Posted tagged ‘change’

My Experiences -Last time (MELT) – 1214

December 30, 2014

Last blog of the year?

People who are following my blogs must have noticed that my blogs 0714 to 1114 has gone missing. I was tempted to write on few topics and even had a sketch and outline on what I wanted to write but did not follow through as I thought those topics would create controversy in my social and professional circle and therefore reserved it for better and appropriate time. I am sure this is sounding curious and this will raise many thoughts on what those topics could be. Have patience it will be pressed (sic) sooner than later. I did not want to give a simple explanation for my disappearance such as “I went on sabbatical”.

Another year has come to an end and like any other year this year has been different in many ways. Couple of thought provoking events that stand out, from my perspective, which we need to be aware and conscious of

  1. Disappearance of three Aircrafts  this year – Is this a noise or a signal
  2. Uber rising to fame – Can the disruptive idea/model be copied in other businesses (albeit recent  bad publicity)
  3. New way of terrorist thinking- Recent attacks on school Children in Pakistan.

As you stay with these thoughts, I will write more on these topics in 2015.

Let me take this opportunity to wish all my readers a Happy and Prosperous New Year.

Back to the future

In early 80’s, an ordinary movie ticket used to cost RS 4( 50 cents)   and  Coke or its substitute was around Re 1 per 200 ml ( 12 cents based on exchange rate prevailing in those days). As the years progressed invention of VHS and mushrooming of cable television made access to movie very easy. Many liked the concept of viewing movie in the comfort of their drawing room or bedroom. Further invention of DVD made the quality of viewing better. The digital content also posed a big challenge to anti- piracy. Many theatres in US went bankrupt and people seriously questioned the survival of movie industry. Few television movies and success of soap operas added fuel to the fire. In India the concept of multiplex was at nascent stage (one could spot few in Chennai but not in other cities) and no business was willing to invest on a sunset industry.

Fast forward to present

Transformers: Age of extinction grossed over a billion dollar in 2014. Iron Man 3 grossed a similar amount in 2013. Avatar was the highest revenue earner with $2,7 billion in 2004. Coming to Bollywood, PK an Indian movie grossed around $36 million in 11 days.  Lingga, a regional Indian movie, has grossed $6 million in first six days.

What has changed since 1980? An industry once categorized as sunset started grossing billions of dollars in revenue? Take a guess – to me it is a four letter word. Don’t let your imagination get wild as I was referring to IMAX.

IMAX story:

IMAX is about filming in IMAX cameras and using a different film print as compared to normal print and projecting them in a curved screen that gave a unique viewing experience. The initial experiment of projecting a movie was confined to museums showing natural documentaries as the proposition was simple and less expensive. In 90’s it started licensing its technology to its theatres. This meant an investment of around $ 5million to create space for projection and cost of projector (as normal projector can’t process IMAX format). This was seen as expensive given that the movie industry was seen as sinking. Further, in the pre-digital era, IMAX version of the film print was $30,000 as compared to $1,000 for a normal print. An IMAX print was bulky and it needed extra efforts to lift to the projection room. All these factors made things difficult for IMAX. IMAX also tried producing their own movie using IMAX cameras but the venture was not that successful. Although, everyone acknowledged that IMAX experience was much better than normal theatre experience, the cost and the effort was not worth it even though the initial investment got reduced from $5 million to $1.2 million.

In early 2000, the company took the strategy of installing IMAX projection free of cost and let the theatres deal with the cost of renovating the space (which was roughly 10% of initial investment). In return, IMAX received 12.5% as revenue share for providing the projectors. The theatres could charge at least 20% more on IMAX format of the movie. Further, another technology breakthrough of converting existing movies to IMAX format helped them to make a dent in their market share. But these were not sufficient reason for them to celebrate as their main goal was changing the way Hollywood was producing pictures using IMAX technology and giving differential experience.

They continued to struggle as there were still not enough believers in investing in IMAX. Changing the Hollywood way of doing business over 100 years was another barrier. No bankers came forward to give them line of credit and shares were traded at paltry 55 cents and effort for LBO failed miserably. Mid 2000 was sternest test for IMAX leadership in keeping the morale and motivation of their employees high.

In 2006 another technology breakthrough of replacing their projectors with a plug and play hard drives (costing $150) helped them install in more theatres. In the next few years network of IMAX screens grew from some 350 to 700.

Eventually, their perseverance and new business model of revenue share ( 20% to IMAX) paid off in 2009 with the release of Avatar in IMAX screens. IMAX made $250 million dollar in revenue. It was a win-win situation as theatres could charge premium on tickets for IMAX version and shared portion of that to IMAX. Currently IMAX is adding some 100-150 screens every year and has penetrated various geographies.

Today the stock price is hovering around $30 per share ( as compared to 55 cents few years ago) You can make an impactful change in the industry you are operating with and its reported revenue is close to $300 million in 2014.

You can make impactful change in the industry you are operating by remaining flexible on your business model and keep innovating. The company took several wrong turns before navigating into the right path. So my recommendation is to keep plan B and C handy to change over quickly

By the way, today in a normal theatre a movie ticket would cost you RS 100( $1.40 cents) and IMAX Rs 250 ( $4) and bottle of coke costs approx. Rs 12 (20 cents)  for 200 ml. Coke price increased by 60% over three decades whereas movie tickets increased three fold( all in dollar terms)  Who would have predicted this two decades ago.

Dessert

“Change your thoughts and you change your world” – Norman Vincent Peale

I promise that I will write more frequently in 2015 as compared to 2014. With that promise I bid good bye with my usual signature “Life is Good”.

PS: IMAX is thinking of coming out with affordable home theatre. Will this create an impact on the theatres? Take a guess.

