The bankruptcy of consulting firm Monitor Group surprised many, especially followers of the firm's founders — strategy gurus Michael Porter and Mark Fuller. (No management education is complete without a cogitation of the Porter's five force model.) Monitor, known for its high quality work, was considered to be a top ranking strategy consulting firm along with firms like Bain, Booz & Company, The Boston Consulting Group and McKinsey.How is it possible that the very firm that advised corporations and governments around the world on business strategy was not able to formulate a strategy for its own survival? The Hindi saying 'Diye Tale Andhera' (It is dark under a lamp) aptly describes Monitor's situation. A firm that showed light to others lost its own way.The recession of 2008 dealt the first blow to Monitor and from there on it was all downhill for the company. In 2010 it hived off its research arm, Grail Research; and in 2012, it filed for bankruptcy.There are many views on what went wrong for the Monitor Group. Taking on an assignment for the late Libyan dictator Muammar Gaddafi between 2006 and 2008, which Monitor later regretted, may have been one of them, but could not have been the only one. The Economist magazine suggests that its structure had become unwieldy and unaffordable as a result of its entry into multiple areas such as executive education, nonprofit consulting, government work, etc. Forbes magazine feels that the firm's customers stopped seeing value in what it was offering. There are dozens of opinions out there; and it is not easy to say who is right, without delving deep into the firm's history. In all likelihood, all the above factors, and more, together brought the firm down.What lesson does the Monitor story have for competitive intelligence and strategy professionals? What should companies do? I feel that there are no new lessons to learn, but the saga certainly reinforces many old ones.Nobody Is "Safe"All companies, no matter how knowledgeable, strong and dominant, they may seem at a given time, are vulnerable to competitive forces if they remain complacent and take their eye off the ball. All organisations can, and do have blind spots, which they need to proactively be alert to. This is borne out time and again by the number of supposed giants that have lost their edge in the market either temporarily or permanently (Kodak, RIM, Blockbuster, Apple, etc.).There Is No Such Thing As Sustainable Competitive AdvantageAll companies strive to gain a competitive advantage over their peers, and all of them struggle to retain it once they have it. Those who have an edge over their competitors as a result of government regulation are perhaps among the few who are able to retain it for a significant period of time. For example, if companies need to obtain licenses from the government for operating certain businesses, those that have the licenses already have a competitive advantage, until the government issues fresh ones.Most other companies need to continually innovate to deliver value to their customers in different ways, in order to survive and stay ahead of the competition. Any competitive advantage gained is lost very quickly as competitors counter these with similar or newer value propositions. For example, Apple dominated the PC market in the 1970s and 80s, but hit a rough patch with a fall in market share in the early 1990s. It regained its technology leadership in the 2000s with the launch of the iPod in 2001 and then the iPhone and iPad. Many competitors now have products that compete with all of these. Whether Apple is able to maintain its leadership remains to be seen.No One But You Can Solve Your ProblemsIf customers stopped coming to Monitor Group, it was because the firm had stopped delivering value for the amount it charged its customers. Corporations have learnt over a period of time, that while they need inputs from external consultants, only they can solve their own problems. It is up to them to determine what inputs they need and seek only those. They cannot expect external consultants to make their problems go away. Is the demise of Monitor a signal to its peers, viz. the other large global consulting firms? When times were good and corporations made healthy profits, there were many who were willing to pay, what now seem like obscenely large fees, to these consultants.With the global economy hitting numerous rough spots, consulting budgets have reduced sharply. Companies are relying on their own managements to come up with smart competitive strategies. And that is actually how it should be. No external consultant can know a company's business better than those who run the company. That doesn't mean consultants can't add any value at all. What it means is that companies need to be very picky about what they seek from strategy consultants.What lessons have YOU found in the Monitor saga? Do share your views…Varsha Chitale is a Director of ValueNotes (www.valuenotes.biz), a provider of market intelligence, research and consulting. She leads the competitive intelligence practice at the firm.
