“Leading MINDS” instead of “Managing BEHAVIOUR”, for Performance Improvement |by: Charles S.Jacobs | Ivey Business Journal

” Certain recent discoveries in the field of neuroscience hold nothing less than the potential to improve the performance of their direct reports. The discoveries may point to a completely different approach than the traditional incent / punish model, but they will form a tighter bond between manager and employee, as well as between stakeholder and company. This author, who has written a book on the subject, describes the lessons managers can learn.” 

Neuroscience may seem far removed from the immediate concerns of running a business, but the fact is that the latest findings in field are transforming management. We’re learning that much of what managers do is self-defeating, and we’re gaining access to new practices that dramatically improve performance.

Neuroscience also gives us a strange new world that takes a bit of getting used to. Not only does it challenge many of our basic assumptions about people, it even compels us to question the nature of reality. It’s as if we’ve landed in Alice’s Wonderland, but in a world of science rather than fiction.

We are in the midst of a paradigm shift that, at times, can be disconcerting. But if we embrace the new worldview that science gives us, we stand to be far more effective managers. The place to start is with an understanding of three fundamental discoveries about how the brain works.


For most of history, Western civilization has assumed that there is a world that exists outside of us, the nature of which we all know and agree upon. If a tree falls in a forest, it doesn’t make any difference whether we’re there to observe it or not. There’s still a physical tree and it’s the same regardless of who’s doing the observing.

But this assumption runs smack up against what a functional magnetic resonance imaging machine (fMRI) shows us about how the brain processes information. Take vision as an example. The commonly held view is that light bounces off an object and enters the eye, causing the neurons on the retina to fire, and sending a mirror image up the optic nerve into the brain.

But that’s not how vision actually works. The 125 million neurons on the retina don’t register the part of the image reflected on them. Individual neurons are highly specialized and they fire in response to colors and contrasts. Effectively, the image reflected on the retina is digitized and travels up through the optic nerve as 125 million bits of information.

When these bits enter the brain, they are processed by over one billion neurons in two dozen areas of the visual cortex. As the output then travels to the seat of consciousness in the pre-frontal cortex, it receives input from the areas of the brain responsible for memory, emotion, and even our desires. What we finally “see” is our unique version of the object, created according to everything going on in our minds.

We don’t have direct knowledge of the physical world. All we can “know” are our ideas about the world. Since our ideas are formed by brains that are shaped by our individual genetic codes and life experiences, we don’t all perceive the same objective reality.

Rather than directly recording our experience, it’s more accurate to say that we create it, according to what we remember, how we feel, and even what we want. And so, when it comes to the relationship between a manager and an employee, conflicts are inevitable.


One way around subjectivity, we assume, is to reason logically, since it eliminates emotion and its validity can be checked. But it turns out that this assumption is wrong as well. Our reasoning is always colored by our emotions, and is anything but objective. There is a reciprocal relationship between the area of the brain responsible for logical thinking in the pre-frontal cortex and the amygdala, the seat of emotion.

In an experiment known as the Iowa Gambling Task, subjects are given two thousand dollars to bet on the turn of a card from one of four decks. If they select a card from decks A and B, they can win $100; they can also lose $1250. If they select a card from decks C and D, they can win $50, but their loss is limited to $100.

Normal players start out selecting cards from decks A and B, because of the potential for greater winnings. They then quickly change to decks C and D when they recognize that their losses will bankrupt them. However, players with a lesion in the area of the brain that connects the pre-frontal cortex to the amygdala never switch from decks A and B, and eventually lose all of their money.

The neuroscientist Antonio Damasio believes that our memories are marked in the brain by our emotions. When we lose access to our emotions, we also lose what we’ve learned from past experience. Even when it comes to something as “objective” as money, we then end up making worse decisions.

Damasio also measured the skin conductive response of subjects playing the game, and found a spike just before the conscious decision of which deck to choose. He concluded that our decisions are made emotionally and logic is nothing but an after-the-fact justification.

Even if there weren’t emotional input, our reasoning would be suspect because of a psychological dynamic known as cognitive dissonance reduction. Holding conflicting perceptions is uncomfortable, so we do what we can to reduce the dissonance, usually by taking the easiest route.

The neuroscientist Michael Gazzaniga tells the story of a visit to a patient at Sloan Kettering Hospital in New York. This woman had a lesion in the area of the brain responsible for recalling location in space. While the rest of her cognitive functions were fine, when asked where she was, she replied that she was in her house in Freeport, Maine.

