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Economics of Value

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Commodities are cheap. They’re cheap because they’re standardized, easy-to-find and easier to replace. There’s nothing unique about them and their value is driven from a consistent set of expectations from each of the units in terms of shape, size, color, taste, or performance.

Economics keep coming into the equation and before I make my point, let me share two unique products with you:

Koh-i-Noor
Koh-i-noor Diamond – The most valuable diamond in the world

Cost: Priceless

Koh-I-Noor means as “Mountain of Light” from Persian. It’s a 105 carat (21.6 grams) diamond that was once the largest known diamond in the world. The Koh-I-Noor was originated at Golconda in the Andhra Pradesh state of India. It was owned by various Sikh, Mughal and Persian rulers that fought each other from time to time. The stone was found to measure 36.00 × 31.90 × 13.04 mm. The gem has now become the property of the British crown and is kept in HM Tower of London and it’s a popular tourist attraction.

Clive Christian Perfume – the most expensive perfume in the world

Cost: around $215,000

It is a mixture of pure and precious flowers from all around the world. The collection used is a rare one and of its purest forms. the lead crystal bottle to keep such a potion is handmade and the collar part of the bottle is an untainted gold-plated 24 karat and sterling silver. It is stamped with one of a kind seal and has an outstanding diamond cut solitaire. The top is twisted after the unique design granted by Queen Victoria herself. The price of this magnificence is about $215,000.

 

When we think about products, it is simpler to understand why scarcity leads the price higher and uniqueness could mean the product becomes priceless. It is uncommon to think on similar lines about skills, expertise and individual contribution – when people are just used to doing regular work and only doing the thing right, they’re seldom thinking about choosing the right thing to do and excel.

If you are always into the regular rut of churning out deliverables; working on that final budget spreadsheet; or that major sales kickoff presentation, you’re doing important work – but that kind of work will help you little to drive your value up.

Take any important brand you care about and you would find that the price it is charging and people are willing to pay for that is not significantly related to the costs – that’s the effect of brand value; it makes the costs irrelevant.

When talking about individuals, you have to take charge of your own career and direction to create that sort of value – that is the only way out. If you’re not ready to bring out the ‘unique’ in ‘you’ forward, then your value will probably keep falling down with every new innovation in technology and/or almost certainly, somebody else will come forward to do the same work you do for less. Welcome to the Globalized World.

In order for you to command respect, value and high compensation, you have to regularly endeavor to keep the unique aspects within you (your USPs) shining! Be it your own entrepreneurial negotiation or a shot at corporate decision making, you have to be scarce to be valuable – you become scarce when you consistently do what most others would not try and most of the fewer who try could not do.

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The Value of Life

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Ever wonder how precious life is? If you’re confused, go ask a mother. We’re always just too busy to keep wondering all the time, isn’t it?

Think about this. When you face a situation where you have no more a shelter on your head, no more an income to look to as your only income source has gone, you have not had anything for the last 2 days, one of your child seems to have fallen sick and there’s no medicine around and no doctors either, your entire family seems to be surrounded by water, flooded lands, misery, hopelessness, fear, sickness, feeling of being left alone, being left desolate and all of a sudden, you start hearing the hue and cry from a neighbourhood woman – her youngest son just couldn’t keep up anymore and is no more amongst us.

That is the moment when the only reality in life becomes survival – to get that next loaf of bread for yourself, but more importantly, for your family. Then, the only reality becomes what you will do if you won’t find anything to eat, and whether someone will be able to come to the rescue. What if no one comes? When the most likely option seems to be to sit and wait for some miracle to happen – this is the condition people in these disaster-stricken areas in Sindh, Pakistan face right now, each day, each hour of the day – how does it feel thinking about this? Not good, yes? Now, consider this: this is their reality!

Also, know that these people cannot post on websites about their condition, don’t access facebook to tell about how pathetic it feels not having eaten anything for 2 days, and can’t even tweet that the child in the neighbourhood just died because they couldn’t find food! If you are reading this post, chances are you’re better off enough that you likely do not even consider these things as luxuries anymore. This is your reality!