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The fuel battle is getting interesting. With buyers flitting between petrol and diesel variants, the demands of aspirational Indians has given birth to a whole new category called the "affordable special utility vehicle (SUV)". And products like the Renault Duster, Maruti Suzuki Ertiga and Mahindra and Mahindra (M&M) Quanto are catering to this segment. However, while the market is moving in that direction with diesel engines, Honda Cars India and Toyota Kirloskar Motor are looking at the market very differently by focusing more on a 50-50 petrol-diesel strategy."There is a clear indication that in 15 months we will see a correction in favour of petrol engines," says Kumar Kandaswami, senior director at Deloitte Touche Tohmatsu. "The last 20 months have seen original equipment manufacturers (OEMs) focus on making their vendors move to diesel components and have starved their petrol capacities," he says, adding that only those OEMs who will be able to balance their petrol and diesel portfolios will have good growth in the coming year. According to auto analysts, in the nine-month period, nearly 300,000 cars were unsold — of which 70 per cent were petrol cars. Will Honda and Toyota be able to pull it off? Honda will localise its diesel engine and push it into the new sedan Brio Amaze. It is said that it is also planning a diesel hatchback under Brio. The firm declined to comment on its product strategy. Honda was the leading auto maker in the C and D segments (mid and large passenger cars) three years ago. When the dieselisation of India took place, it surprised the Japanese auto makers. Honda's market share in the C segment came down from 30 per cent (2010-11) to 14.77 per cent, and from 35 per cent market share to 3 per cent in the D segment. The Brio petrol hatchback has sort of revived its fortunes by capturing a 5 per cent market share in less than one year and beating the likes of Nissan and Skoda that have strong diesel portfolios. The company reportedly plans to revive the Honda City and the Jazz in the petrol segment in the coming year and work on a global multi-purpose vehicle strategy, from its Indonesian plant before coming to India in two years. For Toyota, though, "the market view is the long run and we will launch no new product till 2015", says Sandeep Singh, deputy MD of marketing at Toyota, which has reclaimed the top spot globally after two years of being number3. But the company hopes to set right things in India where it has taken a forex fluctuation hit importing diesel engines. Also, rising input costs have led to a hike in prices of its marquee brand, the Innova, with stiff competition from M&M and Maruti Suzuki.Toyota has invested nearly Rs 500 crore for a 100,000-capacity petrol plant, which is 90 per cent idle. "Even a Rs 5 increase in diesel price will set the public thinking about moving to petrol cars. But once the vendors are in place to move between diesel and petrol components, OEMs can take a more meaningful approach to managing their inventory," says Kandaswami. Currently, of the 2.3 million cars produced in India this year, 40 per cent of the cars sold were diesel cars, a 50 per cent jump over 2011-12. The Japanese, however, are going to have a better year ahead than what they have had to face over the last 12 months.
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An India Pakistan series is always a good time to catch up on commercials, as jingles and slogans creep up on you ad nauseam. And while you are glued to the box, trust social media to come up with the pithiest comment on the action during the break! As somebody tweeted, “The youngsters who were standing on the Airtel bus have now sat down at the CCD café.” Must admit, CCD’s first ever television commercial that weaves in the social media chat culture succeeds in breaking the clutter. One thought though – what’s the idea behind irritating jingles? Yes, agreed, "honey bunny, pumpkin pumpkin" may insidiously worm its way into your head and even into Sangeet ceremonies -– the ultimate proof of popularity -– but is it doing anything at all to brand Idea? The verdict from the ad frat is a resounding No. Three of this fortnight’s picks: No Longer CheekyMicromax, the challenger brand with chutzpah, rings in the new year with a new campaign for its brand new superfone A110 Canvas 2. The promise is that the phone with a five inch screen, 1GHz dual core processor, 8 mega pixel camera and Android 4.0 OS can do anything. So, we have a young man living out the “Can Do” anything promise. Shot in South Africa, the ad created by Lowe Lintas is slick, and sends across the message that hey, here’s a phenomenal phone through clever copy “make ugly look lovely” and so on. But hey, one misses the cheekiness that characterised most Micromax ads, and also the firangi look is a bit of a disconnect. A Feast For Your EyesA visual feast. That’s the quick verdict on the new Sunfeast Dark fantasy television commercials created by Draftfcb Ulka on air since 20 December. Oozing a feeling of sumptuous and luxury, both the ads -– one for the chocolate variant