Thursday, January 29, 2009

Argos Exits India

Argos - the leading British retailer - has now decided to exit India. Argos had a limited presence in India, six shops in Mumbai suburbs. In fact, many people did not even know that Argos had a presence in India, and their decision to exit will go largely unnoticed. However, there is some significance of this announcement for the British businesses looking to go into India.

The conventional wisdom is that Argos is following the path of other British retailers, who are closing down underperforming operations abroad to focus on home operations in this troubled times. Tesco has decided to go slow on its United States expansion and Marks & Spencer is having trouble in China. DSG is pulling the plug on its slow moving Italian operation and trying to concentrate back at home. Argos' decision to exit India, which will mean 'single digit' million pound loss for the chain's owner, Home Retail group, will largely be seen in the light of these experiences.

However, with a close look, it may have more reasons than just domestic downturn. Argos' India operations were plagued with small issues from day one, and they suffered from delays in shipment and stock-outs from day one. They were operating under a franchise arrangements with Shopper's Stop/ Hypercity retail groups in India for about an year now, and their reach even in the Mumbai city was extremely limited. For example, out of the six odd stores Argos had in Mumbai, their flagship had a very limited stock on display and a very thin catalogue [compared to the 1500 page tome we carry home once in six months] and no noticeable web front. The shop, while located in a modern building, was in Thane, far from downtown Mumbai, and it was supplemented by catalogue-only points in nearby areas.

In all, while I am a fan of Argos in the UK, their presence in India disappointed me. They simply did not understand the market and did not have a differentiating strategy in place. I do think this is very common among British businesses to have a very confused strategy about India and a very unclear expectation: I am sure Argos got it wrong from day one.

I know I am indulging in a guessing game here, but let's try to think what has gone wrong. First, I think the choice of Thane, possibly driven by the exorbitant property prices in downtown Mumbai, is a mistake - it is too far out of the spotlight; it is almost a different city. I was told about the brilliant strategy of hiring semi-skilled people and giving them low wages and a incentive - a sure departure from what Argos stands for here, hassle-free shopping, and a recipe for disaster. Besides, as I walked into the Argos store and tried to spot the difference from the homegrown retail chains, I could spot none - other than the fact there were hardly any buyers around. Their prices were at a slight premium - someone must have thought that Indian buyers will pay a premium on electric kettle because it was bought from Argos - another clear mistake.

I can go on and on, but such mistakes are not peculiar to Argos. I do think British companies approach India without first scoping it out, and end up doing too little too late. They also emphasize too much on brand - too much of an inside-out perspective - which surely does not work in India. And, besides, they forget that value creates the brand, and it is not the other way round.

India is an interesting market, by all means, with its huge number of consumers and rising purchasing power. But it is a complex market at the same time - any company having a strategy for INDIA is making a mistake of not factoring various regional and local factors out. It is common among brand-owners to think inside-out, but each new market is a new game altogether and the brand needs to be reestablished. I think it is essential, when approaching India, to scope out the challenges of reestablishing the brand in a big and complex market.

Think of this. Why would I go to Argos and pay a premium for an electric kettle? For a better shopping experience? My foot! The only way Argos could have a sustainable business in India if they offered an unmatched range of merchadise under one roof [which it does in UK and I buy electronics and toys and appliances from Argos] at an unbeatable price. That needed scale and commitment, which it never had.

This also tells another story about piloting new markets. The conventional wisdom prompts us to create small pilots to test the waters before committing to a market. But, more often than not, such business pilots fail. This is possibly because we often confuse the need for scoping with piloting. Especially in markets like India and China, piloting fails to get the necessary traction of volume and fails to deliver value and choice. Such is the fate of Argos: So, of many others.

I was recently asking someone well conversed in international business development whether he has ever met an Indian businessman who talked about less than 200 outlets to him; he admitted he hasn't met any. Now, while this may be because of different factors - exuberance, optimism, or simply talking beyond one's capacity - there is another logic which the European business reasoning fails to grasp: that the market demands such a large scale intervention. From my experience, this is essentially true. A six store 'premium' generalist retailer offering undifferentiated product employing semi-skilled people at low wages was always going to be a sitting duck in a market where Big Bazaar, which came from nowhere and powered themselves on dreaming bag, rules.

This is why I think Argos' experience should be instructive to British, or European, businessmen. I think there are three key lessons here:

(A) India is not a cakewalk. There are highly competitive home grown service companies which can beat the European companies hands down: not just because they are local, but because they are nimble, have less baggage and constantly innovating instead of trying to fit an outworn suit in a new body.

(B) Pilot ventures can only work if this is scoped out right first. This isn't done in most cases. Lots of such international expansions are ego-driven, wanting to be in one the fastest growing markets because the entrepreneur happened to read one of the many recent business books. Such projects, which are based on the mistaken assumption (A) as described above, commit too little. Often, like in the case of Argos, the pilot looks like what the scoping exercise should have been - an exploration into the mechanics of the market.

(C) Whatever the brand, it needs to reestablish itself in every market. Argos should have focused on its basic value propositions - choice, cost, customer service - instead of the board on the door. It is tempting to take a market for granted because one has a brand: but that is committing suicide by taking the brand for granted.

Argos leaving obviously leaves a space in the market in India. I did want to see a shop like Argos [though it was disappointing to find it is different story in India] and I do think a good catalogue retailer will do well in the country. So, we are set to see an Indian company taking that position, soon. And, as the ways of the world these days, it will not be surprising to see that same Indian company buying out Argos in two to five years' time.

Wednesday, January 28, 2009

Comments About Slumdog Millionaire Before I Have Seen It

I have not seen Slumdog Millionaire, but I am already being compelled to comment on it.

This is because it seems to be such a decent movie, but the critics are after it already. It seems to have shown India as a Third World Underbelly - which Amitabh Bachchan quoted, unquestioningly as he does, on his blog. This is already making a quite a bit of noise everywhere, and as you can see, I picked this up on facebook.

This post isn't about the movie, obviously. I haven't even seen it. But this is about this particular line of criticism, which we have heard before - almost every time a good movie was made about India.

What we seem to love is Ghajini, obviously, one that allows us to keep forgetting things. We love the fantasy of Lagaan, the comedy of Singh is King and all the impossible sets and incredible dresses. We love those soaps where people have sanskritized names, sleep with party dresses on and behave like animals as far as their conjugal lives are concerned.

I saw Indians protesting on TV about the usage of the word Slumdog, and others, apparently well-to-do ones, saying that the film shows the poorest parts of India, not the 'real India'!

It is obviously clear that we are a society in denial. We don't know what real India is, where it is. All the people who are ashamed or distressed about seeing the poverty in the movie, sees that everyday, while driving to office, on the road. The funny thing is that they are not embarrassed about poverty, they are embarrassed someone is talking about poverty.

It will be a shame if the movie is shut down. It can be, India has a record of banning books and cutting down movies. I am hoping to catch the movie on my trip to India, and will be disappointed if I can't see it.

Tuesday, January 27, 2009

Day 11: What Does BBC Stand For

I am still struggling - there are far too many things to complete before I go again, and it is only 36 hours away. My fault, surely - I am trying to live as normal a life as possible, when I am travelling three weeks a month. When today the electrical connections went down, I thought I sort of reached a nadir - but then that's the time you start picking yourself up and see what you can do. That's what I have done yet again - the last 10 days was extremely difficult, my car's frozen, all the regular payments due, my expense claims not filed, my computer crashing, my email account out, and now electricity - but then I think that's all and wondering what else can go wrong. The bottom, is the correct expression, so I am feeling optimistic yet again.

I am still working on the Mumbai agreement. This is one thing about India, negotiations never stop. I am sure some people believe that this is the best way to get value, but definitely not in my view. I am actually getting an intuition - while my sales training will tell me that customers who have more objections are actually more committed to the process of buying, but in India, it is actually reverse: Somehow talk is still cheap and negotiations can actually an easy way to get into timewasters' trap. So, let's see what I get tomorrow: I am right on the wire and will possibly snap if I can't move it forward now.

