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Top Trends of 2025 for GCCs in India

Posted on December 31, 2024 by Venkatesh Bhat

India currently hosts the world’s largest GCC base, with 17% of global GCCs operating within its borders as of 2024. As we enter 2025, the Indian GCC landscape is poised for significant transformation. This report delves into ten key predictions that will shape the future of these centers, covering advancements in technology, talent acquisition, and the evolving role of GCCs in the global business ecosystem.

Trend 1

MNCs are no longer solely focused on cost optimization when establishing GCCs. The emphasis has shifted towards strategic value creation. The decision to invest in a GCC’s hinges on its ability to drive innovation, foster a digital-first approach, and generate sustainable competitive advantages. While cost-effectiveness remains an important factor, it is now viewed as an incidental benefit rather than the primary driver for GCC establishment, (Blog from Zinnov, December 2024).

Trend 2

The rapid expansion of GCCs in India is poised to extend its reach to Tier 2 cities such as Coimbatore, Indore, Mangalore, and Bhubaneswar. These emerging talent hubs offer valuable benefits such as highly skilled workforce, lower operating costs due to a more affordable cost of living, and potentially higher employee retention rates as compared to Tier 1 cities. This strategic shift will not only benefit businesses but also contribute significantly to the economic development of these emerging regions. (Economic Times article, December 2024.)

Trend 3

Indian state governments are targeting GCCs by implementing policies aimed at attracting investments, such as the latest Karnataka GCC Policy 2024-2029. States like Uttar Pradesh, Madhya Pradesh, Telangana, and Maharashtra are offering compelling incentives, including tax breaks and infrastructural support, in the hopes of projecting themselves as worthy choices for new GCCs to set up. This increased competition among states provides GCC investors with a wider range of options and more favourable conditions.

Trend 4

Existing and new GCCs are adopting a multi-functional model, in place of traditional spaces like operations and technology. These centers plan to expand their scope to include research and development, finance, marketing, and data-analytical functions. This fosters cross-functional collaboration, leading to innovation in various departments. This positions GCCs as crucial to a company’s global strategy. GCCs offer diverse capabilities, helping corporations streamline their operations, deliver solutions that support long-term goals of businesses and even highlights the potentials of GCCs becoming digital twins of their HQ’s. (Communications Today article, June 2024)

Trend 5

GCCs are keenly focusing on the adoption of cloud computing, AI integration, and an overall digital-first approach. GCCs have realized that leveraging technology, operations, and back-office innovations is essential to stay abreast of competition. This approach ensures streamlined and automated processes that produce great efficiency while also enabling flexibility and cost-efficiency. AI is utilized for advanced data analysis and optimizing operations. This trend is critical to enhance productivity, increase innovation, and deliver better solutions and services. This ultimately sets GCCs as vital players in business transformation. (Blog from Denave, December 2024)

Trend 6

A blog from Morgan Lewis (June 2024), states that the traditional method of parent companies establishing independent subsidiaries is becoming obsolete due to the rise of BOT (Build-Operate-Transfer) and vendor-assisted GCC models. These models offer better scalability, reduced risk, and lower upfront investment. Companies can leverage external vendors’ expertise, infrastructure, and talent pools, for quicker implementation and better operations. The BOT model allows companies to operate a GCC with the ability to transfer ownership after it is fully established. This approach is flexible and low risk, allowing corporations to focus on core business functions while mitigating the complexities of managing different units.

Trend 7

In high-demand jobs like AI, data analytics, and cybersecurity the competition for talent is on the rise. This necessitates making talent retention and re-skilling critical decision points for the boardroom. A blog from Zinnov (May 2024) highlighted, companies must prioritize upskilling their workforce to meet technological demands while offering career opportunities to retain top talent. To improve employee retention and prepare the workforce for the future, organizations must cultivate a culture of continuous learning and offer flexible work arrangements. These initiatives are crucial for enhancing job satisfaction and ensuring employee retention.

Trend 8

As Tier 2 cities emerge as prominent talent hubs, and the competition for professionals grows, corporations are expending more energy in their hiring processes, as highlighted in a blog from Zinnov (August, 2024). In high-demand fields like AI, data science, and sustainability hiring approaches are focused on new talent. These cities offer a large talent pools at a lower cost, along with improvements in infrastructure educational programs and continued support from the government. Companies plan to leverage this untapped asset to reduce recruitment costs, and maintain a stable yet skilled workforce. This technique ensures that diverse skills can be accessed and that organizational capabilities in vital areas of potential growth can be strengthened.

Trend 9

The workforce expectations have evolved and GCCs are adapting by taking advantage of the hybrid work model with flexible variations (EY article, September 2024). Adopting a blend of in-office and remote work offers employees greater flexibility while holding onto operational efficiency. This helps companies tap into the broader talent pool of Tier-2 cities while supporting work-life balance, making this model extremely popular. Some corporations may adopt a more flexible model, with employees working remotely or collaborating during core office hours, depending on their roles. This approach reduces office space requirements, thereby helping to optimize costs. Embracing hybrid work models, GCCs can improve employee satisfaction, increase productivity, and create a diverse and resilient workforce.

Trend 10

Partnering with top educational institutions and other talent sources is a major method larger GCCs use to create a steady pipeline of trained professionals. These collaborations ensure the creation of talent pools in fields like AI, data science, and cybersecurity. GCCs can shape talent development to meet industry standards by offering placements, and internships and aiding in curriculum design. In addition to this, multiple government-funded skilling initiatives have been created to address the talent shortage in specialized fields like sustainability. These types of programs help provide quality training and certification to build a strong workforce. Thereby effectively addressing the GCCs’ need for a readily available pool of skilled talent.

Understanding these trends can help companies plan informed and effective strategies. GCCs will not only be pivotal in improving global operations, but also contribute towards job creation, upskilling of employees, and development of infrastructure in not just major cities but also in Tier-2 cities.

At Astravise Services, we provide integrated solutions that assist businesses in the effortless establishment and enhancement of their Global Capability Centers (GCCs). We guide you through the entire GCC journey, from strategic planning and model selection (including BOT and vendor-assisted approaches) to infrastructure development, talent acquisition, and operational excellence. Trust our expertise to deliver tailored, scalable solutions that drive value, reduce costs, and support your global business objectives at any location of your choice. Our goal is to transform your GCC into a hub of innovation and efficiency. Reach out to Astravise Services for a free consultation, today.