and the other for the vanilla variant -– convey a sense of richness, through minimal use of text or words. And the clincher is in the last shot, which as the camera suddenly zooms out shows just how far one will go for a Dark Fantasy. NEW APPROACH? The firangi look in the Micromax ad (L) seems a disconnect; Indigo (R) 'air-tested' its menu on high fliers A Sub In The SkyIt seems all the action is in the sky these days. We had Finn Air wooing us one Diwali with Bollywood jhatkas mid air. We had KLM trying to play matchmaker with its Meet and Seat programme, where it would match passenger profiles and seat similar background people together. And now it is Indigo Airline’s turn to woo its passengers with a surprise in the sky. On one particular day, recently, over a thousand passengers aboard Indigo jets were pleasantly surprised with boxes of free food samples. The boxes contained a new range of Indigo’s signature airwiches and subs -- the menu being air-tested on high fliers. Passengers were asked to vote for their favourite, with the winner making it on-board as the 'Passenger's Choice'. In the age of co-creation with customers, Indigo’s creative agency Wieden+Kennedy pulled off the challenge of a menu change by involving passengers in getting the best food on board. Catch the fun food outing here on this link http://www.youtube.com/watch?v=K91fON1945A&feature=plcp We would like to hear from you. Write to us at businessworldonline (at) gmail (dot) com
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The best and brightest from across the Indian banking firmament under one roof in New Delhi. Hard to imagine? This was no figment of the imagination as the Businessworld Magna Awards 2012 — India’s first awards to recognise excellence in both commercial and investment banking — saw the who’s who from commercial and investment banks rubbing shoulders at the Taj Palace Hotel.While Businessworld’s commercial banking awards, with PricewaterhouseCoopers (PwC) providing knowledge support, have been around for five years, the investment banking awards are a new introduction this year. The former are a tribute to the best banks overall as well as the fastest growing among small, medium and large banks. The awards also recognise the most tech-savvy bank, socially responsive bank and lifetime achievement in the world of banking.The investment banking awards recognise the best deals as well as the best dealmakers across six verticals — mergers and acquisitions, qualified institutional placements, cross-border loans, syndicated rupee loans, syndicated rupee bonds and foreign currency convertible bonds. At the outset, managing director and CEO of the ABP (Ananda Bazar Patrika) Group — which publishes Businessworld — D.D. Purkayastha saluted all the winning banks for defying adverse economic conditions.Deepak Kapoor, chairman of PwC India, underscored the challenges of the business environment in which banks operated. “It’s very heartening to see that despite the challenging business environment, the level of performance was top notch... What gave the winning banks the edge was their efficiency in using capital and managing risk.”Antony Jacob, CEO of Apollo Munich Health Insurance Company, broadened the discussion. “I believe there is a significant collaborative opportunity between the banking and insurance sectors.”The guest of honour for the evening, Rajkumar Dhoot, Member of Parliament and president of Assocham, congratulated the winners and hoped that the event “will generate more competition among banks to excel”.The chief guest, Union minister of rural development Jairam Ramesh, opened his keynote address on a lighter vein. “Apologies for being late. We had a rather unusual event today: Parliament actually functioned! We had a whip, a vote and Parliament really functioned the way it normally should function.”But he soon took on a more serious note. “The world I come from, many of the assumptions that govern the banking industry get overturned... the assumption that bigger the bank, better the bank; the larger the canvas, the better off we are. In rural development, large banks do not really fulfil the mandate given to them in terms of social objectives.” He went on to urge banks to do more. “Banks fulfil more than a commercial role...banks and financial institutions are crucial to the welfare delivery system (cash transfers).” The awards for the best banks overall and the fastest growing were then given to the winners amid thunderous applause. Ranjana Kumar, former chairperson and MD of Indian Bank, was given the Lifetime Achievement Award while the Banker of the Year Award went to Shikha Sharma of Axis Bank.Next up on the programme was the unveiling of the special issue of Businessworld devoted to the best dealmakers of 2012. The honours were done by Jairam Ramesh, Rajkumar Dhoot, Antony Jacob, Aveek Sarkar, editor-in-chief of the ABP Group, and Prosenjit Datta, editor of Businessworld.The unveiling of the special issue was followed by the awards for investment banking. The first set of awards was given to arrangers of individual deals done since 1 January 2012. The second recognised financial houses based on the total volume of deals done by them. In both sets, the top 3 deals were referred to a jury which decided the winner. The data for the awards was provided by Bloomberg. The awards presentation concluded with Oommen Thomas, national head-advertisement sales, Businessworld, thanking all the sponsors of the Businessworld Magna Awards 2012: associate partner Apollo Munich Health Insurance Company, gift partner Xerox, television partners ABP News and NDTV Profit, knowledge support PricewaterhouseCoopers India, data partner Bloomberg and felicitation partner Episode.(This story was published in Businessworld Issue Dated 14-01-2013)
