Saturday, February 28, 2009

e-Learning in Indian Companies : Are we at a tipping point?

E-Learning, whatever the term may mean, is still a relatively new subject in India. Indeed, the whole discipline of training in organizations got a new lease of life with the economic liberalization and mass mobilization in the service industries, particularly in telecoms, retail and insurance. This led to creation of a significant training infrastructure, development of a sizable training cadre and new ideas and experiments in the field of training. The existing training companies, predominated by IT training giants like NIIT and Aptech, quickly re-engineered themselves to take advantage of this emerging, shall we say exploding, market, and a number of new companies emerged. Demand peaked for trainers, and the salaries reached stratospheric levels.

This party now seems to be over. I have previously written about the contraction in the employee training market and the plight of the training companies. The larger companies are fast running out of ideas and trying to reinvent themselves as something they are not. The trainers, caught in the maelstrom, are trying to close the door - hoping that this will preserve their benefits and perquisites by forming professional groups and associations and making it difficult for newcomers to enter the field. At the same time, many of them are creating entrepreneurial ventures, mostly without any novel idea but based on the faith on their Rolodex. In a gravity-defying belief, they are convinced that they can beat the economies of scale of the larger companies and can offer better training at lower prices. So, in short, things are up in the air at this time and everyone is waiting for the dust, and the debris, to settle.

It is in this impossible background, we are expecting e-learning to thrive. The rationale is that training is needed, more so in recession, and the common sense will prevail among the executives and training will be back in the agenda soon. However, a rationalization is in order, and India is short on good trainers and the salaries have reached unsustainable levels, making the case for an alternative, technology-led, learning stronger.

This argument is simplistic, admittedly. The recovery in the training market is still a paper projection. Besides, whatever is the rationalization requirement, labour intensive trainer-led learning will always score over capital-intensive e-learning in a country like India. Besides, setting up an e-learning facility will require upfront investments - many companies are not sure about their future at this time and they will be wary of spending the money.

Despite these reservations on the contrary, e-learning has been making a steady progress, at least since the middle of last year, on the training agenda. A number of e-learning companies have sprang up, and many companies have commissioned e-learning projects. The competence levels are up, and there is a general, on-principle acceptance of e-learning. In fact, as the discipline of training is relatively new, there is less resistance to e-learning than in Western Countries. In fact, the vested interests that resist e-learning deployment in Western countries, trainers particularly, are facilitating the deployment of e-learning in India, without feeling threatened. One reason for this could be that many of the trainers are of the PC generation, have entered the workforce in late 1990s and may have come from a computer training background in the first place. These people do not feel threatened by e-learning and indeed see it as a new way to preserve the training function in the crunch time.

The downturn also has a profound effect on the supply side. A number of Indian e-learning outfits, which were solely focused on western markets, have suddenly discovered the virtue of a strong domestic base. This has spawned India focused innovation, though this is still inadequate. Indeed, despite the downturn and contraction of corporate training budgets, the real constraint in terms of successful e-learning deployment lies on the supply side.

For example, the choice of and awareness about the LMS remains fairly limited. There are enterprise solutions like Saba and SumTotal, which tops the shopping list, but most people are daunted by the costs. Besides, the deployment model remains complicated - bandwidth in in-company networks remains an issue, whereas there is a lack of faith on how web based solutions work. Besides, the available e-learning content is mostly western, unsustainably priced and unsuitably designed. The western providers loath the idea of allowing their Indian partners tweak the content and the costs of doing so by themselves are too high. Content designed in India still has a limited catalogue and still has a long way to go to match the standards. Also, there is an inadequacy in terms of supplementary tools and activities, like qualifications available online, learning games, online HR tools like competency mapping, assessments that can be integrated in learning etc.

So, in summary, there is a significant scope of innovation in e-learning in Indian companies. There is space for at least a dozen small LMSes, which is light on budget and implementation costs. Outside the practitioner circles, Moodle is still unheard of, and I do think a number of initiatives will be started with a Moodle variant soon. The content needs to be built with a partnership model, and so will be the case with supplementary tools. There will be some disruptive business models soon - free LMSes, free content libraries etc - and this will actually take the e-learning industry forward in India. I know of people who are working on models like the Open Learning Commons, wherein private training can be combined with more public sharing of content, and this will also break into the market soon. Overall - an exciting future ahead; one just hope that the recession recedes now, and let the play begin.

Bangladesh : A War Refought

The mutineers have surrendered arms in Dhaka, but they have been granted a general amnesty by the government. The true horrors of the mutiny is now coming to the fore - not what happened on the street, but what happened inside the barracks. The tortured, mutilated bodies of the officers are now being taken out, and one can see that not only the officers, but their families too, have been brutally murdered.

However, while the troubles have subsided in Dhaka, there is a battle going on in the border camps throughout the country. The army is advancing on the BDR to take over these camps, but, according to the reports, BDR men are resisting, and cutting down the roads and blowing up the bridges, just like in an war. These men, who are now killing their officers and fighting against their own country's army, and jeopardizing the lives of their citizens, are presumably covered by the amnesty. The question remains, however, what would be done with them, after the dust settles.

As I mentioned in an earlier post, there is a sub-plot in this rebellion, that of the dissent against the army from the time the army ruled the country [till end of 2008]. But, as things come to light, an even more sinister design is coming out - that this mutiny may have an islamist angle, and is connected somewhat with the government's decision to prosecute war criminals from the liberation war days of 1971.

This always remained an issue in Bangladesh, indeed. A section of country's population, mostly made of landowners, mullahs and government officers and their sundry underlings, cooperated in the brutal suppression in (then) East Pakistan by the Pakistani Army in 1971. Accordingly, when the Pakistani Army was defeated in December 1971 and the independent state of Bangladesh was formed, these people were to be prosecuted for the crimes they have committed against the country's population. As in other countries [there are a number of Latin American countries attempting to do the same], Bangladesh Government found it extraordinarily difficult to carry this mandate out, as many of these war criminals were actually very prominent men and women in the society.

