Reliance Big Entertainment: The challenges

Reliance ADAG has experienced tremendous success in the past however the pace and scale of their operations has already attracted enough critics. They have successfully entered new industries with disruptive business models and have been able to garner a big market share by effecting business-synergies through backward and forward integrations. However an equally compelling argument is to say that their recent successes can be attributed to the phenomenal growth of India as a whole. With the growth rate slowing down the world over, Reliance-ADAG needs to make strategic choices, develop an appropriate work-culture and actively seek out synergies. With ADAG getting into so many different lines of businesses, it also needs to carefully balance its corporate image, strive for external and internal fit of its strategic choices and work on creating an enriching work environment so as to be able to attract and retain top managerial talent.

 

Reliance Big Entertainment (http://www.rbe.co.in ) is inspired by the great vision of end-to-end integration in this highly attractive yet competitive ‘Media and Entertainment’ industry. Despite of its large footprint, it is still struggling to establish itself as the dominant player. Below is a (non-exhaustive) list of key challenges it is facing:

 

·        Reliance-ADAG is one of the most powerful corporate in India however RBE it is yet to establish itself as significant player in international markets. There are many well-entrenched players like NewsCorp and Disney hence establishing its international presence is one big challenge for Reliance-ADAG.

·        RBE has a very turbulent growth story that does not present coherent strategic choices. Its new businesses, tie-ups and acquisitions are isolated zigsaw pieces that are yet to be put together. The challenge is significant because it doesn’t appear to have paid much attention to organization culture while building / buying isolated businesses in ‘Media and Entertainment’ industry. These individual businesses have to pull together and present themselves as one brand, e.g. Disney. My take is that the change management is going to be challenging and painful. Recruiting and retaining top managerial talent is also going to be a problem.

·        As I mentioned about the isolated jigsaw pieces in above point, there is huge potential of synergy. However synergies don’t just happen, they need to be derived, and achieving that remains a big challenge. There is no significant cross-promotion as of now.

·        Reliance-ADAG still carries the Reliance legacy in terms of brand image. It just cannot shake off that to become an innovative and fun-loving company overnight. Its brand image is definitely at odds to becoming a player in entertainment industry. The most critical factor in its success, and its biggest challenge, is in successfully associating itself with youth.

·        One key reason of its target group’s alienation is probably the history Rel-ADAG has inherited from Reliance. The company is still viewed with deep-skepticism as is obvious by going through various blogs. It needs to invest heavily in social-capital as that is essential for its success in Media and Entertainment industry.

·        Media and Entertainment industry thrives on innovation and creativity, which is traditionally not a stronghold of Reliance-ADAG. There needs to be a concerted effort to inject it in organization’s DNA. Its present offering sorely lack on creativity.

·        As this industry is getting more lucrative and Indian growth story is gaining currency, there is an eminent threat of international biggies entering Indian market.

·        Rel-ADAG has been investing heavily in its tie-ups and other acquisitions. Some businesses like DTH have very long gestation period and Rel-ADAG is offering these services at unsustainable low rates. This puts a big question mark on its profitability and ability to keep pumping in money in new ventures.

·        Reliance-ADAG’s current businesses in Media and Entertainment industry are weak-brands at best. Big FM is ranked 6^th, Adlabs doesn’t compare favorably with PVR and bigadda.com ranks close to 3000^th in terms of site traffic. All these are lagging way behind their respective market leaders. There is intense competition in the market and leaders have had first-mover advantage (Radio Mirchi, PVR and Orkut). Beating the competition and becoming one of top two or three players is still elusive and probably the most critical challenge for Reliance-ADAG. It also needs to remember that leadership positions cannot be bought in the new economy. It is a user driven market and ADAG needs to respect the power of social-networks while attempting to beat competition and become market leader.

·        As alluded above, the consumer is currently spoilt for choice. There is intense competition and users hold inordinate bargaining power. In such case, building and retaining user base is one of the primary challenges.

