Growth Roadmap TiPman Quarterly - 1st Issue Q3 2014

How small fish tries to eat the

big one?

“The business that does not

know its business has no

business to be in business”

What has happened @

TiPman?

Transformational leader who

continues to inspire generations

Rishabh Dudheria MBA. MSc(Bath, U.K.)

Your Partner & Managing TiPman Email: rish@tipman.co.in

Trust- Transformation -TiPman Dear Friends,

Hope you are well. I would like to wish you a very Happy Deepawali and Prosperous New Year. It gives me immense pleasure to introduce TiPman through our new quarterly communication tool “TiPman Quarterly”. It is one of our latest initiatives intended to keep you in touch with our news and thoughts. We have tilted it as “GROWTH ROADMAP” wherein we endeavour to give you some insights on various management topics, industries and leading personalities who have inspired us. We aim to give you brief highlights in each of these and also keep you updated with what’s happening @ TiPman. TiPman is an Indian based global management advisory founded in 1984 by Mr. Inderchand Dudheria. Today, this year we celebrate completion of 30 years just as the world’s leading consultancy Mckinsey & Company celebrates 50. It is a proud moment for us, however it has also been a sad one as our founder has left us only with his thoughts and principles. Inderchand Dudheria founded TiPman with a vision to deliver world class solutions to problems faced both by individuals and companies. The values that have been driving TiPman are trust and integrity in relationships; passion and challenge in tasks, unlimited learning, knowledge share & creation; Excellent service with teamwork, compassion and humility. In this first issue of TiPman Quarterly we reminisce the leadership of Acharya Shree Tulsi - a transformational leader who continues to inspire us and many more through his principles and revolutionary leadership. The second section gives a perspective on management consultancy in India by our founder Inderchand Dudheria which is then followed by the corporate case of Porshce and Volkswagen, the sequence of events when a small niche car manufacturer almost acquired the 3rd largest automotive organization. Finally we update you on what has happened at TiPman over the last quarter and recall the story so far. I hope you will enjoy reading and look forward to hear your feedback. Thanking you, Yours faithfully, Rishabh Dudheria

Acharya Shree Tulsi - Transformational leader who continues to inspire generations By Rishabh Dudheria His

Holiness Acharya Shree Tulsi has been known worldwide as one of the greatest Acharya. He was campaigner for moral awakening in the society and a crusader against violence. Acharya Shree was a leader with a clear vision and purpose – to selflessly work in the service of the mankind and help others find the path to their own self enlightenment. Acharya Shree was widely consulted by leaders from all walks of life including scholars, politicians, social reformers, philosophers, journalists, poet laureates, other religious and community leaders.

Acharya Shree successfully mediated the Indian parliament when it came to a standstill following the boycott by the opposition against report on stocks scam. Such was his leadership which could resolve conflicts with ease in the complex of situations. Acharya Shree Tulsi and his leadership not only inspired but also transformed the

independent India. In addition to his knowledge, selflessness, sacrifice (tapasya) and ability to stand up against all challenges, his leadership style and charisma won him people around the world. Acharya Shree Tulsi renounced his birth family at an early age of 11 to become a Terapanth Jain monk. Acharya Shree was later nominated as the successor by the 8th Acharya Kalugani who was far impressed of his talent. However, nobody would imagine that the responsibilities of being an Acharya and

leader of the Terapanth

would come at an early age of 22. Could you imagine what kind of challenges did Acharya Shree face? Despite being talented,

knowledgeable the challenges were far

superior to test his leadership. There were numerous of them, both at a personal and at organizational level such as to establish himself as scholarly Acharya who would be able to command the respect of the senior and scholarly monks; to educate large number of unschooled nuns; and to inculcate values in the community. So how do we think Acharya Shree could have addressed this

just after becoming Acharya at age of 22? The first order of business was to centralize and unify Terapanth organization and administration. Although a basic organizational structure was in place, Acharya Shree carried out a herculean effort to optimize the Terapanth order at operational and functional levels for effective utilization of resources. Acharya Shree worked to develop an open educational infrastructure by securing a sufficient number of quality teachers and ensuring that the requisite books, study materials were in place. Over time Acharya Shree built an organization that could explore and interpret the extensive Jain literature. Acharya Shree Tulsi faced many roadblocks during the leadership of the Terapanth organization. Acharya Shree considered them as an integral part of growth process and writes in his diary, "There were always many objections to balance out the received support for the ideas I proposed. Most of which were pioneers for the time which made it controversial to some. If my ideas had been accepted without objection, my ego would have inflated beyond reason. Conversely, if I had only received objections to my ideas, I might have become reluctant to express any new ideas I might have had, no matter how good they might have been in my eyes. Thank goodness that balance between criticism and accolades was maintained in these situations."

