Emerging Business Forum – Footwear Industry in Agra

- Contributed by Kanak Dutta

Zee Business along with Milagrow Business and Knowledge Solutions presents ‘Emerging Business Forum’- an exclusive 10 city initiative that aims to enable and empower SME clusters to achieve sustainable development and growth. A buoyant India today is witness to many successes of small and medium enterprise. Their role in terms of employment creation, upholding the entrepreneurial spirit and innovation has been crucial in fostering competitiveness in the Indian business and economy.
Beginning December 17th 2008 (Agra), this forum is in the format of panel discussion which would be continued across ten important cities which includes Agra, Ahmadabad, Delhi, Jaipur, Indore, Ludhiana, Merrut, Moradabad, Pune and Tirupur. The forum was first initiated in Agra which is known for Taj Mahal world over and has an enormous leather industry. This city is catering to the huge demand of footwear in the country.

From Milagrow, Kavita Joshi(Knowledge Mentor) and myself were appointed to attend the forum. The main objective was to network with SMEs in Agra and spread the awareness about the Milagrow services among the entrepreneurs. We wanted to understand their problems and try to explore how we could contribute to solving them. A short questionnaire was prepared by me to investigate the hindrances companies have been facing with regards to the smooth running of their business (like taxation, export, economic recession, association benefits etc).

The panel members included Kavita Joshi- Knowledge Partner, Milagrow Business and Knowledge Solutions, Gurgaon, S N Ganguly- Director, Central Footwear Training Institute, Agra, Shiraz Ahmad Farooqui- Vice President Marketing, Indiamart.com, Noida, Sharad Sharma- General Manager(Network-2), State Bank of India, New Delhi, Capt A S Rana- President, Agra Footwear Manufacturers and Exporters Chambers, Agra, Opinder Singh Chhatwal, President, President, Agra Shoe Manufacturers Association.

The panel focussed on crystallizing concerns, identifying and addressing local environment as well as eco systems issues, Propose financing strategies for competitiveness in the global economy, Facilitate regional hubs to imbibe quality management processes and IT innovation for business growth, Building a unique setting for engagement and exchange of ideas, Taxation Issues, Availability of Skilled Labour , Use of Internet Marketing.

Attendees of this forum were mainly the manufacturers and exporters of leather in Agra who have already established their business but due to various obstacles, are not satisfied.
Kavita Joshi discussed about the overview of the footwear industry, problems faced by the footwear industry and recent initiatives taken by the government. She also discussed as to how Milagrow can play an important role in enabling and empowering SME clusters to achieve sustainable development and growth.

Agra Footwear cluster is a prime example of a rooted low-tech cluster with predominantly small producers. The cluster has predominantly small scale of operations & the industry thrives on footwear making artisans/skilled workforce available in plenty in the cluster, but suffers from acute shortage of managerial and supervisory staff with technical qualifications. Footwear in Agra is a very labour intensive industry and almost no mechanization exists.

Problems faced by the industry are similar to those faced by many small scale clusters:
• Chinese footwear

• Labour shortage

• Technology

• Current status of Information communication & technology

• Taxation issues

• Weak Dollars

• Spiralling input cost

Now the question arises as to how Milagrow can be of any support?

As “consultants” for Small and Medium Enterprises, Milagrow plays an important role in providing the right solutions (“not just ideas, execution also”). Our mission only clarifies that we partner with aspiring enterprises as a Venture Catalyst and build best-in-class managerial and organizational capabilities in them. There may be various measures by which we can help the SME Cluster in growing their business.
• Understanding the business and working along with the footwear companies as partners in their growth.

• Doing a comprehensive cluster research study on the loopholes present in the system and giving the remedial measures to overcome.

• Milagrow can also help in arranging the funds required by SME in the smooth running of the business.

• Help in screening for the best manpower for managerial and supervisory work with technical qualifications.

• Provide a cost effective and best mailing solutions service.

Before signing off, I would like throw some light on the response which we got after the discussion was over. After Kavita gave a wonderful insight into the world of Milagrow, the audience (entrepreneurs) started approaching us even before the networking session could begin. These entrepreneurs had various questions to ask - for instance, how to market their product, expand their sales across territories etc. At one point of time, there was a queue waiting to be attended by Milagrow team. I am sure that Milagrow has the answers to all their doubts. This was just the beginning and we hope to make a significant impact on the cluster in the near future.