In public life, the most outrageous thing that I have come across in recent days is the BBC's refusal to air an appeal - for charitable cause for children and the conflict affected people in Gaza - because they 'can't take sides'. This is the sort of stupid arrogance only BBC can take. They don't have to earn their money, remember. Every houseowner in UK more or less gets taxed for the existence of this out-of-date, out-of-touch institution. As keepers of public culture, they are currently into the promotion of abusive language and abhorrent behaviour. And, now this - a nineteenth century, I-know-best attitude, which is inhuman and beastly. Taking sides? By not airing the appeal, BBC actually condones the mindless killing that is going on in Gaza, and treats everyone of its people as terrorists. They are in this with Sky, but then Rupert Murdoch isn't a great benchmark for humanism anyway. But then, if consumers were outraged [they are clearly not, they are more concerned about Lost and football] and if they left Sky in droves, Sky would have relented and reversed the policy. But, not for Beeb, they have a god-given entitlement to my money and a right to use that in their patronizing way.

Monday, January 26, 2009

Day 10: Rethinking the Indian Republic

I got used to the greeting - Happy Republic Day. This is a new trend, I would not recall being greeted with this ten years back, but something has caught on since then. I would be tempted to think that we Indians have become more conscious about the republic, but may not be so - it is more like Happy Diwali and Happy New Year perhaps.

However, as we return again to our Happy Republic Day, it is important to look back to ourselves, and also our constitution, that unusally long document which wanted to say what we ought to be. It was adopted by our leaders full of hope, who wanted to govern India as a modern country. They were ambitious, otherwise who will talk about universal adult suffarage in a country of millions of poor, landless and illiterate; they spoke about secularism in an ancient land, where daily lives are governed by traditions and beliefs; and they believed in socialism while the riches of the country was mostly concentrated. They wanted to forge an united identity, above the melee of languages, cultures and beliefs. India was possibly the most ambitious project in democracy the world has ever seen.

As we stand back after 58 years, some part of it looks too ambitious, indeed. We are as unequal as we ever were, not just in terms of what we have, but also what we can have - in terms of opportunities. But, at the same time, the democracy project has been a resounding success, bringing forth the biggest and profoundest affirmative action programme in History, leading to a political realignment equal to the revolution that was ushered into American politics by Barack Obama, every day.

As for secularism, we are at an inflexion point in India, where the ideals of our secular country is at a low point than it ever was, and we are obviously lost in the middle of events like the ones in Gujrat 2002 and Mumbai 2008.

I don't really think we have a choice but being secular though. How else do we build a modern country. We have at least 200 million people in India who are not Hindus, and possibly another 500 to 600 million who do not suffer from Brahminical complex? It is only naive to suggest that we create a modern, prosperous country without 70 to 80% of the population. However, those who suggest this kind of things possibly did not know the other 80% exists.

Besides, without being secular, we stop being democratic. The point is not just the 80% population here. It is about one can not be free without everyone around him/her being free. Because excluding other human beings from our lives make us less human. And, besides, though I do fully understand the pains of those who lost their loved ones in Mumbai 2008, and those who did the same in Gujrat 2002, I also know our secularism and freedom are not worth losing over anything: economic progress, assassin's bullet, or even the terrorist's madness. I know the words of Benjamin Franklin by heart - Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.

As I say, we are at an inflexion point in India's history. We have an election in next few months, and we shall usher in, most possibly, a government which will dedicate their energies to changing what we believe, forever. The Hindu nationalists surely learnt from their loss last time, and if given power, they will sway out of the middle road they have already tried and leave the modernist agenda behind. We are possibly going to see an extreme era of politics driven by fear and xenophobia, the end of our republic, secularism, freedom and democracy.

This day, 26th January 2009, may go down in our last Republic Day when we were free to dream unless we strive to save the dream.

Sunday, January 25, 2009

Seeing Through The Bad Times

Jim Collins is researching how companies respond to downturns, and he speaks his mind in the current issue of Fortune. He is obviously researching great companies and he is looking at this with the perspective of History.

Bad times? Jim Collins says this is going to stay, this is going to be the normal life. He points to Post-War period and wonders how the face-off between two nuclear empires actually gave us stability and a period of continuous prosperity. 'Danger, yes, but stability', to quote him. Surely it looks like that now - with the perspective of science - though it is funny to think what makes Cold War look like springtime.

However, the key point is what, in Collins' opinion, makes great companies tick in a downturn. He points to two things - values and having great people on board. He talked about the examples of P&G, which never thought about cutting corners and undermined quality and customer service even in a downturn, and H&P, which never let go the opportunity to hire a smart engineer even when in a downturn.

Thinking this through, I can see how relevant are these two observations. The most common reaction to economic downturn is cutting corners - cutting input costs to keep prices down [especially in services] and cutting people, which often, though not always, increases stress and burden of those left behind. The other thing, of course, is to abandon the entrepreneur's commitment to his staff, people who work to make him/her rich, and letting people's wages go unpaid or letting them go randomly.

As I watch a number of SMEs from close quarters, I know this is a cancerous disease. At the first sign of trouble, the SMEs launch defensive action, goaded possibly by the management consultants who cost them more than what it would cost them to keep the company running. The entrepreneur simply abdicates his role. I have seen people, who are relatively successful as entrepreneur, turning anti-entrepreneurial at times like this, blaming staff for the lack of money and even shrugging off the responsibility to pay regular wages.

The common argument will be that a SME will have to do this, because they don't have the luxury of long term. But this is completely wrong, as most big companies today came from rather humble roots and it is the ability to think long term and big picture made what they are today. And, actually, I would even count IBM in that - the notoriously selsy company with a great, hell-of-salesman leader at the helm. It is the ability to articulate a simple vision, keep going regardless of how the times are and never compromising on the basics defined the success stories amidst downturn.

The point about great people is particularly interesting. No plans or special understandings with banks are going to save anyone in the middle of all this. The only thing that can help now is innovation and smart thinking. And, are we going to get smart thinking if we don't have a smart team? Impossible. And, also, if we don't do our bit to show leadership and take the difficult times in our stride, and demoralize the team, can they innovate their way out of the woods? Very unlikely is the answer.

This brings us back to the question of leadership in the middle of downturns. In any other context, leadership is extremely important - but it is critical in the middle of a downturn. Jim Collins point out a critical leadership skill under duress - the ability to zoom out, to see things in perspective. He contrasts this with a fire fighter's tendency to Zoom In, focus on the square area right in front of him, under duress. This is going micro, which so many of us tend to do in a crisis. On the other hand, zooming out allows us to take a more balanced perspective and have a long term view. And, this allows us to act, more than just on the urgent, on the important things too.

Day 9: Ready to Go

I spent the day - which was rainy and depressing - planning my trips and getting my bags packed, somewhat. This is a bit of an improvement, that I am thinking ahead about my travel plans and getting the bags ready. Usually, I always pack the bag last moment, often on the day of travel, and the travel plan remains up in the air.

It still is, indeed. Though I have now put this neatly on Excel and got at least one round of air tickets, my travel plans have so many dependencies that it can change any time. I am increasingly aware that I need to have greater visibility of my work plans, and days like this, I solely attempt to achieve that. But I do think that I have spread myself too thin - and the fault is all mine - and paying the price for that.

Steep price, I must add. My health is one. Besides, I, like other people, would love to stay home and know what I do tomorrow. Often, I don't. It feels like being up against the wall all the time. Once I am over with this current task, I shall possibly look back at these blog posts [and this is why I write] and think, with satisfaction, that I have completed another tough journey. But, of course, it is painful and confusing while it lasts.

No doubt, opportunities such as this let you learn, which you will not do otherwise. However, my problem is whether these learnings are any way connected to my life goals, and whether I shall be able to, after all these troubles, make anything good come out of it.

I keep talking about going back to India some day, but I must put a date and a plan for this. It is not going to be easy just to go back. I am acutely aware that the same doors, which are open to me today, will close down once I am back. I am also aware that mostly, people will relate to my going back with a lack of success, and I am sure it will hard to explain that this was always the original intent. Because such things do not happen.

I have got some offers to pursue when I go back to India, but sadly, none of these are attractive enough. I obviously do not want to go back in my life and start doing what I was doing before. I can possibly earn a bit of money, but that was never the objective. I am more or less clear in my mind that the next thing I do must lead to building of an institution - of some kind, a business or an organization - and I must be able to associate, and commit, long term to it. Yes, I am hoping that this will be the place I shall retire from, if I ever do.

Now, some people told me that such stability is not in my nature. But that is possibly wrong, my CV is not the correct guide of what's my nature. I actually loved building things, and I am generally long term in approach. I have left jobs only when the requirements of job ran against the grains of my character, and I have always left jobs well. I actually boast that I can almost go back to any company that I have worked for previously, possibly not entirely true or provable till I try, but this is possibly true for most part. In fact, I also realize that it may be true even for the companies where I did not do too well - I guess I can at least know one - but managed to have contributed in some way, even if that was outside my job description.

