Business Lessons That Stree Of Lndia 2020

Business lessons that stree of india 2020

Business lessons that stree of india talk I'm going to talk to you about a part of India that usually we don't sort of recognize as a formal industry or a formal business and usually it's referred to in various different reports and documents and Management studies and business schools as the informal industry the marginalized industry But you will see some glimpses of it, I'll play a short movie for you as an introduction of this unorganized India an Inc I call it India Inc this term is not coined by me. It's a term. That's been coined Many years ago, but it gives you a glimpse of That part of India that we kind of are Indian business that we kind of take for granted And we oftentimes don't even look at them, so let's begin by just watching a very brief montage of India Business lessons that stree of India on ink So in this 30-second clipping you saw a Whole series of activities that happens around us I mean newspapers arrive at home and coconut water comes flower delivery but upon the streets and We forget that this entire Infrastructure and framework which pretty much runs our life on a daily basis is also a former business And we label them as Business lessons that stree of India Informal unorganized sectors over the next 10-15 minutes. I actually want to show you how much of injustice we do By labeling this industry as marginalized Informal unorganized because in every parameter of business metric they very often exceed What we consider to be the tier 1 companies the ones that are listed in Sensex nifty the big giants the unicorns and the branded organizations I Don't know how many of you are aware that close to 50% of India's GDP is Contributed by the unorganized industry not by the organized industry by the unorganized industry and those of you think that FDI You know there's a big celebration that happens whenever i've di inflows come in FDI inflows have never exceeded more than 7 percent of India's GDP ever 50 percent comes from the unorganized industry The unorganized industry employs close to 90 percent of our workforce India has a workforce of about almost 500 million and 90% of that is Employed by the informal industry by the unorganized industry and as I'll show to you With one example after the Business lessons that stree of India other they also perform pretty much in every metric better than Tier one businesses or businesses that we normally consider to be the benchmarks or in many cases the Aspirational companies that we want to join I'm sure many of you must have seen these stores these bookstores these food counters here You see an example of a bookstore on a payment You can actually measure that the per square footage revenue and return of investment That happens in a payment exceeds by several multiples the return of investment that happens in these big malls that you see the shiny malls the the

Business lessons that stree of India chrome and glass and The branded stores the payment actually delivers a much better rate of return for every rupee that is invested in a business over there These books that you see stacked In the payment you would have also noticed that many vendors carry these books in their hand now those of you who are Marketing students or who are studying? FMCG businesses You'd be taught that there is a whole science in placement of products in the shelf space actually the self shell place is very actively Contested and fought for and there's a whole design principles that go into it My sense is that the shelf space that you see this old man carrying He has to carry the set of books and certify it by his sweat equity he has to make sure that every book that he adds on which is another 200 grams and Every three to four kilos that he carries on a daily basis and by the way when you carry 3 or 4 kilos for more than a couple of hours It doesn't feel like 3 or 4 kilos it feels much much heavier matter of fact I tell a lot of my other friends that if you want to know that you have arrived Then you need to find your book in this stack if it is Business lessons that stree of India 2020 there in this stack then this old man has certified That your book is going to become a best-seller Right now you see a Salesman and he is a sells boy he's a Salesman sales boy Who is selling flowers in in and you would have seen them in traffic lights and so many other places? This sales boy who has a 30% margin The flower that he sells to you for 10 rupees it costs him 7 rupees to acquire that and he's got a 30% margin More importantly he can give you a 50% discount on the spot if he likes your face If you try to get even a 5% discount in our organised business if you are trying to implement a 5% discount that decision has to travel all the way up to the CX so in some cases the board level and Then come down from there, and by the time that decision comes the opportunity has already been lost Business lessons that stree of India 2020 This is an example I want to illustrate to show you how the distribution of wealth in the informal sector is far more equitable than the formal sector, so suppose you eat a plate of idly from a Vendor in a footpath, and he charges you twelve rupees for that plate He keeps only three rupees of that twelve rupees the remaining nine rupees goes into the entire supply chain the people who Watch the utensil the people who grind the dough the people who bring it in an auto rickshaw They are the ones who get it if you eat the same plate of idli in a five-star hotel Which costs you about four hundred rupees? The bulk of that money is kept by the establishment and a very miniscule percentage of that actually reaches into the ecosystem The third example I want to show you is the fluidity with which these businesses operate What you're seeing over here is a street vendor? Any idea what he is selling he's selling something for a festival What festival would that be? holy This street vendor and millions of vendors like him They have to change their entire inventory their supply chain their target segmentation their pitch the method by which they sell Every month month and a half, so they actually change their entire supply chain their entire business model More than twelve times in a year now compare that with the business transformation on an organizational realignment that big organizations try to do and I'm given to understand from management gurus That it takes anywhere between five to seven years to implement organizational transformation Which this market does twelve times in a year? That's the kind of community that they have - the kind of agility with which they can operate If you look at this marketplace my sense is I can see more enterpreneurship happening in this crowded marketplace Business lessons that stree of India 2020 Then you will find in the Silicon Valley or in incubation centers and let me explain this to you might have noticed that when you go to these marketplaces Or or or these red lights suddenly a new product will emerge sometimes. It will be a toy sometimes It will be a head massager sometimes. It'll be a kind of a fountain to clean car Sometimes it's the national flag on 15th of august or 26th of January Or is this Christmas hatch that you saw a few days ago now try and visualize How much a planning has to go into this entire process of deciding the? Marketing slots throughout the year the supply chain of the equipment that has to come in the the toys that have to be purchased from China brought in over here the distribution that has to happen the simultaneous launch of that product on the same day at every red light at every crossing Unsold inventory has to be taken back the cash flow has to be managed it has to be done or basis of trust because there Are no SA P. No, no business software There is no Microsoft Outlook to make all of this happen and all of this happens seamlessly it happens without any Asset sham without any fee key or NASSCOM or any industrial body Which is supporting it it happens without any T. Rai which regulates the? the business it happens completely Seamlessly with simply the speed of trust and with the innovation that comes literally at a daily basis the Unorganized sector also has some other great advantages firstly. It's an equal opportunity employer. Whether you're a man woman child transgender Educated illiterate old young matter of fact many of these people who might mention to you just now Usually find their jobs only India

