Eco System Archives - The MindWorks https://themindworks.me/category/eco-system/ By Ramabadran Gopalakrishnan Sun, 28 Apr 2024 06:09:35 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 Creating Ethical Leaders: Can ethics be taught? https://themindworks.me/2019/10/03/business-institutions-essential-for-indias-growth-2/ https://themindworks.me/2019/10/03/business-institutions-essential-for-indias-growth-2/#respond Wed, 02 Oct 2019 23:33:49 +0000 https://themindworks.me/?p=3808 30th, September 2019 FOUNDING FUEL

Ethics can be learnt, though it may be considered difficult to teach. What matters is the kind of experiences young managers are exposed to.

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30th, September 2019 FOUNDING FUEL

R. Gopalakrishnan*

Email: rgopal@themindworks.me

(*The author is a corporate advisor and Distinguished Professor of IIT Kharagpur. During his career, he was Director of Tata Sons and Vice Chairman of Hindustan Unilever. His latest book is “Doodles on leadership: experiences within and beyond Tata”, published by Rupa).

Ethics can be learnt, though it may be considered difficult to teach. What matters is the kind of experiences young managers are exposed to. B-schools and firms play a crucial role in shaping their thinking through such exposures.

This article explores the theme, Creating Ethical Leaders of Tomorrow: Why Management Education Needs to Rethink Its Role, as part of our learning project, MasterClass on TransformingSystems with Arun Maira. The project is based on Maira’s book ‘Transforming Systems: Why the World Needs a New Ethical Toolkit’. The other two themes are: A New Model of Change: Why Complex Global Problems Need Local Systems Solutions, and Building Purpose-Driven Networked Organisations: Why Their Time Has Come.

A note on the theme by Arun Maira: Over the last half century, the idea became ascendant, that not only should the business of business be only business, but countries, governments, and civil society organisations should also be run on business principles. Tools for effective business management taught in business schools and propagated by management consultancies are being applied widely. Concerns about business ethics have been growing at the same time, with egregious failures of governance in respected global companies, and with the global financial crisis caused by insufficient regulation of private financial institutions. Societal pressure is increasing on companies to care for communities and for the environment. Business management schools are being pressed to teach ethics.

A core ethical principle is to put the needs of others before one’s own. Business schools have two dilemmas. The first is, can one teach ethics in a class, or is ethics a way of thinking and being, that is imbibed from family and social norms?

The second dilemma is existential. Business schools are also businesses. A fundamental principle of good business is to produce what customers will pay for. Unless business corporations—their largest customers—are willing to pay a premium for ethical graduates who place social needs above shareholder returns (rather than those who excel at finance and marketing and producing profits for the corporation), business schools are reluctant to change themselves. With increasing societal demands for more ethical conduct of business, who will change first? Businesses or business schools?

I recall conversations with RS Kelkar, a salesman at Hindustan Lever (now Hindustan Unilever), from 52 years ago. Kelkar was to train me, an impatient and proud IIT engineer, on the art of selling. Apart from discussing the technical aspects of selling, he used tangential conversations to teach.

Question: Why is the entrance to our temples so low?

Answer: So that you are forced to bow while entering.

Question: Is human relationship more important or human intellect?

Answer: Things get done through relationships much more than through intellect.

Cut to 2019. Sitting at SP Jain Institute of Management and Research (SPJIMR), I recently chatted with MV Subbiah, patriarch of the Chennai-based Murugappa Group, about business ethics, how to preserve positive traditions, and transmit values in businesses. Subbiah posed two tangential questions.

Question: Why does a mother always place her baby on her left shoulder?

Answer: Because her heart is on the left and her heartbeat soothes the baby. Mothers speak to their babies through their hearts.

Question: Why does a mother always speak to her baby using nonsensical but endearing expressions?

Answer: Because the child learns through emotion and conversation. These positively impact the baby’s plastic brain.

As I reflect on these statements, my reductionist left brain instructs me to google and check the neurological validity of what Subbiah said. I resist that action. I allow freedom to my right brain. It is not important whether Subbiah is technically right, though he must have done his homework.

Subbiah’s message is that vibrant communication, training and sharing occurs through heartbeats, words and emotion.

This provides a fine basis to answer the question Arun Maira poses: Can one teach ethics in a classroom, or is ethics a way of thinking and being that is imbibed from family and social norms?

I would argue that managers are shaped by their world and life experiences, and early professional exposure. And there’s a crucial role for B-schools and firms in exposing them to experiences that will shape their thinking. They can “teach” ethics by following these principles:

  • Encouragement by spending time with them
  • Osmotic learning through storytelling
  • Correcting behavioural aberrations early on
  • Immersion into multiple interactive experiences
Early professional exposure

During my career, I have learnt that principles similar to the ones I mentioned above teach young professionals valuable lessons about sharing, caring and respect (which add up to ethics) during their B-school years and their early career. During this period of what I call ‘professional childhood’, the ethical brain is plastic and malleable to influences. Here are some examples that I have experienced and observed.

1. SPJIMR insists on Abhyudaya: In my association with this institute, I found that MBA students were required to complete a compulsory project, called Abhyudaya, where they mentor underprivileged children. Through the programme, urban youngsters are confronted with the constraints and challenges of underprivileged life. Humility about their own demands and gratitude for their comfort are osmotically learnt, not taught. I doubt that they enjoy the experience while it is going on, but the lessons stay with SPJIMR students all through their professional career.

2. SPJIMR ethics project: For the last couple of years, teams of MBA students have interviewed CEOs about the ethical challenges they faced and how they addressed them. The conversation is intimate and frank. Prominent business leaders like HUL’s Sanjiv Mehta, Aditya Birla Group’s D Shivakumar, Nestle India’s Suresh Narayanan and former promoter of AFL, Cyrus Guzder, take the session very seriously and devote a lot of time to prepare and interact with the students. The students record their learnings and share them through a day-long session at an auditorium. Faculty members devote the whole day to challenge and to comment, thus accelerating the learning process.

3. Rural development projects: Hindustan Lever (now HUL) pioneered the idea that every trainee should spend eight weeks living with a family in a village in Etah district, Uttar Pradesh. Every trainee goes through the experience. Today’s successful global leaders like Manvinder “Vindi” Banga, Harish Manwani and Nitin Paranjape are products of HUL’s rural development experiences.

4. TAS social service projects: During my Tata career, on and after 2002, I introduced eight weeks of social service for every trainee under TAS, the Tata group’s leadership development programme. They probably hated the experience, but later, each one would recall how enriching it was.

5. Sustainability: Tata Business Excellence Model (TBEM) is one of the business pillars of every Tata company. Ethics is not just about honesty and integrity, it is also about respect for fellow beings and the environment. Sustainability was introduced into the TBEM assessment process in the mid-2000s. Over the last decade, the training of assessors and the test of sustainability have spread awareness and commitment deep and wide within Tata companies.

6. The tone at the top: Just as children are sensitive observers of elders’ behaviour, especially with respect to truth-telling and injustice, young managers are sensitive to judging their seniors’ behaviour more than their talk. I recall how in 1968, Prakash Tandon, legendary chairman of Hindustan Lever, drove home in his second-hand Fiat car after his last retirement function concluded. It left his driver, Bahadur, flabbergasted. In Tata, the lessons on ethics were noticed widely among young company managers when the Tata group blew the whistle on itself during the unfortunate Tata Finance “illegal transactions in stocks” episode dating back to 2001.

In short, my experience is that ethics, defined broader than just integrity, can be learnt even though it may be considered difficult to teach. It is done through the four principles listed earlier. These four principles work in family upbringing as well as in MBA teaching and corporate management training.