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The GCC Playbook: Why Karnataka is India’s Leading GCC Magnet

Posted on November 19, 2024 by Venkatesh Bhat

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Karnataka stands as a beacon of innovation, hosting a thriving ecosystem of esteemed Global Capability Centers (GCCs) that lead India’s GCC landscape. The state boasts the largest share of the country’s GCC talent, with a significant portion of India’s workforce contributing to its dynamic economy. Karnataka’s GCCs play a crucial role not only in generating employment but also in fostering cutting-edge developments across technology, finance, and business services, making it a preferred destination for global enterprises seeking to establish their operations in India.

• Number of GCCs: Karnataka hosts over 500 GCCs, accounting for roughly one-third of all GCCs in India. This concentration reflects the state’s attractiveness to global enterprises, which see it as an ideal location for establishing operations that support core business functions, such as technology, finance, and customer support.

• GCC Workforce: Karnataka’s GCCs employ approximately 35% of the country’s total GCC workforce, highlighting the state’s significant share of India’s skilled talent pool. This workforce includes top engineers, financial analysts, and technology experts, many of whom are drawn to Bengaluru’s reputation as a tech hub. The state’s ability to continually attract and retain such talent further strengthens its appeal to global companies looking to establish and expand their GCCs.

• Economic Output: GCCs contribute around $22.2 billion annually to Karnataka’s economy, reflecting the substantial impact of these centers on the state’s GDP and overall economic growth. This economic contribution underscores the value that GCCs bring not only through direct job creation but also through associated services, infrastructure development, and technology advancements. This substantial economic output further reinforces Karnataka’s position as a leader in India’s digital economy.

• GCC sectors: Karnataka has a large number of GCCs in the BFSI and FMCG sectors. For example, 33% of GCCs for BFSI companies like Goldman Sachs and JP Morgan Chase are in Karnataka. 42% of GCCs for FMCG companies like Target, Walmart, and Unilever are in Karnataka.

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The state’s dominance is evident in its staggering share of India’s GCC presence, Karnataka is home to over 50% of the country’s GCCs. Karnataka, particularly Bengaluru, has become a magnet for Global Capability Centers (GCCs) for several strategic reasons:

Established Technology and Talent Hub
Bengaluru, is widely regarded as India’s “Silicon Valley.” Major tech companies and startups alike are based here, creating a rich ecosystem for talent acquisition, innovation, and industry growth.
Cost Efficiency for Multinationals
India’s proven cost efficiencies have consistently attracted multinationals to transition significant internal processes to India particularly Karnataka. This cost efficiency is further enhanced by state policies that offer tax breaks, infrastructure subsidies, and other incentives for foreign investors, making Karnataka a favourable destination for multinational companies.
Innovation and Research Focus
Many GCCs in Karnataka focus on innovation, product development, and high-value R&D functions. With access to some of India’s top engineering and technology institutions, including the Indian Institute of Science (IISc) and various IITs, Karnataka provides GCCs with a strong research ecosystem. The ability to innovate and quickly develop products & solutions attracts GCCs looking for cutting-edge advancements in technology, engineering, and software.
Mature Ecosystem for GCCs
Over the past few decades, Karnataka has developed a mature ecosystem for GCCs, with established players in IT services, finance, R&D, and engineering sectors. This presence creates a network effect where companies benefit from proximity to other multinationals, industry best practices, and collaborations within a well-developed professional ecosystem.
Skilled Talent Pool
Karnataka, particularly Bengaluru, has a highly skilled workforce in technology, engineering, finance, and research & development. The presence of top educational institutions and a large number of engineering and business graduates each year strengthens the talent base.
Quality of Life
Bengaluru’s cosmopolitan lifestyle, pleasant climate, and multicultural ambiance make it an inviting city for foreign professionals. This environment fosters a smooth transition for those relocating from abroad, supporting GCCs that rely on talent mobility and cross-cultural teams. The city’s blend of modern amenities, diverse communities, and recreational options provides a comfortable and enriching experience for professionals, enhancing its appeal as a preferred destination for global business operations.

Karnataka’s Information Technology and Biotechnology Minister, Priyank Kharge, unveiled the state’s first dedicated Global Capability Centres (GCC) Policy for the period 2024-2029, to drive economic decentralization and position the entire state as a global GCC hub. Policy features include:

‘Beyond Bengaluru’ Initiative – Targeted Cities for Expansion

In order to decentralize growth and ease the burden on Bengaluru, the policy encourages GCC establishments in secondary cities such as Mangaluru, Mysuru, Hubballi-Dharwad, Belagavi, Kalaburagi, Tumakuru, and Shivamogga. By developing these regions into business hubs, the initiative aims to distribute economic activities across Karnataka, offering investors new locations with emerging talent pools and lower operational costs.

Incentives to attract Investments:

The policy offers several incentives to make regional cities attractive for GCC investments, including:

Rental Reimbursements: GCCs operating in the ‘Beyond Bengaluru’ areas can receive reimbursements on rental costs, helping them reduce initial operational expenses.
EPF Contribution Reimbursement: Companies will receive reimbursements on Employees’ Provident Fund contributions for newly hired employees, lowering hiring costs.
Electricity Duty Exemptions: Eligible companies in targeted cities will enjoy a five-year exemption from electricity duty, reducing overhead costs and promoting sustainable, cost-effective operations.
Grants for R&D: Infrastructure development grants are available to support research and development centers in regional cities, encouraging innovation and local job creation.
Support for Nano GCCs: Special provisions exist for small GCCs (5-50 employees), often nano-GCCs, with incentives aimed at encouraging small to medium enterprises in emerging tech fields.
Skill Development Grants: The policy includes grants for local training programs, ensuring a skilled workforce for GCCs in regional cities, and supporting Karnataka’s goal of becoming a tech-talent hub.