So, anyway, what do I want from here? Let's say - by March 31st - I need to set right the projects that we have in India. Actually, the project in India has always been a large undertaking, and most people involved in it did not know, or as in my case, did not want to acknowledge how big this project actually is. Interestingly, here, there is a divergence of opinion on what I think my role is, and what other people think my role is. Many people, in India and here, expect me to run the India operations. Now that is almost impossible sitting in Croydon, obviously. I must say that though I knew the sheer impossibility of such an enterprise, I have been swayed to think in those terms, taking upon myself the whole burden of creating a franchise network in India. This has actually created awful pressure on my schedule and commitments. One of my key goals is to set this right by March 31st and bring order to my life. I dont yet know how to do it, but I have now scheduled myself to be in India soon - in fact the whole of February - to sort this out.

And, beyond March 31st, I think it is most important for me to define my life goals and realign my work towards these. If I am supposed to go back, I should start now. If I am planning to stay, I need to define what for, and work towards it. And, the third, most exciting, possibility is that I close the chapter on UK and find work to live in the United States for a couple of years. This is one my heart is set on, as of this moment.

Saturday, January 24, 2009

Day 8: On Becoming British

My Saturday started as usual - late start, no breakfast, resolutions to complete but no progress and a purposeless visit to library - and at 5pm, looks like it will end as usual if I don't do something soon to change it. But, still, I shall pause for a moment to reflect on what's up next. I had a busy week, which ended somewhat satisfactorily. But I have been here before and took a break, only to see all the gains fritter away.

So, not again, and work starts now, etc. But the most nagging thing is that I have to travel soon [which is not that bad] and I have mountains of work to complete, not least turning in my tax returns. The Inland Revenue seemed to have gone crazy and mandated that anyone filing their tax returns after 31st October will have to do so online. While they told me this clearly in advance and I can somewhat understand their logic of driving people to online filing, they have kept the process as complicated as before. Now I have to go and apply for an activation code - don't even remember if I have done this earlier, so will have to do that again - and it will arrive some time on post. Clearly, some people don't understand the online concept and they don't need to understand perhaps, because they can still keep their fat pay cheques and privileges whether there is a recession out there or not.

In fact, while I kick myself in anger for not applying for the activation code earlier and hanging in a limbo at this time - looking out for post morning, day and evening [though it is delivered only once a day] and thinking about the good old days of afternoon delivery - I am thinking that a pay freeze for the government servants will not be a bad idea. They are supposed to keep this economy running and they have to shoulder as much blame, collectively, as we individuals do. Gordon Brown says that he did not see it coming - what an astonishing statement from a man who led one of World's largest economies for more than a decade. A lunchtime conversation with any of the many economists he met would have warned him of this, unless he decided to take an afternoon nap during lunch break. So, why not freeze his salary [poor Gordon] and all his aides' salaries too. [My private opinion is that Alistair Darling's salary should be cut, or he should be fired for creating public boredom even in the middle of a financial 9/11, but I shall keep that to me for a moment].

If taxes aren't irritating enough, the next thing on my agenda is the test for Britishness, a rather dumb online exercise called Life in the UK, which I have to write soon. This is necessary for my Permanent Residence, which will allow me to stay in Britain indefinitely without having to queue up for a visa from time to time and answering questions like common criminals in front of an UK border agency official. Therefore, I have to study and know rather enlightening bits of information like the Queen's birthday, the population of South East England and possibly the date England won the football world cup. This will prove that I have become sufficiently British to be permitted a Leave to Remain.

Of course, I am reminded that I am an economic immigrant, who have come to Britain in search of a livelihood, at least thrice a day on tele. All political parties are united that they need to control economic migration, only letting people come for shortage areas, where they can't find adequate people from the EU. They have a plan to boot out these people after a few years, lest they start thinking and eating British. That way, the wise men tells the rest of the population, they can keep the Britain, British.

Interestingly, of course, it will be an exercise to find out what is actually British. I should know - I should write the test in a few days. Knowing the queen's birthday may not be important for any one with republican sentiments, and Alex Salmond may actually fail the test of Britishness intentionally. Of course, there are many things which are uniquely British and should be preserved, but this colonial pomposity may not be one of them. Kate Fox's brilliant Watching The English of course talks about many strains of being English, though Britishness, like Indianness, but unlike Americanness, is a politically made up concept.

For me, being British is not about writing the exam, but being able to laugh at the vanity of it. Being British is more about beers and football - so that test could have been taken in a pub instead of the dreary online test counters as it happens now. Being British is also shopping for girls and friendship for men. Cloitaire Raphael reminds us that British men has this unique thing about being so close to fellow men ['mates'] and the girls actually feel a bit neglected and therefore dress most outrageously to attract attention. Being British is being a touch vain, don't we see in all American war movies how the British soldiers went along with bands and all. But, if the experience and academic results are any guide, being British has nothing about writing exams and passing it.

I learnt a lot living in Britain. For example, the respect and care shown to the less able is exemplary. So is the public politeness. The love for design. An ability to laugh at oneself. A language that allows one to laugh at oneself, most suitable for wry humour. Things like these - it was worth taking all the trouble of immigration to learn.

But the test of Britishness? To me, it is an unique Anglo-Saxon expectation that the world will behave in their terms and want to be British. A strange old-world baggage when the nation state is almost dead and the globalization has been baptized. As if Gordon Brown had a sudden recollection of things old and gone and brought them in the domain of public policy. Is being in a state of denial British? [Like he did not see the recession coming] The fondness of English language, yes that too, especially when this is a lost property and it is a matter of time when the language is called American.

I noted earlier, while living in London, I felt like the medieval British visitors to Mughal India. Here I saw a civilization at its peak, and a society in decline. With technology changing everything and new financial innovations being made, life has become so comfortable that one starts to forget how one got here. One forgets that the power in this world remains with the curious, not the contented. As those British travellers in the middle ages confronted a far superior, but content, civilization in India. I know they were not subjected to a test of Indianness to settle in India. But as well they could have been - as then India was a society in denial - just as I have to get up now and study useless facts to keep going.

Friday, January 23, 2009

Market Rebels & Radical Innovation

Market Rebels: How Activists Make or Break Radical Innovations, by Hayagreeva Rao, Professor at Stanford University’s Graduate School of Business, was published by Princeton University Press in January 2009.

Day 6 & 7: Moving Forward in a Maelstorm

I actually had a good day today. Relatively, at least. This is the first time in many weeks a Friday evening feels like a Friday evening, when I can cosy up with a book somewhere for a well-earned rest after a hard day's work. I know why this is happening. I travel too much, run around too much. It upsets my routine - I work odd hours at different time zones - and while I am working so hard, the work never actually ends. It keeps coming as I hop from one place to another, one project to another. Then, when I come back, I am like a Zombie for at least a week. I fail to allow myself the rest, or if I try to do this, others jump in. So, I live on unmade beds and dusty kitchens, my car does not start and often important mails get lost in the interminable pile.

I am feeling settled now because I was in England for a while now. I did go to Ireland for a couple of days, but that was not too long to disturb my schedule. I am more or less coming back in step in now, though I can see mountains of work as I look around. Besides, this week was productive, full of ups and downs, but in the end, I got somewhere.

One thing I do not like in what I do is the focus is too much on short term. The more difficult the market becomes, the more short term everything becomes - resulting in a frenzy, almost a stampede. I lived as a NIIT salesman for a number of years, and that was not cosy at all. There were constant pressures to achieve growth, all the time. But I remember Raji Pawar talking in one of his conferences [with us, regional managers] where he talked about how funding for education ventures should be different from the funding of software businesses. Basically, he was saying that these two businesses give different types, and levels of return. Hence, the investor expectation should actually be different in these two businesses. Those days, NIIT used to be one business - training and software - but later they split it into two. I would think this short term/ long term investment objective was one of the key drivers for that decision.

Even after I have left NIIT, and it is five years now, I remembered that discussion. And, that sets the perspective of my thinking when I see the privately funded education spreading fast in India. In fact, this will probably be one of India's biggest growth industries today, and after the global financial crisis, as money leaves real estate and stock market investments, education is becoming the next hottest destination. I believe in the power of enterprise and the individual investor's ability to innovate and improve, while government bureaucrats are unable to do either, by design. However, one of my over-riding thoughts is how sustainable is the model of private investment in education in India.