There were many entrepreneurs coming from different parts of business. As an SME, I understand the passion and ambition of today's entrepreneurs, and through this initiative we were successful in reaching out to our target audiences. I felt as if our mission was accomplished. Thanks to Kavita Joshi and Milagrow for such a wonderful experience.

New Ways of Hiring - Solutions for the MSME Sector

- Contributed by Akash Kumar

A recent study done by Milagrow found that one of the major problems faced by SME is managing human capital. Recently, I was having a discussion with one SME. He told me that his company is doing well, his product quality is superior to other MNC’s product, he pays good salaries to his employees even though he is not able to recruit and retain good people in his organization. I went in to depth and found that employee always want to be on safer side. Therefore, they prefer to work the companies which are well established and having sustainability in market. Thus, reaching out to good, loyal and efficient employee remains big task for any SMEs.

Since last few months, we have been getting news that people are getting laid off from their respective companies. Off course, the reason we all know is ‘economic recession’. Companies are giving reasons that their cost are going above their profits. Therefore, they have no other options than lying off their staff. But there are still some companies which are hiring by considering the fact that they will be able to hire the best people and at low cost. Therefore, we have tried to cover all the ways of hiring which these organizations can choose before going to employee search.

Social Networking: Social networking is picking up its momentum in web 2.0 eras. This has opened a new way for HR executive to search out their prospective employee. Linkedin, Reffster and Orkut are becoming popular among HRs. HR manager are finding it more reliable than ordinary search because they are able to reach to those ‘Passive Job Seekers’ who are not searching for job. These kinds of employee are beneficial for organization because they stick to single job and perform their best and view the companies that they work for their own organization.

Reference Hiring: ‘Reference’ has always been a preferred method for hiring among organizations. I personally know a number of organizations which hire only through reference basis. The positive of hiring on reference is employee’s liability. The people who give reference for other employee always remain responsible for the referred employee. The hired employee always performs and maintains the level of confidence and decorum to protect the reputation of the person, who referred him for particular company.

Outsource HR Recruitment: In today’s world where every company is trying to focus on his operation and productivity, these companies always considers HR recruitment as a time consuming process. Therefore, instead of going for campus to campus hiring or numbers of interview rounds, companies prefer to outsource this function to those who are specialized in it. Even the payroll system, appraisal structure is being outsourced now days.

Database Search: Various organizations, which are providing online job facilities, create a database system where any employee can register himself and upload his/her professional details. In this way, these organizations are able to create a reservoir which carries the details of million prospective employees. Then, any interested employer can just purchase database access for certain duration and start exploring the prospective employee. In today’s scenario, it is enjoying the major market share of entire HR recruitment process.

Specialized Executive Search Firms: There are also some organizations which carry out the task of searching prospective employees. These kinds of firms provide services for middle and top management. When it comes to executive search firm, from finding out the executive to finalizing salary structure they take care of everything. For their service charges, they follow 80-20 rule, which means that they charge more than what other charges for normal staffing solution.

Specialized Hiring Support: There are several organizations and associations which are providing specialized hiring support by giving a platform to showcase their requirements from employees. Some organization provides online job posting service for disable people.

A similar initiative has been undertaken by Milagrow in order to help the entire SME community. With the launch of much awaited Milagrow portal, Milagrow is coming up with an HR solution offering. Under HR Solution offering, there will be one section for employees where they can log-in and start applying to the companies of their interest. Also any Small Medium Enterprise, who is looking to hire some people, can upload their openings. Apart from this, Milagrow will be also providing specialized interim management solution for SME. Under Interim management jobs, any senior executive who will be looking to serve challenging SME community can apply these kinds of job by registering himself. Along with this, SMEs, who were not accessible to senior level guidance, can also post their interim management jobs and get access to senior level guidance. In India, Milagrow is the first who will start offering such unique services to entire SME community.

To conclude, I want say that it is not just hiring an employee; it is all about bringing a new member in your family. Therefore, while searching or interviewing any employee, one should check it out whether the prospective employee will be able fit in existing values and culture. This will also be same for employee, who will going for job hunt that his priority should be the right profile than money. In this way, he/she may not be able to earn as much as he wanted in initial stage but after certain period he/she will emerge as an expert or leader which he/she can monetize in his/her later part of career.

