Working with influencers can be costly proposition for brands. Identifying and continuous engagement with influencers requires investments and efforts to realize the benefits. Influencer aggregate sites like Tribe prove effective for large brands that wish to hire an influencer or growth hacker. Growing brands can pursue an organic approach to influencer marketing. Smarter companies pursue a smarter strategy of catching larvae early before it transform to a beautiful butterfly. They gain a larger traction and higher return on investment on influencer marketing by creating a portfolio of “emergent stars” rather than “shining stars”. Investing in emergent influencers is a cost effective solution.
So how do you choose an emerging influencer?. It is somewhat similar to how VC’s bet on startups and Horseplayers betting on the thoroughbred. Three common rules rule the game. First, check their online actions and sprints. Details of actions such as likes, poke, flares and comments serve as a useful DNA print of the likely influencer. Tools such as Buzzsumo, Social sprout and LinkedIn can be used to identify emergent influencers based on re-tweets, action ability, comments, likes and flares an individual can gather and create. A certain Facebook brand has around 2,500 likes on its page, but its engagement is very high. This person can become an Influencer even though he/she has less than 10,000 likes. Through this we can concur that anybody with a potential can become an Influencer.
Influencer identification based on metric alone has its shortcomings. Check for the background, their online persona, their grunts and groans, and huzzah and hoorays. Evaluate whether there is a fit with your brand and its personality. what is alignment with their values and your brand promise. Check for the type of content, its originality, and how his/her comments are perceived by the people. If his comments are aligned with the audience or do they bring about “online rage”.
Next is their scalability, will they be limited to an industry or a micro-group or have potential to be relevant across different segments. Remember both micro-influencers and global influencers have a role to play in your social media strategy. People with a penchant to engage with broader meaningful topics that cut across geography, race, religion, interest and consumption have a high potential to scale across segments. Smarter companies distribute their investments on multiple emergent influencers to de-risk their investments and maximize influencer ROI. Select across sports, across regions, industries. Ensure industries with high market potential and addressable market get preference in investments.
Finally, how malleable the Influencer will be open to working with your brand. A budding influencer can embrace many roles. She could use different approaches to help peddle your brand. She could span a whole range of content influence strategy, right from basic inform approach to referential, comparison and endorsement types. The latter show a higher disposition to align and embracement around your brand and hence the influencer moves beyond inform stage to influence to advocacy. Define appropriate win-win gains to quickly traverse a likely influencer move from on-the sides information provider to an insider. Brands get value from Influence based Marketing activities over a considerable amount of time. Unlike a brand advocate the market planning horizon is long term oriented. An inflexible yet high potential emergent influencer may not be as valuable as a malleable co-partner.
Vijay Krishna J
]]>“A good coach will make his players see what they can be rather than what they are” goes the popular adage. Every company needs good coaches. Coaches can be internal or external. Coaching and mentoring is often confused to be one and the same. A coach is usually a subject matter expert who engages with a person or group of persons for a specific task. A mentor on the other hand works with the mentee with no specific outcomes but for long term transformational change. Coaching sessions happen in a structured manner with a dedicated amount of time set aside for coaching. Mentoring on the other hand does not have fixed time or agenda. Coaching happens for a specific purpose and done in an official or formal manner as assigned to both the coach and to the people assigned to the coach. Mentoring is more informal and done at a personal level. The purpose of coaching is developing people for a specific task and the timeframe for coaching may end post successful completion of the task. Mentoring happens more from the angle of personal development. It could go on for longer than a year.
Coaching of employees in SME companies is important because of two prime reasons. Given the limited resources and remunerations, if not VC funded, most of the companies have limitations in attracting the top notch resources. Unlike their larger counterparts, SME have unique challenges of growing talent and control attrition. For many SME growing and investing in a loyal employees has more bottom line impact that hiring from market. An employee with long term associations would have imbibed the organizational culture, and hence the transaction costs of bonding, and monitoring as they move to newer roles would be insignificant. Coaching in the context of small and medium companies especially can work wonders in creating star performing leaders and employees. Coaching works in stretching the leadership base in the company and create a pool of second and third level ownership.