Despite suggestions made by a number of international observers, a national reconciliation was never attempted, or was never feasible. There was no Bishop Desmond Tutu, to start with. Besides, there was a general resentment as the people who fought in the Liberation Struggle continued to remain poor and disadvantaged in the new republic, and the collaborators continued to enjoy the privileges even under the new government. Further, there is always a prominent place of Revenge in the politics of South Asia, somewhat following the Mughal tradition - and this revenge was never played out in Bangladesh. And, most importantly, a reconciliation effort needed to start with an acceptance of 'truth' [as in Bishop Tutu's efforts], and truth was never welcome in post-liberation Bangladesh, as the dividing lines were never straightforward and many of the rich and the famous had skeletons in their cupboard.

Unsurprisingly, therefore, the first Bangladeshi administration under Sheik Mujib failed to carry out the task - either of revenge or of reconciliation - as they quibbled about the privileges in the new country. Finally, Mujib was then brutally assassinated, along with most of his family, when he showed some intent to move forward with this agenda. After a quick succession of military led governments, General Zia-ur-Rehman, a military man and prominent hero of the liberation struggle, came to power. General Zia was backed by a coalition of military men, most of whom served in the Pakistani military and may have fought against their own countrymen in 1971. Not surprisingly, this time, General Zia went a step further and granted an amnesty, and tried to put a lid on the issue of war crimes.

This is indeed the amnesty that Sheikh Hasina is trying to overturn now. There is a general feeling that this amnesty was unfair and immoral. Bangladeshi politics, since Mujib's day, have been dominated by this chasm between the feudal elite who prospered under the Pakistanis and the post-liberation elites, who took over the businesses and properties after the Pakistani rulers ran away. These two sections alternated in power, pulling the country to two different directions, and each time they won electoral victories, they assumed the final victory and promoted their agenda as if there was no tomorrow. Roughly, Sheikh Hasina represented the post-liberation elites, whereas Begum Zia, and sundry islamists, represented the feudal remnants of the Pakistani past, though both of them made compromises along the way.

These fissures are again plain to see, as the bodies of officers, and more importantly, their wives and children, are being pulled out of BDR barracks. One would suspect that the government's announcement of amnesty was done without much thought, without a proper assessment of the nature of the insurgency and its consequences. The battle, fought in BDR barracks and now in border posts, as fundamental as the basic tensions of Bangladesh, and the key reason why what could have been the richest and most prosperous nation of South Asia remains backward, corrupt and despondent. The amnesty showed the propensity of Bangladeshi governments, a long succession of them, of flight, whenever the difficulties surface. And, again, an issue remained unresolved.

It will be interesting to see what happens now. By every rationale, BDR must be disbanded now. A new force must be raised and deployed. The government must go forward, and fast, with what it wants to do with war criminals. They must be sincere in bringing out the truth of the freedom struggle, a difficult task, as this will show a number of ruling coalition members in an unflattering light. But, if this is not done, Bangladesh will continue on the slippery slope of history. The BDR rebellion will sooner or later inspire a section of the army, where such interests remain entrenched through legacy and generational loyalties, to a more sinister coup. The democracy will continue to flounder, and the people will continue to be betrayed.

Parliamentary democracy has the propensity to mix up governance with politics. But, in today's Bangladesh, one must remember that governance isn't politics, and those in government must be ready to make difficult decisions, regardless of its consequences.

Friday, February 27, 2009

Alternatives to Capitalist Enterprise: An Unconventional Perspective

For lots of people, capitalism has failed. Their mortgaged houses were repossessed, their savings melted out in the hands [and pockets] of Bernie Madoff and his kind, their stock market portfolios look puny and they are no longer sure where to keep the savings anymore. Banks and other infallible institutions, like General Motors, General Electric and Toyota, look clueless. The leaders of the government are not proving any more enlightened than Uncle Joe down the road, who gambles upon the idiocy of the lenders to climb out of trouble every time. The deep downturn, after years of peak prosperity, is hurting more - and many people blame the greed of the capitalist, embodied in Wall Street bankers, for their trouble.

Media has caught on the mood and many respectable magazines have already announced 2009 to be the last year of Capitalism. The more conservative ones, like The Economist, which remains unrepentant about supporting George W. on Iraq to this day, have been thinking deeply where Capitalism has gone wrong. The current economic pain, for even those who see the upside, is seen as an inescapable consequence of capitalism, Schumpeter's Creative Destruction.

Karl Marx, who was pronounced dead in 1990 after the fall of Soviet Union, is suddenly getting a bit of media space. Che Guevara is back in fashion among college kids and Fidel Castro's collected works were seen at least in one mainstream book stores. Blogs and newspapers quoted Marx - without naming him upfront - to demonstrate how prescient he was about the capitalist crisis. Most people have started toning down their unashamedly greedy stance, partly in fear of getting caught in the wrong side just in case the economic system actually changes.

I am joking, alright. There is no imminent revolution, not even in the wretched countries like Burma. Not of the kind we are talking here, at least. The reason is simple - you will see that we have not mentioned Lenin anywhere here - there is no stomach for revolution anymore. Revolutionaries look forward to the future, but there is no appetite for future now. All we want is to go back to the past; for some, it is to the immediate past when house prices were higher and jobs were available; others want to go back 1500 years to the time of the prophet.

I realized a funny but rather obvious thing as I write this: Marx was a journalist. In his time, every economic downturn, he proclaimed the end of capitalism and advent of socialism. It goes to the credit of the New York Times that they had made exceptionally consistent choice of journalists - they all behaved in a similar fashion over last 150 years.

But that is beside the point. So far, despite all the distractions, capitalism proved to be the most dynamic economic system in the civilization of mankind. It has produced the kind of miracles a society needs in order to progress - spurring ordinary individuals to make unheroic contributions, day after day, in building collective prosperity. To me, this is the miracle of capitalism: That it worked as a perfect foil of Pandora's box, always ending in hope in the middle of despair, always inspiring individuals with self-responsibility and improvement.