 

President of Boeing-India visits ISB

Dr Ian Thomas, Vice President, Boeing International and President, Boeing-India interacted with the Indian School of Business (ISB) community recently at a talk hosted by the General Management Club. Dr Thomas talked about the aerospace industry and Boeing’s operations in India.Dr Thomas, who has a Master’s degree in international relations and a PhD in history from the University of Cambridge, started off the talk with insights into his transition from academia to government and then to the private sector, when he started working with Boeing.He then went on to talk about Boeing’s relationship with India. “We like to say that India joined the jet age on Boeing wings because Air India was the first all jet carrier in the world and that has been a very proud partnership,” he said. He added that Boeing was moving on from the previous model of being an offshore company that was focussed on resource exchange.As Boeing transitions towards an onshore model, he said they were committed to building a $100 million facility in Nagpur in partnership with the TATA group and an $80 million pilot training facility in Mumbai.He said that as India assumes a major political and economic role in the world, its legitimate needs for defense are going to increase, which bodes well for companies like Boeing.He added that Boeing sees India as the potential aerospace giant of the 21st century, with buying power being a key factor. “I think that some of the figures that I have seen are that less than 1% of the population is flying every year. So the opportunity to grow passenger figures is very compelling,” he said.Dr Thomas added that the biggest challenges that the aerospace industry faced in India were infrastructure, tax regime, policies and regulations, and manufacturing consolidation. He added that the proliferation of world class airports, easy access to support activities and immense potential buying power would support the growth of the sector in India.He ended the speech by saying that they were focussed on the next quarter century. “What we are laying down here in India, I think is going to position us for the next quarter century,” he said.

Professor Luis Martins comments on "The Power of Two"

We asked our Professor Luis Martins to comment on the article - "The Power of Two". He was kind enough to share his thoughts with us on this issue.

"I have a personal opinion on this, but am not really up on any research into the arrangement. Essentially, since any differentiation in an organization’s structure requires integrating mechanisms, this type of set up depends heavily on the nature of the integrating mechanisms (which can be done by reducing dependence by having each person focus on different aspects of the role, or by routines for communicating, etc.). Overall, it is tough to integrate the roles, which is why this set up is rarely used and is often unsuccessful. For example, the following link gives some stats: http://postcards.blogs.fortune.cnn.com/2008/08/05/motorolas-co-ceo-gamble/. Which is not to say that it cannot be done, or that it will always fail, but that it is a difficult structure to pull off because of the effort required to coordinate across the two co-CEOs."

Thanks to Professor Luis for his time and valuable comments.

Reliance ADAG Session

Speaker: Rajeev Bhadauria, President HR, Reliance -ADAG

Theme: What is General Management?

 

It was our privilege to have as guest speaker, Mr. Rajeev Bhadauria, President HR, Reliance –ADAG. Reliance ADAG was the biggest recruiter for the class of 2008 and going by the words of Mr. Bhadauria the statistics might stay for our batch as well.

On the request of the GMC core, Mr. Bhadauria set out to define what General Management is, what is expected of General Managers and what do we need to have it in us to be successful General Managers.

He started with the concept of Modernity. Modernity is a concept and has nothing to do with the idea of time. There have been modern people in ancient times. History is filled up with examples like Mahatma Gandhi, Albert Einstein who were much ahead of their times. These were the people who saw the forest rather then counting the trees. Being contemporary is not modern. Modernity is systematic; it is a sigma of a lot of attributes which help us get flexibility and adaptability. He defined the twin pillars of modernity as

Scientific Temper and Humanism. Humanism means looking at technology with a human angle.

The concept of Management doesn’t exist any more! Yes this is what Mr. Bhadauria went on to illustrate. Management is about managing processes, people and technology. In the 50s and the 60s managers did try to manage people but this is no more of a reality today. Motivating people has become a thing of past. Inspiration is what has come to stay. Who want to be led? We all want to lead by no one else but ourselves. This is where the paradigm shift happens from motivational management to inspirational leadership. Motivating factors of the past, like Salary, offices, good work life have become hygiene factors today. They are taken for granted and assumed to be given. The externality driven motivation has given way to the internality driven inspiration.

