This bias gets ironed out by a disciplined mindset shift. You work on your habits to change your attitude. Behavioural nudges work as reminders at the appropriate time to help in changing habits and behaviours of people, organisations. Read more about nudge here in an earlier article written by me. 

A diverse team of women came together to bridge the gap between deaf and non deaf community by assigning a name sign for the first woman of color, The Vice President. Using the first three fingers they not only designed her name sign, they showed the path that the bridge of inclusion and diversity can be made through language. All we need to do is consciously change our habits to think and act in the right manner. 

*(a term used by some deaf people to indicate that they embrace deafness as a cultural identity and communicate primarily through ASL) 

The magic that makes good to great: Sindhu, Chanu, Deepinder, Falguni

“She had tears in her eyes. I told her to think it was a gift for me,” PV Sindhu’s father lifted her spirits when the semi final defeat to Tai Tzu-Ying on Saturday weighed her down. 

“Through all your experiences of ups and downs, did you ever come close to giving up in all these 12-odd years?” asked the interviewer. 

“About a couple of times every week,’’ answered Deepinder Goyal, in his interview after Zomato’s IPO.  

The timelines are palpitating with sheer excitement and nervousness floating when history is in the making, whether in the Olympics stadiums or at Dalal Street. Both sports and startups personalities are weaving some magic in the air. It is filled with hope, with ambition and dreams and most importantly it seems achievable. Yes, we can do it. 

PV Sindhu won her second medal at the Olympics last week. It makes her the first Indian woman to win two medals at the Olympics. Also, in the same week Deepinder Goyal’s startup, Zomato rang the opening bell at the stock market. The event makes him the first startup boy, made-in-India, to reach this high level of success. Zomato’s listing is not only impressive because it is the first new-age startup, but also because it is the first company without profits in its books that has pocketed the likes of people. It doesn’t stop here, there are more names. Chanu Saikom Mirabai, Rani Rampal, Ravi Kumar Dahiya, P R Sreejesh, Simranjeet Singh, Savita Punia and the list goes on for athletes who have been shining bright at the Olympics. In a parallel startup world, being successfully listed at the stock market is almost equivalent to securing an olympic medal. Zomato is a new age startup that had its IPO recently. The next in the pipeline is Nykaa. Cartrade, Mobikwik and several others are waiting in the wings. It is just the beginning.

From Olympics to startups, the made-in-India story is not a story of fiction or mere skill, hardwork and grit. It is the story of leadership, leadership of not just excellence but where the ambition for the mission and institution, exceeds the ambition for the self. In today’s column, I bring to you an understanding of a leadership personality trait that takes goodness to greatness, in both sports and startups. It is called Level 5 Leadership. 

Level 5 leadership is a concept developed in the book Good to Great. Level 5 leaders display a powerful mixture of personal humility and indomitable will. They’re incredibly ambitious, but their ambition is first and foremost for the cause, for the organization and its purpose, not themselves.

As the events unfolded in both startups and the sports world, it became clearer that how the two worlds are similar in performance and delivery. Like an athlete is developed by a village of experts, startups are run by leaders supported by teams across all functions. An athlete digs deeper inside her for courage, so does the founder. The stories of sports and startups match. The leadership style matches. 

Grit and hardwork:

Mirabai Chanu’s  self-discovery of weightlifting started with carrying firewood from the jungle at the age of 12. To train she travelled 40kms everyday. “At times, she would hitch a ride on a truck or if she got lucky share a tuk-tuk, some days she would cycle, and some days she would come half the way and then walk back home. She never threw in the towel,” her mother Tombi Devi said in an interview. 

Deepinder Goyal’s childhood training was to save himself from terrorists. Here is an excerpt from his mentor and investor Sanjeev Bhikchandani: He was born in Muktsar – a small town in Punjab in 1983. His father was a teacher in a government school. For the first ten years of his life the family lived in the fear of terrorists. As a child he was tutored by his parents that if the terrorists ever came he should tell them that his name was Deepinder and he was a Sikh. That way they would spare his life even if they killed his parents. Thankfully the terrorists never came.

When he was fifteen his parents sent him to Chandigarh to study for the last two years in school. He lived in a hostel – ragging was tough but he survived. Academically he was totally out of his depth initially since the standard of study was far higher than he had ever encountered. But he tried hard and managed to clear the IIT entrance examination. From IIT he went to Bain and then launched Foodiebay which became Zomato later on.

