Human capital is the most important asset of any organization and it is the differential factor between success and failure of companies. The outside environment can all be changed by an efficient management and take the organization to higher growth and profits. For example a company like reliance industries in India which started as a polyester trader took to polyester manufacturing and when demand started slowing was quick to get into new business related with the old business and thus got into petrochemicals and by forward and backward integration developed the company into a oil and gas giant. Thus investors try to see the quality of management before investment. Good managers usually follow a delegate approach by believing in people and motivating people. Sub-ordinates should be given a feeling of responsibility and authority over their work. Best way to motivate and retain talent is to show them the fruits of their labor recognize and appreciate their work. There must be good interaction between the employees of a company and every worker must have a feeling that it is his company and we must work for the growth of the organization. Another things people look for is their own growth and top management devise new avenues for this. Every employee must be supported and are more important, so they must not be let down during a slowdown. Over a long period of time it is the management which takes forward the company and should hire the best of youth. Many people consider values more than money and hence companies must showcase trust, integrity and values in order to hire great people. Everyone likes to work in a company which gives him responsibility and trusts him to finish a project. It is this human capital which forms the backbone and the most important asset of any company.Why Human Capital Is Important For Any Organization October 26th, 2009
Human capital is the most important asset of any organization and it is the differential factor between success and failure of companies. The outside environment can all be changed by an efficient management and take the organization to higher growth and profits. For example a company like reliance industries in India which started as a polyester trader took to polyester manufacturing and when demand started slowing was quick to get into new business related with the old business and thus got into petrochemicals and by forward and backward integration developed the company into a oil and gas giant. Thus investors try to see the quality of management before investment. Good managers usually follow a delegate approach by believing in people and motivating people. Sub-ordinates should be given a feeling of responsibility and authority over their work. Best way to motivate and retain talent is to show them the fruits of their labor recognize and appreciate their work. There must be good interaction between the employees of a company and every worker must have a feeling that it is his company and we must work for the growth of the organization. Another things people look for is their own growth and top management devise new avenues for this. Every employee must be supported and are more important, so they must not be let down during a slowdown. Over a long period of time it is the management which takes forward the company and should hire the best of youth. Many people consider values more than money and hence companies must showcase trust, integrity and values in order to hire great people. Everyone likes to work in a company which gives him responsibility and trusts him to finish a project. It is this human capital which forms the backbone and the most important asset of any company.Venture Capitalism October 20th, 2009
Venture capitalism has ushered a new era of entrepreneurs. Venture capitalists are the ones who fund imaginative ideas and disruptive business models. Venture capitalists fund companies which venture into new fields which have a high growth path. Venture capitalists are the people driving economies in fast forward mode. Funding of ideas has enabled creation of several new companies and business. Venture capitalism is mainly thriving in Silicon Valley where there are numerous start-ups with brilliant ideas. Now venture capitalists have started funding areas like biotechnology, cloud computing, ethanol based industries etc. There are seed funding companies which fund initial stages of the company. These venture capitalists not only bring with them capital but also bring industrial best practices, corporate governance, professionalism, board culture, values, trust etc. Hence venture capitalists play a huge role in new knowledge economy by funding new technologies which is changing the way we live. Venture capitalists are ready to fund a team of technical people and it creates a unique combination of technical and management expertise which is equal to the industry standards. In a free market, anyone can compete with giants and thus the playing field is leveled for entrepreneurs. Even though anyone can compete with giants it involves lot of tricks and tactics.Think Different October 16th, 2009
“Successful people don’t do different things but they things differently”. This quote says one of the most efficient management techniques that every process can be improved substantially and each person must be allowed to think as to how he can change the process. This leads to several out of box ideas and any everyone must how to do this think in a more efficient manner. He must not be satisfied with the outcome and always try to improve and perfect on it. Thinking different does not only involve innovation, it is just efficient use of resources by making a small change which will lead to significant profits for the organization. It is this out of box thinking that will lead companies to new highs. It is better to think and act contrary, rather than following a group of people. Great leaders always developed their own path and did not follow any path. Every organization must reward its employees handsomely if he thinks new ideas or innovates new concepts. Think different must be the tag line of its employees. Every company must have an in-house research & development cell and its functions should not be outsourced. R&D spend should not be considered an un-necessary spend and its budget should not slashed during recession. It is an investment for the future development of the organization .R&D can be monitored but they must not be interfered. They must not be pressurized to deliver and every Ceo must have courage to wait for the results and must not get frustrated. R&D team should be highly motivated and handled delicately. They must be given their own freedom and space gets their creativity out. Over a period of time it is the research and development capability that leads to the growth of the organization.The Legend of Investing October 13th, 2009