 

Why this change from motivation to inspiration? Management has become a programmed process but these are not enough to deal with today’s complexities. We need the ability to grapple with this accelerating pace of change. Around 1998 we faced a much talked about issue called the Y2K, globalization lead to development of internet. The next shift was towards ERPs and enterprise solutions leading to concept of virtual organizations. Today we are observing a shift from those virtual organizations to Agile organizations. We need to be agile, trying to make an attempt to grapple with this premise of complexities that we are facing. Steady state paradigms are a thing of past. Settlement is a myth that is always wanted and desired. But is it possible?

 

So the million dollar question is: How do you keep yourself prepared to meet this continuous change paradigm?

 

The paradigm has shifted from the phenomenon of effectiveness to greatness. Hence, today we talk not about management per se but leadership, leadership not as a hierarchy but leadership as a concept. GM means leadership in a contemporary context.

 

Driving customer value, nurturing talent, developing collaborative partnerships, robust planning, managing change, are all leadership traits.

What is leadership? None of us have any role except being business leaders.

It can be better explained by the story of two roads – one all trodden and the other less trodden pioneering road. Leaders question paradigms, Conventional wisdom. They follow the road less trodden. The choice we have to make is between mediocrity and greatness. It’s about how do you learn to be creative and how do you learn to be different. How do you learn to think out of the box?

 

 

How do you define General Management?

General Management cannot be framed in a set of words to give it a definition. In order to understand General Management we need to look from the perspective of roles of a General Manager. Mr. Bhadauria classified general management in 4 important role categories:

1. Analyst
2. Intervention Specialist
3. Change Manager
4. Evaluator

 

The concept of domain specialists has lost its meaning, the domains themselves are changing so fast that it is not expected of anyone to be a domain specialist, says Mr. Bhadauria. So what have become important are the roles like mentioned above which a general manager needs to carry out day in and out in whichever domain possible. There are certain abilities that we need to have to perform these roles.

 

Article of the Day

The Power of two @ WIPRO
April ' 08, Mr Azim Premji announced his retirement as chief executive and appointed Suresh Vaswani and Girish Paranjpe joint chief executives of Wipro. In sharing the post, the duo were being asked to embark on a management first for India. Mr Premji would, however, continue as chairman.
Six months on from their appointment, is “the power of two”, as they call it, proving to be better than one? Or are the sceptics right that at a group as sophisticated and fast-growing as Wipro it is just a recipe for chaos?
So far, the joint role has been good for the numbers. Revenue for the quarter ending in June was $1.39bn, up 43 per cent on the year before, while net profits increased 15 per cent to $190m.
However, with the collapse of Lehman and the deepening problems of other major clients in the US financial sector, India’s outsourcing industry is facing its most uncertain period since the tech bubble burst eight years ago.
Wipro’s dynamic duo are about to get the chance to prove whether the power of two is really better than one.
What do you think? Are we looking at a new paradigm in the top management concept or is it just a blip that will fail and fade away. Comment.

(Excerpts from FT.com
By Joe Leahy in Mumbai
Published: September 21 2008 19:32 )

Leaders in denial

“640K is more memory than anyone will ever need” Bill Gates

Above is often quoted to show the glorious uncertainly of predicting the future. To me, it talks about the genius of Bill Gates in transforming the market. He was not blinded by his vision, kept his hand on the pulse of the market and rode the wave to create a company that has made more than 12000 millionaires out of its employees. However history has enough examples of great visionaries whose vision grew on them and suffocated their companies. There are leaders who couldn’t care less for changing realities and lost everything in the process.

Unquestionably, the most critical role a CEO has to play today is that of being a thought leader and change-agent. There is a well developed marketplace for talent and skills, however you cannot borrow or outsource Vision. You got to watch out for the curves because that is where your leadership may either be reinforced or compromised.

Following is an excerpt from HBR article “Are you leader in denial”.

"The stubborn refusal of theU.S. automobile industry to admit the changeability of consumer demand is one of the best examples.

The Model T was introduced in 1908, and over the next two decades the Ford Motor Company sold more than 15 million of these cars. But by 1927 sales had flagged so severely that Henry Ford discontinued the line in order to retool his factories for its successor, the Model A. To make the change, he shut down production for months, at a cost of close to $250 million. This chain of events was disastrous for the company, because it allowed Chrysler’sPlymouth to gain market share and permitted General Motors to seize market leadership.

….