Skill and speed: 

Sjoerd Marijne, the Indian Hockey girls team coach, talks about Rani Rampal’s skills in a story by Sharda Ugra. The secret sauce, he says, about her physical properties lies in the fact “that she is faster with the ball than without the ball.” With the ball on her stick, she turns into an elusive quicksilver with the most minimal feints and dummies, wrong-footing defenders, leaving them behind, earning her extra slices of time. During a training run, Marijne said he asked the faster players to hustle against Rani, press hard and fast around her, but still she slipped through. Later, she told the bemused Marijne, “She might be faster with the ball, but I am quicker with the thinking.”

Pandemic lockdown in 2020 had presented a problem for businesses. Falguni Nayar knew it would take some quick pivots and strategic thinking to keep the business rolling. And Nayar didn’t waste any time. With operations and logistics coming to a halt, she decided to sell everyday essentials online. “Overnight we pivoted to an essentials-only online store and to handle that we utilised our 70 offline stores across the country to do hyperlocal delivery,” says the 57-year-old Nayar. The hyperlocal focus was, of course, because intra-state shipment of products was restricted during the initial phase of the lockdown. “We would match the products ordered online with what was available at the store to deliver to the nearest pin code,” she adds, as mentioned in an article

Like hardwork and determination, skills and speed to execute is an essential path to being successful in both sports and startups. What separates the good to great is the level of leadership that they exhibit. Jim Collins, in his book Good to Great illustrated that long lasting companies are built by level 5 leaders. Level 1 being a highly capable individual, Level 2- contributing team member, Level 3- a competent manager, Level 4- Effective leader, Level 5 – builds enduring greatness.  

Level 5 leadership trait that makes them good to great: 

It is not that level 5 leaders have no ego or self interest. Indeed they are incredibly ambitious- but their ambition is first and foremost for the institution, not themselves.  For Sindhu, who aspired to get a Gold at Tokyo 2020 faced a setback with the loss in semifinals. 

She gathered courage and focus to fight again to earn a bronze, for herself and for the country. 

Deepinder Goyal, continues on giving up: “It is about how fast you can pick yourself up and get back.” In another conversation he gives a peek into his thoughts while talking about delivery partners. He says, “We are always focused on doing more for them, doing better for them” showing his larger mission. 

Nykaa’s Falguni Nayyar has carved her own successful path operating in a highly competitive space with giants like Amazon and Flipkart. She has skillfully built the company in a capital intensive space, has made it profitable and brought it to IPO stage. 

The unwavering resolve, to do what must be done for the success, no matter how deep they have to dig inside themselves for courage and clarity, is what takes them from good to great. 

Level 5 leaders are fanatically driven, infected with an incurable need to produce sustained results. They are resolved to do whatever it takes to make the company great, no matter how big or hard the decisions. 

That is how the leaders have performed and achieved, in sports and in startups. P.V Sindhu, Mirabai Chanu, Deepinder Goyal, Falguni Nayar. The unwavering resolve of a Level-5 leadership to dig to leap from goodness to greatness. 

Good to great


Surviving Availability Bias in Our Decisions

The man behind the counter placed a pair of glasses on my nose and suddenly split his leg wide open, like baby giraffes do. Baby giraffes, whose neck is not long enough to reach parts of a tree, gather food from the ground. But instead of bending the knee, they split wide open their front legs so that the neck can reach the ground. Grown up giraffes also do a split to drink water. It was a Sunday morning and I was in an eyewear store to get a new pair of glasses. The salesman, a tall man, much taller than my five feet six inches, was taking measurements on my selected frame. That moment, when he split his legs to bring his eye level to mine, it reminded me of the giraffe. The man was measuring the centre of my progressive lens. Now to understand the centre, one must understand the way progressive lens are made. Progressive lens are the lens that helps you see clear sight both for far objects and near objects like. But a lens comprises physics. It can’t be merged into one. So there are bifocal lens which have a clear line demarcating the lens for far vision from the lens for near vision and then there are progressive, the seamless lens where you do not see a line dividing a far vision, a near vision. Both merge in the centre for intermediate vision. Intermediate vision is where you look straight, not down, not far into an object, at a closer distance like a computer screen. The centre point is significant because it depends on the shape of your frame, how the frame sits on your nose and the centre of your vision. It is the ultimate personalisation in a progressive glass that is a necessity. It is measured by both machines and opticians to arrive at an accuracy level.  At the store, I had gone through machine measurement and here I was, in front of the tall, gentle-like-giraffe salesman, in a split position to come down to my eye level. He had made a mark on my glass with a blue marker pen. 