When he then asked her how she could explain the bank of elevators outside her door, she replied, “Doctor, you have no idea how much time and money it cost me to have those installed.” Clearly, she was making it up as she went along, but that’s just the point—neuroscientists believe we’re always making it up as we go along.

If we’re not logical, just how does the brain work? According to cognitive neuroscientists, through stories. Young children use stories to explain their experiences before they learn formal reasoning, and the ancient Greeks used myths before they invented logic.


Ideas are neural networks with lowered thresholds for activation. These networks are arranged hierarchically in the brain, with those responsible for the biggest ideas at the top. When those networks are activated, they key the firing of networks in sync with them at lower levels responsible for thinking and behaving.

While the networks are initially created by chemical changes in the synapses at the junctions of the neurons, repeated firing causes structural changes to occur. Ideas cause physical changes in the structure of the brain, and thus change the experience of the world it creates.


In light of this new understanding of how the mind works, conventional management practices no longer make sense. For example, consider the time-honored practice of giving feedback to employees to improve their performance. Contrary to the conventional wisdom, feedback doesn’t work, at least according to a study of GE’s performance appraisal system conducted over 40 years ago.

Researchers studied the performance-review discussions of a sample of managers and employees, and then tracked subsequent performance. They found absolutely no correlation between praise and improvement in performance. This was to be expected, given that people are intrinsically motivated to achieve and are already doing the best they can.

But the next finding was more of a surprise. The areas that were criticized the most showed the least improvement, leading the researchers to conclude that criticism actually had a negative effect on performance. Although this seems counterintuitive, it can be explained by cognitive dissonance reduction.

People strive to maintain a positive self-image, and so they are driven to reduce any feedback that may be at variance with it. They ignore, discount, or rationalize it away. If it’s experienced as particularly punitive, it summons up aggression toward the source and it becomes rewarding to punish in return. The best way to do that is to persist in the behavior that is being criticized.

It’s not that feedback isn’t necessary for improvement. It’s just that when it comes from the manager, it‘s colored by perceptual conflicts. The manager may be operating with the best of intentions, but that’s not necessarily how the employee striving to maintain esteem sees it.

Nor is reward any more effective at motivating performance. Brain scans show us that the pleasure neurotransmitter, dopamine, is released in the brain, not when we’re rewarded, but when we’re fully engaged in the work that leads to the reward. In fact, studies of using rewards to improve the problem solving of children have shown that extrinsic rewards lessen intrinsic motivation.

Rewards also fall victim to the vagaries of perception. The effect of a reward depends on the value that the person receiving the reward places on it. A five percent salary increase in tough economic times may seem generous to a manager, but appear so small to an employee as to be insulting.

If employees receive the same percentage several years in a row, they become accustomed to it and it loses its value. One study even showed that employees evaluated a reward based more on their perception of the manager’s motivation in giving it than on its intrinsic worth.

If feedback, punishment, and rewards are ineffective, how about using reason to motivate employees? It’s not anymore effective because decisions are driven by emotions and we’re subject to cognitive dissonance. Many studies have shown that people will work against their rational self-interest and like Gazzaniga’s patient, are capable of using reason to justify unreasonable positions.


It’s not that we don’t like rewards, fear punishment, or don’t appreciate logical arguments. It’s just that all three, coming from the outside, are run through our perceptual filters. Since we’re all genetically driven to pursue our own self-interest, any attempt to motivate us to do otherwise will fail.

So rather than pushing on people as if they are inanimate objects subject to Newton’s laws of motion, we’ll be more successful if we use an approach that encourages people to willingly do what we want. Rather than tell them what to do, we should ask them.

Since questions aren’t assertions, they don’t run up against cognitive dissonance reduction. We’re forced to fit the issue they raise into our worldview so that we can respond. And when a decision or action comes from us, our self-esteem is tied into making it successful.

Instead of telling people how they’re doing, we should ask them. By using questions, we should enable them to honestly reflect on their performance. If corrective action is required, it should be self-generated. GE found that active participation in the review process, starting with an employee self-appraisal, improved performance significantly.

In a non-threatening environment, most employees will actually be more critical of their performance than their managers would be. For those that aren’t and gloss over performance problems, the manager should be directive, but only as a last resort. The goal is to leverage the way the mind works as much as possible.