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Infrastructure and Skill Development:

Skill Training Programs:
The policy commits to upskilling 1 lakh professionals in cutting-edge areas like artificial intelligence, big data, cloud computing, and cybersecurity. This initiative aims to build a technically proficient workforce that can meet the demands of GCCs.
Infrastructure Investment:
Investment in infrastructure includes the establishment of IT parks, business hubs, and improved transport connectivity in targeted cities. The government’s Single-Window Clearance system and streamlined compliance processes make it easier for businesses to set up and operate in Karnataka, minimizing bureaucratic delays and enhancing business efficiency.

Thus, for foreign companies, Karnataka’s GCC policy offers direct benefits aimed at cost savings and operational efficiency. To summarize, Key incentives include tax breaks, duty exemptions, and financial rebates designed to reduce setup and operational costs for GCCs. The policy also ensures a streamlined regulatory environment, providing single-window clearances and fast-tracked approvals to minimize bureaucratic delays, allowing foreign companies to establish their operations swiftly and efficiently.

Astravise Services excels in setting up and managing Global Capability Centers (GCCs) in India, providing organizations with a competitive advantage in operational efficiency, cost optimization, and business scalability. Our seasoned expertise enables us to establish fully functional GCCs tailored to meet the unique needs of each client, helping them harness the advantages of local talent, infrastructure, and streamlined operations. From planning and regulatory compliance to recruitment and operational management.

Our leadership team brings a wealth of experience in guiding companies through complex GCC operations, emphasizing both agility and strategic foresight. Our goal is to empower businesses with a solid foundation in the GCC space, enabling them to thrive in diverse markets while leveraging our deep understanding of regional dynamics and compliance frameworks.

Practicing CA to Virtual CFO – Why & How

Posted on October 10, 2024 by Venkatesh Bhat

Picture this. It is 1991 and your accounting firm has just been hired by an emerging textile company to help with their bookkeeping and sales tax application process. You are excited to put your many years of hard work into becoming a Chartered Accountant to use. You speak with the company’s owner, who redirects you to the backroom that is covered from top to bottom with accounting logs for you to sort through. You are tasked with tallying accounting records and determining the tax breakup to help the company and owners file for taxes. All of this takes you about a fortnight to a month to do, and you move on to the next client for whom you do the same thing. This is the peak of your career as a CA or tax consultant.

Fast forward to 2021. There are endless software and mobile applications that assist even mid-sized companies with their accounting and tax work. As a practicing CA, you have over a decade or two of experience working with clients from all industries, yet you find your traditional services being less and less in demand, as companies choose automated technology that is highly efficient and cost-effective to perform the same services. Your experience does serve some value, but where do you go from here?

If you have found yourself in this position recently, you are not alone. Companies globally have been shifting towards automation-integrated business models for many business functions that have traditionally been performed by people – you may have heard of RPA (Robotic Process Automation). A 2018 study conducted by ACCA in collaboration with Deloitte found that there is a high probability (over 50%) of automation for many finance/accounting functions, as this graph below shows.

In India, the trend of automation is spreading fast from large to mid-sized companies; even smaller companies are using more and more “ready to use” software programs for automation of accounting and tax work. Moreover, rapid advancements in technology and AI are deeming many of these automation software handle more complexities with reducing cost of use. The implication of this is clear – the market for traditional accounting and taxation services will continuously shrink.

What the above graph also demonstrates, however, is that higher-level functions in Finance and Management are a lot less likely to be automated. This is because CXO roles require business-focused thinking that revolves around long-term business planning and a focused strategy that takes into account changes in industry standards. Hence, the CFO role has a lot more impact on a business’s performance. So how can you as a practicing CA transition into the type of role a CFO plays?

Traditionally, the kind of value that CAs have been able to provide is limited to a few narrow functions – accounting, tax services, etc. A CFO role involves forecasting future scenarios, detailed planning of resources, leading digitization efforts, optimizing costs, and managing investor relationships among others. This requires a lot more strategic thinking and analysis of data that is not limited to a company’s finances. However, the scope of these job functions and the experience level required usually differ from company to company. For instance, MNCs and large corporations typically have a very specific set of requirements for a finance head, and they often have an entire in-house team for the execution of finance functions. Small businesses such as startups and MSMEs, however, often have a broader requirement for the role of CFO – one that requires experience that spans across industries and business verticals. But, most startups/MSMEs cannot afford a full-time CFO with this kind of background. Given the volume of such companies facing this issue, the concept of a virtual CFO (VCFO) was born.

A VCFO is essentially an outsourced CFO who works with multiple clients providing primarily CFO services, but often additional support that is customized depending on the client’s unique needs. Startups often require immense support in activities such as securing capital funding and building investor relationships, performance tracking, operations management, and MIS to name a few. A VCFO can offer all of these on-demand services at a much more affordable investment to these businesses. This graph demonstrates the entire scope that a VCFO role covers:

Looking for

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Finance Advisory, Managed HR Services

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Reach Us!

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The Key to Business Success

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A virtual CFO role allows for versatility in the type of services you can provide – and the kind of services that are high in demand in the market. As you move from left to right in this graph, you may notice that the need for more non-traditional services goes up. While those skills are acquired through a combination of years of experience as a VCFO and expertise that spans across industries, there is a large market to be tapped in all 4 quadrants. So if you are currently a practicing CA considering joining the VCFO sector, there are many routes you can take as you start building your skillset.

Given how the VCFO sector is a new and developing market, there is a growing awareness that is often clouded with misconceptions about what this role entails. Some common myths are:

Evidently, the VCFO sector is broad in the spectrum of services that can be provided, and time and experience are needed to build your portfolio and build value for your clients. Practicing CAs are best suited to enter the VCFO field due to the technical knowledge picked up during the article ship and all subsequent finance function experiences. However, embarking on this journey from CA to VCFO is not as simple as just deciding to start your own VCFO firm one day. If only life were that easy!