As we were preparing for the relief efforts few days ago and our team members were deliberating on ideas for things needed to be included in standard ration kits, we received an email from one of our coordinators from near the affected areas. He told us that some of these areas have been so badly flooded that there is practically no dry land around to cook food. As I started wondering how we should channelize our energies to come up with a solution, I kept reading on. So this coordinator offers a solution in the next paragraph, and says it’s something that has been tried-and-tested in another area last year. My heart starts pumping faster thinking what it could be and my eyes start to shine brighter. Do you want to know what that successful, tried-and-tested alternative was? He was suggesting we should distribute ‘tandoori rotis – a locally prepared bread’ with ‘pickles’ so that these people can at least stay alive. He also told us these breads are usable (note, ‘usable’ is not ‘fresh’) for 2 days, and it meant we had a lead time of 2 days to execute that plan from start to end there.

Now, as you’re reading this, sit back and ask your heart how you would feel putting down your throat this two-day old bread with pickles? Not excellent, yes? Well, the thing is that it’s an amazing blessing for them. This is their reality – staying alive, remember?

I hope after imagining this and knowing this, at least some of you would feel the same kind of weight on your heart and have moist eyes as I have writing it. My idea is not to make you feel burdened, but it is to share a reality. That’s it.

I hope this answers why relief work is also important right after such disasters. And in case, it still doesn’t answer our question, I have a more important question: are we really living? or just staying alive.

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How to Spot a Business Opportunity?

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The question that many people ask me is that how do I come up with some marvelous entrepreneurial idea that can change the face of this world? How do I provide a service that no one else has ever provided or a product that no one has even imagined about manufacturing yet?

Many people fall into the miserable trap of assuming that unless they have such an idea, it would only be wasted efforts to pursue any opportunity and also that someday such a brilliant idea would be revealed onto them sitting under an apple tree as in the case of Sir Isaac Newton.

If you think that’s going to happen someday, forget it. The opportunity is only available for those who are willing to practically do things and focus on act, rather than dream. I am not at all trying to imply it’s futile to dream, but to keep dreaming could be disastrous. Businesses have been established to satisfy fairly small needs and wants of select group of people such as servicing of hearing aid equipments. Businesses have also been setup of things that are fairly commonly available and consumed such as selling potato chips.

The fun part is that you need to see beyond the obvious – the latent need and establish a business to fill in the gap. As long as there is a gap – and there are innumerable gaps still – you can come up with the relevant business idea and make it a fair success. However, neither waiting for the right idea to be bestowed on you nor jumping in to start anything regardless of the demand-supply gap would work for you.

Keep looking and you’d find many possible gaps around you. You just need to see with a different perspective.

The real voyage of discovery consists not in seeking new lands, but in seeing with new eyes.

– Marcel Proust, French novelist

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On Responding to Crisis

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Most people project their confidence and charisma through their posture, the way they walk, their ease of communication, their choice of words and most importantly, their eyes.

I happened to bump into an old employee of a corporation earlier in the day who had been asked to leave as a result of corporate restructuring. Having spent a total of 37 years in service, I could clearly see the fear in his eyes when he told me his story; he insisted, “I still had 5 years of service left.” I imagine this person was serving in the lower hierarchy of the company and wanted to desperately meet someone who could change his fate and let him continue for another 5 years.

It’s strange how people give in to fear to let others decide their fate, but it is human nature, isn’t it? I have seen many businessmen go through their dips in life, but rarely do I see that fear in their eyes even in the worst of conditions.

It all has to do with an attitude in life, not with the state of affairs afterall, I conclude.

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Be Yourself

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What should you rather do?

Know who you are, or try to be someone else all the time?

What is more important?

Accept the given or seek the truth behind things.

What would you rather do?

Just breath, or Live?

Be yourself
Be Yourself

Would you always accept what others tell about you, or would you rather take opinion of someone who knows you better than most others, i.e, yourself?

The answer to many things in life is in being oneself, and for that one has to start believing in himself/herself first.

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Sometimes the only option is to let go

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Life comes with a great deal of variety: variety of people, places, things, activities, etc. etc. and sometimes it is mind boggling how attached one becomes to certain things or people that it’s very difficult to let go. In businesses as well, there are instances where founders or product innovators or brand managers have seen their company/product grow over the years and face the different winds of all the different seasons. It is these ups-and-downs that make the person so much attached to the product that he cannot imagine letting it go, even after the product lifecycle is far beyond over.