Like all organizational interventions, coaching must follow the process of select, sieve, invest, support and disengage stages. In the first stages, SME management select the individuals who show promise not just on technical stuff, but are prepare to the long haul the company is envisaging them in the newer roles. Selection should be based on 360 feedback and psychometric tests to arrive at a smaller set of potential candidates. Rolling out a coaching program must be done with an aim of making it helpful for the participant employees in their practical situations at work. Since a coaching program is task specific it is important that the program tackles all the identified improvement areas is necessary. It is essential to make the coaching program activity based and include role plays, simulations, etc. A coach may come across several instances where an employee performs well during activities like simulations, real life situation cases, etc but when it comes to execution in the actual situation, they may fumble. Their ability to sense and respond may be not be at best in real life situations. This is where the coach must intervene, develop situation specific frameworks the employee can relate too, ask them to maintain a learning dairy so that they could monitor their progress to various stimuli.
Coaching is a process change. A coach has to plan for the initial engagement, winning of trust and acceptance and plan for disengagement. Coach should move from how to stage to when and why of response and stimuli so that the transfer of skills and experience is sustainable and long term impacting. The trust, empathy and personal touch are key factors that play an important role in coaching outcomes. Lastly, both coaches and management must be prepared for less than 100% outcomes and setbacks. Employee attrition, their inability to own and walk the long haul or organizational changes lead to less than expected outcomes. From a SME perspective, investing in a coaching program rather than splurging $$ on generic training programs help in motivating employees, and identify new layers of leadership.
Sindhu Raviraj
From our analysis of customer funded startups, there are three broad stages of scaling up. First stage, is when the “relevance” needs to be established. In the initial stages, startup must play hard to prove why it can deliver better value and experience compared to an incumbent. The focus in this stage is all about smartly packaging winnable features compared to incumbent. Most customer funded startup find this stage is challenging, but albeit surmountable.
The next scale up stage happens around 6–14 months. Armed with their first customer experience, they need to assimilate, and standardize the offering so that it can work in various other settings than the initial customer environment. Customer funded startups go through this stage in an iterative “learning by doing” approach, eliminating some that did not work, ironing out the sticky corners and shaping the edges better so that the product/offering meets broad acceptance. In this stage, most customer funded startups, to gain broader experience pick orders that may not be right ones for them. Startups suffer when the engagement cost enlarge because of too much customization for the new client or they have chosen to work with a client with high transaction cost (both bonding, and monitoring costs). Many startups suffer are yet to figure out what resource to be assigned for which projects. It is not uncommon to find their A resources working on projects of low margins!. Most of them suffer from utilization mentality rather than effectiveness. Another challenge customer funded projects find at this stage is picking up orders without a good analysis of costs and margins involved. Some do not even do a back of the envelope calculations and rely on their gut feels. Priority list of customers are not explored, no focused account mining is adopted and sales is at best reactive. Key to scaling up in this stage is to know what customers to be dropped, what resources to be allocated when, automation efforts and reduction of overheads, and right costing. Startups have to adopt rigorous accounting principles, sales plans and reporting structure. Decisions related to industry specific versus industry agnostic or how to prioritize key customers and how to align functional process so as to enable the company to work seamlessly at higher scale need to be considered.
The next stage of scaling, emerges around 34-46 months. This is the most difficult one. At this stage, startup’s focus is more on “institutionalization”. How to ensure the culture that sustained them till this stage is preserved and extended, how to identify and encourage next level of leaders to emerge, how to formalize unique organizational practices, how to identify “intrapreneurs” who would own and drive the innovation and change, where to formalize the process and so on. And if it does have a lot on its plate already, how is execution of work going to happen? Do they have a dedicated set of people who believe in the company’s culture, execute and deliver? Companies have to adopt some standardization and routines, bring in some formalization, even some positive bureaucracy. These are required to bring in both allocative and technical efficiency of operations. To succeed in this stage, customer funded startups now must learn to wear the mask of the very “incumbents” they were attacking. Evaluate the efficiencies of process and the scale at which they work, move away from optimization but focus on efficiency, formal reporting and review to encourage decision making and ownership. While learning and aping from the “large incumbent”, the key is to understand what to assimilate, what to preserve and what to shed quickly.