The techniques are limitless and allow ingenuity. The commitment to do something about imparting ethics training will be even more important in the future. You know why? Because competitive advantage, which used to be about physical assets, shifted to intellectual assets some 30 years ago. And in the coming 30 years, competitive advantage will shift from intellectual assets to ethical assets. The future will belong to strongly ethical companies and management institutes. Management trainers must engage with the subject.

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Gandhi: The Great Communicator https://themindworks.me/2016/10/02/gandhi-the-great-communicator/ https://themindworks.me/2016/10/02/gandhi-the-great-communicator/#respond Sun, 02 Oct 2016 00:00:09 +0000 https://themindworks.me/?p=2817 2nd October 2016, ECONOMIC TIMES

On Gandhi’s birth anniversary and as the government designs its global communications after the horrific Uri incident, I am tempted to recall Gandhi’s response in the face of great provocation.

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2nd October 2016, ECONOMIC TIMES

On Gandhi’s birth anniversary and as the government designs its global communications after the horrific Uri incident, I am tempted to recall Gandhi’s response in the face of great provocation. In many ways, Gandhi was a journalist first, and a politician later. He ran and published weeklies which made no profit, but also made no loss. He was responsible for as many as six journals over nearly forty years. Gandhi wrote in a blunt and direct manner with no consideration for what criticism his writing may attract. The simplicity and clarity of Gandhi’s messages are exemplary as evidenced by the following extractsfrom Young Indian :

  • “The curse of foreign domination and the attendant exploitation is the just retribution meted out by God to us for our exploitation of a sixth of our race and their studied degradation in the name of religion.” (YI, 29-12-20)
  • “Hinduism has sinned in giving sanction to untouchability.” (YI, 24-2-21)
  • “We glibly charge Englishmen with insolence and haughtiness. Before we cast a stone at them, let us free ourselves from liability to reproach.” (YI, 11-5-21)

The Transvaal Ordinance, 1906
The Asiatic Ordinance of August, 1906 by the Transvaal government required every Indian resident in Transvaal to register afresh, regardless of gender or age. The certificate was to be carried at all times by the person or else there was the threat of arrest, imprisonment or expulsion. This requirement was hugely offensive to the Indians in South Africa. How did the community respond?

  1. The protestors were made aware of who designed this offensive requirement and why it was done. Lionel Curtis was the Assistant Colonial Secretary of Transvaal and his views on race were not quite the best kept secret in the region. His purpose in issuing the ordinance was simple and clear: to shut the gate against an influx of Asian population.
  2. Gandhi’s Indian Opinion denounced the ordinance as ‘abominable….it threatened to invade the sanctity of home life…..drafted with the deliberate intention of injuring the Indian community.” This was a clear and unequivocal communication of the deep offence within the Indian community. But clearly such denouncement by itself would not suffice.
  3. Gandhi then led a delegation to meet Patrick Duncan, Colonial Secretary, in Pretoria. Not unexpectedly, Mr Duncan refused to withdraw the ordinance. Indian Opinion then compared the Czarist regime in Russia, which ‘murders people openly and directly’ with the British Rule in Transvaal, which ‘kills the people by inches.’
  4. The Indian community from every nook and corner of Transvaal assembled at the Empire Theatre in Johannesburg. It was 1.30 pm in the afternoon on a Sunday. “There were 3,000 angry delegates, many of whom were urging violent resistance to the ordinance,” according to writer Fatima Meer. “He (Gandhi) took the platform and he began to speak. He cast a slow, quiet spell, and as he did so, bound Hindus, Muslims and Christians as one within its web.” Gandhi recounted that the concept of Satyagraha came to him like a bolt from the blue during this historic meeting.
  5. Since there was a need to lobby in London, Gandhi travelled to Cape Town and London. He sought Lord Elgin, Secretary of State for Colonies, seeking an appointment. Since Elgin had served in India as Viceroy, there was hope that the delegation would be heard carefully. Indeed the delegation was heard well enough for Gandhi to describe the meeting as ‘exceedingly good.’
  6. Despite Gandhi’s communications strategy, which progressively upped the ante, the Boers and Britons of Transvaal were determined to deny the elementary rights of citizenship to the coloured people.

Whatever the outcome of the Transvaal Bill, Gandhi’s communication and resistance strategy was shaped through his experiences from the opposition to the Transvaal Bill.

Shaping the movement

Intellectual and writer Nikhil Chakravartty (called NC), delivered the Gandhi Peace Foundation Lecture by comparing the Indian Freedom Struggle under Gandhi’s leadership with revolutions in history.

The French revolution in the eighteenth century was born out of the mass discontent prevailing at that time. It was led by a small band of determined revolutionaries, perhaps a few thousand people, mostly in Paris. Once the fuse was lit, the agitation spread all over France in a spontaneous upsurge. However the revolution ‘devoured its own children’ because the leadership at the core could not hold its own, nor was there any continuity in the leadership. People who led it in the beginning were soon left by the wayside or liquidated.

The Russian Revolution too was led by a small band of people, but it developed in quite a different way. It had a more organised leadership compared to the French revolution. The First World War showed up cracks in the decadent Czarist imperial system. This provided the opportunity for a determined band of communist militants, led by Lenin, to capture power ruthlessly. The Bolsheviks first captured the key points of power, and then set out to redesign the social and economic system according to what they thought was appropriate.

The Chinese Revolution in the twentieth century bore some similarities to the Russian Revolution insofar as it also had a broad sweep and was led by a communist party. Just a few thousand revolutionaries under Mao Zedong undertook the Long March, a decade-long armed sojourn through rural China, to arouse and harness the anger of the peasantry against the deposed Qing dynasty and the ineffective Kuomintang successors.

Gandhi had the challenge of mobilising large numbers of docile Indians into a sustained movement. Communicating with millions of illiterate and geographically spread-out Indians, doing so sufficiently effectively to motivate them to rise from their inertia and harnessing their energy were all hugely challenging—all this without the modern tools of internet, public relations, advertising and so on.

A remarkable feature of Gandhi’s messaging and appeal was that he reached out to all: poor and rich, urban and rural, north and south. Attracting common people in the millions into a movement for independence without resorting to arms and violence, which are usual characteristics of other revolutions, is a great testimony to his communication and motivating skills.

The Salt March in 1930 from Ahmedabad to Dandi was the second nationwide mass campaign against the Raj, the first being the Non-Co-operation Movement in 1920. The whole nation was electrified by the denouement of events. In today’s parlance, you would need an event management company to plan and execute the event, not to forget a record-keeper for the Guinness book of records!

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The experience of mapping your genome https://themindworks.me/2016/09/20/the-experience-of-mapping-your-genome/ https://themindworks.me/2016/09/20/the-experience-of-mapping-your-genome/#respond Tue, 20 Sep 2016 00:00:47 +0000 https://themindworks.me/?p=2815 20th September 2016, ECONOMIC TIMES

The Hindu belief is that we are born with an opening balance sheet of good and bad deeds, karma. We don’t know the balance sheet, so we get on with our lives. Through life’s actions, further good and bad deeds occur along with their consequences.

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20th September 2016, ECONOMIC TIMES

The Hindu belief is that we are born with an opening balance sheet of good and bad deeds, karma. We don’t know the balance sheet, so we get on with our lives. Through life’s actions, further good and bad deeds occur along with their consequences. Astrologers claim to cast our janam patri, based on the date and time of our birth and forecast our future; we are cautiously suspicious, but often succumb to astrologers as the travails of life play out!

When it comes to genetics, Nature endows us with starting genes from both our parents. As a result of environment and lifestyle, by producing proteins, our genes influence our health, which is the Nurture aspect. In technical jargon, this interplay between Nature (inherited genes) and Nurture (lifestyle) is included in the subject of epigenetics. Is there any value of knowing about our inherited genes? Will such knowledge make us slaves to genome-wallahs instead of horoscope-wallahs? Should we at all be interested?

