Tuesday, February 09, 2010

Day 36: About My Work

I am back in England, finally. This was a gruelling trip, physically as well as emotionally. In the end, I feel somewhat good though. In a way, less confused. Work that needs to be done appears clearer now, and I seem to have a plan for my life. The search seems to have ended.

Let me talk about work today and explain why I seem to be so confused. Those who read my blog know that I go through this unending cycle of optimism and despair all the time. This is because I believe in what I am doing. I do believe that the project at hand - of adapting an international curricula for English Language training and dovetailing with various vocational training programmes for Asian markets - has game-changing potential. It fits just right with what's happening in the world, the emergence of Asian consumers as buyers and European companies as knowledge exporters etc. If I could focus on just one thing for the rest of my life, I would choose this trade all over again.

But, the market and the obviousness of the opportunity isn't everything. I should have known: I know now. There are deep-seated role expectations which are more important than pure economic logic: In fact, these psychological factors get passed on as economic logic. For example, consider this: A curriculum which is sold in bi-lingual format in Europe gets sold in a mono-lingual format in India, because Indian consumers pay less for their material. In India, we are talking about the tower of Babel itself - All India Radio does broadcast in 340 languages every day - but that sensibility is missed by the European suppliers. There seems to be a sound economic logic - paying less - but that's not all. One look at the business projections will reveal that the company in question expect to sell the highest number of materials in India, and expects to make the highest amount of profit in India. This 'economic logic' would have immediately dictated that Indian market gets the highest attention and investment in terms of localisation of materials, but the role expectations come in the way. Isn't this an European curricula that all Indian consumers should look up to, lap it up as it is and pay a little premium even, whether or not this does the job for them? White skin premium, without saying so, is being expected here. Unfortunately, that does not happen anymore.

I have come across many British companies who failed to penetrate in the Indian market. I can balance this number with a number of companies who have successfully integrated Indian market in their business. The first category is made up of, overwhelmingly, service companies which planned to sell things to Indian customers. The second category is disproportionately about companies which tapped Indian skills and talents to produce things - goods and services - to sell at home and to other Western countries. There is no stereotype or any sort of finality here. But, so far, Indian consumers seemed to be singularly unimpressed with British service offerings, despite the fact each Indian consumer, when you meet them one on one, talk about the enormous potential that such business format may have. [In fact, I said this too, above]

This apparent contradiction can be resolved by looking at a simple principle. The value in a product is actually perceived, and finally generated, by the customer. The economic value thinking, and the concepts such as Value Added Tax [VAT], make us think that the value is created by the production - and somehow, therefore, the producer can define the value proposition. This is the deep-rooted assumption at the core of modern sales techniques, where the customer is taught the value proposition by the producer's representative.

However, it is possible to see the value chain in reverse, originating, and flowing down from, the consumers' imagination and aspirations. This is indeed true for most B2B value chains, and with increasingly aware and independent consumers, the talk of solutions, as in solution selling, is invading the business literature. So, here, the consumer is in control, and everything in the value chain is not defined by the availability of the input, the raw or semi-finished material, but by the expectations of the output, where the consumer wanted to go.

Many a time, when dealing with Asian consumers, European companies get the value chain concept wrong. In their business plans, the expectations of the consumers do not seem to matter. An implicit assumption is made that the value is created by bringing the product to the market - by that act itself - and now it is the consumers sacred duty to buy it and consume it. This is the role expectation getting ahead of economic common sense. Or, possibly more correctly, this is conventional economic wisdom, invented at colonial times, distorting common sense that is needed in today's market place.

This is the source of my frustration. In my business, we have a supplier who wants to sell what they have, and they have washed their hands off the responsibility of making their products usable for the market. What's more, down this supply chain, the distributors, my employers in effect, bought this assumption wholesale and decided that it must be saleable as everyone says so, and assumed that the act of value add can happen through the simple act of bringing the product to the market. I made a mistake, some time back, of presenting a rather nuanced picture of how this can become a profitable business. My presentation included assumptions, models, investments, and innovations. Unfortunately, I was too inexperienced about the bottom line orientated western business culture that point of time; nothing but the profit figures were understood or remembered.

The most sensible thing for me would have been to accept the madness of it, and walk. I felt the urge to do so many a time. However, I have walked too many times in my life - left positions because I was frustrated - and I did not want to do so this time. I wanted to stay, and see whether I can invent a reverse value chain - where the demands of the market dictate the product adaptation through a set of indigenous agents. Simply put, once I became aware that neither the product owner nor the Master Licensee will take the responsibility of adapting the product to the market, which is the key to success in a diverse and challenging market like India, or Asia in a broad sense, I went searching for licensees in India who will take up responsibility by creating market-based business models and using, and adapting, the products we have, in the context of their own objectives. I could not do this by approaching the traditional target segment for licensing, training companies which are already in the language training business, because they would want to have none of the headache of adapting a semi-finished product, or the first time businessmen [which I tried and failed], because they want a sure-shot business model which earns them money.

This was the rationale behind my looking around for employment agencies who would want to create a downstream integration into a training operation. This made some sense, because the promise of Asian markets actually lie in tapping the unseen millions, the talent which lie there and go wasted in unrewarding work. The process of individual and social value creation gets to the crescendo when a Filipino youngster living in a small village near Cebu is connected with a global employment opportunity, or one in Kerala, India, who would have been a maid, can be trained to become a teacher. This is a business model which can realize the dreams and aspirations of the consumer, at the same time create the social churn and help push Asian societies to modernity. I thought the organized employment agencies are the right agents to take the lead here. Their business models are inherently limited by the access to talent, and a combination of English and vocational training, over a longer term, unlock a huge potential for them.

This isn't a simple job. From a salesman, I have now turned myself into a business evangelist, helping other people set up businesses. A large part of my work is unrewarded. I am creating business models and conducting market research for businesses where neither me nor my employers will have any interest, except being able to sell some of the stock that we need to sell. Back of my mind, I have a deep resentment about this unrewarded work: Not that I don't enjoy seeing these businesses develop, but it sure hurts to be left on the sidelines the moment the concepts form up. But I have now learnt to live with this, in the grey zone of irrelevance as long as the products are sold, and this shows up in my blog from time to time.

I ask: What the hell am I doing? I ask myself because I see most of my work as a terrible waste of time. This is personal though, deeply personal. This does not mean that the businesses I am helping to create will not be successful: I know they will be. I do think my employers will get what they want - returns - though they will be left out of the great opportunity of Asian markets. So shall happen to our suppliers, who will crumble under the weight of their own business practises and narrowness of vision, and will become completely irrelevant in coming five to ten years, but will earn their money - for now.

For me, it will be an interesting experience to live with. When I walk, finally, I would have created a reverse value-chain model with passive originators and active agents and consumers. This will possibly the prototype of the businesses of the future, particularly for those who will sell in Asia. The failure of Western companies to abandon their role expectations will help a set of Asian businesses to emerge and create the value-bridge for the Asian markets. This, in my mind, where I wish to be.

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