There are many ways in which you as a CA can enter this field. Here are a few of the recommended steps based on the advice of industry experts:

Partner with existing VCFO firms: This is one of the first steps you can take, that will help you get a better understanding of everything from how a VCFO tackles a problem to how the firm goes about client acquisition.
Build teams with consulting skillset: Success of consultancy is heavily dependent on the consultants possessing key skills such as working with extended teams, building trust & respect, time management, effective communication, to name a few. Many CAs do not realize the fact that it is not only they who need to learn new skills; it is their teams as well. A practicing CA has a team that would have been recruited for the traditional skills required. When this team tries to deliver virtual CFO services, they often cannot measure up to client expectations. Think of it as trying to play baseball with cricket gear – while on paper the equipment looks virtually the same, using the right gear for the right sport can be the difference between winning and losing the game.
Network with professionals with complementary skills: Acquiring and perfecting any skill takes time and the proper guidance. Interacting and working closely with professionals who are experts in complementary skills can benefit both parties and help build relationships that will be useful in the long run.
Augment your team with digitally skilled members: A big reason why the demand for VCFOs has risen lately is the need for businesses in any industry to be digitally integrated to succeed. The best way that you can equip your team with the tools necessary to provide maximum value for your clients is by providing digital training and adding team members with digital expertise.
Build a consulting practice with focus: A VCFO role, above all else, is about being a consultant with result orientation. Most practicing CAs are accustomed to being problem solvers once an accounting, tax, or investment problem based on data is given to them by clients. As a VCFO, often you need to discover and redefine problems in clients’ business, accept a client’s business challenges as a shared responsibility, and be rewarded based on end results that you have facilitated. This requires a shift in CA’s mindset.

It is undeniable that automation integration is what the future holds for many businesses in every industry. Staying ahead of the curve by adapting one’s skill set to keep up is a crucial need that many industry professionals find themselves facing. As a CA, you are best equipped with the skills and foundation needed to begin your journey as a virtual CFO – however, the most important factor is a paradigm shift. Acknowledging that the VCFO role will be an expansion of duties across any client’s business functions will allow you to build a diversely skilled team that can help you in capitalizing on the increasingly growing demand for VCFO services. The aforementioned pointers can be used as a guide to enter the VCFO space and be the first steps that you take as you embark on this journey.

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Plan for the plan, not going as per plan

Posted on October 3, 2024 by Venkatesh Bhat

I spent months researching and curating an itinerary for a family vacation a few years back. The unexpected happened – the most reputed travel agency messed up the bookings and we ended up cutting the trip short.

We have all faced some version of this problem in our finances too. The unfortunate reality of the chaotic world around us is that – nothing is 100% guaranteed; even the most unlikely scenario can play out at any time. Morgan Housel, in his book “The Psychology of Money,” points out that

financial wisdom is in recognizing that our financial plan needs to survive in reality filled with uncertainty – and therefore it is necessary to build a margin of safety.

Financial prudence lies in not putting all eggs in one basket.

Just the way people plan their personal finances, businesses too have a plan. For example, a business targets Rs. 1 crore in revenue and Rs. 30 lakh net profit in one year. The business plan to accomplish this goal would include product/services, customer purchase goals, employee count and operating costs for the specific period.

However, the probability that the business will meet these targets exactly is low. Many different factors can affect a business’s ability to hit these target numbers. Some external factors tend to be impossible to anticipate and account for (this pandemic is the best example). Therefore, to make a plan that can guide a business despite many such factors, the plan needs to consider scenarios where things may pan out quite differently.

It is more complex than simplistically creating two plans:

an aggressive Plan A
a watered-down Plan B.

Looking for

Finance Advisory, Managed HR Services

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We come across many businesses that fail to understand this fully. They continually operate based on a strategy designed keeping in mind redundant factors, despite evidence pointing to the fallacies in the plan. These businesses tend to run out of cash quickly and fail to attract investors.

Considering the risk involved, lenders also may be hesitant to step in. Those few businesses that manage to pick themselves back from this perilous position face a new set of hurdles – as they have lost precious time and the competition has moved miles ahead.

There is a textbook solution to avoid this classic trap.

First, build multiple business growth scenarios and assign probabilities to each of them.
Then, push the team towards the most optimistic higher probability scenario.
Be fully prepared for the full spectrum of high probability scenarios.
If possible, work on risk mitigation simultaneously.

When the product/service is unique, the team is new, and the business has yet to establish a target audience – how can one create scenarios and assign probabilities?

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MSME Sector Lending Trends – 2024

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Unfortunately, employing this technique in a new business or startup is extremely difficult and impractical. This technique is not useful in the absence of historical insights and experience in a similar business. In our interactions, while many business leaders understand the need for a well-structured business plan that prepares them for the unpredictable world, they need to juggle multiple responsibilities associated with running the business. They often lack the time and industry experience needed to create and modify such a plan. Firms like Astravise Services can step in and provide the necessary assistance needed in situations such as these.

Based on our previous experience assisting start-ups, we have compiled a few guidelines that can help in navigating the choppy waters of business planning:

Business Plan Based on Lead Indicators: Do not build only a financial projections spreadsheet. It is better to ensure the team has a clear understanding of the lead indicators of the business and formulate a plan based on that. For example, data analysis may reveal synchronized movement between the number of customer complaints and subsequent customer churn percentages. Business plans should consider these data points while building a robust customer life cycle pattern.

Test the Markets with a Minimum Viable Product:
To avoid running out of resources during experimentation, test the market with a “Minimum Viable Product”. It lowers the risk of losing time and money and allows making provisions for the next experiment if the MVP gets rejected in the market.
Build “Early Warning Systems”:
Business should track industry developments that provide early indications of failing business assumptions. Business plans should identify possible “red flags” – indicators that signal a negative deviation from the plan trajectory.
Strengthen Your Core Team:
Your core team must be well-equipped to navigate your business despite uncontrolled variables. “Pivoting” or changing direction of strategy is a part of startup life.
Plan Flexible Cashflow:
- Keep as many costs as possible in a variable mode, i.e., avoid fixed costs and examine how to convert an apparent fixed cost into a variable cost structure.
- Go full throttle on spending after keeping a sufficient cash buffer – no risk is worth taking if it is likely to wipe you out. Build room for error.
- Businesses are most vulnerable in front of investors or talent markets when they do not have a rainy-day fund saved up.

Let us consider a slightly different category of events – those that have never occurred in the past can be catastrophic but can be identified by applying thought -so called “Single Points of Failure”. For example, business takes a factory situated in a low-lying area of the city and heavy rains damage the factory, machinery and goods. Or the only good code-writer in the company gets hospitalized for months and has not kept his work so that anyone else can take over. Business plans should consider such possibilities and try to build buffers to reduce the impact of such events.