The mind works through ideas, with those at the highest level creating a mental environment that selects out thinking and behaving in sync with them. In the mental world we live in, ideas are much more powerful than material rewards or punishment.

In one study, when subjects hooked up to a fMRI were shown a picture of a woman crying, there was heightened activity in the emotion-generating amygdala. When they were told that the woman was not upset, but rather was shedding tears of joy because it was her wedding day, the activity immediately abated. A simple idea overcame the emotion that drives decision-making.

But ideas also have the power to change performance in the physical world by creating a self-fulfilling prophecy. Elementary schoolteachers were told at the beginning of the year that their students were “bloomers” and would show a significant jump in IQ. When tested at the end of the year, their score on the Stanford-Binet IQ test went up fifteen points on average. Actually, the students were no different than others—it was the teachers’ expectations that caused the increase.

While ideas can change the way people think and perform when they are asserted as fact, they are still subject to cognitive dissonance reduction. But if they’re packaged in a story to fit with the way the mind naturally works, they become immediately accessible.

Stories don’t assert fact, so they don’t summon up cognitive dissonance reduction. Because they’re the way the mind works, we identify with them, trying out, so to speak, the perceptions and values they embody. Because they convey both ideas and experience, they address both the intellect and emotion.

If we offer a more attractive counter-narrative to the one people are currently telling themselves, they’ll adopt it as their own and it will drive their decision-making and behavior. Great leaders are storytellers.

Studies have shown that successful social movements are accompanied by a narrative, in the form of a romance. People come together, change their thinking or behavior, and achieve a desired future as a result.

In business, the story should posit a future that is more attractive than the present, and demonstrate clearly how the desired change in mindset or behavior will enable people to accomplish it. Improving returns to shareholders isn’t that future, but building a great company, being part of a high-performing team, and achieving more than they thought possible is.

Leaders need to figure out what story works both for themselves and for their people. While it’s got to be inspirational and exciting, it also must be realistic and achievable.

Leaders don’t only tell their stories starting with “Once upon a time.” While they may articulate a vision of the future, they tell their story with everything they do and say, every moment of every day. Because human beings are bad liars and good detectors of lying, leaders can’t fake the story they’re telling. The walk wouldn’t match the talk.


The world according to neuroscience is very different than the one we believed we were living in. Because they are mental rather than physical, traditional management practices such as feedback and rewards or punishment don’t produce the results we expect. In this world, ideas have the power.

It may take awhile to get used to leading minds instead of managing behavior. While it is a significant change, it’s one for the better.

” It’s much more fulfilling being Inspirational than wielding the Carrot and the Stick. In the end, it’s the only way to improve performance “. 

How to “Demotivate” your Best Employees | Employee Reward programs | by: Dina Gerdeman | HBS

It would seem to make sense that, when companies recognize their workers with awards, they are likely to see a boost in morale and perhaps even inspire them to work harder..

It turns out that sometimes rewarding employees for good behavior can actually backfire, leading to a drop in motivation and productivity..??

More than 80 percent of companies dole out work-related awards like “employee of the month” OR “top salesperson.” Managers often view these awards as inexpensive ways to improve worker performance; many believe that when employees bask in the glow of corporate praise, they may even feel motivated to work harder over the long term.

But new research suggests that some awards may actually have the opposite effect, according to a recent paper called ” The Dirty Laundry of Employee Award Programs: Evidence from the Field”, written by Harvard Business School Assistant Professor Ian Larkin, along with professor Lamar Pierce and doctoral student Timothy Gubler from the Olin School of Business at Washington University in St. Louis.

The researchers studied an attendance award program initiated by managers at one of the five commercial-industrial laundries owned by the same mid-western company. Perfect attendance was defined as not having any unexcused absences or tardy shift arrivals during the month.

The plant managers had all the right intentions when they implemented the award program. Absenteeism and tardiness costs US companies as much as $3 billion a year. And in the case of the laundry plant, one worker’s tardiness or absence can affect another’s productivity. If one team of workers falls behind on the job, for example, other workers down the line are left to sit idle.


The plant’s attendance award program began in March 2011 and continued for nine months. Employees with perfect attendance for a month, including no unexcused absences or tardy shift arrivals, were entered into a drawing to win a $75 gift card to a local restaurant or store; the winner’s name was drawn at a meeting attended by all the employees. At the end of the sixth month, the plant manager held another drawing for a $100 gift card for all employees with perfect attendance records over the previous six months.