Progressive lens

This was my second trip to the store, an old chain of eyewear. Nearly six years ago I was here to get my first pair of progressive glasses.The between years, from the first one to this one, took me to a new age, online-offline integrated eyewear retail that had mushroomed all around in the city and screens. They had made the second one for me and were quick to replace my frame and lens when pandemic restricted services. It was all easy-peasy, until a prolonged neck stiffness took me to physiotherapy sessions and I circled back to this eye-wear store to treat my neck. My neck and shoulder have been ruined due to hours of being on the computer and due to the error made in my progressive glass where the centre was not in the centre. It was meant to look at the computer screen straight, while I had been lifting my neck to get clear vision from the bottom of the lens. 

That Sunday morning, I had shared this challenge with the optician at the store. They had just taken my eye measurement through a machine. The good part of the machine is that it makes you less judgemental about yourself. Have you ever sat on an ophthalmologist’s chair where he tries minutely differing lenses and you get confused which one is the clearest. So in a way it was good that the guys used a machine to measure pupil’s centre, eye movements etc through a machine. But it was not enough, as here I was, against a counter, looking straight wearing trial lenses and he, on the other side, in a split position, marking on my lens. He took three measurements. Two differed so he used a blue and red pen to mark it. To verify, he called another colleague- a man of a similar height of mine, to see which one was accurate. The man announced a color. But they were still not satisfied. So they called another gentleman, in a uniform which clearly designated him as a senior of all other salesmen in a crisp white shirt with a tie, while others were people wearing blue. This man had to stand on his toes, in a tippy toe way to be at my level. One color mark on my lens was pronounced the winner. From a giraffe split to a straight standing man to a ballerina tip toe, I had men measuring my lens and it’s centre or the fitting height. 

Here I was, a customer amongst two-three trained salesmen, perfecting their skill on the progressive lens and reminding me of how my biases failed me. 

In today’s Habits for Thinking let me bring the focus to availability heuristic. In simple words, a heuristic is a shortcut in decision making.  

What is the availability heuristic?

The availability heuristic describes our tendency to use information that comes to mind quickly and easily when making decisions about the future.

Availability heuristic has been extended to machine heuristic. In a study, people who trusted machines were significantly more likely to hand over their credit card numbers to a computerized travel agent than a human travel agent. A bias that that machines are more trustworthy and secure than people—or the machine heuristic—may be behind the effect, said S. Shyam Sundar, James P. Jimirro Professor of Media Effects, co-director of the Media Effects Research Laboratory and affiliate of Penn State’s Institute for CyberScience (ICS). “This tendency to trust the machine agent more than the human agent was much stronger for people who were high on the belief in the machine heuristic,” said Sundar.

This is what happened to me where my lack of knowledge regarding progressive lenses coupled with machine heuristic, read trust in technology, led me to ignorance about wrong fitted glasses. 

Excerpt from my previous article on : 
What is Availability bias: All of us have the tendency to use information that comes to mind quickly and easily when making decisions about the future. Our memory is stronger of things that have vivid narration. This availability of our thoughts impacts our decision making.Studies have shown that victims and near victims spend on insurance purchases and protective action after disasters. Another example is you tend to handover a new project to a team member who has a clean recent record and not to an equally competent member who committed a small error recently. This is something similar to recency bias in investing where one tends to take investment decisions based on recent memorable events.

Availability heuristic in the case of trusting that a new age eyewear company is following all the processes is a natural phenomena. For example,  Amazon has made us believe that delivery and return is the easiest thing in e-commerce. So when a delivery is delayed or a return is cumbersome from another e-commerce business, we tend to get upset because our availability bias makes it tough to accept the delayed delivery. 

The first step is to understand the existence of availability bias as mentioned above. The second step is to think methodically about it.

1. Ask for Facts to avoid availability bias:

Availability bias means the mind retrieves the information that is easiest to recall. The mind anchors the latest memory. The last event, like a failure of a recent project, can stay in memory and may make you ignore the entire year’s performance of a person.  In such a case, an effort to take a look at the entire year’s report about the performance needs to be anchored around. 