Let me extend the metaphor of balance sheets. A financial analyst is interested in an opening balance sheet with a clear view of the subsequent cash flows. Why should health analysts not be similarly interested? In this era of technology and entrepreneurship, it turns out that our genome balance sheet can be cast! My ears pricked up when I met Anu Acharya, a Hyderabad-based entrepreneur, who has a start-up called MapMyGenome. This start-up is different from most start-ups, which are based on connecting users and vendors, for example, of cab drivers with cab seekers, food seekers with food suppliers and so on.

To try the offering, their kit, which resembled a toothbrush with a cotton swab at the end, had to be used. All I had to do was to rub the swab around by upper teeth and gums under my cheek area for the company representative to collect. Three weeks later, a copy of my “genome patri” arrived by email. I read the 70 page report but with little enlightenment. A genomic counsellor arrived and explained how to interpret the document. Bingo, I am now aware of my DNA inheritance.

Genomics is emerging and, as of now, not much understood. Of the many human genomes known to exist, apparently only one percent are thought to influence our inherited traits. The genome patri studies only the simplest of those (for the technically orientated, called SNP for single nucleotide polymorphism). Our health bears some influence of inheritance (Nature) and lots of influence of lifestyle (Nurture). Physicians and annual medical tests offer guidance on the latter. The genome patri offers clues about the former. Read together our physician could get better clues about our individual health risks and how to manage them.

Diseases arise from single genes or multiple genes. DNA reports are greatly helpful in simple gene cases like cystic fibrosis and sickle cell disease. But diseases like hypertension and cancer are related to multiple genes. Science still does not know enough to make a clear DNA report when it comes to multiple gene diseases, which are the majority of disease cases.

Soon after my genomic counsellor departed, I described my experience to a friend. Her forty year old husband had died of an unexpected heart attack although he was fit as a fiddle and very athletic. “If only his genome patri was available and we were guided to think about his inherited risk. This stuff sure can be useful,” she sighed. Maybe it was wishful thinking on her part, but if an annual medical check-up is useful, I wondered why a genome-patri should not be useful. It is obviously not a panacea for all health issues, but may offer directional hints and probabilities of disease and advise appropriate care.

Inherited risks to unborn foetus and early childhood could also be valuable to young parents. Some diseases are more inherited than others. Inherited DNA, as separate from lifestyle, accounts for maybe half of the causes of diabetes and heart ailments, but could be much higher for diseases like sickle cell.

The data so collected could also be useful to pharmaceutical companies to devise research solutions for broader national and community characteristics. For example, Indians are increasingly prone to hypertension, and India is the diabetes capital of the world. Could the data be analysed to devise lifestyle changes or specific medical treatments? Wow, this looks real smart, but for sure, it will bring along detractors and objectors!

Has anybody else done this around the world? Yes, there is a start-up called 23AndMe in Silicon Valley. The company has reached a valuation of over a billion dollars in about ten years after some jolts and surprises. However it took a long time to recruit a million customers, who bought into the idea after considering its value and cost.

A once-off ‘Genome Patri Lite’ can be purchased for Rs 15,000 as against the annual standard medical check-up fee of Rs 10,000—one cannot substitute the other. Since the annual medical check-up does not create paranoia among those tested, awareness of individual genetics also should not. Nor should DNA testing be used to type-cast or categorize people.

It may well be that Anu Acharya’s company is ahead of the curve in this technology ecosystem, but, for sure, India and Indians need this science in an applied form.

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Success of Digital India will bring e-waste https://themindworks.me/2016/08/28/success-of-digital-india-will-bring-e-waste/ https://themindworks.me/2016/08/28/success-of-digital-india-will-bring-e-waste/#respond Sun, 28 Aug 2016 00:00:24 +0000 https://themindworks.me/?p=2809 28th August 2016, ECONOMIC TIMES

The World Economic Forum places India at number 91 in readiness to transform intoa digitalised economy. Notwithstanding this poor ranking, the government’s Digital India idea is futuristic and compelling. The plan comprises three components: creation of a digital infrastructure, delivering services digitally and digital literacy.

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28th August 2016, ECONOMIC TIMES

The World Economic Forum places India at number 91 in readiness to transform intoa digitalised economy. Notwithstanding this poor ranking, the government’s Digital India idea is futuristic and compelling. The plan comprises three components: creation of a digital infrastructure, delivering services digitally and digital literacy. 250,000 gram panchayats will be connected with an optic fibre network and every village in the country will be covered through mobile connectivity. Mary Meeker, a partner at Kleiner Perkins VC fund, forecasts that India is set to become the world’s second largest smartphone market in 2017. If all this can be made to work, there is no doubt that India will be transformed. Every citizen would fervently hope for success with our digital aspirations.

With every vision the law of unintended consequences kicks in. When Thomas Edison built the Edison Electric Light Station with his 125-hp steam engine, he could not imagine its future environmental impact. When Henry Ford desired to make a personal car accessible to every American, it was difficult for him to visualize the pollution aspects of his ambition. Now a whole century later, the power and auto industries are completely seized of the issues. Digitizing carries the issue of e-waste.

This is particularly ominous for India for two reasons: firstly, our national record of surveillance of laws is patchy, as evidenced by infarctions of public hygiene, industrial pollution and haphazard urbanization; secondly, because India is set to adopt digitization more rapidly than many other nations in the coming two decades, our growth of e-waste is likely to top the world charts. Therefore Digital India must have a component to limit e-waste. How big is the issue of e-waste?

What is e-waste and how much will India generate?

E-waste comprises of wastes generated from used electronic devices and household appliances which are not fit for their original intended use and are destined for recovery, recycling or disposal. Such wastes encompasses wide range of electrical and electronic devices such as computers, hand held cellular phones, personal stereos, including large household appliances such as refrigerators, air conditioners etc. E-wastes contain over 1000 different substances many of which are toxic and potentially hazardous to environment and human health, if these are not handled in an environmentally sound manner. Here are some facts and extrapolations :

  1. The world already produces e-waste equivalent to seven times the size of the Giza pyramid, roughly 42 million metric tons in just 2014, as per United Nations University.
  2. India generated 1.7 million tonnes of e-waste in 2014 which is roughly 1.3 kg e-waste per capita. If penetration of electronics and electrical products in India by 2030 have to grow even to today’s average world capita which leads to e-waste of 6 kg per capita, the absolute e-waste generation for India will grow five times the current level to 9 million tons in 2030!
  3. Another way of estimation of e-waste generation for 2030 is taking into consideration US EPA’s estimation of 5-10% global increase in the generation of e-waste each year. Given the low penetration of devices in India, our growth may well be 15% on the smaller base, approximately 15 million tons e-waste could be generated by 2030—this is scary.

Environmental and health impact of e-waste
Developing countries with rapidly growing economies handle e-waste from developed countries, and from their own internal consumers. Though the Indian Ministry of Environment and Forest has made import of e-waste illegal, a fair amount of e-waste is still illegally imported into India. Currently, majority of e-waste handled in India is through informal sector using rudimentary practices. The informal sector’s recycling practices magnify health risks. For example, primary and secondary exposure to toxic metals, such as lead, results mainly from open-air burning used to retrieve valuable components such as gold. Combustion from burning e-waste creates fine particulate matter, which is linked to pulmonary and cardiovascular disease.

While the health implications of e-waste are difficult to isolate due to the informal working conditions, poverty, and poor sanitation, several studies1

in Guiyu, a city in south-eastern China, offer insight. Guiyu is known as the largest e-waste recycling site in the world, and the city’s resident’s exhibit substantial digestive, neurological, respiratory, and bone problems. For example, 80 percent of Guiyu’s children experience respiratory ailments, and are especially at risk of lead poisoning. Residents of Guiyu are not the only ones at risk. These chemicals are not biodegradable—they persist in the environment for long periods of time, increasing exposure risk.