Sindhu Raviraj
]]>Government’s latest initiative like Startup India and Standup India need more pronounced support for IP, scaling up and capacity building. Amongst alternate platforms of SME finance, Peer-to-peer (P2P) lending and merchant finance show huge promise. Peer to peer lending platforms have succeeded growing rapidly by using technologies, eliminating the middlemen and allowing the borrowers and lenders to communicate directly. P2P institutions adopt an online reverse auction approach. Most marketplace lending platforms do not require collateral which is a boon especially for service-oriented businesses. SMEs can also benefit from the fact that their performance on these platforms can be driven by various non-conventional data points. What regulatory changes are required to drive development of P2P lending. US administration under President Obama has implemented Regulation A+ route for crowdfunding. Regulation A+ provides an exemption for US and Canadian issuers seeking up to USD 50 Million in a 12-month period from filing reports with the SEC. Since these securities are unrestricted they can be traded in the secondary market. Listing on India’s SME Exchange would cost about 0.49 per cent of the total offered amount which is one of the cheapest for SME Exchanges worldwide. It is likely that an Indian adoption of Regulation A+ could prove to be even more economical for SMEs. To encourage P2P lending spread governments across the globe are pursuing innovative changes on personal tax front. UK laws now allow earnings to be treated as personal savings allowance and exemption from tax up to GBP 1000 for basic tax payers and GBP 500 for higher tax payers is allowed. This allows them to net off losses from loans if any.
E-commerce giants in India such as Amazon, Flipkart, ShopClues and so on have been aiming at expanding their sellers base by providing a range of services, including financial support. SMEs who supply for e-commerce platforms can now receive loans for working capital requirements either from financial institutions or sometimes from the e-commerce platform itself. To promote India GI and cultural products government can consider special purpose programs by rerouting marketing subsidies offered at various level to all major platforms. Such an initiative would help increase the reach and profitability of many India centric product companies.
Aishwarya Nair, BCom (Professional), CIMA, Junior Consultant (Finance)
]]>Prodding further on this, it becomes essential for PEs to analyze what could be reasons for such failure considering both the parties get into such an agreement with a win-win scenario in mind. PEs invest in the companies with an intention to develop and grow the company within a short period of time, making it lucrative for potential buyers and realizing maximum return on investment. The companies too, in an urge to succeed, rush in with their strategies with an aim to build and grow this company. These companies give in to the pressure of the PEs to perform better and falter to execute the strategies in the right manner while hastening the process. Some companies fail to understand the actual market requirement and do not optimally utilize the resources available with them. The PEs too, are not often very well equipped to mentor, monitor and strategise the growth path for these companies. PEs who invest in varied industries often lack the complete understanding and expertise required to succeed in those industries. They work on the simple rule of thumb of return on investment to determine the success of a company. Companies’, who have just taken baby steps in the market and are yet to establish themselves, need someone to back them up with the required know how and strategy to run the business and succeed.
This indicates that today companies not only need investment to build and establish themselves, but they also need profound levels of expertise to align, hold up and lend a hand in bringing the required changes. These companies need someone to analyze the strengths and weaknesses from a third party perspective, understand the market conditions, provide expert opinion on the functioning of the company and be those extra pair of hands that could facilitate in bringing about the right changes in the company. PEs along with the association of such specialists could be rest assured about the company’s progress. This will enable them to transform the company and move towards accomplishment of the set objectives. To keep up the focus on organization’s goals and increase its opportunity to grow, an independent voice and an unbiased view by an expert which is not influenced by both the parties of interest (PE or company management) is essential. This provides the required perspective in decision making. Organizations are facilitated to strategise and put their plans into action. PEs aligning with such specialists brings about the right mix of investment backed with expert advice fulfilling the purpose of the business.
Pratibha Sharma.
]]>Pratibha Sharma
Senior Assistant Consultant – Finance and Strategy
]]>Profitability: Profitability is the primary goal of all business ventures. Companies built to sell must focus on profit maximization, expansion of customer base and specializing in the existing product and in a wide market. The profit to sales ratio when compared to historical results and industry averages need to favourable signifying efficient management of revenue and costs. For, BTG companies the focus should be more than make profits. The major consideration should be increase in the market share, investment in R & D and best quality resources thereby enhancing the quality of the product and constant innovation in products to become a reliable and long term player in the market. Companies can use the surplus cash for growth strategies, such as investing in research and development, expanding capacity and exploring new geographic markets. The focus is therefore on creating long term growth and sustainability for the organisation.
Cost: Cost containment strategies are widely adopted to ensure organisations meet their financial targets. BTS companies must incur expenditures that have an immediate impact on the revenues and financial performance of the company. The reduction in operating cost of a company is a good indicator to the buyer on the efficient utilization of resources and management of activities. BTG companies would incur expenditures on items creating an impact over a period of time like bringing in good quality resources, research and development and expenditures required for future growth. The financial and operational aspects of growth must be balanced during expansion of business. Cost control would be on items which do not have a lasting impact and does not match the intended outcome.