Why did he face such strong opposition, when his thinking and his energy was on welfare and good for the people? It often stemmed from envy of his incisive, revolutionary ideas, resistance to change for conservative thinking. Various examples can be cited here. However Acharya Shree remained firm and fearless as all his ideas were born out with deep holistic, foresighted thought. Continuously planning for the future; understanding the need and problems in the society; clear purpose and vision for Terapanth;

were some of key

aspects which I feel helped Acharya Shree achieve great appreciations and respect in the world. One is such example of Chaapar chaturmas of 1948 wherein Acharya Shree analyzed and planned the future of Terapanth Jain organization course based on society needs. Some critical observations were raised on issues such as “how can we empower and uplift the lives of people? What is the role of religion in uprooting blindly followed social customs? How to raise the education level of monks and nuns? What is the methodology to adequately train those willing to enter monkhood?” The strategy Acharya Shree planned to structure and implement laid the foundation for several new programs such as The Anuvrat Movement; Spiritual training programs for monks and nuns; the founding of Parmarthik Shikshan Sanstha to train future

nuns; Program for suppressed (lower) castes and many more. Anuvrat (moral code of conduct) In 1949 Acharya Tulsi started the "Anuvrat Movement” a moral revolution with the aim of re-establishing a strong system of values. What inspired a religious head like Acharya Shree Tulsi to launch a movement aimed at social reform and moral regenerations? Acharya Shree deeply believed Religion had two aspects: modes of worship which vary widely from religion to religion and a code of conduct which is more or less universal, and Acharya Shree consciously chose to work on character and conduct.’ The Anuvrat movement seeks to use small, achievable steps to build character, purify life and develop and strengthen will power. It seeks to transform attitude towards crime and corruption using the power of individual self-realization. Acharya Shree developed a ‘minimum moral code’ undated with vows such as: I will do my best to avoid contributing to pollution; I will observe rectitude in business and general behavior; I will not resort to unethical practices in the elections and many more. Acharya Shree’s legacies to the society and mankind are far too many in a life of monkhood that spans from an early age of 11, covering over 62,000 miles on foot in a life spanning over 84 years(Jain Monks and nuns remain under a vow of moving on foot all their life). Acharya Shree made several progressive contributions such as Anuvrat, Jeevan Vigyan (Science of living), Samanshreni, training in non-violence. Acharya Shree

also instituted a rigorous training program for the monks and nun

and a massive project to edit and computerize the 32 Agamas and Prekshadhyan along with his successor Acharya Mahapragya. Acharya Shree was also inspirational in establishment of Jain Vishva Bharati University - an education and research institute. Acharya Shree is one of the legends who influenced and transformed the independent India and enriched the world with innovative work in the field of literature, research authoring of over 100 books and still continues to inspire our hearts and minds. This year we celebrate the 100th Birth Anniversary of Acharya Shree Tulsi - the 9th Acharya of Jain Terapanth sect. Large parts of this write-up have been extracted from the book written by Sadhvi Vishrut Vibha “A Legend of Humanity”. I have drawn brief highlights of our Guru and his leadership who has motivated many of us to take up the ethical path of progress. My apologies if I have not completely captured all aspects of the legendary leader of this century. Question for Thought! What do you feel is the key aspect of Acharya Tulsi which inspires the most?

