Success & Growth Mindset

Friends from Infosys pointed me to Mr.Narayanamurthy’s pre-commencement lecture at the New York University (Stern School of Business). A very inspiring speech with lot of reflective thought built inside. I particularly liked this part wherein he says that the mindset one works with is also quite critical. I never get tired when I get to read /listen to his various speeches – every one has a key message. Here, he points to Carol Dweck’s work as quoted by Marina Kravosky, on the fact that it matters greatly whether one believes in ability as inherent or that it can be developed. ( The Effort Effect is my favourite as well – briefly the theory is that with occasional tumble’s one can reach far greater heights). A fixed mind set creates a tendency to avoid challenges, to ignore useful negative feedback and leads such people to plateau early and not achieve their full potential. The latter view, a growth mind set, leads to a tendency to embrace challenges, to learn from criticism and such people reach ever higher levels of achievement. Read Carol Dweck’s book, The Mindset : The New Psychology of Success. Carol believes that personalities can be changed and holding a growth mind-set bodes well for one’s relationships.

Some of the lessons that Mr.Murthy points to are very telling – excerpts with some edits:

1. I will begin with the importance of learning from experience. It is less important, I believe, where you start. It is more important how and what you learn. If the quality of the learning is high, the development gradient is steep, and, given time, you can find yourself in a previously unattainable place. Learning from experience, however, can be complicated. It can be much more difficult to learn from success than from failure. If we fail, we think carefully about the precise cause. Success can indiscriminately reinforce all our prior actions.
2. A second theme concerns the power of chance events. As I think across a wide variety of settings in my life, I am struck by the incredible role played by the interplay of chance events with intentional choices. While the turning points themselves are indeed often fortuitous, how we respond to them is anything but so. It is this very quality of how we respond systematically to chance events that is crucial.
3. Of course, the mindset one works with is also quite critical. As recent work by the psychologist, Carol Dweck, has shown, it matters greatly whether one believes in ability as inherent or that it can be developed. Put simply, the former view, a fixed mindset, creates a tendency to avoid challenges, to ignore useful negative feedback and leads such people to plateau early and not achieve their full potential.

The Takeaway : The message is perhaps the best possible one that once can hope to get for the event. Around the world, corporates need not just managers but leaders with entrepreneurial mindset, capable of taking the organization to its next levels and help break open new frontiers. The message is very powerful considering that it has come from a person of his stature . His reflections , risk taking abilities, determination and moreover his idea of moving from operational management of infosys, an organization that he has so passionately chiseled and built over a long time and finally giving way to others – all are testimony to his greatness. Mr.Murthy's approach towards his life and the dogged determination to shape his own destiny,his beliefs in being ever hopeful, creating and distributing wealth all point to set of core beliefs – the likes of which are essential for entrepreneurship and growth. Depending on the context, the general approach can change- its like changing the template/skin as when new developments happen and when the world keeps changing – new prescriptions and beliefs may necessarily spring up but the core values are timeless and priceless.

Labels: Business Model Success, Emerging Thoughts, Mindset, N.R.Narayanamurthy

Google : Business Model Wins

If ever you need to look for a case as to where business model could ensure win for an enterprise- do not look beyond Google. What an amazing enterprise, it is turning out to be! I was just about to compile and understand the financial muscle of Google when I stumbled on this excellent compilation by Eric Bangeman on Google’s financial muscle. Look at some of the impressive numbers therein:

- Revenue Growth from $400 million plus in 2002 to $10.6 billion in four years (should rate as an all time record for business!!)
- Cash & Short term investments from $2.1 billion in 2004 to $11.2 billion now
- 99% revenue comes from online advertising
- Traffic acquisition costs are 31.5% of the revenue(this means other competitors can’t even dream of spending this – more so by the nearest competitor, in this case Yahoo,further fortifying Google’s lead)

Look at the excellent financial lead Google has over competitors:

- Cost of sales at Google is at 8% & Eric claims that the corresponding number for Microsoft is 22% & Yahoo is 20% and Apple is 22%
- Cash on Hand for Google is at $11.2 billion , Apple has $12 billion, Yahoo has $1.6 billion while Microsoft has $34 billion in cash.

Look deeper – none of Google’s competitors have any wherewithal to compete on existing areas given the cost structures and the topline lead helps Google to keep running faster and creating more money – this is a double treat – it increases the distance of lead while further bringing down/maintaining the cost of operations(Google has been adding cash to its reserve at a faster rate in the last three years). And what does one do with this excess cash – keep investing in core business and focus on innovation and acquisition in new areas. Perfect – can any of the existing players dare to compete against Google in its core areas and expect to win over it? Forget it. Google is not just a technology platform, it has become a business platform –one that would ensure increasing rates of success.

Labels: Business Model Success, Google