REPOST: Look After The Suits - They Drive Competitive Advantage More Than Strategy Or Innovators

Sebastian Bailey shares in his article that every individual has a unique contribution to a business' success or failure.

Image Source: forbes.com

What makes the biggest difference to revenue, brilliantly creative people, a ground breaking strategy, lean processes or strong middle management?

In 2008, MIT School of Management researcher Ethan Mollick set about to discover what has a greater impact on performance within the computer game industry: people or process. Armed with data about the revenue and ratings of 1,536 games across 602 firms, he looked at what proportion of performance could be accounted for by individual contributors – the game designers and managers – and organizational factors. Controlling for team size, the year the game was released, the genre, publisher and whether the game was a sequel or included licensed content, he discovered that individual contributors accounted for 25% of the difference in revenue generated and 19% of the difference in ratings. This was at least equal to the variance accounted for by organizational factors. What’s more, individuals in managerial roles had a greater impact on performance than the creative designers. When the blockbusters and flops were removed – the top and bottom 10% according to revenue – designers accounted for just 7% of the variance, compared to 27% accounted for by managers.

Far from being interchangeable, individuals uniquely contribute to firms’ success or failure. And even in an industry which rewards creativity, managers had a greater influence on performance than the innovators. For all the hoopla surrounding the innovation process and the attention and rewards lavished on innovative individuals, managers are the ones who facilitate communication, encourage organizational commitment and, ultimately, translate that innovation into reality. Perhaps it is no surprise that Tim Cook went from COO to CEO – for all its emphasis on the shiny and new, Apple knows that what really drives success is good quality operations.

Of course, a single entrepreneur can influence an entire market; some say that top computer programmers produce the same amount of work as 10 – 20 average programmers and, according to some estimates, 6% of publishing scientists account for 50% of published articles. Clearly, individuals do matter. But few industries pay as much attention to individuals at the lower level, like middle managers, who are often largely responsible for making the strategic vision happen.

The lesson for business leaders from Mollick’s research? Middle managers matter more than you think – so it pays to invest in them. 

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REPOST: Be your own boss: How to set up a franchise

This Economic Times article gives tips on how to be a successful entrepreneur through franchising.

Frustrated with your job? Feel like strangling your colleagues? Want to push your boss from the top of a cliff? Cry buckets of tears when you get your pay cheque? Want to start your own business?

If you have answered in affirmative to any of these questions, here's fast and safe way to be an instant and successful entrepreneur. No, we aren't spinning the spiel of a swindler. As thousands of Indians have discovered, there is a less risky way to start a business than setting up your own venture: franchise. The franchise industry has opened a wide window for many would-be entrepreneurs, who have the zeal and the zest, but not enough business expertise. Buying a franchise lets you be your own boss in any field that you are passionate about without the added worries that is a given with your own venture—ideation, brand building, infrastructure, legal problems.

The best part? You get help to start a business anywhere, at any age and with any budget. Bangalore-based Lourdu Mary retired as a primary school teacher five years ago. "However, I got bored within a few years, but finding another job at my age was impossible. When I came to know that I could open my own pre-school with just Rs 3.5 lakh, I jumped at the opportunity," says the 65-year-old. The company, My Apple School, provides the curriculum, support and training to her staff.

The supporting appeal of the franchise industry has been the reason for the surge in its popularity in the past decade. Currently worth Rs 82,500 crore, it is estimated to grow to about Rs 2.91 lakh crore by 2017, according to the Indian Franchise Report 2012. The main reason is that both domestic and international companies want to expand their footprints, but don't consider it a viable proposition to do it on their own due to operational and financial pressures.

They prefer to look for partners who can invest to run a branch of their business. From international brands like Domino's and Dunkin' Donuts, to domestic ones like NIIT and Naturals, a lot of companies are opting for the franchising model. It's estimated that the franchise industry is growing at a rapid pace of 40% a year. One of the biggest gainers of this warp-speed growth is Ravi Jaipuria, chairman of the privately held RJ Corp. He is India's newest billionaire, with a fortune estimated at Rs 8,250 crore, and has built his fortune as a franchisee for brands like Pepsi, Pizza Hut, KFC and Costa Coffee. So, do you want to get on this super-fast bandwagon to business bonanza?

Where should you start?

The first thing you need to decide is whether you are fit to be a franchisee. Don't be blinded by dreams of instant riches or assume that because you have a ready-made business plan, you can relax in a hammock and soak the sun. Running a franchise will require as much hard work and effort as running your own venture. Says Gaurav Marya, president of Franchise India: "A franchisee needs to understand that while he has bought a brand name, and with it the potential clientele, the onus is on him to grow the business. It's not an 'invest and forget' option."

The business also comes with stringent conditions about how the workplace will look, the products that will be used, the programme menu that will be implemented, the royalty that will have to be paid, and so on. Individual innovation is rarely possible and thinking out of the box could be frowned upon. So, carefully study the pros and cons before you sign a franchise deal.

Once you've made up your mind to buy a franchise, you'll have to decide what exactly to do. With almost 3,700 companies in about 15 diverse sectors, from food and footwear to furniture and furnishing, the choices can befuddle you. Go through the story, 'Which franchise is best for you?' to figure out where you should dip your toes. On deciding where you want to start from, you can narrow down your choices. Marya advises that if you're a newbie, it may be better to start a business in the field of your professional expertise. "When you understand the intricacies of an industry, you are well-equipped to handle the daily business and any crises that may crop up," he says. Also, you will be in tune with the realities of the sector, which could help you identify the right company to partner.

Angad Singh followed this tenet when he moved back to India after working for a couple of years at a hotel in Melbourne, Australia. His father, Ravinder Singh, had taken VRS from a bank, but wanted to continue working. The father-son duo invested their savings to buy a franchise of New York Pizza and Fried Chicken in Chandigarh. "Both my father and I are passionate about food, but neither of us had the expertise to set up and run a business. Taking a franchise was the logical answer," says the 26-year-old.

Image Source: articles.economictimes.indiatimes.com

Bertrand Management Group assists businesses in their operations, manpower, and management strategies. Know more information about the industry by visiting this Facebook page.