Ford’s blindness resulted from a conviction that he knew what customers wanted: basic transportation. He was equally convinced that this desire would never change. His favorite slogan about the Model T—“It takes you there and it brings you back”—captured this myopic view. What Ford didn’t grasp is that every product or service has two components: the core (the product’s primary purpose) and the augmented (additional functions and features). In every industry the border between the two inevitably shifts over time.

….

By the 1920s, the world was changing, whereas the Model T wasn’t. U.S. consumers had more money and more leisure time. The automobile had become more than a machine; it was a status symbol as well. GM’s president, Alfred P. Sloan, Jr., recognized this and responded with the augmented-product strategy. GM’s cars came in a variety of colors, and its models changed every year. Sloan introduced an array of products that announced their owners’ standing in the world: As Fortune put it, “Chevrolet for the hoi polloi..., Pontiac...for the poor but proud, Oldsmobile for the comfortable but discreet, Buick for the striving, Cadillac for the rich.”

….

Then, hit with oil shocks and stagflation in the 1970s, U.S.consumers returned to their original desire for basic transportation. The Big Three automakers couldn’t believe that the line between core and augmented was moving again—but the Japanese could. They swept in with precisely what Americans now wanted—cars that would get you there and back again reliably and cheaply. This time, an entire industry had been wallowing in the tar pit of denial, unable to imagine that eight-cylinder behemoths weren’t the last word. But history teaches us that there is no “last word.” Is the automobile industry—in its failure to heed the shifting tides of consumer demand—exceptional when it comes to denial? Hardly. Just consider the growth stalls at Kmart, Digital Equipment, Firestone, and Bear Stearns, to name only a few. Denial has involved many other issues as well, from ignoring external forces such as technological innovation and demographic change to overestimating a company’s own capabilities and resources."

 

GMC Panel Discussion (7th Sept.)

The first GMC session of term 4 was about gaining understanding about the typical challenges encountered in a general management role and the skills needed to overcome these challenges. The discussion started off with the alumni from different backgrounds working in different corporate sectors sharing their views and experiences followed by Q&A with the GMC members. The panel members were:

Kamal Narang, MD - Capmark Overseas Processing India Pvt. Ltd.
Janardhan Singh, Regional Manager – IMS Learning Resources Pvt. Ltd.
Srinivasu Satti, Vice President, M&A - Satyam Computer Services Ltd.
Anirban Chakraborthy, Project Controller (MD Office) - Punj Lloyd
Kamal Narang
Kamal works with Capmark in the financial services sector related to commercial real-estate investments. He gave his perspective of what a general management role entails irrespective of the industry. He highlighted the “general” responsibilities, challenges that arise and the key characteristics of a general manager. He also touched on how ISB has helped him in being able to carry out his role as a general manager. Here is the summary of his presentation:
“General” Responsibilities
- Implementing strategic planning in the most cost effective and efficient manner
- Managing: P&L, operations, SBU or a department.
- Developing future plans and strategy for the business unit or organization
- Compliance to industry and organizational rules and policies
- Transparent reporting (answerable to superiors, peers and subordinates)
Challenges
- Every day is a new day!
- Stressful environment (could be due to stretched goals & high accountability).
- Not getting credit for what you have done (and sometimes getting credit for you haven’t done).
- Resistance to change: Be ready to fight the battles; assertiveness (not aggressiveness) is an important quality; act as a change agent.
- Taking unpleasant decisions: Not all your decisions will be liked by all, especially people decisions.
- People: At times, most of a general manager’s time is spent on handling people issues – conflict management, employee retention, egos, etc.
GM – The “Renaissance” Man
- You need to be jack of many trades, and a master of a few
- Leader: Be an enabler (reaching collectives goals of the organization), motivator, innovator (bring about new solutions), and executor.
- PPP: Purpose – People – Process. Purpose – why, what and how; understand people and what motivates them; understand existing processes.
- Project manager
- Extra-ordinary: Be grounded, approachable, humble, fair and friendly.
- Decision Maker: Judgmental, risk-taker, assertive.
- Expressing effectively leads you closer to success.
- Become a change manager.
ISB – How has it helped?
- Academics: Cases and discussions have helped in figuring out how to approach a problem; conceptual understanding of topics in your specialization area; some frameworks do help to streamline your thinking.
- Out of box thinking
- Confidence in problem solving and decision making
- Time management
- Resources: Friends, faculty, networks developed with the ISB community and beyond.
- Become a change manager.
Kamal ended his presentation with an anonymous quote to sum it all up – “We can’t win at home. We can’t win on the road. As GM, I just can’t figure out where else to play”.