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On a hot summer afternoon in 2006 I was accosted by a young Chinese woman at the base of the Great Wall stretch near the capital Beijing. I remember I was sipping a Coke, as I watched tourists trundle down after a walk on the wall that in many ways defines China’s history, strength and resolve. “You speak English,” she asked? When I nodded my head, she quickly made me sit on a nearby bench and said haltingly: “Talk…to…me…in English.” We spoke for a while. She asked questions about me; I answered. A bit later she stood up, bowed and said “thank you” before walking away happily. A few days later, a man caught hold of me on a road in the southern Xiamen city. He too made me sit outside a shop and urged me to speak with him in English. “I am learning the language, but I don’t have anybody to practice with,” he said, introducing himself a schoolteacher. We spoke about this and that for a while. As in Beijing, he stood up after a while and walked away after thanking me for my help. Happy. The 2008 Beijing Olympics were not far away and the Chinese government had urged its people to learn the universal language quickly. The population was doing what it had been asked to. The effort to learn the language that connects the world has paid dividends in a nation that aspires to beat the West by learning the ways of that world. If business has to be done, it has to be done the way the West does it; it is after all China’s biggest market. And if certain skills are needed to master the shortcomings, those skills are to be acquired at all costs. Just as the world’s most populous nation set out to teach English to its people ahead of the Olympics, China now wants to produce a record number of college graduates who can go out and work with the rest of the world in ways they need to. The plan is ambitious and expensive, but the Chinese leadership is quite happy to make a $250 billion annual investment in creating human capital. That’s a lot of money, but then there are lots of young people in China who want the opportunity to enter the job market, which needs to be broadened. China is of course trying to learn from the post-World War II efforts by the United States and Japan to create a new workforce by spending billions of dollars in training large chunks of population, including soldiers returning from war, in new skills. However, a better-educated population raises different problems, some of which India is currently battling. As incomes rise, so do aspirations. As aspirations rise, so do demands. If, for some reason aspirations are not managed and demands not met, the chances of political and social unrest increases. India has two problems. Firstly, its colleges are unable to accommodate all the students who want higher education. India’s 33,000 colleges and 700 universities can take in only 4.5 million, or just over 20 per cent, of the 18 million students who need university education every year. Secondly, its job market is not growing at a pace that is needed to accommodate all the students who graduate from universities. In the five years ending 2008-09, India was able to create only one million jobs! With growth slowing and expected to be in the range of 5-6 per cent every year, the demand-supply gap in education can lead to horrendous politics and economics. There are good reasons to worry when data shows that more than half of India’s 430 million-strong work-force is either illiterate or semi-literate. Despite a boom in certain sectors, what India has failed to generate through its universities is a bunch of world-class innovators who could create long-lasting global brands and businesses. There are tens of thousands of engineers and management graduates, but the quality is suspect. And this stems from the poor quality of education in schools where, according to a recent report on the state of the education, more than half of fifth grade students are unable to read grade two books. China could do well to look at what’s happening across the Himalayas as it begins to move faster on the development curve by creating better educational opportunities and more jobs in a slowing economic environment. The latest growth numbers have mitigated fears that the Chinese economy would crash land, but in the long run the Chinese leadership will have to worry about its ability to fulfill the aspirations of an educated population. Inability to meet expectations and provide opportunities – not many Chinese went