Ethics for SMEs

-Contributed by Kanak Dutta, Knowledge Buddy

Business ethics set the standard for how your business is conducted. They define the value system of how you operate in the marketplace and within your business. With legal scandals concerning insider trading and employee theft making the news, it is no wonder that businesses are increasingly giving attention to the ethical basis of their business and how to lead in an ethical way. While the examples above seem to be clear-cut breaches of ethics, many ethical dilemmas that are not so clear-cut are faced on a daily basis in business. In fact, there may not even be a “right” or “wrong” answer to the dilemma, but how you deal with it will says much about you and your business.

These decisions are often referred to as being in the “gray” area. They are not black-or-white, but could be argued appropriately either way.

Importance of Business Ethics in your company
There are definite advantages to owning your own business when you want to establish an ethics policy. Basically ethics come from the top. Without setting an example at the top, it is often difficult, if not impossible, to convince your employees that they too should be ethical in their business dealings. A well-defined ethics policy along with an outline of related standards of conduct provides the framework for ethical, moral behavior within your company.

What is the benefit of developing such a policy, you may be wondering. The benefit is higher employee morale and commitment that in most cases leads to higher profits. But higher profits should not be your motivating factor in defining your ethics policy.

An ethics policy should look at the bigger picture of how we relate to society as a whole and what our responsibility is to the greater good. Of course, in these days of downsizing and increasing change, some may argue that these ideals are unrealistic. However, it is important to note that most of the opponents of good ethics are focusing on short-term versus long-term results.

Many organisations, which have participated in the downsizing mania, are beginning to realise that they have traded long-term employee morale and productivity for short-term profit margins.

The bottom line is “what goes around, comes around”. If you treat your employees with disrespect and distrust, chances are they will do the same toward you. When you are developing your ethics policy, you must decide what it is you want your company to stand for, put it in writing and enforce it.

How to develop an ethics policy for your company
Consider 5 P’s before you draft the ethics policy for your company.

• Purpose
• Pride
• Patience
• Persistence
• Perspective

Implications of not following ethical policy for your company
To give a live example for this, Satyam scandal raises serious questions about the business ethics. Ramalingam Raju (Chairman, Satyam), being a MBA from Ohio and a course in the Harvard Business School, how it is that people with such elite education are involved in such unethical conduct?

Two things come to mind while answering this question

• Unethical practices of auditing and accounting.
• Despite of having the above mentioned qualification, this didn’t help him in his transition from the mode of governance suitable for a Small Entrepreneur, which he was before starting satyam, to the kind needed to run a public limited company, where one deals with other people’s money.
  

As Edward Freeman, who suggested the stakeholder theory, says, “it’s not useful anymore to separate questions of business and questions of ethics.” An integrated way of thinking about business and ethics is via responsibility of action. That is, “businesses and executives are responsible for the effects of their action. They are responsible precisely to those groups and individuals that they can affect or be affected by...”

Importance of ethics for Small and Medium Enterprises

SMEs are characterized by informal understandings and shared expectations among the workforce of how business is done. Any values and ethical principles will usually be implicit rather than formally expressed through ethics policies, codes and programs that are familiar in large companies. The ethics of a small organization is typically influenced by the owner-manager or managing director. Through their very visible presence, their personal attitudes and behaviors will set the tone of the business and have the potential to signal to employees how seriously ethical behavior is to be taken in the organization. SMEs are not typically able to devote as many resources to building an ethical workplace culture as larger organizations.

Ethics in Milagrow
At Milagrow, our values are mainly based on 4 dimensions:
Ethics- Integrity, Honesty and Transparency in what we do