Capital structure: A company’s proportion of short term and long term debts are considered when evaluating the capital structure of a company. The debt equity ratio is an indicator of the company’s internal and external liabilities. It reflects the financial position of the company as it is a measure of the financial leverage. BTS companies should thrive to showcase good profit margins to attract buyers and maintain less long term obligations and improved liquidity positions. BTG need to make strategic decisions in maintaining favourable debt equity to ensure long term sustainability.
Asset Investments: BTS firms must focus to invest on creating a value for the company and a predictable future. Any investments on assets that are yielding substantial short term returns is favourable and to signal liquidity maintain favourable current asset ratios.
BTG invest in assets based on the expectation that this investment, which is intended to last a long time, will result in continuous positive income. These organizations concentrate more on the Asset Turnover Ratio. This reflects the management philosophy of owning the resources and being less vulnerable to increase in costs and volatility in the market in the long term.
Goodwill: A business acquires goodwill through best practises, customer service, innovation and good governance. BTS strive in creating a value for the company which is associated with loyal customers, brand, continuous innovation and trust in the market. More emphasis is on creating a Unique Selling Proposition (USP) which would provide a competitive advantage and define the business. When the company is sold, the buyer pays a notable amount on the goodwill earned by the company. BTG not only focus on offering best customer experience, but also on the quality of the products, long term relationships with customers and pricing fairness. The companies build goodwill over a period of time and penetrate gradually to establish a strong foothold in the market.
Patents and Trademarks: Corporate valuation relies greatly on a company’s intellectual assets such as patents. Business enterprises perceive patent portfolios as a demonstration of high level of expertise and specialization within the company. Patents also provide licensing opportunities. BTS focus on creating patents for their organizations as it increases the overall corporate value. BTG focus on constant innovation and believe in consistently improving the product/services. Patents are a part of the growth agenda, but the prime focus is on defending the products and markets from poaching, and creating a competitive advantage for the company. BTG companies create patents to exclude the competitors from exploiting the right to make/sell, more from a technology protection perspective than enhancing the value of the firm. They end up investing in related patents and standards to cover their technological grounds.
Capacity Utilization: A firm’s productive capacity is the total output it can produce within a given time period. BTS the focus would be showcasing themselves as a company utilizing near 100% capacity. This would indicate the buyers that the organization has enough work on hand and the cost per unit is also minimised wherein there is optimum utilization of resources. The firm is assumed to be using all of its fixed assets effectively; therefore the profits should be high. Two approaches that could increase capacity utilization could be by reducing the factors of production employed or move into smaller premises/ cut down investment on facilities. For BTG, the focus is to efficiently utilise the resources and capacity expansion to facilitate future demands and cope up with new orders. Firms in expanding markets may expect to have low utilisation while they build their sales and establish themselves in the market.
Finally, as novelist Nora Roberts says…”Know what you want, and work to get it!!!”
-Pratibha Sharma
]]>It is not that only these large temples draw the crowd, even smaller ones witness sizeable participation from locals and visitors. India with 205 religious auspicious days a year, and more than 69,000 temples and many churches, mosques and synagogue is a happening place. Many of these smaller institutions face challenges on grants, support and upkeep. Some function under government bureaucracy, therefore their upkeep and running is a tough affair. Some temples are family managed, or by the villagers themselves and face a problem of continuity. Migration, regional expansions, industrialization and rampant resource exploitation has robbed many of their lands and means of sustenance. Religious institutions of all hues can benefit from digital technologies in three primary areas: Devotee management, donations and infrastructure management.
Devotee management involves advance reservations for seva’s, crowd management, on the spot tickets, distribution of Prasad and others. Faithful steward, WorshipTrac, FlockBase, Minebiz, Kshetrasuvidham, Kshetra, Mohid, Emaze are some of the software available to deliver devotee management and administration workflows. Platforms like onlineprasad or e-Prasad deliver temple Prasad directly to devotees. Devotee management includes not just on premise experience, but ones that caters to off premise engagement too. Due to migration, physical challenges and other constraints many a men and women may not be able to a treat themselves with a rich spiritual and cultural experience. AR/VR experiences can help people to cherish these moments without actually being at the place. Grand scale events such as Mahamastabhisheka of Gomateshwara or ISKCON Chowpatty have successfully worked with Kalpnik to provide an immersive virtual experience to all those devotees and tourists. A smartphone to scan the QR code, s simple 2G connection and a 3D spectacle was what was required to relish the happenings. Brainseed Factory’s Mecca3D delivers a rich virtual tour of Mecca, Haram the world’s largest mosque and Islamic history. Millions of faithful who can’t visit Mecca due to distance, cost, and physical challenges benefit from these virtual experiences. Startups like Spirituallygood are bringing an integrated platform of advance reservations, social media and member devotee experience on to a common page.