The program did produce one benefit the plant managers were looking for: it reduced the average level of tardiness and led to more punctual arrivals for the workers who participated.


Yet when Larkin and his colleagues took a closer look at employee time sheets and records showing the amount of laundry that actually got done both before and after the program was introduced, they found that the plant—unlike the other four that didn’t have an award program—experienced some problems :

First, employees ended up “gaming” the program, showing up on time only when they were eligible for the award and, in some cases, calling in sick rather than reporting late. Most interestingly, workers were 50 percent more likely to have an unplanned “single absence” after the award was implemented, suggesting that employees who would otherwise have arrived to work tardy on a certain day might instead either call in sick to avoid disqualification or else simply stay home because they would be disqualified from the award regardless.

Also, while punctuality improved during the first few months of the program, old patterns of tardiness started to emerge in later months. And once employees became disqualified and the carrot of the award was out of their reach, their punctual behavior slipped back downhill. Larkin says this runs counter to what some people believe—that such an award program might instill a long-term pattern of on-time performance in workers.

The hope is that with the award “you get them to do what you want them to do in a habitual way,” Larkin says. “But we can say it’s the exact opposite. There was only a change in behavior while people were eligible for the award.”

  • Second, and perhaps more significantly, stellar employees who previously had excellent attendance and were highly productive ended up suffering a 6 to 8 percent productivity decrease after the program was introduced. This suggests that these employees were actually turned off—and their motivation dropped—when the managers introduced awards for good behavior they were already exhibiting.

These workers may have believed that the award program was unfair; after all, they had been showing up to work on time before the attendance program, so they wondered why an award was necessary and why some employees who used to show up late were winning the award.

  • All in all, the award program actually led to a decrease in plant productivity by 1.4 percent, which added up to a cost of almost $1,500 a month for the plant.

” Having your top performers demotivated for all eight hours on the job ended up creating a much bigger productivity hit than having the extra five minutes of work from someone who came habitually late,” Larkin says.

Ultimately, the researchers concluded that rewarding one behavior sometimes can “crowd out” intrinsic motivation in another.


Despite the fact that this particular award brought more harm than good, many other types of award incentives have proven beneficial for companies. But Larkin says corporate managers should manage them closely to make sure that employees aren’t gaming the system and that the programs aren’t fostering unintended negative effects.

” Many award programs have created value and are cost-effective for companies,” he says. “Our paper shouldn’t be taken as a blanket criticism of awards. You can’t say awards are good or bad. It depends on how they’re implemented.”

This particular attendance award may have been especially flawed because rather than rewarding workers for exceptional performance, it rewarded them for fulfilling a basic job expectation.

“A lot of awards are focused on identifying people at the top of the class or people who went the extra mile,” Larkin says. “This award did not recognize people who went above and beyond. It was an award for a behavior that employees should do.”

Also, Larkin believes that awards are more effective when they recognize good behavior in the past, rather than behavior going forward. Plus awards for past performance aren’t likely to see as much gaming, he says.

“It’s motivational to hear that you’ve done a good job and are being recognized for doing the right thing,” he says. “And it provides a good example for other people. People aren’t being rewarded because they changed their behavior to match what the manager wanted or by gaming.”

Larkin says that in the laundry study, the reward itself—gift cards—may have led to a higher likelihood of gaming. Sometimes it’s better to keep money out of the deal.

” People respond very strongly to monetary incentives with this gaming mentality,” he says. “When I talk to companies about award programs, I find myself telling them, ‘Don’t put in that $500 or the trip to the Bahamas.’ It sounds like a nice thing to put in, but it also changes the psychological mindset people have.” 

Instead, Larkin says, that ” companies may fare better just by giving people a nice plaque, sending an email to staff, or calling a meeting to recognize certain workers publicly in front of the whole crew.” 

You can’t put a price on that….” The recognition of hearing you did a good job and that others are hearing about it is worth more than money.”  

” Why Customers Dont Buy ?? ” | by: Steve W.Martin | H B R

The real enemy of salespeople today isn’t their archrivals ; ” it’s no decision “…That’s according to the several hundred B2B (business-to-business) salespeople.

What is it that prevents a prospective customer from making a purchase even after they have conducted a lengthy evaluation process ? The reasons may surprise you. 