This is an interesting point. No doubt, private investment in education is needed. This is needed for capacity building and the country's long term competitiveness. Government can not, would not be able to create the kind of explosion of capacity that we are going to need. So, some kind of private participation is inevitable. The question is how much and in what form.

My fear is this: If you look at the education market in major Indian cities, there seems to be a glut in business schools. There are dozens of business schools. All of them charge quite a bit of money, though there seems to be a price pressure forming on how much an MBA can go for. However, even more are being initiated. This is more because of economic reasons: education is big business, and there is a lot of capital on flight from the stock and real estate markets.

However, we have seen this before, there will soon come a point when education institutes will fail. They sure fail in every country, but in India, before they close their doors, they will do silent harm by offering low quality teaching and selling degrees. This is obviously because the regulatory framework is flawed - too lax where they need to tighten the belt and too tight where innovation and enterprise need to be allowed in.

But I think the key point was what Raji Pawar told us. He thought investments in education should be made with an expectation of steady long term returns. He thought investors who seek such return, like pension funds who would want to invest in predictable, no-surprises business, will be ideal for an education venture. However, looking at the current spread in India, you can see the problem in the 'quality' of capital. Besides, this quality of capital issue also distort the market and bad capital drives away good capital from business sectors. I am sure the government is doing a lot, but it sometimes feels that they are trying to do too much.

And, we unfortunately have a fairly unimaginative HRD ministry, which is unlikely to change even if there is a change of government after the elections. HRD ministry, unfortunately, is seen as a retirement place for ministers in India. Unfortunately, that too is short term thinking.

Thursday, January 22, 2009

Day 5: Reviewing The Priorities

Yesterday was interesting in terms of work, though I spent nearly seven hours on phone! I am sure I need to cut this down, because there will be times when I have to take stock of, and give estimates to other people, what I have done, and these seven hours of phone conversations will possibly come to appear as one or two points on a long list. Does not look too good, surely.

Interesting, that gives us a perspective on Taylorism - the system of measuring work by time spent. This is still the dominant management method among employers, who want to see whether they are getting value for money. However, this is less and less relevant in service industries when it is hard to put a benchmark - how much time a particular job should take - though the habit lives on. Consider this - I had an hour's phone call with a partner who was unhappy about a particular thing. What should I have done when the conversation crossed five minutes? I am sure in the call centre context, a flag would have gone up in my mind that this is a time of supervisor call. But I have no one to pass this on to. Besides, it is hard for me to measure the value of loss if I ended the call there - there may not have been a short term loss at all because the monies have already been paid, but this could have affected the relationship irreparably. By partner, I obviously mean a franchisee, someone we do business with on an ongoing basis, and have a six year contract with. So, this little hitch, possibly, could have lived on for another six years.

Now, I know many organizations measure work by time spent. That remains the dominant way of thinking, as SMEs hardly moved out of the management paradigms of the manufacturing age. On the list of work done, it will look a tiny item - placated X and addressed his complain about Y - and will not justify the big 60 minutes put against that. Is there a way to put the amount of time [and heartburn] saved over the partnership lifetime? Not that I know of.

In any case, I continue to work away the Master Partner propositions for India, which is going well so far. These are complex deals requiring a lot of involvement and personal time, but I guess I finally got a way to reduce my actual field-level involvement. This will eventually allow me to gain greater control over my lifestyle, or so I hope.

I am also readying myself mentally to embark on the journey back. It is hard to leave your own country and come somewhere else; it is sure harder to go back. But eventually, I have to go back. I came to Britain to learn; and I guess that objective was somewhat successful. I have a much wider perspective than I had before coming here. I sure want to spend another year formally at the university and seeing other parts of the world. But I am sure I want to go back to India, not later than December 2010, where I would put my learning in practise. How funny that I often said that I want to retire by 42: That, indeed, will be my retirement from wondering around.

Wednesday, January 21, 2009

E-Learning: Into The Future

A friend asked me a question : What are my views about where e-Learning is heading in the next five years. I, as always, chose to give a fairly public reply through this blog.

But, before I comment, I must also remind myself that this is indeed curious timing to talk about e-learning into five years in future. Nero playing violin while Rome was burning probably would have been an apt analogy, but I am no Nero and can not do much to stop the mayhem. But, one thing for sure, there is very little certainty in the economic climate right now, and it is hard to see much ahead at this time.

Having said that, one can safely project a significant change in e-learning usage, in Academia as well as in Businesses, over next few years. There are a number of reasons behind such assertion:

(a) The business climate is not going to improve any time soon and there will be increased pressure of cost cutting across businesses. Training usually bears the brunt of cost cutting very severely. However, tough business conditions also mean that competitiveness will be critical, and the need to send executives to a luxurious retreat to be 'trained' will lose its importance in the agenda. All of this point to a big spread of cost-effective ways of doing training.

(b) There will be a big bandwidth boost and significant investments in network infrastructure in different countries. In fact, in current economic climate, the ego projects like WiFi across the city will take a hit, and investment will go into making available fat pipes, notably in America. This will make possible two things - one, more engaging content with videos etc, and two, the e-learning as a service model, where the learning content sits in a rented server.

(c) Because the e-Learning as a service concept will spread, the capital costs of deploying e-Learning will drastically reduce. The expensive software ad hardware will go, and open standards will be on demand. In time, a training manager in an organization will be able to deploy e-learning programmes like they purchase training programmes today - just enrol a few participants on an online portal, without incurring a huge upfront cost. Similarly, that training manager will also be able to design engaging content, as they do PowerPoint presentations, and will be able to integrate that content seamlessly on the learning platform, without having to call in an army of consultants and IT people.

(d) The demographics of work will change. Consider this: Roughly, we finish education and start working when we are 22. We assume senior management positions, in matured industries, at about 40. We retire at 65. If these are correct [and if you disagree, put your own numbers], the oldest workers in our workplace today passed out of college in 1966. In another five years time, the cohort will have passed out of college in 1971, when computers appeared in many campuses in the Western world. [In another ten years, it will completely change with the post-PC generation coming to retirement] More importantly, however, most senior managers today would have passed out of school in 1980s. In five years time, the generation which encountered a computer in the school room will enter senior management. There will be a whole new way of looking at computers and Internet.

So, e-learning will change and will become more ubiquitous, but what will it change to? Would we say more video? What form will the interactivity take? Answers to these, and many other similar questions, will obviously depend on the breakthroughs in hardware, software and networks. This may also be influenced by the social trends. As TV loses its grip on media, and we start believing our net friends than we do our daily newspaper, what works may completely change. We may not see more videos in e-Learning, but may see more YouTube. Citizen's video will possibly come to dominate learning, though it is unlikely that it is going to replace the professional content on TV. This is because costs will be critical, and people just love to create content on their personal experience. I shall not be surprised if YouTube starts a learning corner, but if they don't, someone else will. It will be a cool idea to let people upload videos on their experience - at work, travel or life. Interestingly, there is this theory that people do not act creatively if they are not paid for it. Call it the Traders' theory of creativity, this has been proved wrong many times over by things like blogs and YouTube. In history, people never created, or invented, for money; patronage was a much better system for fostering creativity than royalties.

Also, before we ponder about the future of e-Learning, we need to think where Learning will go, in a few years time. Obviously, the learner participation will increase - more and more we will see people using collaborative tools to disseminate experiences and learning. I did talk about crowd-sourced learning, but obviously this is a bit blasphemous for the L&D professionals, who wish to keep training as a black art. But the trend is clearly towards more collaboration, and participatory learning, than one way training. This is actually good news for e-learning practitioners; but like practitioners of other dead arts before them, they don't particularly like it.

Day 4: Into The Deep

Barack Obama got sworn in, and after his inauguration speech, where he talked about the resolve to take on the financial crisis, but warned that there are challenges ahead, the Wall Street sank. How much of it is Barack Obama, and how much of it is due to the continuing bad news coming from banks, it is difficult to tell. But it seems it is mostly banks, as they continue to pour bad news, despite clear evidence that they are now hoarding cash, clawing back on loans and obviously passing on their troubles to the broader economy. The British government, over last couple of days, took some extraordinary steps to give the banks confidence about lending money, basically by insuring their loans. Despite this, question marks are being raised about the financial health of Britain's largest banks, Barclay's for one. Across the pond, it is Citi, yes the world's largest financial institution supposedly, which is in trouble. It is interesting to learn that in Citi, it is only its brokerage arm, Smith Barney, that makes the money; all other consumer businesses of Citi group do not make any money at all. And, Citi is planning to sell Smith Barney. So, it is Deja Vu once again, to quote CNBC commentators. It feels like that week in September when Lehman Brothers went into bankruptcy and AIG came out with its troubles. Just that, this time, it is going to be bigger, and the policy options are mostly exhausted.

