Business lessons from an old job
By Ashutosh Tiwari
From August 2002 to July 2004, together with two Nepali colleagues, I ran a small-business support facility called Business Service Aadhar in Kathmandu. Ours was a smartly furnished one-room business counseling office at an equally smart address: Heritage Plaza in Kamaladi. Our job was to help small private-sector service businesses.
Aadhar's parent institution -- the then Private Sector Promotion Project (PSPP) of the German Technical Cooperation (GTZ)- Nepal -- defined help in two ways. The first consisted of providing market-oriented advice to small businesses. The second meant supporting such businesses financially for concept testing, market research and marketing. In either case, the aim was to help small businesses sell services commercially on their own.
The rationale for Aadhar's existence was simple. Small businesses often have innovative service ideas. At times, they even have intriguing ideas such as selling yak cheese on the Internet. But they lack the resources to critically examine how feasible their ideas are. They need information, contacts, networks and access to supportive market players. They also hunger for disinterested experts who can help them brainstorm a way ahead by revising business plans. Often, they remain confused about how to translate -- in a step-by-step manner -- their ideas into profitable ventures.
Clearing up such confusion as an honest broker was Aadhar's role. It offered hard-nosed advice while satisfying the demands of its two constituencies. To its clients, it had to signal that it had the market credibility, the necessary expertise and the networks to help them succeed. To the PSPP, it had to deliver two results: that the money it gave out verifiably generated additional businesses in markets that had not been explored before; and, that other small businesses purchased Aadhar's clients' services.
A critical review of Aadhar in September 2003 by The Springfield Center, a British consulting firm, concluded that Aadhar's work was "non-distortionary support, sensitive to local market norms which encouraged service provider ownership and innovation; effective advice to partners; encouraging greater customer orientation amongst partners through use of market research techniques, such as focus group discussions; outreach outside the Kathmandu Valley; engagement with other influential players in the market place, such as large business houses, the media, academia and some business membership organizations." It added, "Aadhar has developed an effective and motivated team; it has acquired a reputation and credibility in the market place; and it has established appropriate management systems."
But things changed in early 2004. Faced with this country's then deteriorating security situation, GTZ-Nepal reshuffled its development agenda. That resulted in GTZ's placing more emphasis on conflict mitigation activities. Shortly thereafter, the kind of work that Aadhar did in urban areas was absorbed into a new project which found its home at the old Hotel Narayani complex in Pulchowk. That change was necessary to better reflect the new priority which called for reaching out to rural communities.
Still, two years after Aadhar's closure, and having since moved to a new job at a South Asia regional organization, I am struck that whenever I advise clients on business matters these days, I find myself drawing upon the knowledge that I had gained at Aadhar. Briefly, then, here are three lessons that have continued to serve me well.
Business unbundled: At Aadhar, I learnt to see a business in terms of what comes in, what gets transformed and what gets sold. I saw that every business, no matter how large or small, can be unbundled into three core parts. The first part is about coming up with ideas; the second is about putting the internal systems (accounts, logistics etc) in place for those ideas to flourish; and the third is marketing and the selling of those ideas as services and products. Sure, these parts can be divided further. But the main point is that once you have this three-bit frame in mind, business analysis as in what's working and what's not becomes easier to do.
Diversely smart team: I learnt that merely gathering individually smart people does not necessarily make a team smart. Often, our usual practice of getting good people is to hire the credentialed clones-- the ones who dutifully completed their MBAs and spent one summer photocopying documents at a noodle company as a part of their compulsory internship assignment. My approach to recruiting colleagues was to hire on the basis of how they could add value by injecting different skills, networks and backgrounds to what Aadhar's mandate.
The idea then was not to hire people with impressively look-alike CVs. It was to hire to make the existing team smarter by bringing in those who would enlarge everyone's perspectives. This approach must have worked well: the market considered the Aadhar team to be competent. Besides, I ended up learning much from my two colleagues in ways I would not have, had they been just two other US-returned Nepalis.
Client servicing as the PR tool: Ad agencies always told us that the way to build up the Aadhar brand was to spend tons of money placing ads in national media. Our experience suggested otherwise. It was client-focused public relations � the act of incurring shoe-leather expenses to find clients, selling the offer to anyone who'd listen, making mistakes and quickly learning from them, delivering results, and doing activities to bring clients together� that helped us establish the Aadhar brand much more quickly and credibly. Ads only make people aware about what you do. But client-focused PR exercises build up your brand. Once the brand is established, clients actually spend money to do business with you.
To be sure, Aadhar was not a private-sector firm. As a donor-funded entity, it was insulated from market competition. It did not have to worry where the money was coming from, though it had to justify every rupee it spent. Admittedly, these NGO-like attributes are reasons why I would not apply everything I learnt at Aadhar to achieve results in a competitive private-sector business. But in all fairness though, in those adequately lengthy two years, as a mediator between those buy services and those who sell them, Aadhar provided all who worked there a front-row seat to understand the process of managing a small business support unit in Nepal.
(Originally published in Kathmandu�s Boss, a business magazine�s June 2006 issue
under �Thinking Aloud� column)