A habit of presenting your mind with long term facts helps in clearing the bias. 

2. Practice Inversion Thinking to deal with availability bias:

Incase of high impact and irreversible decisions, practice inversion thinking while making decisions. For example, making an investment decision is sometimes colored by availability bias. One example can be the entire team thinking on similar lines. Inversion helps in questioning areas that could have been missed. (Read more about inversion thinking here)

Three men at the eyewear store took turns to remind me that my availability bias, the recall of online and technology trust, didn’t let me question my ill-fitted lens. It is a natural human behaviour.  It happens with us many times. We think the coach we have for the team is the best and knows the job, because he has been a star coach for so many others. We think that this stock has to be bought during the IPO because it is all over the newspapers. We think of what is available for us to think. 

To drink, giraffes first have to splay their forelegs and/or bend their knees, and only then can they lower their necks to reach the surface of the water. To protect the giraffe’s brain from sudden changes in blood pressure when it lowers its head to drink, it has valves to stop the back-flow of blood and elastic-walled vessels that dilate and constrict to manage flow. These are survival of the fittest adaptations. 

We humans need to have thinking adaptations too to survive. Availability bias is a mental model that needs to be worked upon consciously, through processes, to survive decisions.

Survival GIraffe

SHIFT, the online-offline course, next Cohort is starting 16th August. See the introductory video here. Reach out through this form for details/queries:

Reflection

“By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience which is bitterest.”

Confucius

This week, on Habits for Thinking, instead of talking about a topic, let us take a pause to reflect on our journey of ‘thinking about thinking.’

Reflection is an essential part of any learning process. It is not just about what you have learnt, it is also about how and why.

Here is a link to a small form with just 10 questions to help you reflect. I look forward to reading your reflections in this journey of Habits for Thinking. 

The Flywheel Of Growth: Three Essential Tenets

“Dig in and pull only when you hear go,” shouted my friend, a father of two little boys. Before I could repeat for the children standing closer to me, at the far end from where my friend was, I could hear him shout three, two, one and… A few of us were helping some little kids play a tug of war between two neighbouring housing societies. As the kids lined up, we realised the kids from our apartment were little children in their fives and sevens, definitely looked tinier than the kids on the other side, who were more like ten year olds. A fun game, but there is no one who doesn’t want to win. Realising this difference between the two sides, my friend and some of us who were standing on the sides, jumped closer to our gang of little kids, screaming instructions, lining up height wise and just getting them more organised. As some more kids ran and joined the tug of war on both sides, suddenly the attention shifted to this area and we noticed the imbalance. I remember the friend shouting three, two, one and I joined him in … GO. 

Our little gang, as instructed, pulled at one go. And yeah, despite being tinier than the other lot, they were able to pull the opposite team down on the grass. We won. No one expected it. Everything happened at a fast pace, the coming together of kids on both sides, cheering and running parents and the referee standing in the centre blowing the whistle to begin. Ecstatic was the word for the winning team’s reaction. Magic was the word that the losing team thought of when they saw a younger team pulling them down. Collaborative effort is what my friend smiled as his timely strategy worked. He had noticed that kids on both sides of the rope were not organised, it took him a loud voice to get them together and act. 

Business life is also a tug of war, not with another competitor but with the market forces itself. It is not about winning just one tug of war, but it is about continuously winning many tug of wars. In this week’s Habits for Thinking, I want to bring your attention to a concept highlighted by Jim Collins, author, Good to Great  – called the Flywheel effect. 

Here is an excerpt: 

Pushing with great effort, you get the flywheel to inch forward, moving almost imperceptible at first. You keep pushing and after two or three hours of persistent effort, you get the flywheel to complete one entire turn. 

You keep pushing and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation. You keep pushing in a consistent direction. Three turns… four…five… six… the flywheel builds up speed, seven … eight… keep pushing… nine… ten… it builds momentum… eleven… twelve…. Moving faster with each turn…. Twenty… thirty… fifty…. A hundred. Then at some point- breakthrough!  The momentum of the thing kicks in your favour, hurling the flywheel forward, turn after turn,,, whoosh!… its own heavy weight working for you. You are pushing no harder than during the first rotation, but the flywheel goes faster and faster. Each turn of the flywheel builds upon work done earlier, compounding your investment of effort. 