As per a WHO study, children are especially vulnerable to the health risks that may result from e-waste exposure and, therefore, need more specific protection. As they are still growing, children’s intake of air, water and food in proportion to their weight is significantly increased compared to adults, – and with that, the risk of hazardous chemical absorption. In India, “about 4-5 lakh children between the age group of 10- 15 are observed to be engaged in various e-waste activities, without adequate protection and safeguards in various yards and recycling workshops”, said D. S. Rawat, Secretary General ASSOCHAM while publishing an ASSOCHAM-cKinetics 2016 study on e- waste.

Further there are data security implications. I froze while listening to an e-waste operator, who downloaded confidential customer data from a pen drive discarded by a top I.T. company. Imagine Home Ministry or Army e-waste in the hands of certain kinds of state enemies!

What should India do?
On the positive side e-waste contains many valuable materials like rare metals, which are well worth recovering, provided one uses green technologies. Just like green-power entered electricity generation as a business, e-waste disposal can be a business: this has been demonstrated by companies like Attero. The threat of generating e-waste should not diminish our national ambitions in digitizing the country and e- enabling the citizens.

Brett H. Robinson (2009)” E-waste: An assessment of global production and environmental impacts, Science of the Total Environment 408 (2009) 183–191

Along with digitalization plans, our nation needs a matching e-waste plan to contain the e-mess, an advance type of planning rather than a post-facto approach. The first big step is to recognize that the e- waste monster is being created right now.

(The author acknowledges the research and editorial support of Ms Alka Upadhyay, Tata Sons Limited)

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India Experiences Zeigarnik Effect https://themindworks.me/2016/07/16/india-experiences-zeigarnik-effect/ https://themindworks.me/2016/07/16/india-experiences-zeigarnik-effect/#respond Sat, 16 Jul 2016 00:00:09 +0000 https://themindworks.me/?p=2807 16th July 2016, ECONOMIC TIMES

Participating in a senior leadership seminar in 1989 on ‘Quality Convenience Foods’ at Four Acres, Kingston-upon-Thames, along with twenty four Unilever managers, I sliced and diced reams and reams of data over an exciting fortnight.

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16th July 2016, ECONOMIC TIMES

Participating in a senior leadership seminar in 1989 on ‘Quality Convenience Foods’ at Four Acres, Kingston-upon-Thames, along with twenty four Unilever managers, I sliced and diced reams and reams of data over an exciting fortnight. The wellness market included natural, chemicals-free, organic, traditional and similar attributes in food, and personal care products. Mentored by Unilever Director Iain Anderson, we finally presented our judgments for those times: natural, organic and health foods were a fringe market, selling at premium prices to niche consumers; this niche will develop towards mainstream, but only in an evolutionarily gradual way.

Today twenty seven years later, I am fascinated to learn that the wellness market is indeed mainstream. The Economist (9th July 2016) ran a lead business story on how FMCG majors are struggling with low growth compared to emerging health-orientated companies, who have collectively snatched as much as three percentage points of market share from the biggies. Kiehl’s Cosmetics (based on herbals and an apothecary tradition) is an 1851 New York start-up, but after its acquisition by L’Oreal in 2000, its sales have quintupled. The Global Wellness Institute Study 2015 (www.globalwellnessinstitute.org) has estimated that wellness is one of the world’s largest and fastest-growing industries. The research on their behalf by S.R.I International states that the wellness market size is three times the size of the pharmaceutical industry (USD 3.4 trillion versus 1 trillion). Recently Nestle announced the appointment of a new global CEO from outside rather than an insider, the more traditional choice of large companies. Reports state that Nestle must be “looking at a world in which packaged and processed foods can help treat or alleviate health problems”. French food major Danone paid $ 12.7 billion for a 1991 start-up company, named WhiteWave Foods. Something significant is happening in the world out there, truly mind blowing! What about India?

The Indian FMCG market is estimated at about $45 billion (Rs 300, 000 crores) of which the wellness slice has been negligible. Evidence suggests that Indian wellness also is rapidly transitioning towards mainstream. The Madhya Pradesh government has announced a Department of Happiness—based on yoga, and ayurveda! The Indian wellness-resurgence is led by our traditional concepts: yoga (relieves impurity of mind) and ayurveda (relieves impurity of body).

My instinct is that the trend is powered by Indians experiencing a Zeigarnik effect with respect to yoga, ayurveda and indigenous solutions.

What is the Zeigarnik effect?
Bluma Wolfnova Zeigarnik was a Soviet psychologist. In her 1927 research paper, she gave the world what psychologists now refer by her name: that people remember uncompleted or interrupted tasks better than completed tasks. The trigger for her research was her professor’s observation that waiters in restaurants remember unpaid bills better than fully paid bills. Yoga and ayurveda have been’ interrupted items’ for Indians for centuries. How so?

Indian tradition celebrates the confluence of physical, mental and spiritual harmony as a totality. Around 200 BC, Sri Patanjali enunciated the Yoga Sutras, which embraced what modern day writers refer to as yoga, ayurveda and dhyaana. This intellectual property has survived in a word-of-mouth, subcutaneous form for centuries. More recently the attribute of good male physique got a fillip when in 1905 German body builder Eugene Sandow visited Kolkata; his visit triggered a cult of the muscular and sculpted male body. When I was growing up in Kolkata, any boy interested in body-building was greeted with the remark, “Kee, Sandow hobey naa kee?” For long I thought Sandow was a Bengali word! Indeed the Bengalis took to body building in such a big way that the only Indians to have won the Mr Universe title are two Bengalis– Monotosh Roy and Manohar Aich!

In the early 1900s, a young man named Mukunda Lal Ghosh graduated from Scottish Church College, Kolkata, and chose the career of spreading Kriya Yoga. From the age of 27, he lived in California after representing India in the International Congress of Religious Liberals. He became famous as Paramahansa Yogananda, and authored the celebrated book, “The autobiography of a yogi”. Yoga continued its strong global advance when in 1966, BKS Iyengar, the purist, initiated an eponymous violinist, Yehudi Menuhin into yoga.

Within India, for centuries, yoga and ayurveda lurked around as the activity of indigenous vaidyas, somewhat second fiddle to an upcoming western medicine system. Ayurvedic pharmacies of Kerala have been flagbearers in institutionalising traditional knowledge, particularly the Kottakkal pharmacy pioneered by PS Warrier. Companies like Dabur, Zandu, and Charak started making and marketing their products from the early 1900s and grew successfully as niche players. Hatha yoga exponent and Ms Indira Gandhi’s yoga teacher, Dhirendra Brahmachari, must get the credit for democratizing yoga among modern Indians through his weekly yoga classes on Doordarshan during the 1970s. Twenty years ago the government created the department of Indian Systems of Medicine, which got reincarnated in 2014, as a full-fledged Ministry with a cabinet rank minister.

The role of the media in this awakening must also be noted. Bennett Coleman’s initiative of publishing The Speaking Tree has certainly brought these traditional Indian thoughts and practices into lay consciousness. This publication began in May 1996 as an edit page column. By early 2010 it had developed into an eight page broadsheet published every Sunday. For the last two years, 21st June is formally recognised as International yoga day, and this has further spot-lighted yoga within India and also internationally.

This history of yoga and ayurveda is important to understand; yoga, ayurveda and meditation have had a long-standing but unfulfilled existence in the subcutaneous memory of Indians. After decades of being a niche market (proprietary medicines, honey, and personal products)—the size of the Indian products market is estimated to be Rs 5000 crores–these products have burst forth into the collective consciousness of the Indian consumer. The share of natural and ayurvedic products in the segment markets has started to rise. Among investment bankers, ayurvedic brands are beginning to be hot property for sale and purchase, fetching 10-15 times EBIDTA earnings, as illustrated by the transactions of Kesh King and Indulekha. The Zeigarnik effect has started to manifest.