to college until 1990s -- will create a very different set of pressures for the government in a country where freedom of expression and media are both controlled. China has a hard task in preparing its white-collar workforce to meet the challenges from the West as its companies expand and spawn large global footprints, taking on some of the biggest firms across the world. Thanks to the government’s one-child policy, China is facing a shrinking workforce. That is not bad news at a time when economic growth itself has fallen lower than the double-digit GDP jumps that world had become accustomed to see. In the medium term, China wouldn’t mind a slower economy as it pushes its youth into colleges and provides them with the skills to take on the best in the West. But its has to be aware that if there are not enough jobs around, the aspirations of the educated could turn political which will be difficult for the Chinese leadership to accept and manage. China needs to balance it well. (The columnist is president, public affairs, Genesis Burson-Marsteller and a former newspaper editor. He has a deep interest in matters related to China and Southeast Asia)
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One of the things that remain to be fully appreciated about telecom in India is the industry’s changing importance to the common man. There was a time, about 18-20 years ago, when telecom — mobile phones and access to the net — was a luxury. Today, it is a necessity. In fact, everyone, from farmers to carpenters, food delivery services to banks, transport operators, travel agents, media, just about anybody, needs access to reasonably affordable voice and data services. It is the only way to ensure faster and more equitable economic growth. It only seems natural then that taxes on telecom services be reduced. Currently, subscribers have to bear a 12.36 per cent service tax and the industry continues to attract 23 per cent tax, which is amongst the highest in the world.For the industry to grow and meet the goals of the National Telecom Policy of “availability of affordable and effective communications for the citizen”, taxes must be reduced. Otherwise, rural penetration of telecom will remain a dream. It will be impossible for financial services, market data, government health and education schemes and m-governance/ e-governance to reach rural India. The imbalances between urban and rural development will continue to widen at a faster pace. The telecom industry will be hoping that taxes are rationalised keeping in mind that telecom is no more a luxury and a very basic enabler for the rural poor.The argument that operators must drop call, data and other service rates (further) to increase uptake and market penetration is not a good one. Already, India has amongst the lowest rates in the world. Lowering it any further will cripple operators. The rationalised tax structure will have a much-needed indirect impact: banks that find it difficult to lend money to telecom operators will loosen their purse strings, seeing that growth in the industry is assured. This budget must ensure that money is more easily available to the industry to build out better infrastructure (towers, Optical Fibre Cable, etc).I would also emphasise diesel costs here. If they go up, it increases the bill to run cell tower generators (which are a major component of mobile infrastructure). The mobile industry is responsible for 3.5 per cent (2 billion litres) of India’s annual diesel consumption. The point is that the diesel generators are necessary, especially in remote rural areas where cell towers are not serviced by power grids, so either provide the operators with uninterrupted power supply else don’t cripple them by added costs. By implication, the Union budget must provide incentives for the adoption of alternate sources of energy for cell towers. Not only is this a long-term solution to provide power for communication, but also to bring down costs and reduce emissions. I believe telecom operators will welcome this, given the fact that it will also prevent pilferage of diesel that is rampant in the business and adds to operating costs.On the hardware front, one can only hope that the finance minister thinks it prudent to continue with the 1 per cent excise duty for handset makers and the concessional excise duty rate of 2 per cent (on condition that no CENVAT Credit of any inputs is availed of) for parts and components such as battery chargers, memory cards and handsfree devices.Overall, the emphasis on encouraging R&D expenditure (through the deduction of 200 per cent tax liability) has had the desired effect and we have seen local handset manufacturers offering some exceptionally rich devices to consumers. India is the second largest handset market in the world (after China). Indian users are becoming mature, demanding a complex set of features. This is a good sign and local R&D can only help reduce the cost of ensuring that every segment has access to smart phones. Besides, the development of such handsets will find a health export market.Finally, we hope that the finance minister announces measures that will boost mobile entrepreneurs (through fiscal incentives, access to funds and through the creation of special funds that provide entrepreneurs with visibility in the international market and connects them with other entrepreneurs across the world). This is a key segment that is powering innovation around mobility. It pushes the industry envelope and ensures that handsets and networks continue to expand their capabilities and improve their services.True democracy for a country can only be achieved when all its citizens can have access to education and information and can use the same to impact their daily lives in a more safe and productive manner, what better industry can enable that than mobility?(Sunil Dutt is Managing Director of RIM in India)