Let's talk about it - policy options. It is extraordinary to see what the governments are doing across the world. If we wind back 12 months, the first set of responses were based on interest rates, where the monetary authorities were trying to make money cheaply available to keep the economy going. This was getting sticky, with rising inflation and a negative real interest rate, but everyone kept going. However, around mid year, Banks started failing and the phenomena of reckless lending came to light. By then, interest cuts were no longer the option - it was already cut too low - and the word 'Bail Out' came to the fore. So, governments bailed out the financial institutions and thought everything will be back to normal. It did not, as banks started repairing their balance sheets first - what else do you expect of a profit making entity - and we moved from bail out to 'stimulus', injecting money to the wider economy through loan guarantees to banks and even the extraordinary steps like allowing the central bank to lend to businesses. It looked like we are going on reverse gear on economic theory - we reached from Milton Friedman to Keynes in a few short months.

If one has to read anything in the current situation, the crisis is not going to get over any time soon. I, like many others, expected this to be a short recession, almost an unfinished one, blown away by combined policy actions by the middle of 2010. But, it does seem now, the interventions so far has done nothing - and this is the extra-ordinary thing about collective psychology - and as the banks act rationally in line with their economic interests, we have no way out of this crisis any time soon.

Without the real life pain, I obviously worry about the business I run, it would be an interesting game of strategy. The governments are running out of ideas fast. They are facing a crisis of an extraordinary proportion, and increasingly it is looking like that the whole capitalist system is in a sort of crisis. I say this because, as it stands, if everyone, bankers, entrepreneurs and government officials keep behaving the correct rational way, this crisis will deepen; so, we are possibly standing at a point of inflection in our history.

What could be done now? Everyone knows that we are seeking a Direct-to-Consumer strategy. How to reach money to the consumers so that demands can revive, businesses can start producing and banks see the rationale in lending money yet again. However, in our cascaded society, we have few options for such a stimulus. In fact, the deeper issue is about equality, sub-prime is not the problem but the solution rather. We have been hoarding money in the hands of a few for far too long: such a crisis was expected.

God has this habit of acting Robin Hood. It seems that whenever the balance of the economy is lost, he flattens it out yet again. It happens through disruptive technologies and innovations, but this time it is going to be a cruel correction of economic forces.

There is pain ahead, as Barack Obama also said. The question is: Whether we shall keep our faith and emerge, as good men and women, on the other side of the tunnel. Or, shall we lose ourselves in the process. Suddenly, failure does not look that bad at all. At times like this, I guess the trick is to focus on what we have, rather than what we don't; keep ourselves flexible, and feel the great freedom such crisis provides, one to do anything and be anyone, yet again.

I am, however, stuck to my old life, though I am trying best to escape. I am working on agreements and numbers, knowing fully well that this is about building a hut on the sea-shore amidst a tsunami. But then, habits die hard - our business culture is used to certain things, without which it does not look like work. So, I shall play the game as long as I have to, though I am desperate to send an IM to Noah to keep a seat.

Tuesday, January 20, 2009

Day 3: Waiting for Obama

I am still on the ball - went back to the habit of drawing up to-do lists in the morning and ticking it over once done; got a few things done during the day that way. Most importantly, I had to write and finish the Research proposal for the university, and all my non-working time went there. So, when I finished, well past midnight second time in a row, I was feeling a bit zombie-ish (sic!) - haven't moved out my chair much through the day and that is a depressing feeling.

But, I am over with it now, for the moment. Obviously, the work starts now and I have to do the research. Sometimes, I feel tempted to think that I am better off completely focusing on such work - writing, reading, research - rather than trying to keep so many balls on the air. There is, of course, no better time to take a career break than this year, when everything is topsy-turvy and the world economy has decided to go back a few years, as if in a time machine. But then, the work I do is not just work - this is my baby in lots of ways and I can't suddenly take a break. Also, I have tried talking this out with friends, and it draws diverse reactions. Some people, professionals and businessmen, clearly follow a line and for them, going back to the university is simply not an option. They rather point out how much lost income this will mean. On the other hand, there are others who get inspired by the idea and wants to do the same - these are people who are not so much after money than they are after happiness. And, for me, a perpetual Gemini, I am neither here nor there, it is hard to make up my mind.

Outside of my own problems, the whole America is now waiting for Obama. Today he gets inaugurated. The American transition process is incredibly long drawn and unbelievably civil, at least as it turned out in this case. To have a President-in-Waiting for almost three months would be almost unbelievable in many countries, but I think it is a great idea - because it is designed to transition the responsibility slowly and correctly. Of course, this is done not with intent - it is just the process of counting and tallying the electoral votes that takes the time.

There are concerns about security and still disbelief that a black man can actually become America's president. I picked up a joke in Ireland. It goes like this: When Obama turned up in haven, St Peter was guarding the gate [no surprises] and he asked Obama, 'And, who are you?' Obama replied, 'I am Barack Obama, the first black president of America'. St Peter, amazed, said,'Oh! I did not know that. When did this happen'. 'About twenty minutes ago', says Obama.

I am sure the security is tight all over America and the excitement is oozing out. I know more than 2 million people will possibly turn up at this inauguration, which I plan to watch, either on TV or on Facebook. But what will be on every one's mind is such dreams, such possibilities are usually fragile - remember Martin Luther King Jr. - and everyone of us, across the world, must do our best to protect the possibility and foster the opportunity. This is an unique moment in the whole human history, when democracy has finally triumphed and showed what it can achieve. We must keep this flame burning.

Obama obviously comes at a difficult time, but his intentions are somewhat clear now. He will not bring in a revolution, and pack Americans off Iraq tomorrow. That is understandable. In real life, you can't be ideological. If he tries to pack off American soldiers off Iraq on the first plane - he can't. There are simply not so many planes to carry all the soldiers and their kits. So, some have to be left on the ground, who will then be exposed to more danger. He has to do an orderly transition. He has to ensure that Iraq does not become another failed state. He has to tread cautiously.

Interestingly Obama knows this and this is why he is the President. But the way Israelis packed their bags and ran from Gaza tells us that they had this license to finish off from Bush and Condi Rice, but they can't carry on any longer. Obama will, hopefully, show firmness and fairness dealing with this conflict, one which is endangering the world not just by fostering terrorism but also by lowering the moral authority of state power. One can not let Israelis go on killing innocent children. As I said earlier, I was moved by the plight of Baby Moshe in Mumbai; however, I can see Israeli government behaves no more civilly than those terrorists in Nariman House.

So, that gets us to January 20th. I have a full diary, and I shall wait, with baited breath, for Obama.

Monday, January 19, 2009

Day 2 of 100: Getting There

I almost wasted the whole day on my laptop, which refused to start in the morning - resulting in a panic that took the whole time away. I tried almost everything, concluding at some point in the afternoon that I have to go out and buy a new laptop, only to realize that how hopelessly dependent on computers my life is at the time - I was thinking of buying a DELL online! But, anyway, I could salvage the situation somewhat, though this did require a full hard disk format and rebuild of the operating system, and almost six hours of work backing up and restoring all data. A colossal waste of time - or in another way, an useful lesson to learn very early in my 100 day experiment.

The lesson is simple : don't leave for tomorrow what can be done today, and I just quoted Benjamin Franklin. I was to write an article on Bangladesh's election for a journal, and while I was almost ready on Saturday evening, I decided to sleep early and send it over on Sunday morning. I wanted to have a last review with fresh mind - so I told myself. But this was actually simple laziness that gets me some time, and this was one of the occasions. I was obviously cursing myself when my computer wont start in the morning, and recounting events in my life when I left things for too late. One of them affected me professionally: I was to write a guide for e-learning to be given out to participants in an exhibition and I left it for too late, only to be caught up in a situation where a family member got very ill and had to be taken to the hospital. My relationship with Mike, my supervisor, which was usually excellent and still is, took a nosedive on this issue - Mike justifiably thought I let him down big time.

I have noticed that I do well under pressure and many of my accomplishments, professional and personal, were achieved in a very short time. But that's no consolation, as I almost always told myself that I could do a better job if I had more time. And, the truth is - I never gave myself more time. I always waited till the last moment to work on something. I think this is a big negative in my character and I ought to work hard - and will do so rather publicly in this blog - over next few days to sort this out.