The legend of investing is easily warren buffet. He admires several investors and has made himself and his shareholders a lot of money. His principle of investing considers various things which also help entrepreneurs learn the art of managing business and make money for the company’s shareholders. So his principles must be learnt by every effective executive. The principles are: never invest into stocks, buy businesses, Invest in companies which has a brand differentiation and difficult for competitors to topple, Invest in companies which have good corporate governance and transparent with its shareholders, Check for the management quality of the companies, Buy when blood is there on street. Be fearful when others are greedy and be greedy when others are fearful, Valuations are very important for any buy and buy companies at cheap levels, don’t try to time the market or the economy. Don’t flow with the tide. Think contrary, Invest in companies which are not too much dependent on interest rates, exports, currency fluctuations etc, Don’t chase companies when valuations are rising, Invest in companies which does not raise a large amount of debt or raise equity often, thus diluting the shareholders stake. He also checks the average return of equity for the past 10 years of the companies. He writes letter to the chairman once a year. He likes to invest in intelligent people and says “only when the tide ebbs, people who are swimming naked can be found”. He understands business cycles and always tries to invest at the bottom of the cycles and has the guts to see the valuations of his companies go down by 50%.he is willing to wait and his preferred investment period is lifelong.Regulated Free Markets October 10th, 2009
Regulated free markets are the best price discovery scheme for all assets. Free markets always bring with them a lot of transparency and opportunities. No individual should fix the price or the goods needed in an economy and it must be left to the market forces to decide and all must follow the supply-demand rule. If something is not in demand eventually its supply must be reduced and this happens in free markets by eventually reducing the price of the good. But free markets should not be un-regulated as it may lead to huge speculation and flowing in of illegal money. Financial markets without proper regulation have led to the crash of various banks like Lehman brothers. Markets always offer better price and it’s difficult for individuals to manipulate time the market consistently. Markets with proper regulations are going to be the future policy of every country and this implement to new markets like telecom markets, commodities market. However, when there is a crash government must enter and prevent further downfall or else markets form a negative feedback cycle and prices goes on reducing. Thus regulated free markets deliver correct price to both the supplier and customer and hence they are satisfied.Mobile Marketing October 9th, 2009
Nowadays marketing of a product gets as importance as any other processes in the manufacture of the product. Marketing decides the sales of the product in the field. Poor marketing can reduce the sales of a good product and good marketing can improve the sales of some medium quality products. There are many types are marketing. Some of them are TV advertisements, and advertisements in other media such as radio, net and news paper etc. Now a new mode of marketing has arrived, it is mobile marketing. Even though it is new to the marketing field it has gained enormous fame in a short period of time. There are only a few sites which offer such mobile marketing campaigns. Among them only a very few sites provide such mobile marketing campaigns at both large and small scale and most importantly in a successful manner. The best among such sites is cellitmarketing.com. This site has some sister web sites such as Coupon Zap, Cellit Studio and House4cell. These sister websites does mobile marketing for smaller clients, Whereas Cellit mobile marketing has proved as the best mobile marketing service. It is a prime provider of such mobile solutions in both large and small levels. The mobile marketing the site provides helps you to reach your customers. The mobile marketing solution may be for a newspaper, a restaurant or any live events Cellit has the tools and expertise to step up the customer interaction and to improve sales. Cellit is working with a lot of large organizations in the world. Some of them are Hearst Corporation, IKEA, Tribune Company and HSBC etc. They also provide mobile marketing for sixty percent of all Broadway shows. Some other famous shows in which they are involved are Blue man group, Legally Blonde etc. You can contact the site to know how they can help you. All you have to do is to fill your name, email and phone number along with your questions or comments. The site also provides information about the mobile marketing. It says that there are three constituents required to build a productive mobile database. The three ingredients are Cadence, Content, and Commitment. The site also provides highlighted news about mobile marketing in the news papers and magazines. House4cell is one of the leading mobile information services for real estate agents. It provides a number of features, best carrier and customer support at a very low rate when compared to other sites.