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The difference is stark. The Roads and Highway ministry is struggling to hold on to private investors who are exiting critical highway projects across the country. Meanwhile, the Ministry of Railways is actively pursuing and engaging private investors to invest in dedicated freight corridors.Railway Minister Pawan Kumar Bansal seems to be getting some traction from investors for the freight corridors. The 434-km-long Mumbai-Ahmedabad high-speed corridor for instance is slated to cost Rs 63,000 crore and will require funds from private investors.At the Road Ministry, the mood is glum. The government’s target of building 20 km of highway every day is nowhere near being met. The current rate is barely 5 kmperday. Recently the GMR Group walked out of the Kishangarh-Udaipur-Ahmedabad NationalHighway project 16 months after it won the project in a bid as it did not get environmental and other clearances in time. The industry is abuzz with news that some other operators are contemplating an exit too as project costs are rising and clearances are not coming through. This is scaring lenders who are either suspending fresh exposure to the sectoror are advising companies to exit delayed projects.As a combination of these factors, the government has been able to award highway contracts of only about 10 per cent of its target of 8000 km for year ending March 2013. Road Minister CP Joshi may be putting up a brave face, but it is clear that attracting fresh investment from private players will be tough now.Issues of land acquisition and environmental clearances are common to road and rail. There are many ways in which government agencies can coordinate to offer ready to utilize land. The proposed National Investment Board is expected to take up this role for all mega infrastructure projects.If the government is wondering which sector to revive after its effort on retail, it has to be roads and transport. Transport policy in India has always been fragmented and uncoordinated. Railways and Road Ministry have made their policies independently. After many years, both the ministries are under the same political party. Also, the ministers in charge are pragmatic, pro-private sector and reformist. This could be the chance for the UPA government to ensure that it creates a coordinated transport policy that makes the most of private sector investment.Any step that shows that government is synchronizing its steps will again enthuse the private contractors and lenders. Most corporate leaders say that lack of funds is not a problem for them. The real issue is lack of bankable projects.Growth momentum can’t be revived only with reduction of interest rates. As industrial activity picks up, it will require an improved infrastructural environment. Consumer demand is growing in middle India. Catering to this market will require immense logistic effort that must ride on efficient rail and road linkages. Such linkages will drive down the cost of these products and contribute to inflation management.Government must now make a fresh push in roads and railways to transport growth to a new level.(Pranjal Sharma is a senior business writer)
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One way to understand a place is through the people you meet there. During the IMD Executive MBA Silicon Valley Discovery Expedition of 2012, the class met approximately 140 individuals, from all walks of life. The vast majority were extraordinarily well-educated, amazingly networked, successful, open-minded, experienced in various domains and wanting to make a difference. Few were simply "doing a job" for a pay check. All had the hope and expectation that they would change the world in some way.Let's start with Guerrino de Luca, former Apple marketing genius and now CEO and Chairman of Logitech, the well-known mouse and PC peripherals company, now extending itself to support tablets and video. Though its roots are in Switzerland, Logitech is very much a product of Silicon Valley, and we saw on stark display the openness and no-nonsense attitude of the region. The firm has not done well recently, and Guerrino gave us a very blunt assessment of the mistakes that he and the company had made, and what they were doing to come back. No punches were pulled. Silicon Valley is a place based on meritocracy, and the visit to Logitech, and the candid