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Prodromal signals do provoke deep thought https://themindworks.me/2016/06/12/prodromal-signals-do-provoke-deep-thought/ https://themindworks.me/2016/06/12/prodromal-signals-do-provoke-deep-thought/#respond Sun, 12 Jun 2016 00:00:23 +0000 https://themindworks.me/?p=2805 12th Jun 2016, ECONOMIC TIMES

By R Gopalakrishnan

Financial crises of nations and companies produce prodromal signals, which means advance warnings. The challenge is around how you interpret and respond to those prodromal signals.

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12th Jun 2016, ECONOMIC TIMES

By R Gopalakrishnan

Financial crises of nations and companies produce prodromal signals, which means advance warnings. The challenge is around how you interpret and respond to those prodromal signals. If you worry a lot, you are thought to be an alarmist. If you are blasé, you are thought to be not quite a thinking citizen. To think deeply and to act sensibly in the face of prodromal signals, leaders have to act with enough despatch with a sense of positive stress but not with overpowering neurosis. Trust is an important currency in responding to prodromal signals and leaders must earn the trust of their people.

In the business and financial environment around us, we sense multiple prodromal signals. The negative signals arise, no doubt, from the cumulative effect of several decades; some signals are deeply disturbing, but could things deteriorate rapidly? Even if they can, it is not easy to admit it and respond in panic. Without doubt the government is facing up to realities in a measured and thoughtful manner, but is there enough trust, collaboration and urgency? These are vexing questions.

I understand economic and financial matters only as an experienced generalist. I am intrigued by the plethora and texture of bewildering statements about the banking and financial sector. What are these signals?

  1. In the lifting tide of 2003-2009, Indian real estate valuations and the business of lending both ballooned. Expansion of lending was predicated on an expected scintillating growth rate. Subsequent events have been mellow. As a result, gross NPAs of listed banks are reported to have doubled within the last one year exacerbated by the belated recognition of bad loans by the banks. India’s NPAs are now 11% of GDP, amounting to USD 170 billion. Economist Dr Haseeb Drabu, now Finance Minister of J&K, in his recent budget speech, went so far as to use the C-word in his speech, “I have corrected the budget numbers because otherwise, the State finances could head into a crisis” (italics are mine).
  2. Nature demonstrates that animals with fangs do periodically bare them. Other animals should know about the fangs, or else of what use are they? Through the Kingfisher episode, our PSBs demonstrated that they do have fangs. Here I don’t comment on the merits or facts of the Kingfisher case but, for sure, the PSBs went after the bloke, showing that, given the right circumstances, they can bare their fangs. Why don’t they professionally bare their fangs when their business requires them to? Why do they need someone to tell them to do so? The behaviour by
    PSB boards and management is a poor example of corporate governance–they want “protection from CAG/CBI”. Bankers may well need some assurance, but the issue is that the CBI/CAG etc have been so badly misused by successive governments that trust has been lost by even bank chairmen. Think about the common citizen.
  3. RBI Governor’s statements must be taken seriously. On one day, he warned the banks to face up to reality and to provide for their mounting NPAs. Soon after he advised banks not to become excessively risk-averse: lending should not slow down to the point of stifling growth. Shaken by these messages, one after the other, the banks made provisions in a ‘quarter horribilis’. In Q4 15-16, two thousand companies, excluding financial and oil sectors, showed a 20% growth in profits, but add in four hundred financial and oil companies, the profit growth is minus 20%! The “true and fair” financial status of PSBs is a national enigma; there is a more than a decent chance that muck lurks somewhere.
  4. Banking expert, KV Kamath, made what he probably intended as a calming speech; what I understood of his view is that this level of NPAs is part of a growing economy and should not cause alarm! His message produced butterflies in my stomach. I was bothered a bit like a daughter would be, by her elder’s remark that getting stressed about a recalcitrant, adolescent progeny is “unnecessary” because it is all part of growing up. The statement is partly true, but telling the parent not to stress is not helpful!
  5. MoS Jayant Sinha says, “We (the banks) have gone through governance and management reforms, we have gone through asset quality review, and now we are in the consolidation phase, to ensure that at the end of this phase, we have a set of competitive banks.” How long will this consolidation phase be, 3 years, 10 years? Chris Wood, the CLSA managing director, then writes a paper expressing his hope that by April 2017, the “PSBs will be recapitalised so that banks are cleaned.” How dirty are the banks anyway? Who can say how much is needed to sensibly recapitalise our PSBs? Those who make a reasoned estimate, as happened after the recent Union Budget, are
    immediately talked down.
  6. Critics quote the sore example of Air India, which reportedly has borrowings of Rs 30,000 crores from banks with no plausible way to repay. Why is no bank baring its fangs at Air India? Only because the nation stands behind it? Another example relates to the meandering, desultory journey of fertiliser subsidies through issuance of off-balance sheet bonds, inadequate budgetary provisioning and general pain to the industry and farmers.

In the next part of this two piece article, I propose to review the prodromal signals from the power sector.

In the first part published last week, I had reviewed the prodromal signals in the banking and financial sectors. In this second part, I write about the power sector.

In November last year, the Union Cabinet approved an imaginative UDAY scheme (Ujwal DISCOM Assurance Yojana) to resolve the electricity discoms mess. It has an operational improvement part, and a financial engineering part. All citizens must accept UDAY as a scheme worth the try, and they must pray to the Lord that sense will prevail among elected State governments. I have no quarrel with the UDAY scheme in this respect of pushing State discoms to improve operational efficiency.

The crisis in the power sector is the product of years of muddling and obfuscating by successive governments, both at the State and the Centre. To cut through the muddle, an important sine qua non is that the Centre has to find a way to work collaboratively with the States—as is true for agriculture, GST and many other next generation reforms. The fractious politics of State-Centre relations is not helpful in focussed and speedy correction of the lectricity situation. The absence of collaboration with the States is a definite risk factor.

The accounts of the three PPP electricity distribution companies (discoms) in Delhi reveal ‘regulatory assets’ of a staggering Rs 20,000 crores as of end of March 2016. Put simply, 10 million electricity users in Delhi owe the discoms Rs 20,000 per capita! The Delhi electricity consumers are unlikely to be even aware of their debt, or that they are paying interest on that debt. In the case of the Delhi discoms, the regulator has assured that the debt will be paid by consumers. On that basis, auditors have certified the accounts because anyway there is no way to confirm that the 10 million consumers will pay. This situation has arisen because of the nexus between the Delhi Government and regulator, who failed to award cost-reflective tariffs. The same picture exists in several States. Besides the staggering losses, the ‘regulatory assets’ in all discoms of the country is over Rs 75,000 Crores.

What is this electricity mess and how did we get there? The discoms are, for the large part, companies under the Companies Act. They are supposed to be governed and to behave similarly to any Private Sector Company (actually they should behave in an exemplary manner to set an example to private sector). For many decades, State governments gave away electricity freebies to secure political patronage, the discoms obediently picked up the bill on their balance sheet, and banks subserviently financed the discoms. As of March 2015, the aggregated accumulated losses of the discoms are, hold your breath, Rs 3.8 lakh crores and their outstanding debt is Rs 4.3 lakh crores, approximately USD 65 billion! This is apart from the ‘regulatory assets’ of another Rs 75,000 Crores, approximately USD 11 billion!

Who is responsible and accountable for this mess? The Centre says it is the States, politicians blame industrialists, and they all blame bureaucrats. Attempts were made at least twice in the last fifteen years to devise a remedial scheme; the schemes devised were good as schemes go, but the State governments were busy doing what Milton Friedman derisively termed, “spending other people’s money on other people.” The discom finances got worse because States were undisciplined.