Unlike life, businesses need emotions to the extent they push overall growth and in some circumstances, the only option is to let go of the product. To sum up, for life’s major decisions, one should mostly think beyond brains and for business’ major decisions, one should always think with brains!

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Believability

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They say every man is born twice, the second time when he earns his reputation amongst people.

– Avatar

In personal and professional lives and also in businesses, earning the believability of others is an obvious imperative. Key businesses and business people have gone far and wide to keep earning this reputation for believability through their actions and choices, time and again.

J&J’s Tylenol fiasco was an obvious example, where the imperative for the company’s employees who made sure their commitment to ethical operations was unwavering and was not affected by any short-term repercussions on their numerical bottom line. They earned a reputation. They earned the believability of their customers, prospective customers, investors, media, government and the general public as a whole.

When one walks into any of the thousands of global branches of the McDonald’s franchise, he/she expects a certain quality of food to be served in a certain kind of environment. Ray Kroc’s commitment to living up to the Q S C V (Quality, Service, Cleanliness & Value) meant no compromises, to the effect that now they’ve developed a kind of believability amongst those that go to McDonald’s and even those that don’t.

This is not an overnight transformation, but a conscious effort at earning your share of the customer’s trust – which takes years, and sometimes generations.

LU’s Pied piper was something that stood as an image for three generations now based on the consistent delivery of their brand promise.

It’s not only about survival of the fittest. It’s about more. It’s about getting to know your customers and letting them know you. Earning believability is the second life most corporations fancy, but to live through the small moments each day to grow and nurture that believability is what most of these most would not focus on. Hence, the customer’s preferences.

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Exemplary Customer Service at Nando’s Pakistan

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I happened to win one of the competitions setup by Nando’s Pakistan for its promotion during the Islamic month of Ramazan this time. The competition was quite interesting, so I sent in my entry. It needed me to write a tagline for a picture & a concept of one of the new deals introduced recently. Amazingly, I was selected as the winner for the competition and offered a deal for two.

When we went there, along with two other friends, we were not treated right in terms of serving priorities for food, courtesy of staff as well as the deal details. I came out pretty upset mostly because of the impression I left on the fellows I had invited over. Anyways, I wrote an email about this to the customer service person at Nando’s a day or two later. To my surprise, their receptivity to this new information was quite awesome.

After apologizing for what had happened, they actually made a point to try and spot the mess-makers in their staff and offered me a complete dinner for 4 in an attempt to please me. I hesitatingly agreed and later on decided on a date to dine at Nando’s. Although I had called the same three fellows, one never came due to his previous bad experience.

I was quite delighted to notice the additional care and attention to detail that was taken in welcoming, offering a comfortable table for 4 this time, serving, and selecting pleasantly courteous staff. We had a proper dinner, and enjoyed the entire theme totally more than ever before I had visited Nando’s. The other two fellows shared this story with several others including the one who didn’t show up and we’ve at least made 10 more people visit Nando’s because of this story.

Customer service needs dedication beyond the duty, and understanding the clients’/customers’ needs and wants and delighting them always. Seth Godin writes about building a tribe and making a purple cow; these kind of stories certainly help float another purple cow around.

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On valuing employees

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Most successful corporations have learned their lessons about people power, and come to a common conclusion: People happen to be at the core of their business. Internal branding, therefore, has become an important facet of branding issues, where the internal customer (most often, employees) are partnered with to gear the company for success.

Some companies live on hope (Management-by-hope), which is to say that ‘if’ this happens, we will get an ‘x’ amount of growth in our company, relying on that ‘if’ to happen. These are poorly managed structures, because these are the kind of organizations that think about employees the last, if they ever do it.

Proactive management means to not only anticipate change, but create the change that will come to shape. It’s not an approach. It’s a norm. Approaches change, norms hardly do. When companies are focused on creating change, they not only empower, but also involve and engage employees in their growth, the employees then relate to the higher vision and work towards the targets with missionary zeal.

There are some companies that will most likely never change – of course, until they cease to exist; it’s better for the proactive employees there to change their companies instead.