Chief Strategy Officer / India
The future business became narrower and more explicit
- Industrial commercial and strategy career
- 32 years
- Order planning began July 1994
- Strategy colleagues
- 14
- Three managers; separate from the division previously led
- Annual strategy expense
- ₹4.6 crore
- No independent investment approval
Decisions & consequences
01Continuing a planning pilot without calling it profitable
I supported a paid replacement-planning pilot for eight industrial customers. The proposition was a continuing planning service around their records and commercial requirements, not an assurance that equipment would operate without interruption. The pilot earned ₹46 lakh in fees and incurred ₹39 lakh direct delivery expense. That seven-lakh difference became the most repeated number in discussions about expansion.
CFO Reema Zalveri challenged the summary because setup had cost another ₹71 lakh. Total programme expense on the defined account was ₹1.10 crore, leaving a ₹64 lakh deficit against the fees. The direct contribution was useful information, but it did not show that the pilot had recovered the cost of establishing the service. I had sponsored the idea and needed to correct the enthusiasm attached to my own recommendation.
The commercial team favoured a rapid rollout. Six customers had renewed and two declined, which gave their argument substance. They believed a larger base would spread the setup effort and make a small pilot's economics less important. I recommended limited continuation instead, with the direct delivery and programme accounts both retained. The CEO approved that scope; finance kept responsibility for the definitions, and technical colleagues retained actual condition and replacement decisions.
The cost of restraint was slower pursuit of recurring fees and a less confident growth narrative. The cost already spent did not vanish. Nor did the two declined renewals prove that the service lacked value for the other customers. We continued a bounded experiment with evidence of demand and an unresolved economic question. I would now agree how the complete pilot account will be presented before launch. A sponsor should not wait for a CFO's challenge before explaining the difference between a positive delivery contribution and a programme that has yet to pay for its setup.
Choosing eight prepaid allocations over eighteen consignment locations
A proposed replacement-stock programme would have placed supplier-funded material at eighteen customer locations. The opening inventory estimate was ₹5.6 crore. Commercial colleagues preferred its breadth because a local stock position could make the manufacturer more relevant to a customer's planning. I agreed that proximity mattered, but wanted the business to examine the funding and continuing responsibility alongside the location count.
We compared that proposal with a narrower prepaid allocation route for eight customers, carrying ₹2.2 crore opening stock. The selected route required ₹48 lakh implementation expense. Finance, legal and operations colleagues worked through the actual terms, ownership and controls. My recommendation concerned the commercial direction and commitment; it was not authority to infer a customer's rights from a presentation label or to promise availability independent of the approved operating arrangements.
The wider programme's sponsors argued that asking customers to fund an allocation could limit adoption and surrender an advantage to competitors willing to finance stock. That was a real consequence. We accepted a smaller initial footprint and left ten of the proposed locations outside the chosen programme. The two routes were not equivalent purchases at different prices. Subtracting ₹2.2 crore from ₹5.6 crore would therefore not establish a realised saving.
The outcome was a defined eight-customer arrangement whose capital and commercial responsibilities were clearer to the business. It did not settle whether wider consignment might later be justified for particular accounts. I wanted expansion to follow an examined relationship rather than an ambition to maximise dots on a map. Next time I would put the stock-funding question into the first market-development brief. It shapes which customers the proposition fits and how the manufacturer earns from it, so it should not arrive as a finance objection after the commercial footprint has already become the preferred strategy.
Reducing the replacement scenario when the customer history disagreed
Our three-year revenue scenario for a defined replacement cohort was ₹56 crore. It used a blanket fourteen-month replacement assumption. The model was easy to explain and made the aftermarket direction attractive, but the assumption had travelled further than the customer history supporting it. I commissioned a ₹29 lakh review rather than continue using the same interval because it made the plan internally consistent.
Sixty eligible completed intervals were examined. Their median was twenty-two months. The reviewed group was not every customer or every application, and completed intervals do not capture all equipment still in use. We retained those limits in the account. The observation was commercial evidence about this cohort, not a product-life certification or a maintenance instruction. Qualified technical colleagues continued to own condition assessment and replacement decisions for the actual use.
The revised three-year scenario for the same cohort was ₹39 crore. Both amounts remained forecasts. I did not call the difference lost sales or claim the review had caused revenue to decline. Some colleagues wanted to retain the earlier case as the main ambition, arguing that stronger commercial engagement could bring replacement discussions forward. I accepted that engagement could change behaviour, but it did not justify presenting the fourteen-month assumption as an observed pattern.
We used the revised account in the strategy discussion and preserved a separate description of what would need to change for a faster scenario. The immediate consequence was a less ambitious revenue story and the expense of research, with no automatic reduction in the work already required for customers. I learned to ask whose history a replacement model represents before debating its growth rate. A plan can be mathematically tidy and still borrow its central assumption from a different kind of buying event. Correcting that assumption is part of strategy, especially when the revised number weakens a direction the strategist has been advocating.
Declining to turn product supply into a bundled installation business
We tested a proposed installation bundle through nine assignments. The idea was commercially understandable: customers buying a replacement mesh might prefer a single account for the surrounding work. The indicative annual fee opportunity was ₹1.8 crore. It was not contracted revenue, and the trial was intended to establish what the proposed offer would actually require before launch.
Seven assignments needed outside specialist service; two could use an existing authorised route. The trial cost ₹63 lakh. Qualified operating and technical colleagues examined the work and its requirements. I did not use the counts to declare that all installations were unsafe, interchangeable or beyond our competence. They showed that the proposed commercial bundle depended heavily on a field capability whose organisation and continuing responsibility needed a much fuller account.
The sponsor favoured hiring and building that capability. A single relationship could simplify the customer's coordination and potentially create a more durable service business. I recommended declining the bundle at this stage and keeping product supply separate from the customer's appointment of a qualified installation provider. The CEO accepted the boundary. Existing obligations retained their own responsible owners and process; the strategic choice was not permission to abandon an accepted assignment.
We gave up pursuit of the indicative fees and retained the trial expense. The decision also left customers with more than one relationship to organise, which was a genuine disadvantage compared with the proposed single-account offer. I wanted that cost acknowledged. A simpler customer proposition can require a more complicated business behind it. Our choice was to concentrate on the product and planning work we were prepared to own rather than assume that a fee estimate supplied the missing field capability. In a future review I would ask for the operating and competence account before the bundle's revenue appears in a growth scenario.