talk by Guerrino was a perfect reminder of this.Like our EMBAs, many come to the Bay area to see, feel and touch entrepreneurs. But what are the essential traits of the successful entrepreneurs and what do these entrepreneurs look like?I'd argue that many look like David Lazovsky, founder and CEO of Intermolecular. After 9 years in a large company he saw things happening in the semiconductor industry, and his company was not responding to the opportunity, so he decided to go out on his own and do something about it. He took stock of what he knew and had, and started networking with smart people. He had an idea, not yet a technology or even a business plan. But he found the right people, including a good venture capitalist, put together a great team and then started figuring out how they wanted to change the world. Seven years later, before he himself turned 40, Dave took Intermolecular public and they are well on the path to becoming a profitable billion dollar company.And some of the entrepreneurs look like Paul Towhey. The thirty-three year old, two black belt, computer science geek from Stanford and Berkeley, dropped out of his PhD program to work at Palantir on "big data." He then went on to strike out on his own with his co-founder, Corey Reese, whom he met at a hack-a-thon. Together they created Ness, a beautiful personalised search engine for finding great restaurants. Ness learns your taste, literally… and one day Google or Yahoo! will either buy them or be worried by them.Alex Rampell, co-founder and CEO of TrialPay also looms large as the entrepreneur poster child, though by accident. He fell into being an entrepreneur, because that's all he has done all his life. When he was young he created a cute software program and posted it online just as the Internet was starting, asking users to send him $5 if they used it. His boarding school post office was inundated with envelopes containing $5 checks. Creating products and a company is a natural thing for him. One thing led to another and today he is running a company that has so far received $75 million in investments, and has 100 million users in 180 countries. Alex has found a niche that pays, one that most of us (any of us?) probably never thought of before: placing advertisements online in unusual but highly trafficked places like bill payments. Today he has 2,000 advertisers using his technology.And I'd also suggest that Hilary Barroga, the programme director at ECH Lifebuilders, is a great example of a Valley entrepreneur. She is helping to run a shelter for the homeless in Santa Clara county. Though she could get a job anywhere, she is using her education and talents to make a difference for those who have fallen by the wayside in one of the richest regions of the world, and she is doing it with the leanest of budgets, like any successful startup founder.But allow me to weave two more threads into the fabric of Silicon Valley: innovation and people motivation.If you get a group of people to talk about innovation, eventually someone will mention IDEO, the industrial product design firm headquartered in Palo Alto. Dave Blakely and Bruce MacGregor embody the firm's unending desire to find better ways to do things. To ask the right questions, get the best team together, and then rapidly brainstorm, prototype and test until you have an amazing solution. Any time spent with the folks at IDEO leaves you wanting to innovate and unsatisfied with the status quo.Some will argue that it is solely money that motivates people in the Valley. Maybe. Others will state that it is the opportunity to work with the sexiest technology. Possibly. But Debra Engel and her band of HR Divas were able to bring much more granularity to this discussion. The Divas are not a startup – they're simply a group of experienced individuals who have helped many companies change the world. Though very much a Human Resource professional, Debra and her friends also bore a striking resemblance to the entrepreneurs that we met: smart, incredibly networked, open-minded, blunt and with a ton of experience. Their simple recipe for motivating people? Hire the best, and they will attract the best. Hire 'A' people, and they will attract other As…. (Or hire Bs, and let them attract Cs, but then don't assume you will change the world).Spend a week in the Valley with a group of inquisitive EMBA participants from around the world and you'll discover hundreds of people stories like these. Are these people inherently different from the rest of us? Not really. Most of us have the education, experience and intellectual breadth and acuity necessary to create and nurture a business. But most of us are caught up in the comfort of our current jobs, and the inertia of life. And perhaps with good reason, as entrepreneurs take enormous risks when they take the leap without the safety net that a job usually provides. But any of us could do this if we wanted to or had to.(Jim Pulcrano is Executive Director of IMD, and a member of the teaching team for IMD's Executive MBA. His doctoral research is on entrepreneurial networking.)
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