To conclude, planning is a complex process that must factor in different uncertainties and thoughtfully build flexibility. In other words, the most crucial part of every plan is to plan for the plan, not going according to plan.

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MSME in India – Background and Prospects

Posted on September 30, 2024 by Venkatesh Bhat

India is expected to emerge as one of the leading economies in the world over the next few decades. The Micro, Small & Medium Enterprises (MSME) sector is expected to play a significant role in the emergence of the Indian economy. The development of this sector is extremely critical to meet the national imperatives of financial inclusion and generation of significant levels of employment across the country. Further, it can nurture and support development of new age entrepreneurs who have the potential to create globally competitive businesses from India.

The MSME sector in India was largely unorganized and was governed by the Ministry of Small-Scale Industries and the Ministry of Agro and Rural Industries. Prior to the 1980’s, while the sector contributed significantly in terms of number of units, employment generation and exports, in the post liberalization & globalization phase, growth and performance of the sector declined due to increased competition as the sector moved from a protective environment into a competitive one.

Recognizing the need for legalizing policy framework for the sector, The Micro, Small and Medium Enterprises Development (MSMED) Act was notified and subsequently came into force with effect from 2 October 2006. On 9 May 2007, the erstwhile Ministry of Small Scale Industries and the Ministry of Agro and Rural Industries were merged to form the Ministry of Micro, Small and Medium Enterprises (M/o MSME). The Ministry now designs policies and promotes/ facilitates programmes, projects and schemes and monitors their implementation through various offices and nodal agencies. Over the past two decades several initiatives have positively impacted the sector and contributed to its growth and development.

Thus far, the MSME sector has contributed substantially to India’s growing economy. According to recent statistics, there are approximately 6.5 crore MSME units across various industries, employing nearly 110 million people throughout the country. Overall, the MSME sector accounts for 33.4 percent of Indian industrial output and 48 percent of our exports. The sector’s contribution to India’s GDP currently stands at around 30 percent, with the Government setting a target of 40% in the short to medium term.

Over the years the sector has grown more or less in tandem with the overall growth of our economy. This could be attributed to the fact that MSMEs have a comparative advantage when it comes to adaptability and flexibility in business due to their smaller size and existence of deep technical and entrepreneurial skillset. They also have huge and growing opportunities as ancillary units to larger players, being in a position to supply products and services in a cost-efficient manner. However, MSME enterprises face many challenges that have impeded their potential immensely. Some of its most persistent challenges include lack of access to credit and funding coupled with a lack of trust placed in the sector by providers of finance, lack of financial expertise, unorganized labor and resistance to digitization. In addition, the MSME’s are easily affected by changes in the external environment. The most recent example of this has been the effect of the COVID pandemic from which the sector is still struggling to recover. Not to mention, the redundancy that many MSMEs units may face due their inability to adapt to rapid changes in technologies and increasing global competitiveness.

Looking for

Finance Advisory, Managed HR Services

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Leading with LEAD Measures, A Guide for Exceptional Leaders

[/fusion_text][fusion_button target=”_self” color=”default” linear_angle=”180″ stretch=”default” icon_position=”left” icon_divider=”no” hover_transition=”none” animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” title=”explore our blog” margin_left=”20px” link=”http://localhost/astraviseservices/insights/leadership/lead-measures-for-the-ace-leader/” size=”medium”]Explore Our Blog[/fusion_button][/fusion_builder_column_inner][/fusion_builder_row_inner][/fusion_builder_column][fusion_builder_column type=”1_1″ type=”1_1″ layout=”1_1″ align_self=”auto” content_layout=”column” align_content=”flex-start” valign_content=”flex-start” content_wrap=”wrap” center_content=”no” column_tag=”div” target=”_self” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” order_medium=”0″ order_small=”0″ hover_type=”none” border_style=”solid” box_shadow=”no” box_shadow_blur=”0″ box_shadow_spread=”0″ background_type=”single” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ lazy_load=”none” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” sticky=”off” sticky_devices=”small-visibility,medium-visibility,large-visibility” absolute=”off” filter_type=”regular” filter_hover_element=”self” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ transform_type=”regular” transform_hover_element=”self” transform_scale_x=”1″ transform_scale_y=”1″ transform_translate_x=”0″ transform_translate_y=”0″ transform_rotate=”0″ transform_skew_x=”0″ transform_skew_y=”0″ transform_scale_x_hover=”1″ transform_scale_y_hover=”1″ transform_translate_x_hover=”0″ transform_translate_y_hover=”0″ transform_rotate_hover=”0″ transform_skew_x_hover=”0″ transform_skew_y_hover=”0″ transition_duration=”300″ transition_easing=”ease” scroll_motion_devices=”small-visibility,medium-visibility,large-visibility” animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ last=”true” border_position=”all” first=”true” min_height=”” link=””][fusion_text animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky”]The Government in its part is making significant efforts specially in the last decade to eliminate hindrances and improve ease of doing business. This is seen in the form of increased budget allocations year-on-year, initiatives under Atma Nirbhar Bharat and Make in India as well as financial support through MSME loans, credit guarantee schemes and the like. On the qualitative side, significant measures have been made to hand-hold the sector through promoting entrepreneurial skillsets, technology upgradation partnerships, technical support groups and cluster development schemes. The development of several MSME support portals on digital platforms and the digital registration system through Udyam is also seen as a welcome move towards bringing more units under the formal sector net, providing them access to the various initiatives, schemes and protective support from the Government. Further, the recent change expanding the definition of MSME is a major enabler which is likely to improve the ease of doing business manifold.

While the government’s efforts are pivotal in resolving the many challenges faced by MSMEs, these alone would not suffice if the sector is to achieve its true potential. This is because the nature of support provided by the Government is mostly external in nature. In order to cope with a rapidly changing business environment, MSME’s need to also look inward, more closely into their businesses and make critical changes in their approach towards solving common business problems. MSME’s need to be enabled through strategic partnerships, better financial solutions and strong business networking. The role and scope for professionals like CA’s cannot be undermined in this regard. Moreover, they need to recognize the need to think differently, to strategize, identify gaps in their business and adopt a systematic approach towards bridging these gaps. This is possible only through a collaborative effort from professional bodies and a willingness for MSME business owners to break through the ‘small business’ mindset.