So, despite journalistic proclamations and recent woes, capitalism lives on. The alternatives to it look unimaginative. We can see what a all encompassing socialist government can do in Burma or North Korea - clamping down all improvements and making the country a bureaucratic prison. Communism does not exist other than among a few species other than men, and we are currently waiting for them to reach a state of civilization to write a post facto Das Kapital. At this time, we have little choice but to live Capitalism.

However, lots of very successful men and women say there is something fundamentally wrong about capitalism, and it is the greed. There is something very obvious about this statement. Adam Smith, before he managed to write his capitalist doctrine, warned us against this in his little-read The Theory of Moral Sentiments. This remained unread, Malthus was generally dismissed as alarmist and Karl Marx as an amateur. However, the complaints have continued to this day, and some of the big names today, Dr. Md Younus, Bill Gates, Warren Buffet etc, are trying to evolve an alternative model of capitalism - the one without the greed bit - and calling it by various names, like creative capitalism or compassionate capitalism. On the other hand, of course, there are capitalist social thinkers who would want to take capitalism to its last frontier, to the depth of poverty, and a completely new approach in evolving through the works of Dr C K Prahalad, seeking Fortune at the Bottom of the Pyramid.

How far do these alternative, imaginative, ways improve capitalism? I think the core argument is against two of capitalism's main failures - that it is divisive and turns life into a zero-sum game [hence, we must create wealth and abandon greed] and that it fails to create a sustainable future [Malthus, and modern thinkers of Creative Capitalism, who wanted to solve world's problems including the environmental decline].

There is a merit in each one of these lines of thinking. But, there is also something fundamental to capitalism which these thinkers do not touch: the question of ownership. The growth of capitalism is closely identified with clear individual ownership of the means of production, as Marx saw 150 years back and Hernando Del Soto rediscovered the truth recently. In Del Soto's theorem, ownership is fundamental to the growth of capitalism, and hence, while the alternate models may seek redistributive justice in the outcome, the ownership of the means of production must be clear and unambiguous. [An example can be shown in Grameen-Danone project in Bangladesh, which has a clear ownership structure, but works towards social justice].

However, I think the current problem of capitalism is actually attached to too much of ownership. Michael Heller makes this point in his brilliant Gridlock Economy. It is plain to see when the logic of ownership is extended to creative output, to writing, to music, to everything else. The point of ownership is intellectual output is to encourage creativity by rewarding the artist; but this ownership structure, and the attendant overheads, actually discourage creativity by importing a structure in artistic enterprises and imposing a requirement of self-promotion in what used to be soulful work.

None of the alternate models address the issue of ownership. This is - because as Del Soto argues - central to capitalism. Its vices and virtues come from here. Its problems can not be fixed, or its achievements can be repeated, without addressing the ownership, its definition or understanding, first. Socialism provided an alternative, but that was an inefficient model, because that meant transferring ownership to people who did not work for it.

While we search for solutions, the answer may actually lie in the religion. The religion always focused on temporal nature of ownership, and the existence of a commons beyond one's own limited interests. We may as well blame our godlessness for our crisis: we tried to own too much for ourselves, and left too little for God, to end up in this crisis.

Thursday, February 26, 2009

Employee Training In India : Recession in Perspective

I have spent most part of the last few months in India, primarily because the current recession is forcing us to adopt a complete rethink of our business strategy. What seemed obvious a few months back seems extraordinarily complex at this moment. Besides, we built a high margin business by offering business communication training to organizations. It was nice while it lasted, but staking out resources on the same feels like going to the beach to watch the tsunami now. We are probably seeing the first glimpses of a turnaround, indeed, as things come close to March and revenues start shoring up. But, nevertheless, this is a moment to stop and reflect - it is obvious that this downturn will affect training and development, and we need to somehow estimate how much.

There are some rough estimates I got from a friend, a veteran in corporate training in India. Indian employee training market is estimated to be US $20 Billion, though parts of it are internally sourced. The initial expectation in training circles, when the recession hit India in late September, was that this would have an impact of about 20% contraction. The unfortunate fact is that it is looking a lot deeper now, and some of the top training companies have taken a revenue hit of more than 50%. The downturn, when it arrived in India, was almost tsunami-like in its suddenness. For months, Indian corporate executives were talking about India escaping the worst of the downturn. But after Bear Sterns went bust and rumours of a possible meltdown at the Citi, and some large Indian banks, reached the markets, the stock market and executive management hit the panic button in full force.

That was in October, remember, traditionally the worst month of training business in India because of festivals. So, suddenly, the market dried up for training companies. After that, there was sudden contraction of the workforce - caused by mostly psychological factors; I say this because India has huge unexplored capacity and the recession need not be severe here. One can justify the reactions of the export-based industries, including software services and Outsourcing companies, but they account for very little employment in India anyway.

The domestic businesses - telecom, insurance, banking, hospitality, retail - are significant contributors to training business turnover in India, and all of them are operating under-capacity and this downturn can not affect them too much. However, they hit the button driven by the media frenzy and banished training from the noah's arc almost immediately. They froze recruitment, cut the salaries and started reducing workforce - and created an acute talent shortage within their respective businesses.

So, what we have now is a paralyzed economy - which is dominated by the fear of fear itself. But, from talking to a number of executives in the last few days, I realize that we are reaching an inflection point. The downturn has resulted in a number of good things, like rationalization of executive compensation in India [which was way out of line of productivity] and a search for more efficient ways of delivering training [e-learning and blended learning are back in fashion], but this panic has accentuated the capacity issue. Take insurance, for example. Only a fraction of the population in India has enough insurance coverage. Besides, health insurance is an emerging area, and Indian providers have just started venturing out in these. areas. They need thousands of brokers all over the country, along with the attendant managers, actuaries and support staff. Being a critical and compliance led area, this will need high quality training and competent staff. All these plans have suddenly been frozen, for no rational reasons but for the apparent paranoia in the financial market.

