Pingthink corp

October 2001 | Page 1

Growth acceleration workshop

Subba Iyer


PPING ING TTHINKHINK

Objectives

• Understand that growth is a default option

• Discuss growth choices:

– A dynamic situation and an environment

– An environment poised for change with multiple options

• See the “whole”in you, and not just the parts.

• Look at unconventional approaches -- the 10X imperative

• 3 surefire approaches that will improve your chances

significantly

• Case studies, examples, worksheets to stretch you

mentally

• Have serious fun!



Agenda and format:

• Agenda:

– Introduction

– Growth architecture

– Application (Robin Hood case study)

– Post case study conclusions.

– Unconventional approaches

– Some successful management

approaches for small business

– Case study (optional)

– 3 sure fire approaches to boost your

business.

• Format:

– Informal yet structured.

– 1 case study detailed analysis

– I case study (optional)

– Mini work sheets.

– Frankness and openness

– Challenging and respectful



Simple rules

1. in the beep-once or silent mode

2. You decide when to start and stop

3. You decide when you want breaks

4. The only foolish question is the one that was not asked

5. If you are glad, tell us about it

6. If you are sad or mad, tell us about it

7. We all accept responsibility for time boundaries

8. The agenda is flexible and we can change emphasis.



Our dialog:

“Dialogue is a stream of meaning flowing among and

through us, out of which will emerge some new

understanding. It’s something new, which may not have

been in the starting point at all. It is something creative.

And the shared meaning is the ‘glue’ or ‘cement’ that

holds people and societies together.”

- Dr. David Bohm



The only question:

When you hear an idea, thought or argument in this

workshop that is different from whatever you thought or

believed until now, are you willing to hold it in your

mind for the duration of this course, without rejecting it; to

examine it, reflect on it with an open mind, seek

clarification and express your own opinion about it in the

class?



Defining not just the levels, but the common context

1. Vision: Where We Will Be

2. Mission: Why We Exist

3. Goals: What Will Get Us There

4. Objectives: Major Steps We Will Take

5. Strategies: How We Will Go about Doing This

6. Tactics: Who Will Do What by When

7. Roles: Ownership of Tasks

8. Relationships: People Working for a Common Goal


How much should you grow?





Accounting way to look at the business

Sales

Costs

OperatingProfit

(EBIT)

Depreciation/

Amortization

Pre-tax profitEBT

Interest

EBITDACashflow

Tax Dividends

Retainedprofit



What is shareholder value?

Share holder value = Corporate value - debt

Corporate value =

Future cash flows

Discounted at the weighted average

cost of capital

Cash

Cash

WACC

RevenuesCash profit

TaxFixed assetsWorking capital

Cost of equityCost of debtCapital structureRisk



Free cash flow

EBITDA

Workingcapital

Fixedcapital

Tax Interest

Dividends

Share buy back

New equity

Free cash flow

Cash flow afterChanges in

financing

Profit is an opinion

Cash is a fact.



Are you just growing or are you rich?

3850

Revenue

3196

Costs

1303

CurrentAssets

377

Current liab

654

PBIT

236

Taxes

2028

Fixed assets

926

Working cap

418

NOPAT

2954

Ave assets

365

Cap charge

8.1%

WACC52

SVA

Sample illustration: Share holder value added calculation



7 levers to manage growth

• Sales growth (or what is called turnover growth)• Cash profit margin (EBITDA = Earnings before

interest, tax, depreciation and amortization)• Cash tax rate• Working capital (to grow the business)• Capital expenditure (a.k.a fixed capital to grow the

business)• WACC - the risk and inflation adjusted weighted

average cost of capital• Competitive advantage period.


Now, look at your business and analyze

The financials are over..let’s change the thinking hat..!!!



Growth success formula

THOUGHT

ATTENTION

LEADERSHIP

INTENSITY

TIME, RESOURCECOMMITMENTS

Give Capability and

Capacity building

As much importance as

Doing sales and

Doing your favorite /

Expert activity



Branches of the growth treeType, segment

Place, geography

Time/occasion

Value

Variety

Service

Best practice transfer

Process reengineering

Smarts

Organization effectiveness

People capabilities

Culture

Customergrowth

Value perCust growth

Learningrate

Pace of execution

ContributedValuegrowth

Productivitygrowth

ProfitableBusinessgrowth

ValueCreation

Productivity

Many aids exist to provide a path if you wish !