Regardless of the prospective customers’ confident demeanor, on the inside they are experiencing fear, uncertainty, and doubt while making their selection. The stress this creates serves as the key factor in determining whether or not a purchase will be made. Therefore, all salespeople need to understand this lowest common denominator of human decision making. They need to understand the nature of stress.

From a psychological perspective, stress shortens attention spans, escalates mental exhaustion, and encourages poor decision making.

From an organizational perspective, when anxious evaluators experience too much stress it typically results in analysis-paralysis.

They are too overwhelmed with information and contradictory evidence to make a decision. It’s the salesperson’s responsibility to anticipate and diffuse the main sources of customer stress during the selection process: budgetary stress, corporate citizenship stress, organizational stress, vendor selection stress, informational stress, and evaluation committee stress.

1. Budgetary Stress : The question here: Is the money available and justified to be spent ? Whether a purchase is actually made is directly related to the perceived risk versus the anticipated reward. A company’s budgeting process is not only designed to prioritize where money is to be spent but also to remove the fear of spending it. Here’s a quote from a senior executive decision-maker I interviewed as part of a win-loss study that explains this point :

“There are TWO main criteria for deciding on whether OR not to make the purchase. One is value to the company as measured by return on investment and how it compares to the other projects being considered. Then there are strategic projects that are critical to our long term success such as protection of our brand or improving customer satisfaction. While projects may be approved initially for further evaluation, a cross functional team of senior executives reviews the final recommendation and whether the money should be actually allocated and released.” 

Every initiative and its associated expenditure is competing against all the other projects that are requesting funds. Purchases are continually re-prioritized based upon emergencies and in response to changing conditions. For example, when new executive leaders join organizations, one of their first acts may be to freeze major expenditures and reevaluate all requests. The bad news is that a salesperson may have worked on a deal for most of the year only to find out that it was never truly budgeted.

2. Corporate-Citizenship Stress : Before finalizing an order, executives will always ask: Is this purchase in the best interest of the company ?

While customers inherently want to do what’s in the best interest of their company and to be good corporate citizens, the fundamental dynamic of corporate-employee loyalty has changed. Today, business is a “survival of the fittest” world where employment is never guaranteed and loyalty frequently goes unrewarded. In some situations, prospective buyers can feel continual pressure to put their individual needs before the company’s. For example, I remember one information technology decision-maker telling me, “There’s no such thing as picking the wrong solution so long as it helps you land your next job.”

Even after a formal evaluation process, the likelihood that a purchase will not be made jumps tenfold when the solution recommended is not aligned to company’s goals and direction. This is frequently the case with projects and purchases that are instigated by lower levels of an organization as they bubble up the chain of command for review. There is not a compelling business case to drive the purchase forward so it never garners senior level support.

3. Organizational Stress : Buyers care about how colleagues perceive him. Peer pressure is a powerful influencer of group dynamics and evaluators are constantly worried about how the purchase decision will reflect on them. Senior executives are worried about what investors, the board of directors, and members of the leadership team think about them. And of course, they want their employees to respect them as well. Mid-level managers suffer competitive pressure because all are striving to advance in their careers and move upward in the organization. Lower level personnel are continually seeking to prove themselves to their managers.

Whether from above, below, or the same level in an organization, coworkers are continually evaluating the behavior, success, and failures of those tasked with the decision-making process. Obviously, this exerts pressure on the evaluators to make the right decision and not to make a decision if there isn’t an obvious choice or clear-cut direction.

4. Vendor Selection Stress : One of the biggest problems during the sales cycle is that the difference between most products is extremely small. Compounding this problem is that everyone is presenting the same basic messages to the customer. Take a moment and visit the home page of your company’s website and those of your two biggest competitors. Often you’ll see that the words and claims are basically interchangeable.

There tends to be a higher no-decision rate where product differentiation is extremely small. Since all the competing products share the same basic features, functions, and benefits, evaluation team members may take longer to make their decision or postpone it indefinitely.

5. Informational Stress : As you make your pitch, buyers are inevitably asking themselves: Is the information being presented truthful ?

We live in very skeptical times in which information presented by the media and experts is continually challenged and constantly debunked. In addition to being subject to the general cynicism of our society, most customers have had negative experiences with some salespeople sometime in the past. Therefore, customers are always in the stressful position of separating fact from fiction. Meanwhile, even the most ethical salesperson carries the burden of proving he’s telling the truth.