This is almost certain to have a major impact on productivity. Most companies in question run with quarterly results, and the excuses will run out after the first couple of quarters. So, it will be a return to realism by April/May, this time on a more rational scale, and the capacity building will restart. Training will be back in agenda firmly then. Many companies will then need a sort of Marshall Plan for training - an intensive investment period to rebuild the talent pool - as early as April.

Admittedly, a different story is being played out in IT and IT Services sector. For many years, these companies were poster boys of the shining India. Suddenly, the shine is gone, as the Western Clients, many from the financial sector, have started cutting back on project commitments. The impact was somewhat muted in the first two quarters by a soaring dollar, but many companies are bracing themselves for the moment of truth end of March. The scandal in Satyam, which could have dealt a body blow in these troubling times, have been contained for the moment. But all of this will come to impact the wider economy - jobs, rents in boom towns, and public psyche - come April.

From the training perspective, this is an interesting moment. Many companies will shift their focus on domestic market, and the export-intensive ones will try to diversify their market focus. More importantly, to stay in business, these companies have to innovate and remain competitive. The days of getting easy money out of building sweatshops will be over. So, the focus will shift from prescriptive how-to training to training for innovation and leadership, for embracing the unknown. The basic facts will hold true - there will be rationalization and search for efficiency, a lot more of e-learning and a lot less love for fads - but training will be back on the agenda, with a different focus.

So, who could blame me for being optimistic about the Indian training market? I see greater efficiency, a lot more rational approach but a significant expansion in investment in the coming quarters. Training will become critical now, not just a feel-good thing. Training managers will now be far more accountable and integrated with the organization, and may find themselves sitting with the CEOs at the lunch table a lot more time than usual. As for the external providers, they have to cut the blabber and make sense, and they will now need to be lean and efficient. These companies will offer lot less black magic and lot more meaningful training in the coming days. If I have to attempt a projection, we shall get back to that US $20 Billion quite quickly - just that we have to be a lot more innovative and a lot more committed to do so.

Wednesday, February 25, 2009

Obama Effect on Outsourcing

President Obama finally said what he has been saying for a while - that US companies will not receive tax breaks if they ship American jobs abroad. He is speaking for many democrats, who favoured such a measure for a long time. They are hoping that this will dampen outsourcing, at a crucial time when the politicians need to be seen doing something to stem the job losses. It will tickle the economic nationalists the right way, and indeed, every recession sees them in ascendancy. So, President Obama has said the right thing, at the right time, for the Americans.

The comment dominated the discussions in India. We traditionally favour democratic candidates, but usually got raw deals from successive democratic administrations. The reviled George W. bestowed us with a nuclear deal, whereas the enormously popular Clinton clubbed us with Pakistan and tried to put sanctions on us. Obama, and Kerry before him, has been saying uncomfortable things for a while, but now this has become a policy statement and will soon become a legislation. This is precisely the bad thing that could happen to India at the worst possible time - the tech cities of Bangalore and Hyderabad are reeling under the downturn already. So, unless someone is pathologically jealous of the landlords in Bangalore and Hyderabad, it is impossible to be happy about what President Obama is setting out to do.

Except that, it seems a completely meaningless gesture, and based on a dated understanding of how the world works. And, instead of being bad for India, if we act fast and decisively, we can turn this into our advantage. Instead of becoming the obituary of Indian BPO, this could usher in a new era of Indian competitiveness.

So, what did the President mean? Global American companies, there are more than 1000 of them, earn profits in different countries. Now, the United States tax codes allow a tax break for companies repatriating the profits earned abroad. President Obama is saying that this tax break will not apply to companies if they ship American jobs abroad. Sounds nice, but so what?

Let's take, for example, a company like Microsoft. It earns billions in profits outside the United States, by employing thousands of people across the globe. Under Obama's scheme, they will not get the tax break if they repatriate their profits to the United States. The question really is - whether Microsoft needs to repatriate the profits and at what cost?

There is a fundamental misunderstanding among political circles about outsourcing. It is not done for philanthropic reasons. Microsoft employs brilliant Indian graduates not because it wants to employ them to alleviate poverty or do good to India, but because if they don't, they will not remain competitive. For all the talk about American jobs, these are not American jobs, for these will not exist if an US administration legislate the companies to only employ people in America. These are global jobs, necessitated by the competitive pressures of the globalized economy, and President Obama is fooling himself by thinking that he can bring the jobs, body for body, back to America.

I think there are a number of possible outcomes of this policy initiative. Let me list them here:

(a) American companies will stop repatriating offshore profits to America. They will find another nation more willing to let them keep their money. It could be India, or any other nation, in the need for capital. This is a very likely scenario, and the American government needs these profits more desperately than anyone.

(b) American companies will stop employing Indian/Chinese/ Filipino workers and will become less efficient. This will allow Indian companies compete better against American firms, and get the jobs back in India. This is unlikely, as American firms are not dumb, but if such a thing happens, this will only allow Indian companies move up the ladder. In an even more unlikely scenario, the administration may legislate that Americans must buy goods and services from companies with American production base, robbing the country of economic choice and undermining its competitiveness even further.

(c) If situation b happens, this will mean that there will be easing of the competition for global talent, which will benefit local companies in India and other countries, and if they are ready to take the advantage, it will spawn entrepreneurial ventures in these countries which will compete with the US companies. It is almost as if when Americans try to take their jobs back home, they export their competitiveness and innovativeness, and most countries will welcome that.

Yes, that's the end of the list. I do not think the possibilities that the US lawmakers have in mind, that outsourcing will stop and US jobs will be back, and those which Indian doomsayers can see, that Indian outsourcing industry will be over and we shall all go back to farming, are likely scenarios.