Situational leadership model

Participating /

Supporting

Selling /Coaching

Delegating /Empowering

Telling /Directing

Task BehaviorsLow High

High



Task oriented behavior

1. Goal Setting

2. Organizing

3. Establishing

4. Directing

5. Controlling



Relationship oriented behavior

1. Giving support

2. Communication

3. Facilitating

4. Active listening

5. Providing Feedback



Team readiness matrix

WILLINGNESS

ABILITY

L1-

Unable & Unwilling

L2-

Willing but Unable

L3-

Able but not Willing

L4-

Able and Willing



Situational leadership

R4 R3 R2 R1

Turn over responsibility for decisions and executing

Find out why the reluctance. Share ideas and help in decision making

Explain your decisions and provide opportunity for clarification

Provide specific instructions and closely supervise performance

Able and willing or confident

Able but unwilling or insecure

Unable but willing or confident

Unable and unwilling or

insecure Follower Directed

Leader Directed

How to do it……

Follower Readiness

Leader BehaviorS4 S3 S2 S1

DelegatingObservingMonitoringFulfilling

Understanding EncouragingCollaboratingCommitting

TrainingExplainingClarifyingMonitoring

TellingGuidingDirectingEstablishing



Can you continuously learn?

In times of change, learners inherit the earth;

while the learned find themselves beautifully

equipped to live in a world that no longer exists.

Eric Hoffer



Can you continuously lead?

The natural energy for changing reality comes

from holding a picture of what might be, that is

more important to people than what is.

Peter Senge

People don’t resist change; they resist

being changed

People do things for their reasons, not

yours



The core belief

Never underestimate the enemy. Respect him, but equally

always remember, regardless of the odd, team to team,

yours is better.

If there is any doubt in your mind in regard to this previous

sentence, you had better start training harder, or hand over

your command.

(source: Australian Army Leadership Manual 1994)



Case study : Robin Hood

• So, what’s the situation that Robin Hood is facing?• What approaches makes sense?• What are the underlying considerations for the approach?• What is unique about the approach?



Reflections:

• Any similarity between your growth dilemma and Robin Hood?

• Amongst the various approaches that have been outlined, which one seems the best?

• Which approach comes closer to your growth dilemma?• What are the implications for you?• What are the implications for the business model?






The growth trajectory

Growthoptions

LinearGradual

IncrementalRear-view

Non-linearUnreasonableBreakthroughForward view

Promise of the probable

Promise of the possible



Think different!

“Here's to the crazy ones, the misfits, the rebels, the

troublemakers, the round pegs in the square holes... the ones

who see things differently -- they're not fond of rules... You

can quote them, disagree with them, glorify or vilify them, but

the only thing you can't do is ignore them because they

change things... they push the human race forward, and while

some may see them as the crazy ones, we see genius,

because the ones who are crazy enough to think that they can

change the world, are the ones who do.”



25 words that changed a nation’s history

There are risks and costs to a program of action. But they

are far less than the long range risks and costs of

uncomfortable inaction -- J F Kennedy



Think shift

• Challenge the accepted wisdom

• Engineer the breakthrough.

• Hit the Reset :

• Say bye to the comfort zone

• Act as if your life depends on it

• No bad days

• You know what to do

Periodically

With a Counterview

Think afresh

Change with the changes

Stewards of outcomes

Choose your attitude

Realize and act on it



Mini exercise 1: Your comfort zone

• Step 1: Recognize that you are in the comfort zone

• Step 2: Revisit your motivation and business goals

• Step 3: Looking for what’s holding you back

• Step 4: Examine the consequences

• Step 5: Take one small action and one BIG ACTION.



Mini Exercise 2:

• Make a list of 10 to do items that can grow your business

by 2.5X in the next 18 months.

• Review the list.

• Review the list once again.

• Find just the one item that stands out

• Circle it

• DO IT.