Business lessons that stree of India mean if you are take a poll of how many companies employed transfer sites or employ a Handicapped people or employ aged people You'll realize that it is only the unorganized sector Which takes them in adopts them and gives them ability to earn a living when the organized sector Has either abandoned them? Or don't even look at them you look at how they have to change their synergies literally on a daily basis the Vendor that you see was selling those snacks in the morning he sets up that store in front of Shivaji Park or places where people Are going out and jogging and he sells a different kind of? Snack in the morning in the evening he sets up the shop in front of a liquor store And he sells a different kind of snack so in the morning and the evening he trips his business model. He'll shift his customers He leverages different synergies in the same city at different times of the day the last person you see on that slide is a tailor in fashion Street, actually he's a Garments owner shop owner in fashion Street and some of you must have been to Fashion Street, right? Do you realize that there are? identical more than 150-200 Identical stores, there is no difference Yes, right most of the Business lessons that stree of India 2020 customers who come to fashion Street or many many such streets all over India They're going to come only once so there is no customer repeatability There is nothing in that 30 seconds or one minute of interaction This tailor has to visualize the size he has to pick out that garment And it has to happen in the first or the second fit Otherwise that customer will move to the next store now that is the kind of agility that's the kind of? innovation that's the kind of customer understanding that these people have to do literally on a daily basis I also believe That there are more management lessons in the street out there then in many of the bee schools put together and let me give you This example so some years ago. I was working in a company called first choice, and I had gone to Delhi in Delhi there's this Pragati Maiden and some of you might have known it and my colleague was also a CEO of another company, and he was using this opportunity in Delhi to brief his local team So his team had gathered around him And he was sort of reviewing their performance or briefing them or whatever and since it was none of my business I was standing on the side, but when I was standing on the side I noticed a street urchin who saw this gang of people and kind of you know walked up to Business lessons that stree of India 2020 them And he started begging and asking for money So my friend was busy. You know briefing his people and he was getting irritated by him, so he tried to shoo away This kid in it told the kid to go away but the kid ninh go the kid kept standing there and After some time my friend got a little irritated and out a sheer irritation He started looking for change in his pocket and that of course was the cue For the rest of the subordinates to immediately pull out change from their pocket and hand it over to their CEO And so he picked out a coin from the palm happened to be a Five rupee coin Which those days was a very you know a substantial amount of money? And he gave it to the kid the kid was also surprised that he got so much of money But he were very happy And he started running as he was going away a couple of other kids saw that he had got this money and they tried to snatch it out of his hand but he fought them off and he Managed to reach his headquarter so to speak and many sat over there There was another kid with him who obviously was a younger brother And he nudged that kid and he pointed towards this group of people and told him to go and pick. You know try his luck with this set of customers Now I want to point out 4/5 management lessons that these kids know intuitively The first lesson they know is to talk to the decision Even if it is not the decision-maker who gave the money the money came from somewhere else But they knew how to talk to the decision-maker the second lesson They know is persistent space so even if my friend told him to go away first. You didn't go away He kept standing there because we know that persistence will take third when he got the deal. He knew how to protect it He did not go around announcing it to the whole world so that the competitors would come in and undercut your price and take it Away, he held that very closely to himself and when he reached his headquarter What better example of customer relationship management do you want to see when he tells his younger brother? These are paying customers you should go and get more money out of that It takes roughly about 4 to 6 years to teach these basic principles to management trainees when they join corporates Because typically this young MBA they will go to some fancy title that they see you know vice-president photocopiers or something like that He'll go to that person that person will say oh, it's a very good product But we don't have the budget for it you go back and come back next year And these guys will come back happily to the organizations. They have called us next year They don't know that when it says no budget. There is always a budget when it says no vacancy There is always a vacancy And if you know how to talk to the decision maker you can get that budget out from somebody may not be the decision-maker These kids know that Because they starve in the night if their pitch is not secure They starve if the the value proposition that they have given is not accepted by the customer It's not a it's not a loss of some bonus or Business lessons that stree of India 2020 some Increment it is going to bed hungry, which teaches them those management lessons One of the most important lessons I think which we need to learn and usually it takes us You know 12 15 22 years to learn this lesson is the lesson of enough this this person you see on the screen his name is Sandeep and Those of you go to were Lisi face. Do you go to one Lisi face any of you yeah in the morning? Morning, okay because evening is a different set of activities. I'm talking about the morning So in the morning you if you go to Berlin see face you see a lot of people running jogging and doing other kind of stuff over there and he sits right next to that point where the ceiling begins and you must actually go and meet this person and Verify what I'm telling you so when you will go to him he sells wheatgrass and wheatgrass is you know organic you know sort of a Supplement which a lot of people consume, and he sells that and he gives that to you for 20 rupees a cup He also has if you notice another steel container kept

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