Yesterday, however, there was a good thing to report amid all this chaos. After a real long time, I tried writing by hand. The laptop was backing up and I was afraid to touch it lest it crash again. So, I took up pen and paper to write, only to realize how unaccustomed I got with that medium. Later in the evening, when I decided not to go to bed without first sorting out the promised essay, I picked up bits from whatever I wrote on paper, but then chose the medium I am most accustomed with - this blog's editor. Yes, over MS Word or any such package, as I am far more familiar with this interface now than anything else. This had an upside too - I got the article saved up on the blog archives. Some day, when the article has already been published [or rejected, as may be the case], it will take me a few minutes to publish it on my blog, in its unedited format. Voila!

Yesterday, I watched a lot of TV - couple of movies, one of them was an old classic, The Apartment. I have not seen this before - one where an ambitious employee gives keys to his apartment to his boss to fool around with a girl from office and thereby gets a promotion - though I have seen a similar story in the bollywood version, Life in a Metro, where Kay Kay Menon played the boss and Kangana Ranaut played the girl from office. I also watched Kevin Costner and Ashton Kutcher in The Guardian, an old movie yet again, but none the less, I like both the actors and it offered the necessary distraction while struggling to recover my files.

More TV, and it was interesting to follow Niall Ferguson on Farid Zakaria GPS yesterday. Dr. Ferguson was essentially saying that we are looking at long drawn out recession ahead of us, one where a situation like Japan's lost decade will be the best case scenario. He made an interesting point: He said that the current world economy is driven by a Chiamerica partnership, where the Chinese is producing and saving and the Americans are consuming and spending. He was suggesting that if this partnership falls apart in the weight of the recession - if the Chinese for example stop buying US treasury bills and start using their savings to generate domestic demand, start a massive social benefit programme for example - the United States government will have a particularly hard time recovering from the recession. They, in fact, may not be able to recover from the recession at all - like the British in the 1940s.

This is an interesting point. Because the Chinese have to do it anyway. The growth in China has already slowed and the situation is rather dire, by the reports I hear. China does not have a democratic society and therefore, is bereft of a peaceful mechanism to voice grievances and seek political reconciliation. In short, China can not elect a Barack Obama and make a new start. So, the government has to keep things going and keep things cool, and the most plausible way to do this is to offer a massive social stimulus - to fix its broken health-care system or to bridge the rural-urban divide may be - by spending some of the trillion dollar reserve they are sitting on. However, while this looks like bad news for the moment, as this will mean the US Treasury Bonds will have to be sold elsewhere and the interest rates will rise, this is not so bad news because this will mean the consumption will rise again, this time with a Chinese engine pulling it.

This, incidentally, means a significant shift of perspective for the businesses. Dr. Ferguson expressed his faith on America's ability to innovate its way out of recession. Very true, and I am certain a new genre of entrepreneurs are waiting in the wings to make the best out of this dire situation. They will have to grapple with a new reality though: How to design products and services and sell it profitably to billions of customers who live on less than one dollar a day. Yes, we have already talked about this in Fortune at the Bottom of the Pyramid. Call it Capitalism's last frontier, if you wish, but this is where the action will be, if the world economy has to move forward from the current mess we have found ourselves into.

Sunday, January 18, 2009

India and The New Bangladesh

Democracy's Comeback

The overwhelming victory of the coalition led by Awami League and its leader Sheikh Hasina, in the elections in Bangladesh, has been celebrated widely in India. It is indeed good news, and the contrast to the year-end 2007, when Pakistan was tottering on the brink after the assassination of Benazir Bhutto, could not be more stark. The expectations are that Pakistan will now be almost irreversibly ruled by a democratic government, however weak, and that in Nepal, hostilities are over and a government, whatever its allegiance, will be firmly in control. With Sri Lankan government finally winning the war against Tamil Tigers, and Maldives and Bhutan successfully implementing democratic transition, it seems that democracy and peace are finally making a comeback in the South Asian region.

This could only be good news for India. Gone are those days of cold war policy making, when we played zero-sum games with our neighbours. The concept of sphere of influence lingers on, but appears dated in this age of global communication and terror. Earlier, it was important to see 'favourable' governments in power in the region; now, the best security for us is in the culture of democracy and shared prosperity.

However, old thinking dies hard and there are far too many people in India who do not like the Nepalese government's closeness to China, or the fact that Sri Lankan Army has now almost beaten the Tamils, who have strong cross-border allegiance. Awami League's victory in Bangladesh, seen in the prism of this thinking, is a good thing - as this is a party supposedly friendly to India.

Forever in Debt

Such assumption of friendliness, of course, originates from history, when India extended its logistical and military support to Awami League led Liberation Fighters and helped them defeat a genocidal West Pakistani army. India was the first country to recognize the independent Bangladesh, and helped its government closely to run its affairs after independence. One of the reasons of downfall of Sheikh Mujibur Rahman, the first Bangladeshi President and Sheikh Hasina's father, was that he was seen to be too close to India, a stooge, and successive administrations after his assassination, tried their best to distance themselves from India and get close to its regional rivals, China and even Pakistan. The post-liberation generation in Bangladesh, which grew up in the Eighties and the Nineties, have come to regard the Indian intervention in their liberation struggle as a helpful step, but one largely dictated by India's own geo-political interest. On the question of relationship between the two countries, a prominent Bangladeshi intellectual once told me that Bangladesh was no more indebted to India than the United States was to France, and yet it would have been a travesty to expect George Washington to become a vassal of Louis the XVIth, as India did expect of successive Bangladeshi governments.

Indeed, Indian policy towards Bangladesh varied from treating it as a friendly but weak nation to taking it for granted. Take water, for example, an extremely sensitive issue for this largely agrarian country. India, while it built a barrage at Farakka in West Bengal on the Ganges after a long consultation with Pakistani, and later Bangladeshi, authorities, started diverting its water soon after Mujib's death without first reaching a water sharing agreement with Bangladesh. This created an outrage, and though an agreement was worked out later, Bangladeshis always perceived it as an unfair one. The Padma, as Ganges is called downstream, today is much reduced river - something every Bangladeshi squarely blames on Indian unilateralism. Further, it did not help when, in 2003, the Indian government made public its intentions to link its various river basins, without a detailed consultation with the government in Dhaka. Overall, it affirmed the common Bangladeshi perception of India as a Big Brother state.

Bangladeshis today marvel at India's economic achievement and want to imitate its IT industry, though the lack of respect and consideration from India is too obvious to cancel out any feeling of admiration. The on-again off-again relationship between the two countries have not helped trade and exchange, though the cultural and people-to-people relationship across the border remained warm and close. Indian government, despite its professed liberalization and commitment to global trade, has been particularly harsh on Bangladeshi companies trading in India. The best known case on this is Rahimafrooz, the largest automotive battery manufacturer in Bangladesh, who saw a penal tariff being imposed on its batteries after it started making inroads in India, and the Indian manufacturers complained. A furniture business owner, who saw an opportunity when the Indian government recently allowed free trade through SAFTA in 2007 and expanded his business in Indian north-east, saw furniture being quickly added on to the sensitive list, therefore outside the SAFTA provisions, as he started gaining market share.

Besides, this is not just the Indian government, but Indian companies contributed to this mutual distrust. The commercial ties between India and Bangladesh were always strained; the double taxation avoidance treaty between two countries was signed very recently and many Indian companies used this as an excuse to trade with Bangladesh through their offshore subsidiaries, often located in tax havens. This also led to a low level of accountability and lack of professionalism in the commercial engagement, and stories abound how prominent Bangladeshi business houses were short-changed in the commercial transactions with Indian companies. While cultural misunderstanding is largely to blame for such fiasco, and there are indeed successful examples of Indo-Bangladesh commercial engagement, one would wonder whether the narrow, almost reluctant approach to trade is the primary reason for lack of trust between the two business communities.

Hasina's Mandate

While India has its share of responsibility in squandering the goodwill it earned through its engagement in liberation war, Bangladesh was indeed a difficult nation to do business with. Its recent experiments with democracy was riddled with corruption and internecine violence. Political killings were commonplace and Ministers amassed vast wealth on the back of rotten deals. The considerable wealth and natural resources of Bangladesh were plundered by successive governments since the 1980s to the extent that by 2001, Bangladesh was ranked the world's most corrupt state, beating Nigeria and a host of African nations in the game.