You know what to do. Do it


Strategic thinking



Importance of time frames

History Weeks Months YearsDays

NOW

Operational

Tactical

Strategic

Tell me where you spend your time and I will tell you the health of your business.



From mindset to strategy options

Growthoptions

LinearGradual

IncrementalRear-view

Non-linearUnreasonableBreakthroughForward view

Promise of the probable

Promise of the possible

Strategy of probability

Strategy of possibility



Breakthrough thinking:

Think afresh

Change with the changes

Stewards of outcomes

Periodically

With a Counterview

Choose your attitude

Realize and act on it

Challenge the accepted wisdom

• Engineer the breakthrough.

• Hit the Reset :

• Say bye to the comfort zone

• Act as if your life depends on it

• No bad days

• You know what to do



Your strategic considerations

• If ever there was a way..

• I don’t know.

• The Merlin method :

• Think backwards

• Something worth accomplishing

• 10% or 10X thinking

• End from the beginning

I don’t know yet!

Be the possibility strategist

Seeing the end at the beginning

Reduce the detour

Invent the goal

Only way to stay ahead

What’s your exit



Mini Exercise: Your exit zone



Use a new perspective

• Why and why not?

• Breaking a compromise

• The opposite of truth:

• Think bigger

• Be afraid of the right thinking

• Give up prejudices

• Have a mentor

Do the critical factor analysis

Eliminate the standard approach

Is another truth

Stand for something

Use fear to create

Only way to stay ahead

A mastermind



Deming’s contribution:

Frame theproblem

Why?

Why?

Why?

Why?

Why?

Why?

Rootcause

Why?

Why?

Why?

Why?

Why?

Why?

Rootcause

Why?

Why?

Why?

Why?

Why?

Why?

Rootcause

Why?

Why?

Why?

Why?

Why?

Why?

Rootcause



Lemonade:Root case worksheet

• How many horizontals did you fill up?• How many verticals did you go down?• Did you see any cross-connection?



Exercise: Reverse the truth:

The Truth Reverse the Truth

We need more customers How can we make more money by having fewer customers?

We need more staff to expand our business

How can we serve more clients with having the same staff or lesser staff?

We don’t have enough time to get everything done

How can we do more in less time while working less?

Our competitors are forcing us to lower prices

How can we gain more business by raising prices?

The customer is always right The customer is often wrong; how can we turn that into an opportunity?



We have to lower prices to get higher market share

How can we use higher price position to attract better clients?

Our customers want greater selection

How can we profit by having a limited selection of exlcusive products?

Our support costs are driving us crazy

How can we turn support into a profit centre?

It takes too long to build a brand

How can we use our Brand -X status to build faster name recognition?

???? ???? ???? ????? ??? !!! !!!!! !!!!! !!!!! !!!! !!!!!!!!!!!!! !!!!!!!!! !!!!!!!! !!!!

The Truth Reverse the Truth


Execution



Execution

If companies were to become highly skilled at execution and

realize the full potential of their current strategies, the

increase in performance would be nearly 60% on average.

…

The elements of Dell business model are no secret.. So

why haven’t other companies been able to copy your

model? “ Because it takes more than strategy. It take years

of consistent execution for a company to achieve a

sustainable competitive advantage.” -- Michael Dell in HBR



Execution is difficult

• Involves a lot of people

• Spans over multiple time periods / locations

• Getting things done is a lot of grunt work.

• Strategy and execution are de-coupled

• Different kinds of drift -- from boredom to chaos

• Lack of will power

• Resistance



Simple sauce to guarantee execution

AccountabilitySet standards by personal example and peer pressure.

No whining zoneIf you are not part of the solution, you are the problem

Agreement Agreement is sacred and we shall honor it.

Regular tracking In God we trust, the rest we track

Reward the doers The Roman reward system



Effective mechanisms

Do less than other people -- just once

Most people do it thrice --anticipation, actuality and rumination.

Sacrifice is a commitment

Dump the insignificant things

Manage your time Do things that will have the biggest impact relative to what you are striving for!

Pain is given But, suffering is optional

Seek excellencePerfection comes as a side effect

Pingthink corp

Business

growth sales growth

growth choices

capital fixed capital

opinion cash

business capital expenditure

growth tree type

shareholder value

share holder value