Next few months will indeed be crucial, as the effects of recession and such short-sighted policy measures play out fully. But it indeed seems that President Obama is trying to be a populist president, and if he tries to do that, he will find himself in the wrong job at the wrong time. He will harm America's long term competitiveness, push the economy to a greater crisis and do harm to global economic recovery by ushering in protectionism, precisely the wrong thing to do in the middle of a global recession. In the meantime, if Indian business community and policy-makers are alert and adaptive, Indian economy will benefit enormously - by getting access to better talents, and by getting favourable terms to compete with US firms.

At the end of Round 1, then, Obama 0, India 1.

A Mutiny in Bangladesh

A mutiny took place in Dhaka today. The Bangladesh Rifles (BDR), the paramilitary border guards, mutinied against the Army, who they say discriminate against the paramilitary forces. The statement, made by an unnamed BDR officer to BBC Bengali Service, said that the BDR has nothing against the government and they expect that the government will be humane. The latest reports indicate that the Prime Minister, along with her cabinet colleagues, met the representatives of the mutineers, and offered a general amnesty to mutineers in exchange of laying down of arms and release of the officers held hostage. Dhaka had a tense day - with visible military action on the streets, general panic and fear that this will snowball into something more sinister. Hopefully, it won't get there and normalcy will be restored soon. However, in my mind, this mutiny indicates how difficult it is to govern Bangladesh now and how urgent is the need for action to restore the faith in democracy and fair governance.

It is interesting to note that a general amnesty of mutineers is being offered. This is an extremely difficult decision and possibly made with short term considerations. This breaks down the gold standard of discipline in the armed forces and politicizes its operations. It also sets a precedence, both inside the forces and in the eyes of general public, and this is where the danger lies. Bangladesh has a history of coups, and an amnesty for the mutineers is indeed a dangerous thing in the context.

It is almost besides the point that this mutiny was against the army. One can not mutiny against the army - it breaks the law of the land, so by implication, it is against the government. If an unit takes its commanders hostage, it becomes un-commandable, and therefore, useless. But, in the context of Bangladesh, such a story has an interesting sub-plot. It is almost as if the mutineers are addressing their grievances from the period before the last election - when the army ran the country. It is 'revenge' when things have changed and the army has relinquished power.

On the same note, the army is unlikely to take this generously. The army took the power a couple of years back and recently handed it back to a democratically elected government, but they will be less than willing to cooperate if this new government undermines their position in the society. And, that's exactly what the government may end up doing by being soft on the mutineers. By design or default, this will undermine the authority of the army overall, and let people on the street laugh at them.

I spoke to friends in Bangladesh today and they assured me that the situation is well under control. They saw little chances of a snowballing of this incident. However, that's because there still seems to be some faith in the newly elected government. If the same incident happened before the election, it would have had explosive consequences. If the government does not deliver on the promises and meet the high expectation bestowed on them, a similar incident some months later will destabilize the country and undermine the balance in the region.

So, it is imperative that the government delivers, soon. The general economic climate is getting worse. The gloom in Dubai will hit Bangladeshis hard - several of them will return home and many of them will not be able to go. The most dangerous moment in the history of Bangladesh is now - when hope may dwindle and faith may fail. It is in everyone's interest in the region not to let that happen. The mutiny has been a wake up call - let us not sleep any more.

The Question of Culture Training

Culture is perceived to be a lifestyle thing than a hard business issue. Undeniably, most businesses spend serious money to promote diversity internally and conduct cultural familiarization training regularly for staff travelling abroad and interacting with foreign clients. However, culture is usually considered as the things done outside - food, preferences, manners etc - than what is done inside the business. In my experience, it is assumed that there is one way of doing business - presumably the Anglo-Saxon way - though people come from diverse backgrounds and have to assimilate themselves in the 'mainstream'. This implicit assumption often cloud the way organizations approach culture training, and limit its effectiveness.

There is another major issue with culture training as it is done today. The training often trains people to behave in a different way than their own, at least at the staff operator level. While researching on the impact of cross-cultural training on people, I have often faced questions why one has to adopt a behaviour pattern other than one's own. Many training programmes address this issue inadequately, primarily because these are resource-poor and prescriptive, telling people that there is only one way of doing business - the Anglo-Saxon way - and they must adapt to it.


I shall rate these two issues to be the key problems in conducting effective culture training. Culture, indeed, affects the whole behaviour and that includes work. This determines how people see, think and perceive, and therefore, it is important that culture is considered a hard business issue, and not just as a peripheral, lifestyle thing. Besides, the objective of cultural training can not be about teaching a culture - it is foolish to imagine that a seven-day programme can fundamentally alter the ways a person thinks - but about making people more open to cultural diversity. The prescriptive training is bound to fail; though some people love these prescriptive tidbits [never hang your coat on the back of a chair in a Russian restaurant], prescriptive training presupposes that a person's culture could be overridden, which is wrong at the outset and runs against the basic purpose of culture training.

I have read recently a number of books on culture and communication, and noted, to my dismay, that many of them make such a mistake. One notable example is a book by Chris Storti , Communicating with Indians, which I read and used as one of the inputs for a training programme for Western executives. A finely written book, it observes the Indian business behaviour in the context of Western Value system. In all fairness, this book is written for an western business audience, so such an approach may appear common-sense; however, it will appear patronizing and unfair to an Indian reader, as the frame of reference is staunchly Anglo-Saxon and suffers from the resultant arrogance.

Let me give an example. The book quotes an imaginary conversation, where a Project Leader, Indian, is giving several hints to his boss, a Westerner, that a project will not be completed on time. But instead of saying things as it is, he goes on about it in a roundabout way, saying that 'he will try his best' and the project 'is challenging' etc. The author goes on to state that Indians speak with hints and suggestions, and are almost never straight in breaking bad news. The rest of the book, one can say, stands on this central theme of the lack of directness in Indians, in other words, the abundance of mitigated communication.