Worse yet, as the sales cycle progresses competing vendors may try to escalate FUD (fear, uncertainty, and doubt) in the customer’s mind about the wherewithal of the competitors’ and the capabilities of their products.

For example, competitors will try to sabotage one another with facts such as unfavorable performance metrics, missing functionality, and tales of unhappy customers. In turn, the attacked competitors will provide the customer with believable information that contradicts the original attacks. Therefore, the sales cycle naturally disintegrates into a quarrel between salespeople and this scenario helps set the stage for no decision to be made.

6. Evaluation Committee Stress : Whenever a company makes a purchase decision that involves groups of people, self-interests, politics, and group dynamics will influence the final decision. Tension, drama, and conflict are normal parts of group dynamics because decisions are not typically made unanimously. As members promote their own personal favorites, the interpersonal conflicts can cause the decision-making process to stagnate and stop. Other selection team members may not be 100 percent certain they are picking the right solution. All of this uncertainty encourages no decision.

Salespeople need to keep in mind a basic fact : ” Customers are stressed out. They don’t know whom OR what to believe…? ” 

They are under immense peer pressure, and they are torn between doing the right thing for the greater good of the company and acting in their best personal interest. To make matters worse, the vendors increase the pressure by injecting claims of their superiority and accusations about their competitors’ inferiority.

For all these reasons it’s no surprise that ” NO DECISION” is the top competitor today… 

“Honda” plans single-brand retail stores to sell all its products under one roof,in India | Business Standard

” Currently foreign Auto Companies sell their vehicles as well as their spare parts through franchised outlets, which is the industry practice “…. 

Two-wheeler major Honda Motorcycle & Scooter India ( HMSI ), a 100 % subsidiary of Japan’s Honda Motor Company, looks set to spark a new trend among auto firms by opening its Own Exclusive Retail Stores to sell its products.

It has sought the permission of the “Foreign Investment Promotion Board ( FIPB )” to start single-brand retail outlets in the country. 

The products to be sold at these outlets would range from high-end imported motorcycles and all-terrain vehicles (ATVs) to specialised side-by-side vehicles (small ones designed for off-road use), spare parts, accessories and even Honda-branded merchandise.

At present, the industry practice is that foreign automobile companies sell their vehicles, as well as spare parts, through franchises. However, HMSI, justifying its strategy to roll out company-owned single-brand retail outlets, has said in its application that it would give “better visibility to our brand Honda in India which will help ensure access to the advantages of cutting-edge technology, world-class products and services to the Indian two-wheeler industry, resulting in competitive pricing for products and services”.

The firm has identified the products it wants to bring through these stores. For instance, it wants to introduce two all-terrain vehicles — TRX 250 TE (priced between Rs 2 lakh and Rs 2.5 lakh) and TRX 420 FA. Besides, two side-by-side vehicles — Pioneer 700 and MUV 700 — could also be introduced in the Indian market. HMSI has also sought permission to sell over 28 categories of Honda-branded merchandise. These include mugs, pen drives, key chains, t-shirts, wall clocks, wallets, riding boots and body protectors.

These sales outlets would also purchase and sell spare parts and accessories for its entire range of vehicles.

The spare parts and accessories for Two-wheelers manufactured in India would be procured from Indian suppliers, while those for imported products would be sourced from overseas facilities. Since the value of spare parts, accessories, apparel and merchandise sourced from domestic vendors would be significant, the mandatory local sourcing condition in trading of spares, accessories and merchandise would also be met, the company said in its proposal.

Under the existing FDI policy, a Single-Brand Retail company with foreign investment must source 30 % goods from India, preferable from micro, small & medium enterprises.

Honda has sought a waiver on this, saying it would not be possible to procure high-end technology from Indian suppliers for ATVs, high-end bikes and side-by-side vehicles.

The company is likely to get the permission, since the turnover of these vehicles is likely to be less than 1 % of  HMSI’s total manufacturing turnover.


Italian Auto maker “Fiat” eyes 100 plus exclusive dealerships in India by FY14-end | Economic Times

Italian auto maker ” Fiat “ is looking to expand presence in the country as it aims to have over 100 exclusive dealerships by this fiscal end.

“As part of restructuring our operations in the country, our aim is to have 100-plus dealerships in the country by the end of the current fiscal,” Fiat Chrysler India, Operations President and Managing Director Nagesh Basavanahalli told reporters here.