What was the one thing that caused things to go so fast? You wouldn’t be able to answer. Flywheel momentum is not an act of one big innovation, it is a combined effort of many small activities. 

For example, free shipping by Amazon is considered to have greased the flywheel for Amazon. “People who want something in 2 days are going to pay for it, but everyone who wants free shipping will get their stuff in 5 days,” says Jason Child, who describes the 2001 shipping fees debate as fundamental for the Amazon Prime program and Amazon’s explosive growth. The team was debating whether free shipping would cannibalize their revenue from shipping. The decision to offer free shipping to Amazon Prime customers was a journey from a debate to trials to a success story today. 

Not every idea is successful. Amazon too had launched and withdrawn other ideas. For example, placing a button on the fridge of the household for monthly repeat orders. These were called Amazon Dash buttons. It was rolled out only in a few markets. Designed as a stick-on button to be placed on the fridge or any convenient location, the button made it easier for customers to quickly reorder frequently used household items like paper towels, detergents, soaps etc.  The idea was to make it effortless for frequently ordering items. It didn’t roll out in many markets and after a few years of being in the market, Amazon pulled it out of the market a couple of years ago. 

Free shipping is not just one push in the giant flywheel of Amazon. There are several other activities too. Like getting to put the customer order in a package under a certain time limit in the inventory team. Or, to work on the ease of returns and refund. Every step that solves a customer problem was not taken as one giant step but  was seen as a small push in that area. The only common thread across all teams is focussed towards the goal: customer satisfaction. 

Several initiatives by Amazon have kept the Amazon flywheel in momentum. 

Flywheel is not one giant push. It is a matter of gaining momentum through multiple initiatives. Keeping the flywheel in motion is about keeping the business in good shape. The Flywheel of growth is fueled not by several push initiatives but is also strengthened by three tenets: 

1. Discipline fuels the flywheel: 

The discipline of remaining aligned to the mission. The discipline of keeping the momentum going. The important part of the flywheel growth is it doesn’t stop turning.It takes a disciplined approach to keep the pace of the flywheel. Success often makes businesses complacent. The discipline of turning customer knowledge into action, reading market pulse and maintaining the rigor does not allow any complacency to set in. 

2.Innovation adds to the flywheel momentum:

Flywheels do not move overnight. As a startup, a new innovation in product or service, customer engagement gets the flywheel moving. But as the startup moves and the flywheel gains momentum, the culture of innovation starts working on creating the next push for the flywheel. In established companies too the innovation culture has to keep the flywheel moving in the new digital world. A discipline of prototyping, testing, redesigning or embracing failure for that product or service makes the culture of innovation.

For example: UPS, the global shipping and logistics firm, took an innovative step. Realising the growth of small medium enterprises and e-commerce, UPS launched a new technology company called Ware2Go aimed at connecting small- and medium-sized businesses with warehouses to help streamline online orders. “This is really a technology and platform company – more than a services business – with merchants on one side, looking for order fulfillment capabilities, warehouses looking to fill space appropriately. We wanted to build that using the best of both worlds,” said Nick Basford, vice president of global retail and e-commerce strategy for UPS. Ware2Go is one innovation push to UPS flywheel. 

But it doesn’t stop there. Recently, Ware2Go has added another offering – NetworkVu that analyzes merchant sales and transit data using machine learning with the aim of recommending ideal warehouse placements to small and medium enterprises. This is to maximize delivery speeds within ground networks and control costs.

Ware2go is a new business offering. It is further aided by recommendations for warehouse placements. Each of these add momentum to UPS flywheel business.  

3.People keep the flywheel in motion

The culture of flywheel is dependent on people- not just leadership but also on the middle management. To get teams aligned, especially the middle management aligned towards innovation is not an easy task as this set of people are focussed on regular work delivery. Also, flywheel can stop if the momentum drops due to leadership change, management change. If the business holds a strong culture of innovation and keeps the team aligned to the main purpose, businesses  get built further on with that culture. 

Discipline, Innovation and People are three essential tenets for keeping flywheel in motion. Getting complacent in any one area will initially slow the speed and later will bring it to a halt. It is almost like being in the tug of war and getting all three, the discipline, the culture of innovation and people digging in and pulling together with the sound Go.