It is also important to note that the politics of the Centre-State relationship becomes very important. UDAY assumes that States will behave better by improving their operations. Bengal and Tamilnadu have not yet signed up for UDAY. As I write, sitting in Tamilnadu, I face unscheduled power cuts four times a day, while the State government has declared that it has surplus power to export to other States! Further, right after the recent elections, the CM of Tamilnadu did the opposite of what UDAY demands—she decided to give free electricity to certain sections (as also waiver of farm loans by cooperative banks).

The official presentation makes no mention whatsoever of the consequences if the States fail to meet targets. What is Plan B for UDAY if the States don’t deliver as their past track record indicates? What are its financial implications since both State and Central deficits will be affected? Are we postponing facing the reality?

It is also a concern as to how the accounting is proposed to be done in UDAY, requiring these loans to be tucked away in the State’s finances, hidden without actually hiding them; they are behind the curtain, and if you know how to part the curtain, they are visible. Would it have been better to account for things as they are? If the facts show up in visible ratios like State/Centre fiscal deficit, all concerned might behave more responsibly. There is also an element of ever-greening the loans by passing the hat from PSBs to PSUs to give the optical effect of there being no NPA.

Imagine if a corporate group came up with such a bond scheme–let us call it CUSY standing for Company Udhaar Sadabahaar Yojana. In essence, the beleaguered company’s parent would issue bonds which are supposed to be bought back by the banks which have given the loans. Technically the answer would be ‘yes’ if the parent company had a solid balance sheet! But does it not stretch credibility?

Much of the financial engineering of UDAY is possible because of the national balance sheet, but is it a bit stretched? The government has a difficult problem to solve, and they are surely trying their best. However the prodromal signals of politics stretching the boundaries of economics and financial planning are deeply worrisome.

The issue may also be one of credibility of government, whether UPA 2 or NDA. Pratap Bhanu Mehta has averred that “the dominant government culture is to spin, so that even truths begin to get doubted.” While governments do have to showcase their achievements, beyond a level, the spin is so intense that the credibility of the government gets eroded. Hopefully we are not at that point with this government.

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In future, more manufacturing may deliver less jobs https://themindworks.me/2016/06/05/in-future-more-manufacturing-may-deliver-less-jobs/ https://themindworks.me/2016/06/05/in-future-more-manufacturing-may-deliver-less-jobs/#respond Sun, 05 Jun 2016 00:00:25 +0000 https://themindworks.me/?p=2803 5th Jun 2016, ECONOMIC TIMES

By R Gopalakrishnan

Make in India (MiI) was announced on 25th September, 2014 in the hope that more manufacturing means more jobs. Make in China 2025 (MiC25) was announced on 20th May, 2015 in the hope that more manufacturing can be done with less jobs! Silicon Valley’s controversial Marc Andreesen says, “Manufacturing is a government-subsidised jobs programme.”

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5th Jun 2016, ECONOMIC TIMES

By R Gopalakrishnan

Make in India (MiI) was announced on 25th September, 2014 in the hope that more manufacturing means more jobs. Make in China 2025 (MiC25) was announced on 20th May, 2015 in the hope that more manufacturing can be done with less jobs! Silicon Valley’s controversial Marc Andreesen says, “Manufacturing is a government-subsidised jobs programme.”

What is happening to manufacturing/making? What are the implications for India?

Gideon Rose (editor of Foreign Affairs) haunted me with his view on manufacturing, “Something is clearly happening here, but we don’t know what it means. And by the time we do, we may well have been replaced by algorithms.” Seventy percent of the world’s robots are sold in four countries—US, Germany, Japan, and, hold your breath, China! China’s Midea is making a USD 5 billion bid to buy Kuka, Germany’s leading robotics company. In The future of technology and jobs, Dr R.A. Mashelkar acknowledges that the new type of manufacturing will destroy jobs, but hopes for new ones somehow or the other.

The recent China Global Investment-Shenyang Euromoney Conference gave me much learning from my three knowledgeable co-panellists: one from China’s Robotics Company, one from a Sensor Company and another, the Vice Chairman of the Sino-German Cooperation: first, the back story.

In 2011 the Germans first contemplated Industrie vier punkt null (Industry 4.0). Stalwarts Siegfried Dais and Henning Kagermann studied the subject with experts and reported back at the Hanover Fair 2013. Promptly Chancellor Angela Merkel adopted it as a national program–intelligent manufacturing, which means applying the multiple tools of information technology to production. Global interest in Industry 4.0 zoomed to stratospheric heights, thanks to the commentaries of consulting companies, and the eponymous Klaus Schwab report at Davos. Why 4.0? 1.0 was mechanization of production using steam, 2.0 was mass production using electricity, and 3.0 used ‘simple’ digitization. ‘Complex’ digitization facilitated Industry 4.0.

The Chinese reaction was swift; Ministry of Industries and Information Technology (MIIT) breathtakingly announced, “Upgrading of China’s manufacturing industry has become urgent as its status as the world’s factory is undermined by developing countries, and it seeks a new engine of growth amid a slowing economy.” That is how the Chinese cabinet adopted MiC25. Gosh, if it is urgent for China, what about India?

All over the world, the impact of Industry 4.0 is being increasingly felt by people, business, and government.

For sure people will get impacted because, for the first time, high growth does not equal more manufacturing jobs. China is driving its Make in China 2025 agenda because its labour is becoming too costly. The middle of the labour market is being hollowed out; low wage-low skill and high skill-high wage at the two ends survive. India has a window of ten years for labour-arbitrage based manufacturing, but must plan for something thereafter. India’s manufacturing owes much to the middle of the skill-wage map. Industry 4.0 can dehumanize people.

Business has been impacted for some years now. The supply chain and productivity efficiencies leapt out during our visit to BMW Brilliance’s world-class Shenyang car factory. Due to deployment of 85% automation in the body shop through 675 robots, hardly any workers were visible on the shop floor. Apart from producing the premium BMW cars, this JV has produced, ground-up, the first zero emission, electric car, branded as Zinoro.

Government is being impacted by smart manufacturing. From phase 2.0, governments got used to solving problems in a linear, top-down manner. The Shenyang government is a minority shareholder in the JV, and it helps by avoiding interfering. “Now governments have to adapt by learning how to collaborate with business and society,” explained one Shenyang official. Here is a human interest example of government reorienting to collaborate and support.

Narendra Chavan was appointed as CEO of NTACO, the Nanjing subsidiary of Tata Auto-Components. Soon after Chavan arrived in the Nanjing factory, the HR head learnt that the one passenger was suspected of having bird flu as detected by the sensor gun. The authorities needed to quarantine for a whole week all passengers from the three rows in front as well as back of the suspect’s seat. NTACO’s attempted to quarantine Chavan in the company-booked hotel was rejected; Chavan went to their unpretentious hotel being used for quarantine–a sparse room with a small TV, clean bed and attached toilet. They allowed some magazines, cold drinks and food from NTACO but no visitors. Chavan was required to wear a face mask, especially while emerging from his room for food.

During the seven days of doctor visits, temperature recording and physical checks, Chavan contemplated the scenario if an expatriate faced a similar situation back home. However the attitude of the authorities was exemplary. After a whole week, Chavan found that of those quarantined, most were foreigners. Even after his return to NTACO, government officials called on him to show empathy. Local officials arranged a dinner next day. Chavan felt that the government officials connected with the companies, they communicated well and were very sensitive. To Chavan such humanism has to be part of any “Make in” program.

India can attract through Make in India some low-cost manufacturing for maybe ten years. Importantly India is uniquely positioned to leverage the global phenomenon of 4.0 because India has middle order skills in both manufacturing and software. 4.0 can be to manufacturing what Y2K was to business software.