Management Consultancy – A Perspective By Inderchand Dudheria - TiPman Founder & chief Since seventies, the Management of Business in India has acquired new dimensions. The whole concept of business has undergone

a radical change. The opportunities in the field of business activities have grown enormously and people with resources, vision and enterprise have reached new heights of success. There is a tremendous change in the outlook, approach and conduct of businesses. The decision making is becoming more and more scientific and objective through accurate, continuous and complete business information made available to the decision-makers. The identification of strengths and weakness, evaluation of the alternative growth options, setting up of goals, formation of strategies, planning-mobilization and utilization of resources have all acquired greater importance and awareness of these is necessary while taking a

decision on tapping a new opportunity. As the situation exist, the industries are not equipped with the Man-

Power-trained, experience and qualified in new skills to take new look at the new dimensions of business. And rightly, the industry is turning on to more and more Management &

technical advisories for the professional

services – a change from traditional approach to a more professional management. A management consultant is one who both by formal education and experience is specialized with knowledge of situation analysis and resolving. He is an expert in his functional specialization of various business aspects such as production, marketing, finance,

Human Resource etc. He is an independent agent, an outsider to the Industry. Though he does not

have line authority, his commitments extends to actively helping the management in planning and implementation of recommendations. The Law of “Survival of Fittest” applies perfectly to business, as it is seen that only “Fit units survive and fittest flourish”. It is not very uncommon that in an industry, one unit is growing, expanding and diversifying where as another is on the verge of collapse. In an enterprise, one department or product fetches better results than other departments or products of the same enterprise. Management is better utilization of the 6M – Men, Materials, Machineries, Money, Market and Methods. A well managed unit flourish, a managed unit survive and a mismanaged collapse. Similarly, in the same unit, some departments are effectively managed than other departments. And therefore, are more profit earning centres for the enterprise.

A discussion on the concept of being efficient and effective is pertinent at this juncture. Efficiency is concerned with doing the things right. It may not necessarily mean better results for the enterprise. On the other hand, effective management means doing right things and this is required. “To succeed

one should do the right things often enough and long enough”.

The consultant have been found most useful when an organization expects or desires distinct changes in various aspects may it be problem avoidance or reduction, opportunity seeking or cost benefit analysis for make and or buy decisions. These all factors contribute to Managerial effectiveness and in turn better results for the organization. Consultants design the path, make the way and take the organization to the peak of success. “We want you to flourish” is the Motto of consultants towards the Industries because they are known and judged by the success, growth and advancement of their client organizations.

Management of change and productivity improvement studies are important areas where the

services of consultants can be made use of to advantage. Management of change is a difficult task for top management as there is lot of resistance to change in the Industry. The introduction of sophisticated technology though very vital to changing technological climate, necessary in increasing effectiveness, attaining higher production levels, costs reduction, control, and better operating results faces stiff resistance from workers, trade unions. They are suspicious to any action of top management and have preconceived notions. Here consultants as change agents have been successful.

Studies have well established that management consultant are the single largest agents, responsible for diffusing advanced management techniques in industries and increasing productivity, success rate of these industries without necessarily increasing the use of capital.

We have discussed the role of consultants in the Industrial and business enterprises. But the services of consultants in devising managerial effectiveness schemes

in managing the various public utility institutions like hospitals, educational institutions, transport services, can be utilized advantageously. In fact, services can be made use of in ones day-to-day life activities in increasing the effectiveness. The demand for the professional management consultancy services is increasing and this has led to a tremendous growth of consultancy organizations.

Inderchand Dudheria founded

TiPman consultants in 1984. He

started it as a project management

consultancy which involved

preparation of project report,

turnkey projects, management

consultancy, and sick unit revivals.

Over the last 30 years he had

served industries in every sector.

Today he leaves behind his legacy

in the form of his thoughts and

achievements. He has been

adorned with numerous awards

like the HIND Rattan award (by

NRI society) in 1994. For more log

on to www.tipman.co.in.

TiPman –“Your growth is our success” Project Management Consultancy – Strategic planning advisory – Individual Coaching Institute

How small fish tries to eat the big one –

The Porsche & Volkswagen case By Rishabh Dudheria

Was it a battle for corporate control? Was it to consolidate? Was it for any personal ambitions? Was it daftest idea?