Janardhan Singh
Janardhan chose IMS because of his passion to work in the education sector. He joined IMS 2.5 years ago. He said the company encourages the entrepreneurial spirit of its managers. He shared his perspective by giving us a glimpse of his journey in IMS so far as a Regional Manager located in Hyderabad.
- Understand your customer: He said he learned the ropes of the business by initially taking classes for students, and taking counseling sessions for students. He mentioned how his first class was with just one student and how he learned to connect with the students. By taking a class, he could gain an understanding of the pain points of the students. IMS Hyderabad had a 4% market share a couple years ago and has grown now to 16-17% market share. Established 9 centers in Hyderabad with a low cost strategy.
- Recognize the different needs: The directions to the Hyderabad office were coming from the head office in Mumbai. But, the situation in Hyderabad is totally different compared to Mumbai. IMS Hyderabad was hardly known.
- Connecting with people: When he joined the Hyderabad office, he said the first step he took was to the remove the barriers between MBAs and non-MBAs. He met every single person on the team, excluding no one. He made himself approachable and accessible. This helped in gaining valuable information. He went on to describe how he operated under resource constraints, how he invested his time in people. For example, the counselors had the feeling of being treated as mere receptionists. He tried to change their feeling by emphasizing how they are the career influencers of students who approach them.
- Encouraging transparency: It is important to provide employees opportunities to grow their careers and encouraging employees to be open about their career aspirations.
- Good listener: It helps in learning about people, retention management.
- Establish processes in place.
- Walk the talk: You need to be seen as a believable and trust-worthy person. Back up your team in times of crisis.

Srinivasu Satti
Srinivasu is VP of M&A at Satyam Computer Services. He had a variety of roles in the 9 years of experience before coming to ISB – Civil engineer at L&T, Project Leader , Corporate Strategy at Satyam, etc. The one thing he highlighted along with agreeing with what some of the other panelists conveyed is the integrated nature of learning at ISB. He believes that a person from any type of work background can play a general management role as long as he/she realizes the necessary key skills and works on acquiring them. He said that during the last 6 years of his work at Satyam he was been able to relate internal strategy measures with the external strategy followed by the organization. Over these last few years he has gained the experience of overseeing 30 deals (including the ones that they went through and the ones they chose to drop) Srinivasu closed his part by iterating the importance of “full lifecycle leadership” – you have to give importance to all the aspects of managements depending on the situation.

Anirban Chakrabarty
Anirban described his exciting journey so far after ISB and shared with some things that matter and some thing that don’t in the context of the work he was doing. Right out of ISB he started with Ernst & Young. He mentioned that his first assignment was a financial assignment. He was sent to U.S in his first week on the job and was requested to rehash the accounting system for Anheuser-Busch brewing company. This showed that ISB grads are expected to hit the road running on your first job out of ISB. After his stint at E&Y, he wanted to take on new challenges and moved on to Punj Lloyd because of the growth track the company was. He joined as an Executive Assistant to the M.D. at Punj Lloyd. He described some of the benefits and drawbacks of working for company without strict processes in place. It started with the difficulty of meeting his boss and to try to define his exact role. After he met his boss, he learned he had the freedom to structure his role and free operation. He focused on strategy. He the people at the profit centers at various countries that Punj Lloyd had presence in. Not surprisingly, the job entailed a lot of international and domestic travel. Some of his key points:
- Incentives define behavior, because most people don’t take targets seriously
- You will have to deal with resistance to change, be patient.
- Patience is important; you have to work on a sustained continuous basis.
- Understand what the adhesives for the organization are.
- Legacy needs to be understood and leveraged where possible before bring about change.
- Importance of extra-curricular activities in the long term. You will be a well-rounded person because of it.

The session ended with Q&A from the gathered students and was followed by lunch and resume review session with the panel members. Overall, it was a great session!