However, the inherent culture bias has not left the author here. First of all, he sets up a power equation of an Indian project manager and an western boss - an unequal equation with an assumption of a 'correct' outcome, a direct communication. Change this context, and you will see how perfectly acceptable this becomes. For example, an Western Project Manager telling the Indian boss that it can not be done on time because the specs of the project was done up wrongly, and the Indian boss saying that s/he has faith in the team that they can pull this off even with difficult circumstances - hinting, almost with a lack of subtlety but remarkable politeness, that s/he expects this to be done on time regardless of the trouble. Secondly, this may be okay for communication between Indians, who like Latins, thrive on hints and suggestions and whose culture is built around thoughts and interpretations. Besides, the whole communication is being done in English, which may be native to the Western boss but not so to the Indian Project Manager, and it will invariably introduce a bias. Because Indian languages are constructed for mitigation, most Indians feel a bit 'naked' speaking in English, which undermines the nuances of words and subtlety of expressions, and therefore, adopt an unusual language which is high on adjectives, but low on directness.

If, however, one invests time in training to understand, rather than training to behave culturally different, one gets to an all new level - a level of tolerance and diversity, which almost comes naturally to Indians. It is indeed a paradigm shift - from the Anglo-Saxon prescriptiveness to Indian multidimensionalism - and whatever I learnt of cultural training, this will prepare the participants far better for the surprises that invariably comes in course of dealing with a new culture. I do think this type of culture training will also be easier to deliver - as this does not have to start with unlearning a person's own culture. It will, therefore, evoke less resentment and make the learner feel enriched, not culture robbed, at end of the exercise.

Monday, February 23, 2009

Incredible India : Indian Tourism

Incredible India is a very good advertising campaign. It has great visuals and a simple message, it reaffirms the colours and the tunes and the great spectacles of India in an effective way. Indian government spends quite a bit of money, I am sure, as this is omnipresent in CNN and various other channels in the West, as well as a selection of high-end magazines. Country tourism ad-space is getting a bit crowded - I recall seeing ads for Pakistan [which, I initially thought, was a new version of Incredible India! ad] and Egypt [Egypt offers the Sun - specifically to British travellers, I suppose] on the same channels, apart from the regular inserts from Australians, Americans, Peruvians [Pack your six senses and come to Peru], Croatia [the Mediterranean as it once was], Greece et al.

I have also recently noticed a new campaign in the newspapers in India, fronted by Aamir Khan, a very popular Bollywood actor. Indian tourism had a campaign running for a while - Atithi Debo bhobo, 'Guest is God' - evoking the ancient Sanskrit dictum to tell Indians to treat the guests to the country with warmth. Aamir Khan is now fronting the campaign for making India more tourist friendly, by appealing to people directly and in a more targeted manner, to the youngsters, who would have found connecting to a Sanskrit dictum difficult.

India, rather obviously, has a lot to do to attract tourism. Despite being World's sixth largest country by the size, and the second most populous country, India is far down below in the tourism league - not even in the top 25 destinations in the world. India is cheap, somewhat middle of the world, with lots of sun, lots of history, with great mountains and sea-side resorts, but yet it fails to capture the imagination as a tourist destination. Advertising is a good start, but there is indeed more to be done, starting with our airports and railway stations.

Someone told me about her travel experiences of India and said you can either love it or hate it. Being an Indian, I sure disagree - I can always find something to love in India. However, the truth is, in this competitive market of tourism, when every country is vying for the holiday season dollars, it is a buyers' market and a tourist is not going to take the trouble to find anything to love in India. All they would want is safety and convenience, decent hotels and transparent service providers, hygienic food and water and a system which they can trust. India has work to do on many of these areas.

Take hygiene for example. Food safety standards are still too lax. There is no other way than bottled water, and even bottled water in India, as many surveys indicate, fail the western standards. Transparency and customer service are non-existent outside major luxury hotels, and if you are out on the street, everyone is out to make a few quick bucks out of you. Many airports are tottering, including the one in Kolkata, a major city, and though railway stations have improved, it still has miles to go. Most apparently, information - about reservations, hotels, transport etc - is difficult to obtain, creating a class of 'information intermediaries' at every level, making travel difficult and scary.

As I said, I can always find something to love in India. In the small, rather unknown places in Kumaon and Garhwal, in the dark alleys of Varanasi and Delhi, in the deserted sea shores of Mandarmoni and Chandipur - there is a great beauty lying unexplored. We have taken Atithi Debo Bhobo in our heart, no one had to tell us that we must treat our visitors well, not for an economic advantage, but for the sheer pride of our land and our culture. We are tolerant, almost indifferent nation, and many a times, we shrug off insults thrown at us by western tourists with a smile.

But, then, at the same time, our government allowed the formation of the agent class, information intermediaries, who keep things complicated and difficult. I think it is our deep-rooted corruption, the morality of trying to make money without an honest effort, which makes us so difficult to deal with. I have noticed, and wondered, how people change when they interact without an apparent economic opportunity and when one such opportunity arise. I think this is what really makes India so difficult to travel to, above everything else.

I have heard horror stories of travelling to India. They always relate to the corrupt agents and officials. I know perception is an issue and some Indians are currently lecturing that Slumdog Millionaire will destroy India's perception as an emerging nation. But then, so will the taxi rank in the Mumbai airport, or the ticket office in the Delhi station. So will be the bureaucrat in the air-conditioned office, who will ask for money for nothing. I am surprised that so called India lovers are okay with all that goes on, but ashamed when Mumbai slums, which are indeed real, are photographed.

So, welcome, incredible India this is. This is a place where the ordinary men and women can show you the decency in poverty, whereas the officials and the powerful will demonstrate the poverty of decency. This is a country which you will think one way, see another way. You will see great beauty lying unexplored, and cheap wares being hawked everywhere. You will see modernity as an aberration - unfailingly the guy who speaks English is the most corrupt and bending the rules - and if you care, you will see an ancient soul lying unstirred. The message you will get from India - all this will pass, the filth, the corruption, the glitz - and you will see timelessness. Welcome to my land.