Our government has envisioned to make India a USD 5 trillion economy and global powerhouse in this decade. The MSME sector has the potential to emerge as a backbone for this economy and act as an engine for growth, given the right set of support and enabling framework. The MSME opportunity is to develop entrepreneurship and support growth led by innovation, digitization and financial inclusion over the next decade. With adequate business and strategic support from professionals coupled with the Governments initiatives, MSMEs are at the cusp of driving the economy towards this target.

Published in November Newsletter by Bangalore Branch of ICAI

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Challenges faced while Scaling Startups

Posted on September 25, 2024 by Venkatesh Bhat

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Indian startups have been at the forefront of innovation and disruption in various industries, showcasing impressive growth potential and entrepreneurial spirit. From fintech giants like Paytm to social media platforms like ShareChat, Indian startups are addressing local needs and capturing a global audience. However, scaling these ventures from fledgling concepts to established businesses presents a unique set of challenges. From fierce market competition and funding constraints to talent acquisition hurdles and regulatory complexities, Indian startups face multiple challenges as they strive to scale their operations and carve a niche for themselves in the market.

We all have heard or read about the startups that had a great product or service and were well funded but could not scale as per projections; such startups are likely to be seen by the business world as failures despite other business parameters being in green. On the other hand, there are well known cases of startups scaling exponentially for some time disregarding critical business parameters & compliances; inevitably their bad actions come home to roost with business and founders getting discredited eventually. Thus, effective scaling involves understanding specific challenges to scaling relevant to your startup, identifying solutions that may deviate from traditional business wisdom and adopting it after being sure about its sustainability in the long run.

Scaling challenges for Indian startups are diverse and multifaceted, representing “hurdles” that startups often encounter as they strive to grow their businesses exponentially.

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Market Penetration & Successful Competition:

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Every startup strives to build a unique product that addresses a hitherto unmet need of customers. However, the market dynamics is such that no product or service is significantly unique. Also the competition can arise from new players who were never considered competitors in the past. Scaling business can become quite intense with heavy market spends, technological innovation requiring huge investments in differentiating product features and customer acquisition costs skyrocketing due to discounted prices.

Example: Swiggy and Zomato, two leading food delivery startups in India, have been engaged in intense competition to dominate the market. Both companies have had to invest heavily in marketing, technology, and customer acquisition to stay ahead of the competition.

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Talent Acquisition and Retention:

Finding the right talent is a universal challenge, but in India’s booming startup ecosystem, it’s an intensified battle. The dearth of professionals with specific skillsets, coupled with fierce competition from established corporations offering lucrative packages, makes talent acquisition a herculean task. For instance, a recent report by Nasscom (National Association of Software and Service Companies) highlighted a deficit of over 4.5 million skilled professionals in the Indian IT industry alone.

Funding Constraints:

A well documented challenge of startups revolves around timely funding from investors. Access to capital is the lifeblood of any scaling business. While the Indian startup ecosystem has witnessed a surge in funding in recent years, securing funds, especially beyond the initial rounds (seed funding and Series A), remains a significant hurdle for many ventures. Startups need to demonstrate a clear path to profitability, a strong team with a proven track record, and a market opportunity with significant potential to attract investors. Startups need to pursue multiple avenues – bootstrapping, angel investors, Venture Capitalists and crowdfunding.

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Maintaining Quality at Scale:

As a startup scales its user base, ensuring product or service quality becomes increasingly complex. The initial, tightly-knit development process can struggle to handle the demands of a growing user base. This can lead to bugs, glitches, and a decline in customer satisfaction. Implementing robust quality control measures, adopting agile development methodologies, and continuously gathering user feedback are critical for maintaining quality during scaling.

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Building a Scalable Structure:

Transitioning from a close-knit startup team to a well-oiled machine with defined roles and hierarchies requires balancing contradictory requirements. Establishing clear reporting lines, fostering effective communication, and empowering team members are crucial for efficient scaling. However, striking a balance between structure and the agility that contributed to the startup’s initial success is vital.

Scaling a startup is comparable to tightrope walking. While growth is important, it should be pursued strategically and sustainably. Investors expectations have changed from scaling at all costs to sustainable scaling with profitability. By prioritizing quality, building a strong foundation, and focusing on long-term value creation, companies can solve their specific scaling challenges and achieve lasting success.

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MSME Sector Lending Trends – 2024

Posted on September 22, 2024 by Venkatesh Bhat

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In India, MSME (Micro, Small & Medium Enterprises) constitute 29% of GDP and 44% of exports. The sector employs 12.3 Crore of labour force as per latest statistics available. The MSME sector in India has sustained its share in the growth of economy over the years and has protected the economy from global adversities and shocks. The sector is a critical stakeholder to the large companies and industries, providing them with necessary parts and components. The MSME sector has been instrumental in promoting economic activities in rural and less developed areas. As India gears upto move from the current level of GDP of $ 3.6 Trillion to $ 5 Trillion by 2027-28, MSME are expected to increase their share of GDP to 40%. Despite its critical importance to the economy and society, MSME sector in India faces similar problems like its global counterparts – access to finance.

As per an ET article, the decade of 2020’s started with an estimated shortfall of INR 16 lakh Crores lending to MSME. Credit deficit has been a key reason for the slow growth of the MSME sector in the country.

In addition to the quantum of finance availability, there are other challenges faced by MSME sector when it comes to availing existing finance facilities. Financial institutions need to navigate well known challenges such as lack of credit history, inadequate collateral, lack of awareness about government schemes, and high interest rates when they deal with MSME. Over 90% of the sector consists of micro enterprises where credit assessment and provision present multiple challenges. These deep-rooted factors have made it difficult for MSME to secure financing; this has hindered the sector’s growth and development. As per TransUnion Cibil Report, only 250 K units out of India’s 630 K units have obtained credit from the formal financial sector. MSME sector remains underserved by the formal finance sector.

India is gearing up for another significant year of economic growth in FY 25. It is expected that the Government policies and schemes that are already in place will be further boosted by large budget allocations & new initiatives will be announced as we move into the budget season.