DIPP, Niti Aayog, NASSCOM and CII should recommend a policy to the government, which can consider an India-Germany 4.0 initiative between Chancellor Merkel and PM Modi.

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Effective leaders need moral as well as legal authority https://themindworks.me/2016/04/24/effective-leaders-need-moral-as-well-as-legal-authority/ https://themindworks.me/2016/04/24/effective-leaders-need-moral-as-well-as-legal-authority/#respond Sun, 24 Apr 2016 00:00:34 +0000 https://themindworks.me/?p=2801 24th April 2016, ECONOMIC TIMES

An effective legal system can function if it is built on a strong moral foundation in society. The civil engineering principle is relevant—poor foundation, wobbly skyscraper!

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(Promoting products that don’t deliver is a waste of money because advertising has to be honest, so wrote Rosser Reeves. Does this apply to public services?).

24th April 2016, ECONOMIC TIMES

An effective legal system can function if it is built on a strong moral foundation in society. The civil engineering principle is relevant—poor foundation, wobbly skyscraper!

When issues like Bofors, Commonwealth Games, 2G, and coal mines arise, there is vehement denial by the people concerned. A long wait follows as the law courts churn and twist through lies and facts. When the Panama leaks were reported, South Asians denied everything, whereas the PMs of Iceland and Britain accepted the facts and explained. In India when insider trading in shares is suspected, there is neither acceptance nor speedy resolution by the judicial process. A rare corporate leader, who denied the allegation, voluntarily stepped down as Chairman, and gracefully returned, was Mr. Vellayan of Murugappa Group! I wish his moral conduct had attracted wider kudos.

Leaders should not and cannot lead by resorting only to the courts of law. The court of public opinion matters; it has a pervasive influence on perception. This reality should influence the behaviour of all leaders–companies, institutions and nations. Public opinion bestows the moral authority to lead because conduct and intent are perceived to be of high standard.

In 2001 Goldman Sachs global economist Jim O’Neill popularised the acronym BRIC. Of the four countries, currently India stands apart. I cannot help recalling what Allama Iqbal wrote of Hindustan in 1904, “Yunan- o-Misr-o-Roma sab mit gaye jahan se, Ab tak magar hai baaki naam-o-nishaan hamara.” From an unassailable position of economic dynamism and leadership, Brazil is enmeshed in a web of intrigue and allegedly sordid corruption. Russia could have been a liberal democracy, but has emerged as a Kafkaesque kleptocracy. Sure-footed and amazing China is now perceived as a wobbly entity. Despite its numerous internal contradictions, India continues to grow economically, and to attempt to be liberal. India is a candle in a dark global economy.

Public perception demands more than self-esteem. Public perception is influenced by the four estates of democracy—the results achieved by the executive, the behaviour of legislators, the performance of the legal system and the projection of matters by the media. Our system seems to rely excessively on the media and the judiciary.

Particularly with respect to the judiciary, all sorts of matters are referred to the already over-burdened courts: Bollywood squabbles over personal rivalries, which words affirm nationalism, whether women can enter a place of worship, cricket administrators’ egoistic forays of fancy and power, and businessmen’s larger-than-life personal activities. If the courts do decide (as in the case of IPL matches), critics say there is judicial over-reach. If they don’t (as in the LGBT issue), then the courts are accused of not stretching themselves. India has only ten percent of the per capita judge strength compared to OECD countries. The delivery of justice in the country is in urgent need of being bolstered, but we don’t have to burden the courts.

Public credulity is offended when a person in power behaves without the moral authority of leadership. For example: a lavish wedding in a poor area, a sports event amidst drought; a union minister offering an offensive expansion of the three letters that describe an opposition party (which elicits reciprocally offensive epithets); an uncouth response, “Yes, I did; and I will do so a thousand times again” when the Election Commission enquires from a chief minister whether a promise was made during campaigning.

If people without moral authority expect to lead their members effectively, they are no leaders. The challenge is not only within our companies, political parties and governments but also within clubs, gymkhanas, building societies and NGOs.

The onus rests very much on the ‘ruler’ to reach out to the ‘opposition’, thus “dignifying the political morality of the rivals with their attention” (The key to political persuasion, NYT). The collaborative leader needs to step back from the war posture of politics and be vulnerable. The methods were so well exemplified by Mahatma Gandhi, Nelson Mandela and Patricio Aylwin (Chile). As commentator Roger Cohen pointed out, “Liberalism demands acceptance of our human differences and the ability to mediate them through democratic institutions….Liberalism may appear to be feeble as a battle cry, but nothing is more important for human dignity and decency.” As I close, I recount an incident from history.

After the zenith of Aurangzeb, the Mughal throne was occupied by a failing Muhammad Shah from 1719 until 1747. According to historian Sir Jadunath Sarkar, “although he was a mere cypher in respect of his public duties, there were some redeeming features in his private character.” A soldier, whose job was to guard the imperial jewel house, stole a valuable necklace and was arraigned before the emperor. In self- defence, the soldier stated that his salary had not been paid for twelve months, and regrettably he had no choice but to steal–from the place where his salary was locked up rather than elsewhere! A shamed Muhammad Shah paid the arrears and retained the guard.

What would have happened if such a situation arose today?

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Under-delivery kills private goods as well as public services https://themindworks.me/2016/03/27/under-delivery-kills-private-goods-as-well-as-public-services/ https://themindworks.me/2016/03/27/under-delivery-kills-private-goods-as-well-as-public-services/#respond Sun, 27 Mar 2016 00:00:09 +0000 https://themindworks.me/?p=2799 27th March 2016, ECONOMIC TIMES

General expectations from public services is low. Hence poor service delivery can pass muster by meeting the low expectations.

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(Promoting products that don’t deliver is a waste of money because advertising has to be honest, so wrote Rosser Reeves. Does this apply to public services?).

27th March 2016, ECONOMIC TIMES

General expectations from public services is low. Hence poor service delivery can pass muster by meeting the low expectations. Sometimes a hype is created, for example, when a government wants to signal transformative change, to tom-tom about its performance or during elections. Within a Lakshman Rekha, some hype is acceptable.

In 1961, American advertising practitioner and chairman of Ted Bates, Rosser Reeves, wrote a seminal book entitled Reality in Advertising. His message was that advertising has to be honest by delivery being commensurate with the promise. What I call the ‘Rosser Reeves trap’ states that product promise which is far in excess of product delivery accelerates downfall.

Does under-delivery compared to promise work differently in the case of monopolistic public services than with competitive company products? Does the Rosser Reeves trap apply to public services? I feel that the Rosser Reeves trap threatens everything that makes claims.

The wonderful Aadhar initiative started with excessive hype seven years ago, but was sensibly tempered soon after. Recall the disastrous election results after an excellent ‘Shining India’ advertising campaign because of public perception that the claimed promise had crossed the Lakshman Rekha. Contrast this with the recent Bangladesh foreign policy initiative of 2015, the green revolution of 1970s or the economic liberalization of 1991—great transformations with understated claims in the initial stages.

The Make in India (MII) campaign has been spectacular. The apt logo by V. Sunil of Wieden + Kennedy India, the scintillating advertising campaign, the breath-taking scale of the Bandra Kurla exhibition, the diversity of the foreign delegates, all of these must count as highly savvy. But in the chambers of commerce, the pink papers and on TV business channels, the question is cautiously debated: have things on the ground really changed?

The fact is that the sclerosis of doing business in India has accumulated over decades. The ground realities surrounding MII and many other initiatives do face the Rosser Reeves trap. Not surprisingly everybody has a view on the subject but whatever the truth, it would be foolish to assume that the Rosser Reeves trap is inapplicable.