Trust- Believe in people

Respect- For all stakeholders

Commitment- Own everything we do

Rajeev Karwal, Founder, Milagrow Business and Knowledge Solutions strongly believes that “values are something which have to be lived from day one. At Milagrow I have always made sure that we follow ethics and integrity with a 360 approach. You can't be corrupt on one day and then say that you will be ethical the other. We have not only lived a corruption free life ourselves but have made many clients who approached us change their unclean ways. We have never manipulated profits to save taxes or manipulated revenues or costs. We have also adopted sustainability as part of our ethical value system”. He firmly believes long-term success occur only if an organization constantly aligns to/shapes the consumer needs/expectation. In an ethical business the essential thrust is on social values. Business is conducted in consonance with broader social values and the stakeholders' long-term interests. This ranges from concepts of nation-building and trusteeship that are demonstrated in the business practices of the Tatas and Birlas, and new generation enterprises such as Infosys, Wipro, Dr. Reddy's and Ranbaxy, where less emphasis is on minimising negative impacts and more on maximising the positive spill-over effects of corporate development. Thus, it is the need of the hour that business houses become more careful and know their responsibilities towards the society as hurting the sentiments of the consumers can really be hard on their finances, profits, share prices and their mental peace.

References:

http://www.smallbusinessjourney.com/

http://www.bitc.org.uk/

http://www.smallbusinessnotes.com/operating/leadership/ethics.html

http://www.goodcorporation.com/

White paper from Institute of Business Ethics

Why is it difficult to approach Government

- Contributed by Tapan Bhatnagar

As a Senior Minister recently stated during an International conference, “Approaching the Government is for help is like asking for a Kiss of Death”, but what I fail to understand is Why is it that the Government which is Of the People, By the People and For The People portrayed in such a Mafioso style.

Though there can be many reason for this the two reasons I can attribute to this is Corruption and Red Tape. Let me talk from a personal perspective for each of the reasons I have stated.

Talking about corruption, it is definitely not news for most of you who are reading this, corruption is like a cancer gripping the country. It is no surprise that we come so low down in any ranking for honesty in comparison to almost the entire world. Corruption is prevalent in almost all levels in the country, the DDA housing scam can be the most recent example for this. But, speaking from the personal front, let me tell you about a visit to a Government office. One approaches the reception desk which is manned by two low level clerks, the job of these clerks at the reception is well, to issue slips and direct the visitors to the correct office/officer. One will think so how can there be corruption at this level. Right? Wrong! The first thing they ask when you approach them for a pass will be and I quote, “Sirji, Abhi toh hamari dosti kachhi hai, kuch chai paani ka intazam kar do toh dosti pucci ho jayegi!” (Sir, right now we are just acquaintances, give us something for tea/coffee so that we can become friends) And the worst part is, that the statement remains more or less the same in most Government offices almost as if they have been trained at a central place. It seems they have a central training institute for this like the others around. Keep this in mind that this is at the lowest level in the Government; I cannot get to the higher levels without raising heckles of everyone in this ecosystem but I am sure you get the hint of what I am talking about. Surprisingly in a recent study carried out by Milagrow almost 98% of all the respondents directly or indirectly agreed that Corruption existed in the system. The sad part is that it has now become an accepted practice within the ecosystem.

Getting to the next point which as per me is the next culprit due to which it becomes virtually impossible to approach Government, Red Tape or the excessive bureaucracy in the government. It must be noted here that the policies and schemes that the Government implements from time to time can lead to India beating China in development or at least the rate of growth, but unfortunately most of the time the schemes are known only to a select few and even if the scheme is known the paperwork involved in getting a sanction from the Government can make any person who is an expert in documentation and enjoys it lose the sanity. Please do not think this is just a ranting against the government. No, not at all, I have been fortunate enough to have been supported in almost all endeavors, agreed I am yet to receive any kind of assistance but I can safely say it is in the pipeline. But, saying this, let me also run you through a simple process of applying for a scheme for financial assistance to entrepreneurs for attending and exhibiting at International trade shows. The scheme which has been recently updated (for the better, I may say) has so many different forms to fill and such complicated filling instructions that most of the entrepreneurs will not understand what needs to be filled and which form does not need filling, this is also compounded by the fact that the scheme has four sub schemes. So effectively if you have to apply under the said scheme, you have to find the sub scheme you want to apply for, based on the required sub scheme one needs to fill the first form but not the second, but you may have to fill the second part of the second form but you will have to submit it after the visit, Confused!! Well most probably you would have either missed the trade show or cancelled the plan by now.

Having said this and this is just the tip of the Ice berg I am sure you can come up with many other reasons for inability to approach the Government, but the Government is evolving and at a fast pace. There are many enlightened officers which are taking the necessary steps for this evolution. As Confucius says, “The journey of a thousand miles begins with a single step” I hope the government has taken the step in the right direction.