Key trends in MSME financing in 2024 and even beyond are enumerated here:

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Sanctions and disbursals by the formal sector has increased significantly in the last few years and will continue to increase in the foreseeable future

Commercial credit portfolio grew at 15% year-over-year (YOY) and credit exposure stood at INR 27.7 Lakh Crores in FY 23-Q4. The government guidelines require banks to achieve a 20% YoY growth in credit to micro and small enterprises. There has been a notable increase in credit operations within India’s banking sector, occurring against the backdrop of a dynamic global landscape. The surge in credit activities is evident in various forms within the Indian banking sector.
Loan disbursements have seen a significant uptick, spanning various sectors such as retail (including mortgages and personal loans) and corporate loans for infrastructure and manufacturing. Banks are currently extending credit at unprecedented levels. Compared to FY 20-Q4, commercial loans disbursement saw 1.7X growth as of March 2023.
The credit portfolio is experiencing expansion, with a broader range of loan types catering to a diverse spectrum of borrowers and their needs. This strategy not only mitigates risk but also fosters a more inclusive financial development.
The ascent of new technologies is noteworthy, as banks leverage innovations to streamline credit processes, improve risk assessment, and extend their services to populations previously excluded from banking. This technological integration is a major contributor to the expansion of credit operations

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New-to-credit (NTC) entities will define the next phase of MSME credit growth

Significant amount of credit growth within MSME sector has been driven by “New To Credit” Micro enterprises. In FY 23-Q4, NTC borrowers accounted for 56% of new loan origination in the MSME lending space as per August 2023 edition of MSME Pulse Magazine. The number of MSME in the country is expected to go up from 630 L to 750 L by 2024 and a staggering 500 L of these units ( most of them micro) are expected to be “New to Credit”.

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Micro sector (loans below INR 1 Cr) will continue to grow handsomely

Indian MSME have depended on a mix of formal and informal institutions financing & significant portion of both formal and informal financing have gone to micro enterprises with smaller ticket size of the loans.

MSME credit performance has improved in the last few years

After the challenges brought on by the pandemic, there was an initial surge in delinquency rates. However, over subsequent quarters, there has been a gradual decline as Micro, Small, and Medium Enterprises (MSME) consistently met their credit obligations. The decrease in delinquency rates is observed across all three categories of lenders, with private banks recording the lowest rate at 1.4%.

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Government policy and push will enable the formal banking sector to reach out to the underserved parts of the economy

The Indian government has launched several initiatives to promote MSME financing. Some of these initiatives include:

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE):The CGTMSE scheme provides collateral-free credit to MSME. The scheme guarantees up to 85% of the loan amount, which reduces the risk for lenders and makes it easier for MSME to secure financing.
Pradhan Mantri Mudra Yojana (PMMY): The PMMY scheme provides loans up to Rs. 10 lakhs to MSME. The scheme has three categories of loans: Shishu (up to Rs. 50,000), Kishore (up to Rs. 5 lakhs), and Tarun (up to Rs. 10 lakhs). The loans do not require collateral and are available to both new and existing MSME.
Stand-Up India: The Stand-Up India scheme provides loans up to Rs. 1 crore to SC/ST and women entrepreneurs for setting up new ventures in the manufacturing, services, or trading sectors. The scheme aims to promote entrepreneurship among these communities and provides support through the entire loan process.

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MSME increasingly embrace ESG practices supported by institutional financing and other assistances

As more retail and corporate customers of MSME adopt ESG practices, MSME will feel the need to adopt ESG practices in the coming years to retain customers. Further, investors will increasingly look for ESG compliance as a business continuity need in the investee companies. SIDBI is providing financing under multiple schemes towards sustainability projects, solar power and innovative projects. There are avenues such as Green Bonds under various private sector financing options. Off-take by MSME is expected to significantly increase as awareness about and conducive environment for sustainable economic development goes up across layers of Indian economy.

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Fintech sector will play a critical role in reaching out to the Micro and small sector

The years ahead will showcase the fintech players penetrating MSME sector using digital approach to solve some of the challenges to MSME lending.

Data Analytics: Gaining a deeper understanding of the borrower’s profile is essential for avoiding Non-Performing Assets (NPAs). Fintech startups leverage machine learning methods to analyze and assess the creditworthiness of small businesses, facilitating informed lending decisions.
Digital Payments: The introduction of a unified payments interface (UPI) and mobile wallets has revolutionized the speed and security of business transactions. Fintech platforms for payment services not only enable swift payments but also offer additional financial services like investments and short-term loans within a single, easily accessible platform. These platforms can be conveniently accessed through smartphone apps, allowing MSME to conduct transactions and apply for loans using affordable mobile internet.
Automated Loan Application: Many MSME face challenges navigating financial processes and find traditional loan application paperwork cumbersome. Fintech platforms streamline the loan application process by employing AI-assisted applications, making it more intuitive and user-friendly. These applications are often customized to meet the specific needs of each customer, eliminating the need for all businesses to undergo the same verification stages. This automation enables fintech services to disburse short-term loans promptly, while also reducing operating costs. The cost savings, in turn, allow fintech companies to offer loans at lower interest rates.

While the macro trends in the economy are largely favorable in the year ahead, parts of MSME sector are facing severe challenges that threaten their existence; To name a few, let us consider limited market reach, lack of innovation, huge gaps in human capital & outdated technology. There needs to be a concerted effort to build organizational capabilities and resilience in MSME sector. It is imperative that the funds flowing into MSME sector are deployed in productive ways by MSME to create long term value.

The capability building exercise, which needs to complement MSME lending, requires several stakeholders to act in co-ordination. Government Departments and institutions as well as several new age institutions assist, incubate & accelerate innovation, technology acquisition, organization strengthening and building world class processes in MSME. We noted earlier that a relatively small section of MSME access finance; the ground reality is that even fewer MSME access capability building assistance and networking opportunities. Creating awareness amongst MSME needs to move from the current incremental approach to an emergency response approach.

The CA community is uniquely placed to contribute significantly to the MSME sector performance. We need to join the efforts by ICAI & other institutions in creating awareness of the financing avenues, in building innovative fin tech solutions that enable micro and small enterprises to avail credit and equally important, in assisting MSME in becoming credit-worthy. This concerted approach will lead to MSME sector benefiting significantly from the aforesaid positive trends in MSME lending environment.