Nevertheless, it is an interesting strategic case study. A case almost unprecedented in corporate world, a takeover by a niche sports car manufacturer producing around 100,000 cars per year with around 12,000 employees to buy the third largest automobile manufacturer which sold over 6 million cars a year and with 340,000 employees in 2007. How could this saga event happen and what led to its turnaround? And how did Porsche AG became one among the 12 brands of Volkswagen (VW) group? Porsche was founded in 1931 by Ferdinand Porsche, along with his son Ferry Porsche and son-in-law Anton Piëch. It started off as

Porsche Engineering Office which sold design and engineering services to other carmakers. In 1934, a new firm Volkswagen was founded to make a common people’s car as per direction of Hilter. Ferdinand Porsche was given the contract for his design and he was then appointed to the supervisory board. It wasn’t until 1948, 3 years after the end of World War II, that Porsche produced its first own branded sports car. The history of Porsche automotive group is intertwined with that of the Porsche and Piëch families and the feuds between them. In order to avoid disputes the Porsches and Piëch’s decided in 1972 that no family members would be permitted to take an active role in the management of Porsche, even though the two families equally owned 100% of the voting stock. This resulted in a promising R&D engineer Ferdinand Piëch (son of Anton Piëch) move his career to VW where he ultimately rose through the ranks all the way to the CEO and chairman of the Supervisory Board of VW while his cousin Wolfgang Porsche(grandson of Ferdinand Porsche) , was the chairman of the Supervisory Board of Porsche.

Porsche was profitable niche carmaker on the rise with highest rating in quality, engineering and solid financials and cash reserve of 3 billion Euros. It was the world’s most profitable automaker on a per unit basis; impressive considering it was not a volume player. Riding high on its profits, products and engineering Porsche decided a future course of its strategy. What do you think that the Porsche strategy should have been in this situation?

The CEO of Porsche, Wendelin Wiedeking and his strategist decide to takeover VW an automotive manufacturer down the road headquartered just across Porsche in Wolfsburg. Did he realise size of VW operations, benefits of acquiring and its associated challenges. There wasn’t much in common then what was the reason, what was

Porsche -VW

takeover SWOT

the benefit to Porsche? Nevertheless, they planned on executing this massive takeover they also persuaded the Porsche and Piëch families. How such a strategy was planned and embarked upon by Porsche? Joachim Häcker explains the strategy as 4 phase plan by Porsche. In the 1st phase Porsche entered in VW and gradually became the biggest principal shareholder it was able to increase its stake to more than 20%. In the second step it soon edged towards the 30% mark acting indirectly through options and effectively “sneaked” its way to the 30% mark within one year. It continued its march crossing the 30% threshold; it publically announced that it did not intend to acquire VW. However, its intent became evident when in October 2008, sitting on a fat, 42.6 percent block of VW shares (and with options to purchase another 31.5 percent); it finally admitted its intentions to take over 75 percent of VW shares during the course of 2009. To endeavor complete acquisition, Porsche was relying on two key factors. One was its ability to acquire a large position using cash settled options without having to alert the market to its ownership position. The second was the repeal of the VW Act. In general, the German Stock Companies Act ("Aktiengesetz") calls for a majority of 75% of the shares to approve fundamental issues such as mergers and acquisitions. However VW had been exempted from this rule which guarded its workers’ rights more diligently and sought to

protect the interests of the state of Lower Saxony which had 20.3% voting rights. As per this act it was necessary of 80% of votes to acquire the firm. However the seniors at Porsche were relying on the repeal of the act which was also backed by the EU Court of Justice ruling on October 23, 2007. In spite of the EU ruling the government of Germany passed a new VW act similar to the earlier one and enforced it as a law in December 2008. The tables now turned around against Porsche in 2008. Porsche was faced with weak car sales and a huge debt burden. To add a final straw was the 2008 financial crisis, Lehman-Brothers collapsed and credit markets froze. At that time Porsche owed about € 9 Billion to its banks, yet it needed to go even deeper in debt in order to increase its ownership of VW. To make matters worse, Porsche held a 50.8% stake in VW, but that stake did not provide decision making power because the New VW Act had not been repealed. They had hoped to get into a controlling position that would enable it to use VW’s funds to service its own debt. Turnaround of their strategy - VW was back in the driver’s seat. Porsche needed to reduce its debts either by selling its automobile company or by a merger with VW on VW’s terms allowing all the control to VW

(supervisory board chaired by Piëch). Perhaps this could have been Piëch’s ambitions to keep the control in his hand as against with his cousin Wolfgang Porsche. On May, 7th, 2009, Porsche landed in the VW group as its 10th Brand. It started by the attempt of the small car manufacturer Porsche to take-over Europe's biggest auto firm VW and finally turned Porsche into VW's "brand. On the way, hedge-funds lost a fortune, Porsche earned more revenues from financial transactions than from producing cars, one part of the union fought against another part of the same union, and a long and tumultuous family feud, but in the end it had also been profitable. Now the Porsche/Piëch families own more than half of one of the world’s largest automobile groups.