Advertisements

My Experiences -Last time (MELT) – 1113

December 29, 2013

As promised in my last blog, I am dedicating this blog to one of the greatest man ever lived on this planet.

Nelson Mandela- Greatest transformation Phenomenon of our life time

Prisoner number 466 of 64, Nelson Mandela released were the headlines on February 11, 1990. The 46664 Mandela number also became the symbol for the AIDS campaign. 46664 was the Nelson Mandela number that is known all over the world, both for the suffering he went through and as the AIDS campaign that he supports and that runs his birthday celebrations. The Nelson Mandela number and the Nelson Mandela date will live on. 27 years of suffering and never once faltering from the cause he eventually won are just part of what make up the nature of this man. Nelson Mandela in jail, Nelson Mandela as President, Nelson Mandela the man was and is an inspiration to us all.

Almost after 4 years from date of release of Nelson Mandela, Mr John Kotter wrote an article for Harvard Business Review entitled “ Leading Change: Why transformation efforts fail?” This paved way for development of Eight-stage process of creating major change. As I was writing this blog an interesting thought surfaced on how Mandela’s change and transformation would fit the Kotter’s model. So I have attempted below to plug in some quotes, speeches and thoughts of Mandela to the eight stage process of creating major change.

How do I describe Mandela?

The best way to describe Mandela was to reproduce the poem by William Ernest Henley. This  pretty much personifies Nelson Mandela.

Invictus

Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.

He drew his inspiration from this poem. While he was in prison, Mandela would read William Ernest Henley’s “Invictus” to fellow prisoners. The poem, about never giving up, resonated with Mandela for its lines “I am the master of my fate. I am the captain of my soul.” He truly was captain of his soul which transformed the world’s thinking. Now I attempt to fit Mandela’s thought and action into Kotter’s Model.

Mandel’s Leading Change- Action fitted into Kotter’s Model

  1. 1.      Developing a vision and strategy

“Vision without action is just a dream, action without vision just passes the time, vision with action can change the world.”

“I dream of the realization of the unity of Africa, whereby its leaders combine in their efforts to solve the problems of this continent. I dream of our vast deserts, of our forests, of all our great wildernesses.”

  1. 2.     Communicating the change vision

Nelson Mandela clearly held a positive vision of a racially harmonious South Africa during his 28 years in jail and helped bring it into reality peacefully– to the amazement of the world. His medium of communication was not words but demonstrate through his actions.

  1. 3.     Establishing a sense of urgency

This is what Buthelezi has got to say about Mandela “ From the beginning, I perceived in Mr. Mandela a sense of urgency in almost everything he did, as though there was just not enough time to accomplish all he had in mind, or as though there was no time to waste in achieving it. There was always a dignified air about him, but always that underlying sense of urgency.”

  1. 4.     Creating the guiding coalition

“As a leader, I have always endeavoured to listen to what each and every person in a discussion had to say before venturing my own opinion. Oftentimes, my own opinion will simply represent a consensus of what I heard in the discussion. I always remember the axiom: a leader is like a shepherd. He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind.”

  1. 5.     Empowering employees (people)  for broad-based action

But Mandela used his training as a lawyer to hamper many of the attempts by warders to harass prisoners, and insisted on their right to study for university degrees. He also made a point of trying to talk to prison guards, most of them Afrikaans-speaking whites.

Besides his iron will and principled stance, Mandela’s easy charm and generosity helped to chip away at the prison’s strict rules and disciplinarian barriers. “The inmates seemed to be running the prison, not the authorities,” Mandela said. Educating the prisoners and giving confidence to them was one of the key success factors in his fight against apartheid.

  1. 6.     Generating short term wins

Remember to Celebrate Milestones As You Prepare for the Road Ahead

Mandela, who spent 27 years in prison in his struggle for justice, said, “I have discovered the secret that after climbing a great hill, one only finds that there are many more hills to climb. I have taken a moment here to rest, to steal a view of the glorious vista that surrounds me, to look back on the distance I have come. But I can only rest for a moment, for with freedom comes responsibilities, and I dare not linger, for my long walk is not ended.”

An entrepreneur’s work is never done. We can always do better.. Sometimes it feels like we haven’t accomplished anything at all. It’s important to stop and celebrate those small successes and milestones and take in the “glorious vista” along the uphill climb. Remind yourself how far you have come as you look at the road ahead.

  1. 7.     Consolidating gains and producing more change

“The power of imagination created the illusion that my vision went much farther than the naked eye could actually see”

Nelson Mandela consolidated the democracy by setting important precedents in acknowledging the constitutional limitations on his executive power. His good-tempered acceptance of Constitutional Court judgments that ruled against the government was particularly important in this respect. His famous gestures of reconciliation and empathy with white South Africans fostered among white South Africans broad acceptance of the new government’s moral authority. His role in shifting ANC policy perspectives in the direction of a pro-market policy undoubtedly helped to reassure white South Africans and foreign business. In choosing to serve only one term and presiding over an orderly succession procedure within the ANC he certainly strengthened ANC commitment to constitutional procedures

  1. 8.     Anchoring new approach in the culture

I recall how he stoically announced the passing of his eldest son, Makgatho Mandela, in January 2005. In an environment still reticent toward disclosure, he boldly stated that his son had succumbed to HIV/AIDS, urging us to break the silence around this disease.

“It always seems impossible until it’s done.”

Dessert

Mandela had a great sense of humor and audacity. Mandela even amused the British royal family with his casual, overfamiliarity with the Queen, whom he called “Elizabeth” and not “Your Majesty.”  “Well, she calls me Nelson,” was his repost, when one of his grandchildren asked if it was not perhaps in bad form to call the Queen by her first name.

There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.”

With those inspiring thoughts, I bid good bye with my usual signature Life is Beautiful


%d bloggers like this: