We have an ecosystem of companies that are completely independent and work in completely different sectors. Yet they require very similar business services. We’ve aggregated all these business services in a company called ‘InnerHeads’ which provides a central source for Finance & Accounting, Corporate Management, Human Resources, Facilities Management and related areas.
- Bandwidth of Venture Leaders: A venture may not be able to afford even one person for certain functions. But this places a burden on the leaders. For instance, the Head of People Development at Innerheads does Mentoring Meetings with each and every team-member of the company (most of them multiple times) and summarizes it in detailed reports sent to the venture leader. These are among the engagement processes that allow us to keep attrition low and productivity high. If a central Head of People Development did not do it, someone would still need to do it. Probably the CEO of the venture. But that would take time and attention away from his core responsibilities.
- Cost Efficiencies and the ‘Unit of One’ problem: If we decide to create each business service within the company itself, we would run into the ‘Unit of One’ problem. Which means that the minimum number of certain functions we can hire is ‘One Person’. Minimum one Head of Human Resources, one Recruitment Manager…But most companies are perhaps too young to need even one full-time Head of HR or a Manager for Administration. But we cannot do with zero also. If we hire this one person, then the overall cost increases, as opposed to assigning the cost across ventures.
- Quality of Processes: Each venture gets to ride on efficient processes developed in our ecosystem and edited for application into the company. People get recruited, inducted, mentored and reviewed. Financial MIS systems get designed and implemented…all of this without anyone at the company having had to design any process from scratch.
- Quality of Recruit problem: A much higher quality of person is attracted to work across a 225+ person organization than will be interested in a singular venture. For instance, our Head of Finance at Innerheads is a Chartered Accountant PLUS Company Secretary and has worked in leading global companies. Before coming to us he was Financial Controller at a venture which raised over $40 million in venture funding across Series A, B and C. Even if a venture needed him, would he have joined a 20 or 30 person-company? Unlikely.
- Focus on Core: With Innerheads, each venture focusses on their core business. The ‘Teeth-to-Tail’ ratio is 100%. There is no receptionist, administration person, HR manager… Everyone is a Business Manager, Product Manager, Programmer, Technologist…This leads to greater focus, greater harmony and greater cohesion.
- Organization Strength Projection: When business visitors come to us in Goa, they are met at the airport by a company driver with a car, often stay in a company-owned guest apartment, eat at the company office café, are bought to a thriving buzzing office…They get a sense of maturity and capability which any single venture could not project by itself. This helps us to punch above our weight in terms of perception and confidence among employees, investors, clients and partners.
The companies are charged for these services on one of the following models:
- On proportionate allotment, based on the actual requirement for say the Recruitment Services or Finance & Legal services. Example: A venture may not have a lot of financial entries, and therefore only spend for half an accountant and the supervision of the Head of Finance.
- On headcount basis for facilities such as Infrastructure. Example: A venture may spend roughly Rs 5,500 per person per month for infrastructure that includes the seating, internet and electricity.
- On actuals based on usage, such as vehicle usage or catering usage or software licenses. Example: If executives from a venture do 20 trips to the airport and back in a month that is what they will pay for. And if they do zero trips, that is what they will pay for.
The costs that Innerheads charges are carefully calibrated to only cover their costs and generate a minor surplus to provide for comfortable cash reserves. There are no additional margins levied by InnerHeads for many services, and only the actual amount is charged plus any tax component. For example, for Electricity usage or Internet usage, there is no additional revenue earned by InnerHeads.
For many of the other services as well, InnerHeads charges a marginal service charge.