Business folks are disturbed by the simultaneous negative actions–unexpected tax demands on foreign companies, price control on technology-led GM seeds and a ban on combination drugs. Business folks are enthused by the government decision to use the PAN number as a single enterprise number applicable across multiple laws and authorities to do business more easily. But hang on, the common enterprise number is what Aadhar was supposed to do for individuals? After seven years of wonderful Aadhar, here is what I experienced to effect an address change.

I was naïve to believe that with my Aadhar card, an address change in my case would be fast and speedy. I have had to submit a large number of self-attested copies of sensitive documents to multiple authorities. Here is the gist of my experience.

The Aadhar folks verified my fingerprint and iris, lo and behold, I got the Aadhar card electronically in a few weeks. Fantastic. I was irritated by every other authority seeking ‘an original’ of Aadhar because the electronic print-out looked like a photocopy to them!

BEST wanted the purchase contract of my flat which is my private document! After making enquiries, BEST implemented the new address on their bills. The ration authorities scrutinised the recently changed electricity bill, did a physical check, and changed the address on the ration card. The RTO (driving license) sought authenticated copies of many documents and mailed me a new license only after I demonstrated logistical Terpsichore by being at home to receive the postman with my license.

Over seven months, I achieved success with BEST, MTNL, Income Tax PAN, ration card, gas cylinder and Aadhar by providing each authority with self-attested copies of all the ‘already address-changed’ documents. God knows how many authenticated original documents of mine are filed in these departments. I worry about the implications for privacy and data security!

Then came my passport, banks, mutual funds and depository. The core passport processes are with the Regional Passport Office and Police, requiring one visit to RPO and multiple visits to the Police Station and home-waits for the visit of the postman! The banks wanted a KYC and the MFs wanted me to have a CAN. When all this was done, the MFs texted me a ‘jhatka’ by asking me about FATCA, whatever that meant! One of them wanted my bank statement for the last six months! We have too many regulators and departments, each with their own processes and bureaucracy.

At about this time I attended a public presentation on J-A-M (Jan Dhan-Aadhar-Mobile). Very soon several layers of software will simplify my life to the click of a button. I hope it all works. Meanwhile I worry that about the many authenticated copies of my documents floating around. Where is the promise that my single Aadhar will establish my identity? Why should business folks expect that the PAN as a single identity will work for enterprises? Bloated promises and rhetoric are known to produce unexpected election results. In communicating our public change programs, we must be conscious of the Rosser Reeves trap of the promise getting too far ahead of the product.

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Start Up Bharat https://themindworks.me/2016/02/23/start-up-bharat/ https://themindworks.me/2016/02/23/start-up-bharat/#respond Tue, 23 Feb 2016 00:00:41 +0000 https://themindworks.me/?p=2796 23th Feb 2016, ECONOMIC TIMES

(Disruptive biological and information technologies offer a never-before opportunity for transformation of Bharat).

A cognoscenti used a cricket metaphor for the Indian economy. Of the 22 players, a handful get all the attention, while other players wait patiently for their magic moment.

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23th Feb 2016, ECONOMIC TIMES

(Disruptive biological and information technologies offer a never-before opportunity for transformation of Bharat).

A cognoscenti used a cricket metaphor for the Indian economy. Of the 22 players, a handful get all the attention, while other players wait patiently for their magic moment. Bowlers account for under half the numbers, they take all the wickets, but account for barely 20 percent of the runs scored—like agriculture, which employs over 50 percent of workers, but accounts for under 20 percent of GDP.

The urban mind-set and frenzy must now reach Bharat. Earlier this month, Narayan Khadke, 78, of Walsawangi returned his 1983 Sheti Nishtha award. Farmers’ leader Kishore Tiwari says that the Maharashtra CM’s plan to tackle the “worst ever agrarian crisis has failed to take off due to rampant corruption and an insensitive bureaucracy.” On the positive side, the PM has unveiled the Pradhan Mantri Fasal Bima Yojana and the National Agriculture Market, a digital platform for farmers to sell their produce anywhere in India. FM Jaitley has held out the promise of an agriculture-focused budget. Agriculture has been important enough to be discussed and funded big-time for 60 years, yet has produced inadequate results.

In The Fourth Revolution, authors John Micklethwait and Adrian Woolridge argue that “dysfunctional government has become a cliché….countries’ success depends overwhelmingly on their ability to reinvent the State….govern the world of Google and Facebook with a quill pen and abacus” In Rebooting India, Nandan Nilekani states “government as an enabler of people’s aspiration ….implies a radical rethink.”

India has no well accepted and consistent National Agricultural Policy. In the first phase from independence till 1965, agriculture lurched amidst multiple pulls and pressures. The food crisis of the mid-sixties led to the second phase, when enormous success was achieved in managing political consensus and in adopting new technologies. The green revolution phase ran its course until 2000 when the third phase began.

In 2000, a new National Agricultural Policy was announced by the Vajpayee government “to achieve an agricultural growth of 4 percent per annum (not achieved), to strengthen the rural infrastructure, to offer a decent standard of living to farmers and to speed up value-added agricultural growth.” The next government of Dr Manmohan Singh received a report from the National Commission on Farmers in 2006. However we still have no National Agricultural Policy—there are bits and pieces with no over-arching framework.

In transformation management, frameworks inspire participants that “they are building a cathedral, not laying bricks.” Dr YK Alagh has said, “The future of agriculture is not in the stars, even in a country deeply committed to the inevitability of predictable karmic outcomes…pull together the main analyses and place them in a holistic framework…Indian agriculture responds well to well thought out policy stimuli.” The country needs an integrated framework to transform agriculture and a version has been suggested in a recent paper. (What India Can Do Differently in Agriculture—Sarthak Krishi by Dr YSP Thorat and R. Gopalakrishnan http://www.tata.com/article/inside/Sarthak-Krishi-Yojana).

What kind of disruptive measures can bring a frenetic energy to the farm sector? Firstly, a Mandela-style initiative for rapprochement and to agree a national agenda for agriculture. It makes good economic and political sense for all parties if the ruling party would initiate with sincerity. If the effort to build consensus for GST had gone into building a consensus on improving farm economics and well-being, it would have a far higher impact!! Managing water, implementing farmer-friendly produce-marketing measures and applying modern science, all are illustrative candidates.

Secondly, reorient the research effort to be market and farmer-led with a scientific approach to experimentation. Bt cotton has disrupted Indian cotton production. New ideas like the nutrient buffer power concept (Dr KP Nair), micro-irrigation and deployment of drones can transform soil management. We need to reimagine a new framework for agriculture and inject technological vibrancy. Thirdly, with all its fabled software skills, India must connect farmers through a taobao-style digital network. Private sector start-ups are already working in this area.

Fourth, agriculture needs the equivalent of SMEs/MSMEs of industry. India needs someone, maybe NABARD, to lead willing farmers to form FPOs under the Companies Act so that farmers will become somewhat bankable. But there is a counter-impactful SARFAESI Act, 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest) which deals with the regulation, securitisation and reconstruction of financial assets. However the Act specifically excludes “any security interest in agricultural land.” Fifth, include agriculture in the Skills efforts of the country by launching ATTIs just as ITIs were started for industrialisation. If FPOs are formed, the farmers need management and governance skills. Is there any reason why India needs only defence and aerospace production and not more efficient food production as part of Make in India?

Sixth and last, restore public investment in rural infrastructure–check dams and bunds for water, rural roads, and warehousing. Increase irrigated area from 48 percent to 60 percent over a few years. Revamp the MSP regime, which began as a support but has become a crutch. Rationalise the heavy subsidy regime on fertilisers. The current policy has strangulated the nutrient industry and distorted the national soil map.

Many committees that have suggested what should be done; India needs the framework of a National Agricultural Policy for the how.

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