Friday, February 20, 2009

What's Next For Me

2009 is going to be a watershed year for most people. World is at an inflection point - a recession shaking up the tree and most of us have to pick ourselves up fresh from the ground. Admittedly, this is not apocalypse yet and there are plenty of things, which are going as good as ever. Education is one of them, indeed. This is the best time to go back to school for most people and learn a new skill or get a new degree. Paradoxically, the business I run is looking better than ever, as English Language offers many people, stuck in the threshold of employability, a sure way to move forward.

However, this is not coming without pain. Suddenly, the business model we envisioned only a year back looks inadequate. We, somehow, ended up building a business around corporate training, which was like going to seashore to watch a tsunami. I spent some time talking to industry professionals yesterday and understood that Indian corporate training business has fallen by as much as 40% in the last six months. Sadly, the downturn hit us in October, which is the worst month for corporate training business anyway, and so far, the bad news have not stopped coming. I think almost everyone in the sector is looking at March, the traditional big month for corporate training, and the results end of March will tell everyone whether the assumption of 40% contraction is also optimistic.

But one good thing for us - despite the pain associated with changing course - was that we are not a corporate training company. The positioning was artificial anyway, a sort of a safety net our managers built in the interim. Taking out that cover is now exposing us to what we needed to do in the first place - sell franchises and get going with retail training - and things have started falling in place on that count.

However, a certain fatigue is setting in me. Fatigue due to travel, indeed - I may want to stop these long haul travels some time soon. The 3 to 4 week travel commitments are unsettling, and since I have done too many of those since August, my life is currently in a complete disarray. But I did not want to stop till the business turns a corner, and I estimate we are almost there. So, I am almost looking forward to a quieter April, though I already know that March is going to be as bad as February, and I shall start rebuilding life from that point on.

Rebuilding life as in doing something else. I do think that by April/May, this business will have a life of its own. A different sort of life than initially envisioned, but I do think that will be more in sync with the aspirations and the capabilities of its shareholders than the current model. That will be a point when I can step back with the satisfaction of a job accomplished. And, I am sure I must step back, because the format we have now will contribute little to my own learning and satisfaction. I shall need an opportunity which provides me learning and variety to keep me going, as always.

One of the ideas I have is going back to the University for a year. As everyone does - there were no better time than this. However, I do consider myself a bit too old for that. Not too old to learn - one never gets too old to learn - but to spend a full year away from work, which implies a lifestyle change of significant proportion. This is one task at hand for me - I need a break and think it through - whether I can actually handle the transition.

The other idea, of course, is to embark on a second migration. I would love to go and live in another country for a while. Even if I keep Britain as my base, I am keen on expanding my horizon. Living in Asia is something I would consider, though North America seems equally attractive. I am also keen to come back to India at a not too distant future, and this constitutes a third option. I am more or less certain that if I don't do the university, I shall surely attempt a location change. This will happen as early as this summer.

I have also realized that I do not project myself well. I have done many things in life and learnt, mostly with private effort, a number of things. However, I failed to collect evidence and get this visible on CV. That remains a potential roadblock for moving forward. This is something I wish to work upon very soon, not just the CV but think through what I want to do, and which skills align best to that objective. I am actually going away from Kolkata for next couple of days into the interiors of West Bengal, and I am hopeful that whatever else I do, this will allow me time to reflect and study a bit.

So, a sort of midlife crisis on my plate at this time. However, I have one thing working for me. I am not afraid of change. In fact, I always loved change and the variety it brings. I am actually feeling free - feeling sort of lightness - and I am approaching all this with happiness in my mind. Somehow, I feel confident that my life post this point is going to be better than what it has been so far. The only thing I have to fear is fear itself [courtesy FDR] and I am not going to repeat that mistake once more in my life.

Tuesday, February 17, 2009

The New Sales Function

Everyone seems to agree that we live in the era of great change. Everything around us is changing - as textbooks say - and every manager worth his/her salt knows this. But, there are certain areas, this belief in change does not reach. One such area is sales, though this is the most customer-facing of all business functions and where the impact of market change is the greatest.



Let me explain. The businesses try to handle change with a great inward focus. The thought is something like, Change is more IT; Change is Diversity in workplace, modern reward management and miscellaneous improvement in HR; change is also the way the board meets over video conference. All such things are change. But, ask a CEO what change means for the sales team, he would normally only say that we live in a more competitive world, but will assert that his/her salespeople are completely geared up: After all, why are you in sales if you are not competitive.



The problem is that the changes facing the sales function is the sum of all the parts of change. Competitiveness is just one aspect - it was always competitive to sell - but now what we have is global competition, similar products at lower prices from across the world. The simple faith that cheaper prices mean lower quality does not hold true anymore, and everyone knows this. Besides, the customers know more - so it is no longer a game of making the call before the competition did. Also, there is IT, simplifying many functions for the customers and eliminating many tasks of the salesperson. More feet on street - a sales philosophy peddled by some gurus even to this day - appears naive and out of touch in the Internet age. Sales today is a all new ball game and most managers refuse to see it.



Take the sales role, for example. There are lots of missing parts today. A salesman, even a decade back, would have spent time taking down orders, processing payments and updating stock records at the point of sale. Most of these functions are history now. IT took it away. So, the sheer number of sales people makes little difference - better IT can free up far more sales time than extra people. And, in an organization which has done this, the sales role has indeed moved up the value chain.



Like what? Today, it is far more possible to access databases, research and know about the customer beforehand. Time spent here should ideally replace the time spent in taking down orders etc. Better research is far more effective than traditional success ratio thinking - make 200 calls a day and you will get at least 1 lead, stuff like that. It is easier and cheaper to write an email, and it is instant and hassle free, immediately after a discussion. So, the sales role has shifted from the sales clerk to the sales strategist - and this is indeed the only way one can sell things today.