Steps to Creating a Culture of Trust and Accountability In Your Team

Posted on September 18, 2024 by Venkatesh Bhat

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Whether you are a smaller or larger organization, good collaboration can only achieve success. Building a culture of trust and accountability in any successful team achieves organizational productivity and effectiveness. This culture promotes a positive and collaborative environment that leads to team cooperation and performance improvement and, in turn, produces the best results.

A culture of Trust and accountability refers to the employees being accountable for completing their tasks and working with a team to reach their target. It implies clear expectations and objectives, effective communication, efforts to foster a positive and supportive environment, and strong leadership.

As per a recent GALLUP survey, 63% of people attending their workplaces seem to lack engagement, leading to a noticeable absence in their job-related efforts. An additional 24% display active disengagement, obstructing the productivity of others around them. 13% emerge as the diligent minority who dedicate themselves to their tasks.

Let’s discuss the culture of Trust and accountability in a team and explore the importance of the critical steps to achieve success in organizations.[/fusion_text][/fusion_builder_column][fusion_builder_column type=”1_1″ layout=”1_1″ align_self=”auto” content_layout=”column” align_content=”flex-start” valign_content=”flex-start” content_wrap=”wrap” center_content=”no” column_tag=”div” target=”_self” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” order_medium=”0″ order_small=”0″ hover_type=”none” border_style=”solid” box_shadow=”no” box_shadow_blur=”0″ box_shadow_spread=”0″ background_type=”single” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ lazy_load=”none” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” sticky=”off” sticky_devices=”small-visibility,medium-visibility,large-visibility” absolute=”off” filter_type=”regular” filter_hover_element=”self” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ transform_type=”regular” transform_hover_element=”self” transform_scale_x=”1″ transform_scale_y=”1″ transform_translate_x=”0″ transform_translate_y=”0″ transform_rotate=”0″ transform_skew_x=”0″ transform_skew_y=”0″ transform_scale_x_hover=”1″ transform_scale_y_hover=”1″ transform_translate_x_hover=”0″ transform_translate_y_hover=”0″ transform_rotate_hover=”0″ transform_skew_x_hover=”0″ transform_skew_y_hover=”0″ transition_duration=”300″ transition_easing=”ease” scroll_motion_devices=”small-visibility,medium-visibility,large-visibility” animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ last=”true” border_position=”all” first=”true” min_height=”” link=””][fusion_title title_type=”text” rotation_effect=”bounceIn” display_time=”1200″ highlight_effect=”circle” loop_animation=”off” highlight_width=”9″ highlight_top_margin=”0″ title_link=”off” link_target=”_self” content_align=”left” size=”2″ text_shadow=”no” text_shadow_blur=”0″ text_stroke=”no” text_stroke_size=”1″ text_overflow=”none” gradient_font=”no” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ style_type=”default” animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” font_size=”35px”]

Why does Trust play a vital role in an organization?

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One of the most indispensable plays in an organization is trust. It is like the invisible threads that connect the fabric of a community. It builds a more substantial relationship between an organization and its employees.

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Nurtures Unity and Collaboration:

In an organization, many people work in a team. They share their ideas, opinions, and knowledge openly when individuals within an organization trust each other. This free flow of information enhances collective problem-solving and innovation, as diverse perspectives are brought to the table without fearing ridicule or rejection. This nurtures unity and collaboration in a team within an organization.

Enhances Productivity:

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Employees are motivated to do their best when they believe their contributions and efforts are equally recognized. Trust empowers individuals to take initiative, make decisions, and execute tasks confidently, leading to faster decision-making and smoother execution of the project. This enhances the organization’s productivity and efficiency.

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Promotes Direct Communication:

Direct communication in an organization leads to an organized workforce, a clear understanding of the organization’s goal, and the required efforts to achieve these goals. Also, employees feel more comfortable when they share their ideas, concerns, and views that are taken into action and renowned.

Thrives Employee Satisfaction

Employees feel more comfortable when their superiors trust them. Their involvement in work also increases. Employees can feel a genuine connection to the mission and take pride in their contributions when the Trust is promoted. Thus, Trust drives employee satisfaction in an organization.

Enables risk-taking and Innovations:

Trust drives calculated risks that can lead to breakthrough innovations and the discovery of new solutions.

Employees who know potential failures won’t lead to blame or punishment are more inclined to experiment with new ideas and approaches.

Supports Effective Leadership:

For effective leadership, trust drives leaders to demonstrate reliability to earn the respect and loyalty of their team members. This improves your ability to influence, guide, and motivate your team. Trustworthy leaders inspire Trust and provide a solid foundation for the organization’s growth.

Builds Resilience:

Trust becomes a lifeline in challenging periods. Organizations that enable the foundation of trust are more prepared to cope with weather storms or other natural calamities. Trust fosters a sense of unity, enables teams to collaborate effectively, make tough decisions collectively, and maintain a positive attitude even in the face of adversity.

A culture of trust empowers individual performance, promotes collaboration, and enhances efficient growth in an organization.

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What steps are required to build a Culture of Trust and Accountability in your team?

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As per Kareem’s quote, everyone should be responsible and more active to cultivate Trust and accountability in an organization. This process requires dedication, consistency, and intentional actions.

Titan Company, a leading consumer goods company known for its jewelry, watches, and eyewear, has prioritized employee welfare and trust-building initiatives to achieve business success. The management team introduced programs demonstrating a strong commitment to their employees’ well-being.

One program is the “Employee Stock Option Plan (ESOP),” which allows employees to become stakeholders in the company and benefit from its growth. This initiative boosted employee morale and aligned their interests with the company’s success. Titan also invested in skill development and training programs, enabling employees to enhance their capabilities and contribute effectively to the company’s growth.

As a result of these initiatives, Titan achieved higher employee retention rates, lower attrition, and increased employee satisfaction. The trust and commitment demonstrated by the management team contributed to a positive work environment, fostering innovation and ultimately leading to business success.

The following steps explain how to build Trust and accountability in an organization, which becomes a natural part of your team’s culture.

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Leaders should demonstrate the behavior’s of honesty, integrity, and transparency in their actions and decisions that they expect their team members to exhibit.