With this the devotee can book in advance, share the photos and experiences on both temple’s page and her personal page, can send an invite to friends and donate for a particular puja or a cause like feeding widows or cattle. Devotee and tourist help create more information about the deity and place, increase awareness and followers to the temple. Heritage temples endowed with parchment paper or Talapathra scripts realize they need to digitally archive these to preserve the valuable information, but also help many consume the same in the form of e-books.
Donations are key source of all major religious institutions. Donations are required to maintain structures, deck the statues and halls, pay for the staff and priests and conduct elaborate events on special days. Using digital technologies, religious institutions can obtain tighter alignment between sources of funds (individuals, corporates, institutions and government), increase reach and deepen engagement of volunteers and donors. What most temples and mosques need is donations of kind, support for say restoring a gopuram or a minaret. Procuring these skills may be difficult for temples and government run temples may use locally available contractor who has no knowledge of the agama Shastra’s or the age old building techniques. Donation of time and efforts is where digital technologies may play significant role. Any person volunteering for a temple may find information about various temples that requires volunteers and she can select and participate for a particular activity at a particular temple of choice. These platforms thus allow not just Arpitha sea’s but also precious support required to run the mammoth activities of a Bramhotsavam or a Baisakhi langar. These platforms also facilitate an individual devotee post about a particular program, say revival of an old structure or an abandoned temple and request for support. These platforms provide not just an opportunity to take part in activities of interest, but actually own and drive an initiative. The platforms thus help increase the reach of temple and personalized involvement at the same time. . Startups are also exploring AI tools for recommendation about Pooja, auspicious times to conduct/visit temples according to ones’s horoscope, and suggestions on appropriate donations.
Temple administration and infrastructure management is another area where digital technologies can play a big role. Booking of accommodation, managing shops and establishment owned by temple, administration of transport and human resources, and prasadam management is where digital technologies can drive efficiency and effectiveness of the operations. Inventory management, ticketing systems, transport management, contract and rent management are areas where software from companies like SAP, Quest informatics, Synergize, Shivam software, Sopanam and many others offer point solutions that may be used by temples. Key to digital transformation is to create an integrated system, not point solutions as pursued by now. IT administration is a major issue and most temples do not have sufficiently qualified manpower to manage it. Digital transformation must be therefore all pervasive, devotee centric, efficiency driven project. Digitization must help religious institutions realize better devotee engagement, higher margins for their merchandize, increase reach beyond physical arena by using webinars, campaigns.
Board administrators need systems that allow visibility of allocation to priority areas, shared responsibilities and outcomes. Boards also need systems to manage their overheads, what % of the donations spent on HR & other areas and what % of the funds used for effective development of the institutions itself. Digital transformation must therefore connect not just CRM, Inventory management (rooms, marriage halls, shops, and commodities), social media and payment gateway, but also financial system-of-record. Digital transformation does not just mean automation and elimination of manual roles, especially of those that are prescribed in ancient texts. It is more about preserving and enshrining the rituals as prescribed in scripts by self-sustained institutions. Digital transformation is also engaging believers, devotees and tourists. Digital transformation must facilitate higher donor/volunteer involvement, deeper cultural immersion and revival of these institutions. Boards and administrators must embrace digital technologies to provide better spiritual and devotional experiences.
Dr TR Madan Mohan
]]>Business Transformation is the radical and holistic change companies undergo to grow the business faster, make them more relevant to the market, and de risk them from any technology or environmental change. Like any change companies can either pursue a big bang approach or a state-wise approach. In this blog, we share our experience of companies that have successfully embarked and achieved business transformation using an incremental approach.
Like the Chinese proverb, a long journey starts with small steps, successful business transformation starts with small but measured initial steps. The first question when companies attempt transformation is which process to touch. In most businesses, the easiest function that is amenable change and one without too much dependencies and investments is “sales”. Moreover, any minor changes in sales function has a direct impact on the “outcome”, be it new customer acquisition, or more orders from existing customers. Either ways the outcomes impact the overall mood and functioning of the company. Sales outcomes are also highly visible, all across the organization people can see the flurry of activities that start once a new client is gained. Any win, however small, can uplift the mood for change and thaw the resistance to change. Employees should not feel threatened by it; instead they must be allowed to participate in this change – especially the critical members of the team who are key influencers. It must vibe with a sense of growth and pride in the organization. What such changes do is to convince fence-sitters that change is good and doable. A highly visible short term win will also enable the top leadership of the firm to start change on a winning note.