Ponzi Schemes October 8th, 2009
Ponzi schemes are schemes in which there is no flow of services or goods in the system. The system is formed such that money coming into the system is always greater than the money going out of the system. So, people who gave money initially get away with the money of the people who gave later. It is named after an Italian ponzi who played a similar scheme in the early 30’s by rotating money among his creditors. Ponzi schemes will definitely collapse at any point. Madoff scandal is a ponzi scheme where he returned money of his old investors by getting money from his new investors. Ponzi schemes usually come disguised in the form of chain marketing where people get money, if they join other people into it. There are several forms of ponzi schemes. Only 33% percent people make money in ponzi schemes. Ponzi schemes make use of people’s greed to make a killing. Today economies all over the world are playing ponzi schemes with their debt, where countries repay their old debt by taking new debt. It is very difficult to stop a ponzi scheme. Even among student communities there are a lot of ponzi schemes where students are asked to refer to other students to get money. People join into it thinking that they can make money seeing their friends making money. This psyche concept follows the greater fool theory thinking that some other fool will join and thus he will get his money. People get confused of ponzi schemes with chain marketing techniques, where there will be a flow of product or services through the system. It involves publicity through individuals and they earn commissions by selling products. There are companies like Amway which have developed a strong business model through several chain agents and thus make profits.Next Bubble October 5th, 2009
After the disastrous 2008 for the global economy with numerous real estate and financial sector bubbles, the world is seeing the next set of bubbles emerging. The most prominent is U.S government debt/dollar bubble. With nearly 0% interest on the bonds, the U.S government is still able to sell most of its bonds as there is huge demand for them from all over the world. Most of the debts of large corporations are dollar denominated and hence when deleveraging was taking there was a sudden increase in the demand for dollars and that led to the appreciation of the dollar. With dollars printed in huge numbers, the value of dollars should eventually come down and there will be a structural change in the currency market. When the risk appetite of the global investors they will eventually lead to the decline in the dollar as they start investing out of the dollar denominated government debt. There will be no crash of the dollar as it serves as the reserve and global trade currency. When America comes out of deflation and once bank lending starts, then fears of inflation will come again and interest rates will start to rise and hence the bond prices start to fall. So the hot money which is flowing into the debt market will eventually come out and the dollar/debt bubble will burst.Microfinance October 4th, 2009
Micro-finance is fast growing to be a very profitable and popular business especially in developing Asian countries. A vast majority of people have no access to funds and hence cannot grow beyond a limit. Most of these people don’t get working capital loans which takes a great toll on their growth and market access. These pay way for unorganized players who make huge money by lending at intolerable rates. Rates can be as high as 80-100% per annum. Even with the rates of loans if the players can make a profit then think about the profit they make if they get access to loans at 10%.with organized players like Grameen bank in Bangladesh, the concept of microfinance has been popularized. The society is the greatest benefiter and it helps people to come out of poverty. For example, a person selling fish needs money to buy fish and sell it retail. The money which he gets in the morning is nearly 200rs. He makes 300 rupees by selling the fish. Of this he nearly pays 10 rupees as interest to the loan giver which is exorbitant (5% per day). If these people get access to proper capital they will prosper in lives and the business model if organized and takes into account risk discounting then huge profits can be made out of microfinance. Grameen bank has shown this with peer pressure model where people get loans in groups and if a person in a group doesn’t repay, then no one in the group will again get loans and this pressurizes the borrower and the non-performing assets is as low as 2%.India’s Demographic Advantage October 1st, 2009
India is a young country with a median age of just around 25 years. The huge population growth of the 1980’s and 90’s now augur well for the country and its prospects. With a growing economy, India can well take advantage of its demographic dividend. This demographic dividend will continue for the next 35 years. At the peak of its demographic yield India will have 70 working people for every 30 non-working population. With liberalization and democracy India will well be the country of the next century. With women entering the work force the working class population is growing manifold and with a burgeoning middle class of 400 million(more than the population of America) India offers huge opportunities to business. Corporations which need to dominate the next century need to invest hugely into India. They must understand the Indian psyche and get the trust of Indian people to grow faster. India also presents a huge human capital with its traditionally sound education and knowledge. India has a advantage in the new knowledge economy and offers huge research and development capabilities. With a reformist mindset and developing infrastructure which includes soft infrastructure(internet, mobile networks, database) and core infrastructure(ports, highways, airports).this will change the landscape of world business and is a compelling story for global investors.