The Real MBA..

At B-school, we have a chance to interact with sometimes the Who's Who of the corporate world, gain and learn from them. But remember a quote which said - Inspiration is everywhere, it only depends on the way in which you look at it..

A similar thing happened, when i conversed with my laundry guy . Its a small family of 3 who do not wash clothes, but just take washed clothes for iron'ing. They use a small handcart and are stationed at a place near a corporation ground.

Everytime i went to them, they would tell me a particular time for delivery and i used to bargain them for providing it me early . The guy said, he had lots of work and he meant it. One small glance on the Hand Cart, the space below, and the adjoining areas and you would find bundles and bundles of cloth.

I just asked him why he also does not wash clothes as that would mean additional income from the same set of customers ( i tried applying my MBA stuff there..going up the value chain etc..though i never mentioned any of these there,my thinking was on the same lines) ...And then he started replying...We had a pretty small discussion about 4-5 minutes..Look at his responses :

1) He told me firstly that he would not go for washing clothes, because that would mean additional investment. I asked what investment ? And he replied, all 3 in his family are already over-worked here and he would have to take more people. Am not sure how many corporates view their people as an investment ? It hit me straight like a bullet.

2) Second bullet he shot - He is earning decent returns on his Iron'ing business . He charges about Rs. 2 and they all do about 300-400 ( its not a typo ! ) clothes a day and works for almost all days in the week , excepting festivals etc. His only costs are the coal costs used for heating the Iron box and that is well within control .

In washing the clothes, he would never be able to do more than 80-100 clothes a day ..all 3 together. And though the charge could be anywhere between 5-7 Rs, yet the effort required would be atleast 5 times more . This guy knew his mathematics. I remembered Key driver costing techniques which was taught . This guy was taking his own time to be the Key driver and working out the marginal returns and deciding on the services to be offered !

3) I asked him how he plans to grow then ( being an MBA, its our birthright to ask questions ) . And he said, i will start thinking of other things only if iam free . Now iam continously expanding my customers in the same line of business . Once he does not find new customers, he will start thinking about it. Couldn't argue much..The guy made so much sense..I remember the BCG Matrix and also the Mature market concept.

4) And this was the best of them all ..I just asked him what he would do if his customers would switch to another guy who did both washing and laundry.
And he thought for a moment and replied - I might actually lose customers if i started offering washing services as well. I asked how ? And he told, for washing he would need to go to a far-off place , carry the clothes ,wash them , dry them , wait for so long as they got dry and then carry them back, Iron them and then give it to the customer. All of this would easily take 2 days . AND HE DID NOT TRUST THE UNPREDICTABLE CHENNAI WEATHER. IF IT RAINS, THE CLOTHES NEED TO BE WASHED AGAIN AND THE WHOLE PROCESS REPEATS ITSELF.

I started smiling and he made the same gesture and said - when you are not willing to wait for a total of 3-4 hours and fight with me for early delivery, iam not willing to take the risk . Customer satisfaction, ..no he was talking about Customer delight. Only promising what you can deliver !

Now this sealed it. I argued no further. Met a Real MBA - Master of Business really . I realised that we are just working and its high time we stopped calling ourselves MBA's. Just as you cannot learn swimming without getting in the water, its just not possible to master a business without owning it and feeling it. And this was a 5 Minute MBA course !

I asked him if he had any special discounts or any Loyalty programs for customers and he just smiled and replied - " I can do a few handkerchief's free for you " !!