Once this clarity of purpose is communicated through changes in sales, it becomes necessary to get the second level. It is best at this stage to use existing resources within the firm and enable them to drive change on two areas eliminate waste and improve visibility. Create groups to improve the operations, ask them to identify and drive changes where they feel empowered. Next involve people in information, communication and advocacy changes. Ask the employees to suggest changes to website, the sales and marketing collaterals that work best and ask them to drive these improvements. Their buy-in is absolutely essential to drive the second-order change. Now that we have a broad based team that believes in the new vision, we need to build a sense of urgency so that the change that has been demonstrated can be capitalized upon. Once this happens, creative inputs on products, offering and markets start to pour in. It also gives everyone a chance to delve deeper into the core offering to examine possible extensions. This helps build the roadmap for the company as to which markets and products they need to be in. Once we have the top and second level of leadership involved in this exercise, they believe in the new vision and positioning, especially since it is their aspiration that has been translated into the firm’s vision and strategy.
Once there is trust, comfort and belief in the vision and need for change, it becomes easier to begin small structural changes within the organization. The structure needs to align the capabilities within the organization to the new goals and strategies. Given today’s environment, no team or division can work in silos. Hence it becomes imperative that we put in place review mechanisms that will facilitate cross functional work. Implementing measures and balanced scorecards that help break silos should be thoughtfully designed and implemented. Training and reviewing team members to drive this, building their capabilities and motivating them becomes essential. Working as teams and leveraging off each other needs to become a habit, a new way of working. Once success can be shown in a couple of inter-functional initiatives, a broad base of employees becomes adept at adopting such structures across the entire organization. Making change happen in other functions and departments new becomes a lot easier. Hence managing transformation in stages with the right vision, by building the right capabilities, help build the foundation for a large business transformation.
– R M Sanjay
While discharging their duties as an independent director in SME and family businesses possibility of facing conflict of interest situations are almost inevitable. Overlapping roles and relationships is a powerful peg for conflict of interest. Directors with parent-child relationships, spouses and shareholders within family has imminent potential to make singular decisions. Cultural elements also play as a big impediment in open and fair discussions of the decisions. Personal interest and family politics may creep in the way of investment or implementation even when they are in the best interest of the company. Major areas of potential conflicts arise:
Whenever disputed and conflicts arise, quality of board decisions may be affected by the established power dynamics. It is not uncommon to see even when a family director views and suggestions are sound, other members may oppose based on historical incidents and family relationships rather than business reasons. An independent director can deftly handle these issues without offending family relationships and hierarchy.
Schedule IV companies act encourages independent directors to meet separately with aggrieved to have executive sessions. Accordingly, Independent directors may moderate arbitrations in the interests of the company as a whole. Encourage the parties to address conflicts head on and not procrastinate over the issue which may permanently damage relationships and company’s prospects. Facilitate information sharing between the parties and encourage give and take vision for both sides. Independent director must present solutions that benefit business not personal positions of either parties. Help uncover pros and cons of each position, highlight anchor areas and nudge to see common grounds. Help them to sort out the issues by mutually understanding the causes and come to a common conclusion. Some issues may be solved by implementing appropriate governance mechanisms like remuneration committees, RPT and partners charters. Independent directors must highlight the weak areas and suggest common goals that each partner would drive so as to improve the overall business goals. Let each party own two objective and measure QoQ improvement and bring objectivity to measure contribution. Create a business charter that puts toles, liability, profit distributions and conflict resolution strategies in writing. Tie-breaker policy is another method independent board member may use, especially if voting trusts and multiple family representation exist on board. Define decision matrix ensuring appropriate decisions are vested in each individuals, but effective communication mechanisms exists to continuously feed FYI & FYA bits. Independent directors may also suggest a dispute resolution mechanism involving senior members of the family or representatives of the family board or combinations. Such a mechanism helps resolve the issues quickly without causing any damage to the company. In some companies, dispute resolution meetings may happen only off-site and are scheduled every quarter with the complete board presentation. These meetings ensure the relationships are well-oiled and deepens trust. Working together is not simple. Successful business like a marriage require a little bit of serving, counter-balance and occasional mending of edges. This is what independent directors must remember in times of conflict.
Dr TR Madan Mohan
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