The company, which used to sell its cars through 176 Tata Motors dealerships till last year, currently has 54 exclusive dealerships so far in the country.

Last year, Fiat and Tata Motors ended the distribution alliance formed in 2007 to distribute and service the vehicles of the Italian firm.

“Initially, we are focusing on Tier-I and Tier-II cities and gradually would also look at having dealerships in other cities and towns,” Basavanahalli said. When asked about the company’s plans to enhance its brand image in the country, Basavanahalli said Fiat is taking various steps, including a full fledged marketing campaign.

“…Every single day dealer partners are signing with us…we are in the process of building the infrastructure… transition time is on,” Basavanahalli added. Fiat, which today launched an exclusive dealership here, plans to launch over nine new models in India in the next three years.

Among the New-models, FOUR would be from the “Fiat portfolio”, FOUR from “Chrysler” and ONE from “Abarth brand”, Basavanahalli said.

When asked if the company plans to set up a new manufacturing facility for the new models, Basavanahalli said: “Some (models) would be imported while others would be assembled here (in India)”.

Capitalizing on India’s “Digitally Influenced” Consumers | from Buzz to Bucks | BCG

” India is on the threshold of a digital revolution”. Driven by cheaper mobile handsets and the spread of wireless data networks, the number of Internet users in India is expected to nearly triple from 125 million in 2011 to 330 million by 2016. And although online purchases are just a small portion of commercial activity today, the numbers obscure a critical fact: the Internet’s influence on buying decisions is growing rapidly. This influence affects up to five times more purchases than those actually made online. Online activities such as product research and price comparisons are shaping the preferences of Indian consumers, affecting what they buy and why. Digital influence is expected to greatly accelerate over the next five years. What’s more, digitally influenced consumers earn higher incomes, are disproportionately represented in key product categories, and spend more money on products than their less-connected peers.

How can companies capitalize on this explosion of high-value online consumers? And given the prevalence of mobile-only access, what new models of connection and engagement will be required? To find out, The Boston Consulting Group and Customer Insight surveyed 25,000 Indian consumers aged 18 to 55 living in 26 locations—the biggest metropolitan areas and a mix of tier 1, tier 2, and tier 3 cities. Our goal was to understand the nature and extent of digital influence on buying decisions. To this end, we explored how consumers use the Internet during the product purchase cycle. We then examined specific behaviors of the digitally influenced users.

Our analysis assessed the use of digital technology across TEN touch-points within the THREE stages of the purchase-cycle : 

  1. Pre-purchase. Product research, price research, search for store locations, and search for discounts or coupons
  2. Purchase. Online ordering and online payment
  3. Post-purchase. Troubleshooting, customer service, accessory purchase, and posting product reviews or comments

We explored the prevalence of digital touch points in 101 product categories, assigning each category a Digital Intensity Index score (DII) on the basis of the extent to which digitally influenced consumers use the Internet in each of the ten touch points of the purchase cycle. (See “What’s Your Product’s Digital-Intensity-Index Score?”). 


We also looked at how satisfied digitally influenced users are with their online experiences and the importance of digital media relative to other channels during the purchasing process. The survey’s insights can help guide companies as they develop strategies for reaching and engaging India’s growing base of online consumers.

The Size of the Prize : 

Estimates of total online purchases in India today range from $6 billion to $10 billion—not that impressive given the size of India’s population and how quickly consumer spending is growing overall. But those estimates fail to capture the full impact of digital technology on purchasing decisions. Of India’s 90 million urban Internet users, 40 percent report that their online activities influence what they buy. Put in terms of financial impact, this digital influence affects $30 billion of consumer spending in India today, as much as five times that of e-commerce alone. With growing access and use, this digital impact is expected to grow five-fold to $150 billion by 2016—more than the combined revenues of the major retail chains (estimated at $106 billion) and 20 percent of the total retail market (estimated at $799 billion). (See Exhibit 1.)  

India’s Internet penetration is expected to reach 330 million users by 2016. A number of factors will drive this growth. For one thing, mobile phones, which many Indian consumers use, are becoming more affordable. Internet penetration has reached small towns and rural areas, so online access is more widely available. An increasingly youthful population and rising incomes will also drive growth. Finally, government interventions and structural changes such as better broadband and wire-line access will improve penetration. As a result, the Internet is projected to reach small towns and the low rungs of the economic ladder more quickly than retail chains will, bridging geographic barriers and feeding the growing appetite for consumer goods among “ Aspirer” (annual income of $7,500 to $18,400) and “next billion” (annual income of $3,300 to $7,400) households.