Bangladesh's recent politics point towards a common consensus against corruption and political violence. The country is no stranger to violence, but terrorism and violence particularly intensified during the five year rule of the BNP and its Islamist allies [2001-2006] and the ensuing Caretaker government had to pursue extreme options, including capital punishment for some of terror leaders, to control the violence.

It is commonly agreed that the result of this election adequately reflects such imperative, though Sheikh Hasina is an old hand and many of her colleagues and comrades, including the Jatiya Party Chief, ex-President HM Ershad, is indeed the corrupt-in-chief of the country. The results are somewhat paradoxical in that respect, though it appears far more decipherable when the following arguments are considered:

First, Bangladesh has experimented and failed to evolve a third way, an alternative to the two major parties in the fray. Attempts were made to create an alternative with Dr. Md Younis at the helm, taking advantage of his huge popularity and post-Nobel prize international prominence. However, such a move failed to gain political momentum. Besides, the Caretaker government, led by technocrats, started with great hopes but eventually lost its way in the political maze. When in disarray, its autocratic strains became all but visible. Bangladeshis, and all the external powers, obviously realized that their democratic options will be limited, for some time now, to the two warring begums.

Second, this victory is largely attributable to formation of effective coalition, as the results in 2001 were largely on account of BNP and the Islamist vote coming together. Awami League has an extremely motivated following of roughly 35 to 40% of Bangladeshi electorate, and with the consolidation of Anti-BNP votes through a broad-based coalition, they became unstoppable. However, it is prudent to note that this is a coalition victory more than it looks on surface [Awami League won a simple majority on its own] and Shiekh Hasina has to work with her partners if she has to create a sustainable government.

Third, one important factor in this year's election were the first time voters, young men and women millennials who care less about liberation struggle and are more concerned about the road ahead. Studies seem to suggest that Awami League and its partners got their votes; BNP's last minute lurch to Islamic conservatism has cost them dearly here. Bangladesh is a country of young people and this is the new generation which is going to dominate the political agenda from now on.

The All New Opportunity

Therefore, it is reasonable to expect Shiekh Hasina's policies to be dominated by the dynamics of her mandate rather than any feeling of past gratefulness. Her victory presents India with an opportunity, indeed; it is much easier to pursue a common agenda with this administration than it would have been with a coalition involving Jamaat. However, the position now is almost reminiscent of the heady post-liberation days: We have an exciting opportunity, for us to squander.

Bangladesh, contrary to popular perception, is an extremely important state for India. It is resource rich and strategically located. Access to Bangladeshi natural gas will change the economy of West Bengal, and access to sea port in Chittagong and road transit rights through the country will transform the troubled economies of Indian North-East and integrate them far better to the mainland. Bangladeshi entrepreneurs are cash rich and innovative, and free trade and investment opportunities between the two countries will benefit India as much as it will do to Bangladesh.

Besides, Bangladesh is militarily important. This was the reason for India's intervention in 1971 after all, to mitigate a threat on its Eastern borders. China has successfully cultivated the junta in Myanmar to lease air bases and missile installations close to Indian borders; any link-up with Bangladesh will allow it to reach the doorsteps of Kolkata.

However, more importantly, Bangladesh is critical for India's, and the World's, war on terror. If Pakistan was the first, and foremost, example of a modern state created on the basis of Islam, Bangladesh is a prime example how that identity could not be festered upon a linguistic group. If a prosperous, democratic state could be built in Bangladesh, that will serve as an example to the whole world. If it fails, only the Islamic hardliners will be pleased.

Bangladesh, over last several years, became the training ground for ISI and its terror brethren. The rural poverty, and disaffected, unemployed urban youth provided the ideal recruitment zone; the corruption and lawlessness allowed covert operations to go on. After much effort, the government of Bangladesh has pushed back some of these groups, but economic success and political stability will now be required to make those gains permanent.

India needs to engage with Bangladesh with this backdrop. It is time for fresh new thinking, even if it is Sheikh Hasina we will have to deal with. The situation will be irretrievable if we commit the mistakes of the past - take the country for granted or fail to give it its due weight - and we must build a relationship based on respect and mutual commitment. We must allow democracy to succeed, however unpalatable its outcome; and we must be prepared to share our prosperity, as only this can build sustainable peace in the region.

Rahul Gandhi, when speaking in Indian parliament in defence of the nuclear deal, urged his colleagues to think like a big country. In the affairs of South Asia, we have thought and acted with fear and insecurity for too long. It is time that we act like a big country, and engage our neighbours with sincerity and fairness.

Saturday, January 17, 2009

Day 1 of 100: New Season

I am living a new 100 days.

This time, I want this 100 days to transform to my life. And, the change is that I am not going to wait till the 99th day for the change, as I have done before. Change starts now.

Last week, I had a very productive visit to Ireland. One which changed my perspectives and the way I saw things earlier. I must admit that I went with an open mind, the way I am trying to do these days, and it helped. I was putting that extra effort to figure out why people think / do the way they think/do, reaching out to hitherto indecipherable individuals.

I mus admit, I could see how wrong I was on certain counts, especially when the prism of my own perception was removed.

I got one very valuable feedback. I am not ruthless enough. That's something which I knew from before, but did not get the right word. I thought I am a people/relationship person. But that's a nice way to say this thing. Ruthlessness is indeed needed, when most people take advantage of niceness. And, if I am not ruthless, I should very well forget about a career in politics, which I intended to get into, and my managerial career also may not get too far. I mean - I do great in functional roles, but can I actually function as a line manager if I am too attached to people I manage.

That's been my problem. In my world, everyone is a friend. That worked brilliantly when I did not work with them, but not so well when I did. It is an interesting way to think. A very Anglo-Saxon thing, I thought, this commercial ruthlessness. But then I can remember San Tzu's dictum, which I quoted in this blog, a leader can not be too attached to his people, otherwise he will make mistakes in trying protect them. My problem, surely.

So, do I want to develop Ruthlessness? Don't know whether it can be developed, first of all. Besides, it is so much against my fundamental character - a touchy-feely nerdy one - that I probably have to live without it. I know I shall be happy without that quality, and it is indeed a good quality to have if one has to lead a team of not-so-equal men.

This gives me another important answer. I remember Tulika, who I consider to be my mentor-at-large, told me once that while I am a brilliant leader in a small team, my leadership style isn't very effective for a larger group. Was she meaning this? Perhaps. Besides, I also know that I expect people who work with me to work like me - with the same level of commitment and energy, and lose patience when they don't. But then I don't force my hand, I wait too long and i keep giving people benefit of doubt. I guess all this adds up - I am not ruthless, too forgiving and hence can't manage a bigger team.

Does this mean that I should now give up and accept mediocrity as destiny? Don't they say that nice guys always come last? I would have thought so - I have never been very competitive in life - and gave up too many opportunities to excel. And, this will obviously rule out my chances of success in entrepreneurial ventures, sadly.

But then, I think I have a few substitute qualities. Like focus. Like commitment. The fine line between ruthlessness and commitment is the objective. Do at any cost is ruthless, but commitment is Do, but don't cross the limits of fairness. That will suit me well - as I am always trying to be fair, some times comically so. I would think I have to give up careers like politics or business, but I can surely do well in a profession, or in cause-related work.

Which indeed means giving up the hopes of living in a manor, going around in a limo or marrying Drew Barrymore [that's off limits already]. But that's fine with me - I am no longer twenty and have a bit of perspective in life to know that going there will take away many things dear to me. Like this time to write this pointless post. The sheer joy of walking on Croydon roads. Things like that. I wanted to be rich because I thought being rich gives you choice, something I wanted to have. But, suddenly, I know choice sits in your head, not in your bank account. I am suddenly feeling free - to do anything I wish to do.

And, that makes me start this new 100 days.

Friday, January 16, 2009

Why Bail-outs May Not Work

The New Year is yet to start.

I was hoping, like everyone else, that there will be something magical on 31st December night. 2008 was a year like never before: Shall we say it was the best of the times and the worst of the times? Or, more appropriately, it was the season of darkness and the spring of hope, perhaps. A recession, worst in many years, was setting in. But, at the same time, a historical American election took place, wiping out the disappointments and disconnects of last eight years, giving people, across the world, something to cheer about. And, this, apart from the usual flipping of the calendar, will bring a fresh start, I was hoping, along with the usual New Year confectionary.