Questions for thought! What does Porsche need to clarify in order to successfully attack the big fish? How can Porsche make sure that nobody realizes that the small fish is about to eat the big fish?

References: Joachim Häcker “Volkswagen and Porsche - Corporate Finance Case study” – St Galler business School Rebecca Henderson, Cate Reavis (2009), “What’s Driving Porsche?” MIT Sloan management case study Nolte.H, Butcher, A.W (2011), “VW and Porsche One Family, Two Car Companies, & a Battle for Corporate Control”

TiPman Quarterly Update – Q3 2014

www.tipman.co.in :– (your new web interface to connect)

We have launched

your new website to

keep you updated with

happenings @ TiPman.

A tool which we feel

will help us reach you

effectively, help you

understand various

aspects of your

partner, happening

activities, services

available and

opportunities to

extract from some of

our learning. We also

aim to provide

interface to get in

touch with your

queries. Do drop in

your feedback; we are

keen to improvise as we embark on this journey.

Your Think Tank

We have relocated our base from #46, 2nd Floor K.H. road in Bangalore to your new think-tank in Wilson garden. This has been planned with a view to expand our services, provide a new base for the leaders of the business & industry to break away from their corporate constructs. An environment created to stimulate creative thinking. We aim to support & facilitate growth services, provoke ideas restructure the thought process, support with external assessment of business environment.

Your Partner Story

Partner @TiPman – we believe in

partnering with our client, we

mutually work to plan, restructure,

and create strategies, plans, and

growth roadmaps.

Why strategic planning services?

We had started management consultancy way back in 1984 under our founder Inderchand Dudheria – an idea with a foresight, consultancy services which were new in India back in those days. The need for India was more around new project setups, sick units revival etc. However, today we envisage India at large heading towards an interesting industrial growth phase and far more exposed globally. Hence we are in that phase in Indian industry where growth is on a high with competitive pressures, and a dynamic global, political, legal, economical, social, environmental & technology situation. Businesses & industries need to incorporate

and plan for these changes for long term sustained growth. Who are our potential clients?

We believe partnering with our client, we mutually work with the thought leaders, experts and the partner champions who are looking for growth, who would like to plan, create their roadmap for expansion & diversification. We partner with people who require industry, business analysis, and strategic recommendations. Hence the businesses can focus their organizational resources on delivery of projects. We also partner with people to help them create their personal plan and growth roadmap. What drives us?

We strongly believe in growing our

client which indicates our success.

We see ourselves as facilitators,

business analysts and strategists,

thought provokers, problem solvers

and knowledge developers. Hence

we are driven by problem solving,

knowledge creation & share, and

above all realization of growth for

our clients truly determines our

success.

What are our plans and how do we

tend to achieve them?

With globalization having a major

impact, we envisage taking our

firm to global platform and further

leverage our overseas experience in

project & strategy formulation. We

aim to develop a network of experts

who would like to share their

knowledge. We are in the process of

collaborating with other specialist

consultancies and keen on further

strengthening our tie-ups with

leading educational institutions

both in India and abroad to meet

our objectives of delivering world

shaping thought leadership and

knowledge excellence.

Partner with Trust Partner with Teamwork

Partner with Transformation Partner with Thought leadership

Partner with TiPman

We believe in partnering with our client. It is imperative for us that partner growth is above anything else. We endeavor to provide

Clarity in thought & direction

Fact based objective analysis

Well researched & excellent prepared materials

World-shaping ideas & service

Inspirational coaching

Partner with us @: TiPman Think -Tank #15(above Navkar Dental Clinic), 3rd Floor, 9th A cross Wilson Garden, Bangalore 560027 Karnataka, India Website: www.tipman.co.in Mail me: rish@tipman.co.in

“Your Growth is Our Success” -

TiPman