Management, Aam Aadmi Party style
Whether it is the CEO following the rules, scaling up too fast or positioning the product in the right market for the right kind of consumer, there are many dos and don’ts start-ups can learn from the Aam Aadmi Party
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The Aam Aadmi Party (AAP) has been described as a start-up; indeed, as a David fighting Goliath. In office in Delhi for just about a month, it is still too early to say whether the party has been successful or is heading for failure, but the question is, will its style of functioning be a game changer in politics? And are there lessons that start-ups can take away from the challenges and triumphs of AAP’s management style? Eight rules that no company can afford to ignore:
Changing the rules of the game
“The AAP is a great example of a start-up that takes advantage of the blind spots and arrogance of well-entrenched competitors to capture the market by changing the rules of the game,” says Pramath Sinha, founding dean of the Indian School of Business in Hyderabad, and now Delhi-based CEO of media company 9.9 Mediaworx Pvt. Ltd.
AAP’s coming to power is reminiscent of the great battle of the detergent brands Surf and Nirma, he says. In the 1980s, regional brand Nirma took on established market leader Surf by selling at one-third the price, and cutting costs by means such as selling in polythene bags rather than the more expensive paper containers Surf was using. Similarly, to battle “a corrupt establishment”, AAP relied on technology (for example, urging people to use cellphones to catch corrupt officials in the act of taking a bribe). “Only through unconventional ways can you create change,” says Bangalore-based V. Balakrishnan, formerly director at software giant Infosys Ltd and now an AAP member.
Take-away: Changing the rules of the game may help capture mindshare and market share. AAP has done this effectively so far.
Getting the marketing mantra right
Besides, AAP has managed to be seen as an all-inclusive brand. “In India, even the well-to-do think of themselves as aam aadmi (common man). And using the promise of anti-corruption, which resonates with all, AAP has managed to strike a rich vein,” says the Mumbai-based group CEO of advertising agency RK Swamy BBDO, Shekar Swamy, who also teaches a course on marketing at the Northwestern University, US. “They have excellent branding and symbolism (the topi and the broom) and a strategy that is well suited for today—door-to-door and peer-to-peer conversation and conversion, a mass volunteer group with well-educated volunteers,” Swamy adds.
Their communication strategy, with Kejriwal appearing many times on Google+ Hangouts to address and interact with groups of citizens both in India and abroad, answering questions, also worked to create their brand.
Take-away: Creating awareness about your product should be in conjunction with what your target audience is looking for.
Location, location, location
Rao says that in Delhi, AAP has had what in business parlance would be described as a very successful test market. Yet going from a test market to a national launch has its own set of challenges, he adds. “In a test market, you have a limited geography, a relatively well-understood customer base, the senior management gets very involved and pays attention to the details and your salesforce is very enthused,” says Rao, of any product launch, and a process that certainly holds good for AAP’s campaign in Delhi. Yet once you go national, with multiple markets, you have to understand different consumer mindsets, translate your advertising slogans, and contend with different people. Doing this in a short time is going to be a huge challenge, says Rao.
Take-away: If your product is meant for a specific market, concentrate your energies in that space only, at least until you find your feet.
The same standards for all
Any organization or movement that wants to drive change needs a strong leader. “Arvind Kejriwal has many critics who question him for undertaking dharnas and declare that he is an anarchist, but at the end of the day, he walks the talk like a leader should,” says Sinha.
Sinha adds that Kejriwal realizes that accepting the trappings of power, like a five-bedroom duplex house on Bhagwan Das Road as chief minister of Delhi, would undermine his credibility, just as a CEO who advocates cost-cutting measures across the company but flies business class will never be seen as a leader who “walks the talk”.
Take-away: Live by the same rules that you set for others in your team.
The challenges of execution
Certainly, fears about AAP’s inability to deliver a stable and coherent government are increasing. “Removing corruption is a great goal, and yet it must be accompanied by an implementation strategy. It’s important to focus on the root cause of corruption, and figure out why it is becoming so endemic, and then re-engineer governance, systems of allocation, etc.,” says Mumbai-based Sunil Mehta, former country head and CEO, Tata AIG India, who is currently working in the non-profit space.
Take-away: A start-up will prosper only if a step-by-step process of how to execute and grow a company is in place. Of course, you will have to innovate and firefight as you go along, but at least spell out and stick to your processes.
Transitioning from a start-up to a mature organization
Leaping from start-up to mainstream requires the creation of a whole new set of competencies. In AAP’s case, this means a transition from agitator to administrator. Managing this change without losing energy and playing by a different set of rules than the ones that brought it success to begin with isn’t easy.
“AAP needs to start building itself slowly and steadily, it must concentrate on building a rock-solid foundation first,” says Mehta, who feels staying the course and getting technically proficient in governance is what will be key for AAP if it wants to survive in the long run.
Take-away: Build on your strengths before you look to expand.
To grow or go?
This is perhaps the most risky and controversial aspect of AAP’s plans to scale up quickly. “It’s a gamble. But it is also the very essence of the entrepreneurial spirit,” says Sinha, who believes that spotting an opportunity is the first step to making it happen. “There is no sense in slow consolidation,” agrees Balakrishnan, who feels it is important for AAP to become mainstream and be a part of the government to create real change now, not five years down the line. Swamy says: “I am not sure if there is anything called scaling up too soon in politics. The AAP...have to seize the moment and learn as they go along.”
Yet growing at such speed brings with it the challenges of being unable to do the very job AAP set out to do—govern well. It also brings with it the risk of a change in goalposts—from good governance to moving towards the task of winning elections and attempting too much too soon.
Take-away: Scaling up too soon can be risky. As an organization, you have to assess your resources and then deploy them.
Organizations falter sometimes. This is where crisis management comes in. In the case of AAP, the recent dharna at Rail Bhavan, Delhi, and the decision to retain their law minister, currently at the centre of a storm, may result in a significant loss of goodwill. “The ability to genuinely reconstruct what went wrong in any crisis and to make reparations is something any successful organization needs to master,” says Mehta. And in order to recapture consumer or public goodwill, making reparation must be accompanied by a robust communication strategy. Confectionery giant Cadbury suffered loss of credibility when worms were found in a few chocolate bars, but a series of crisis management measures, including communication from the then newly signed brand ambassador Amitabh Bachchan, put the brand back on track.
Take-away: Things will go wrong and mistakes will be made. Acknowledging the mistake and taking steps to rectify it must be the top priority of any brand or start-up.