Recessions are painful, but one can not avoid them. Recessions, as the economists see it, are instrumental in moving forward our economic system and sustaining the cycle of innovation and progress. Joseph Schumpeter talked about creative destruction as the principal driver 0f efficiency and improvement in capitalism: We have one at hand right now.

However, while recessions may be an unavoidable aspect of our economic system, even necessary, but it is corrosive and destructive socially. So, it is understood that the politicians can not let a recession happen. They have to intervene, and they have to stop this from happening.

And, the great hope for Joe Blogs, Joe the Plumber, and myself is that they are successful in the effort.

However, I think, so far, we got a very wrong approach to managing the recession. Great hopes were pinned on government activism, fiscal tools funded by taxpayers' money, and one hoped that such activism will allow us to escape the chaos of the Great Depression of 1929, or even a protracted deep recession of the 1980s. I thought this would turn out to be an unfinished crisis - something tamed up fiscal intervention, leading to a greater chaos coming out of an American loan default years later.

Sometimes, things go bad faster than one would imagine, and this year is turning out to be one. We have already had a significant amount of fiscal stimulus and it has solved nothing. The US government was inconsistent and half-hearted, wasting huge amounts of public funds on failed projects and sending out wrong signals. And, more disturbingly, the incoming administration of Barack Obama seems to be committed on a similar fiscal stimulus plan.

This is bad news. Because this reflects the lack of will to fight the recession and sort it out soon. Schumpeter said it and America preached it to everyone else in the world: Structural adjustment was the word they dished out to every other country in the world, including Japan. The advise was - it was painful, but necessary. But when it came to America, no one seems to have the appetite for the fight.

What am I trying to say? When recession sets in, the appropriate policy response is to try to contain the social impact of it and providing support to people who are losing jobs and income. It is important to provide loan guarantees to small firms, so that credit can flow. However, it is also important to recognize that the structural adjustment is necessary, and the economic pain must be bourne. There is no point giving in to inefficient bosses, bloated unions, and greedy investors. Mistakes must be paid for, by them. Throwing money to keep things as it is, is a colossal mistake and will only worsen the situation.

Think about it: what a colossal mistake bailing out Bank of America is. Those guys went out and bought Merill Lynch. Now, they must pay for their mistake. This is crazy that they eat the lunch and taxpayers pick up the bill - and, in turn, everyone in the world, whose retirement money is saved in US Treasury Bonds [because their governments chose to do so]. There are better uses of that money, and these can be spent in building a social safety net, which will allow us to take on future recessions as they come. Instead, we are bankrupting ourselves - spending our money on some greedy banker and his fat-cat speculators.

There is indeed a lesson to be learnt from Japan's experience. Businessweek published a timely article on Japan's Lost decade, which makes this point. And, as things unfold, and the article points out how fast things are happening now, we must brace ourselves for economic pain [yes, let Barclay's fail!] but social resolve. That's the lesson of recession, one which we refuse to learn.

Top Brands in India : The Pitch Magazine Listing

I picked up the latest issue of the PITCH magazine, which had a very interesting feature called Marketing Lessons for The Best. They picked up five very successful brands from India, and talked to respective CMOs to understand their approach. I am attempting to produce a summary of what they said, with my own comments, as usual.

First, the list. The five chosen here were Titan, Kingfisher Airlines, Big Bazaar, Airtel and LG Electronics. I thought this is very appropriate listing, as I could not think of any other consumer brand as good as the ones above. There are a few corporate brands indeed - like Tata or Reliance - but that was not what this feature is for. One could argue that ICICI Bank is a consumer brand and could feature in this list. And, may be some of the car brands too - has Maruti 800 died? - as can be Tata Tea, though they have been considered in a separate section of the same issue. But, overall, a very appropriate list.

Let's start with Kingfisher Airlines first. It was immensely interesting reading about their marketing philosophy. Indeed, their approach sounds uncannily familiar to Richard Branson's - they set out to create a Hospitality in the Air brand. May be, Branson's is slightly different - entertainment in the air. But, those, who travelled with Kingfisher Airlines, know how they package themselves. Apart from this hospitality angle, to which I shall return in a minute, Kingfisher also flies to more locations and have a greater choice of flights than anyone. This is possibly why they have removed the Deccan brand altogether, and repackaged those flights.

At a personal level, though, I must say that I have shifted my loyalties from Kingfisher to Jet recently. I was absolutely floored by the new aircraft, personal entertainment units even in the economy class, Vijay Mallya's charming presentation, its food etc. It had a wow effect on me, apart from the fact that I could use the Kingmiles on Emirates, which I fly often. The availability of the flights had an effect too - I fly Kolkata-Hyderabad sector often, and somehow Jet Airways does not have a direct flight there.

However, I have noticed a marked decline in Kingfisher service off late. I thought they were getting too busy and their staff appeared confused and stressed when the flights were full. On several occasions, I found the cabin crew fairly rude and uncommunicative - they were doing all they were supposed to do, but one could tell that the pressures of quick expansion was telling on Kingfisher. At the same time, I noted the service at Jet Airways improved markedly. Despite various public faux pa they committed, their flights were gradually upgraded, leg space improved marginally and more than anything, their staff appeared better trained, courteous and helpful.

In my mind, Kingfisher Airlines is actually an example of Obsessive Branding Disorder, a title, obviously, I picked up from Lucas Conley's highly readable book. In all this talk about experience, they were out to create an illusion of experience. I hope that it is only very fast expansion and not many trained staff created the problem, and they will be able to focus on fundamentals soon. But, for the moment, I could not buy all the smart marketingspeak which Kingfisher executives handed out.

In contrast, I shall cite Big Bazaar as a great example of consistent branding. It was great to know that the downmarket, Bazaar, feel of Big Bazaar is intentional, designed to appeal to those Indian consumers who have an instinctive distrust of sleek branding and an yawning for value. By being crowded, noisy and a bit chaotic, Big Bazaar is actually trying to send a message that they are cheap and good value. This, in my mind, is branding at its best - projecting a consistent 'character' as opposed to a temporal 'experience'.

Airtel's branding efforts too project a consistent character, a rather traditional Indian character. Airtel adverts and schemes often are very focused on family, the key unit of Indian thinking. It sells itself sublimely through a series of adverts with the message 'some bonding [connections] are forever'. It typically communicates a 'being with you' message. In one of the most memorable advertising campaigns in India, Hutch employed a loyal dog which followed the little girl everywhere, helped in everything she did.

Airtel's adverts, on similar lines, project people-to-people bonding and project a very distinct 'connection' message. Accompanied by a beautiful tune, it invites to 'Express Yourself'.

But then, the line drops.

As in the penny drops. And, we are back to the experience thing again. The line drops. Some connections are forever, but Airtel connections are only for a minute. Their network is on the breaking point under pressure from expansion - success from their branding efforts - which undermine their branding itself. And, again, I would think it is good to have Airtel on that list, but this is taking the purely communications angle into account, and not what would be a complete perspective of branding.

Contrast that, in this case, with Titan. Watches were precious gifts in India, something you received only on special occasions. We Hindus have a ceremony of threading - somewhat akin to Bar Mitzvah - and I was thrilled to get my first watch on that day. This was a mechanical watch made by a Public Sector unit called HMT - watches that worked but was never very fashionable. HMT was what everyone used. Titan changed all that - in a few short years. In fact, I was surprised to discover today that HMT still exists. Titan - more than advertising - built the brand through presence and touchpoints. Suddenly, the fashionable watch stores - the world of Titan - sprang up in the cities, where you could browse and buy fashionable watches. So, my sister started getting watches for passing exams and when valentine day became fashionable, my valentine got watches. That changed the whole ethos of watch wearing in India and in a sense, of personal fashion.

Titan obviously captured that trend and since then, diversified into Jewellery and Eyewear. In fact, I mention eyewear as against Spectacles because of the transformation Titan Eye+ is bringing in India. They are riding the trend of personal fashion and targeted the boring, often unwanted spectacle as an element of personal statement.

In summary, Titan again, represents a character as against experience. Permanent as against temporal - something rooted in the heart of urban India and in line with the times. It is surely not a product versus service thing, as I shall certainly consign LG, whose TVs are fashionable but do not last and whose fridges will need couple of months in the workshop in their lifetime, to the experiential branding.

I do think Indian consumers want value, and such value can be delivered through creating characters through branding - a consistent expectation, buying and consuming experience. The more we focus on experience, our attention gets to the pre-buying experience, and less to what lingers on. I am sure when we judge brands and rank them, it will be good idea to look at them with the complete package, not just in terms of who had the slickest presentation.

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