As Internet access increases, so does digital influence and its impact on purchase decisions—a pattern that repeats itself across product categories, age groups, and demographics. Contrary to popular belief, digitally influenced Indian consumers are not just young, affluent city dwellers. In fact, digital influence isn’t a function of demographics at all, but of “digital age”—the number of years a person has been online. Consumers who have spent more time on the Internet are more comfortable, engage with a greater range of product categories, and are more likely to perform commercial activities—including purchasing—online. As penetration and consumer spending increase, India’s Internet economy—just 4.1 percent of GDP in 2010—is expected to reach 5.6 percent by 2016.

Our research also showed that consumers who use the Internet to make buying decisions spend more than their less-connected peers. For instance, digitally influenced consumers are only 16 percent of mobile-phone buyers, but they account for 24 percent of spending in that category, buying products that, on average, are 46 percent more expensive.

The Missing 98%: “How to Become an Execution Expert” | by: Lindsey Donner | Executive Street

“ If you’re not growing, you’re dying,” said Simon Mundell. “As a business leader, CEO or business owner, you have to get out of the way of your business.”

Simon, co-founder of Results.com and serial entrepreneur, has helped thousands of business leaders become execution experts over the past 15 years. In Simon’s view, execution is the only role for the modern business leader–yet most of us fail to do it well (or do it at all).

“Execution is what you do. Execution is about getting things done through others, not yourself,” Simon explains. Reality often seems to get in the way, however; most business leaders spend their time putting out fires. And the bottleneck this creates at the executive level–where every decision must pass by the CEO first–is deadly.

Yet thought leaders like Tom Peters agree–execution is “the missing 98 percent” for success in business. So how do we shift gears and rise above the turmoil ?

Easy: boil company strategy down to a one-page document.  That’s right. Not TWO pages; not 30. ONE. 

Simon uses a simple, one-page template based on what he calls the Five Pillars of Execution. If you want to grow your business, you can too. Below, we walk you through the key elements of crafting a one-page strategy document that works.

Here’s how :

1. Vision–There are three elements to a company’s vision: core values, core purpose, and your Big Hairy Audacious Goal (BHAG, coined by Jim Collins). “Aspirational statements on a plaque mean nothing,” says Simon. “How do we behave? Who aligns with these statements? We need to understand what our core values are and recruit only people who fit those core values.”

2. Strategy–What does your company do? Can you get your strategic positioning statement into a statement that’s eight words or less? Simon thinks you can–and should. Businesses that do are, on average, 70 percent more effective.

3. Engagement–“You can’t grow your business. Only your people can,” says Simon. According to Gallup research, an astonishing 71 percent of the North American workforce is disengaged. Yet progress is the number one employee motivator.  Use profiling tools to get the right people doing the right jobs, playing to their strengths.

4. Accountability–Simon points to research showing only 15 percent of employees know their companies top priorities, and 62 percent doubt there’s a plan at all. “You can fix this with one piece of paper,” says Simon. His template outlines company action priorities and performance indicators, but it also defines personal priorities. Accountability is about alignment. Keep it to one page, keep it actionable, and your people will follow.

5. Cadence–“Cadence is a rhythm or flow so that all of this can take place whether you turn up for work tomorrow or not,” says Simon. It’s time to implement a weekly meeting around the execution of strategy–and during that time, your team needs to look closely at the data. Are they executing your strategy? Are you ?

Of course, you can’t answer this until you’ve defined strategy and put it on the wall for everyone to see.

It’s important to remember that Results.com’s Five Pillars of Execution aren’t guesswork. They’re based on extensive business research, the results of which may surprise you.

Did you know, for example, that offering one blunt, overt benefit (instead of converting all of your features into benefits) makes your business 75 percent more likely to survive for more than five years ? OR that focusing on one market segment only (instead of expanding to serve many) gives you a 60 percent greater chance of success in business ?

Most listeners did not, but the message is clear: without strategy, business leaders cannot execute. And you have to get out of your own way first.

“This is the reality of business,” says Simon. “You need to make the execution of your strategy have as much or more weight in your business than the day-to-day distractions.

“ The enemy of execution is business as usual ”…..