Also, think what is the task of the salesman today. In my mind, they are there to avoid price competition. Today, it is possible - in more cases than not - to source a cheaper and BETTER product globally. The role of a salesperson is to swing this balance by adding relationship value to the product. People still want to buy from people - feel more comfortable about it. In many cases, I shall pay a little extra to buy from someone I liked. This is where the sales people come in - to put a human face in the product and avoid the trap of price. [In this regard, I think sales people sits at the opposite end of business thinking than price comparison websites]

Unfortunately, most sales training today still is fairly mechanical, and they fail to recognize this big change of reality. Relationships, in most cases consistent and ongoing, are still to make a splash in sales thinking. While it is recognized that relationships are important, the discipline has been usurped by the marketers and IT, who, having never had to face customers in person, have put in an impersonal spin on the whole relationship management agenda. And, sales remained, well, sales.

However, hardships in the market will change this. Companies are more squeezed today, as are customers. Certainly, sales is at the forefront - a good salesman makes a difference more than ever. Hopefully, organizations now will accept the truth - that they need to see the sales function in a new light.



An inadequate appreciation of the changes affecting the sales function leads us to train the sales people wrongly. The sales technique best-sellers mostly date back to 1970s and 1980s, and deal with products like insurance, brokerage, electric appliances and encyclopedias, products and services which by itself has undergone massive change since those

China & India : Billions Of Entrepreneurs

I am reading Tarun Khanna's Billions of Entrepreneurs, a study of the economic opportunity in China and India. Obviously, there are scores of books on the subject. We have seen a massive body of literature on BRICs - about the emerging opportunities in Brazil, Russia, India and China - and of late, on CHINDIA. In fact, these things do get people excited - I have been told by at least two entrepreneurs that they are looking to invest in India after reading Businessweek's compilation of articles on Chindia.

There is indeed a lot of merit in these studies, though the current recession has taken some shine off the emerging economies. Like Tolstoy observed that happy families are like one another, but each unhappy one is unhappy in its own unique way, it is easier to label developed nation economics under one broad study, but the developing nations need a far more nuanced understanding if the economic opportunity is to be fully realized. To this end, Dr. Khanna provides an excellent presentation comparing and contrasting China and India in a McKinsey video interview.

The question, however, remains whether the party is already over as we talk about it. The strains on the Chinese economy is already visible. Indian service sector, particularly Outsourcing, is taking a massive hit, and the white collar job losses are mounting. The governments in both the countries appear somewhat lost, they are more or less waiting for the United States to take the lead in the recovery process, and so far, not done enough to focus on domestic demand generation at all.

Many economists, including Paul Krugman, firmly believes in the continuing US leadership of the world economy. Despite the emergence of Japan in 1980s, the Asian Tigers in 1990s, and Chindia in the new millennium, thinkers like Krugman put their faith on the US providing the key impetus - in terms of innovation and enterprise - to the global economy. On the other hand, scores of others, including Dr' Khanna, see a rise in the relative power of the Asian Giants, even if within a collaborative framework led by the United States. This recession, indeed, is the testing ground for both the views, and also an opportunity to reflect on economic history and draw some lessons.

Lessons, such as ones from the last century, when another industrial superpower emerged, which could match the United States in innovation and entrepreneurship. I am talking about Germany, indeed. We must remember how it all ended - how the creative spirit of entrepreneurial competition soon degenerated in the destruction of political ill-will. And, it all started, if we accept a slightly generalized version of history, with the scramble for oil, and as policy makers started worrying about the sustainability of their national progress as the domestic resources start running out.

Those themes are still very familiar today, and more real. This is where the current competition is very different from the one provided by Japan and Asian tigers. These were small countries with limited population, and their stunning economic achievements were largely based on sophisticated technologies. In fact, their development came hand in hand with a focus on energy efficiency, as Japan particularly was always very aware about its resource constraints. The developments in India and China are far more like Germany, as they follow the path of natural resource-intensive path of development.

Oil prices, at this time, are as low as ever. This may be due to a combination of recessionary pressures, low demand for auto fuel, and a number of other things. It already seems that the last summer's extraordinary high was unusual, driven by strategic reserve building by the United States and some speculative profit taking. But it is also true that the oil prices are unlikely to stay where they are now - as the demand will soon grow and oil is a scarce natural resource. One would expect them to start moving up soon - may be by April - and that is surely going to bite the emerging economies even further, and impact the collective psyche.

I don't think we have politically progressed much though our economic and industrial achievements, over last 50 years or so, are stunning. The world still seems to be driven by nation states, with a bright exception of Europe. The economic nationalism remains the dominant political ideology of international relations. National Self-Interest is still considered a good thing. Spread of democracy, which is essentially a good thing, without the sobering of national sentiments, lead us to an uniquely short term world, right at the threshold of an environmental crunch time when we should be thinking more long term than ever. So, we are exposed to a similar, self-destructive era of economic nationalism and political conflict soon, much like what we did a century ago.

There is also this enduring faith that democracies do not go to war against one another. China isn't a democracy, by the way. But, more than that, we do not have enough history to make such an assertion, and more wars than most, in last two hundred years, were started by the two Anglo-Saxon countries which consider themselves the fountainhead of democracy. Besides, recession makes democracies behave in an unexpected way. I am real worried about the outcome of the forthcoming Indian election, and hope that this will not become one like the watershed German election of 1933. May be not, as the Indian electorate has always behaved in a matured manner, and our economic competitiveness made us stake-holders in the global world. But there is a very real danger, as the recession bites and economic nationalism gains ground - that's exactly where it all started last time.

Sunday, February 15, 2009

Looking at Asia

I am back in India. I came back with a new perspective altogether - one about how accepting our Asian identity expand our horizon and enrich our identity. I am travelling back from Philippines, not the most Asian of the countries arguably; but this time, I had an unique exposure to the opportunities of Asia, and the possibilities it represents for us.

Not surprisingly, one of the evening discussions centered on the idea of One Asia, pioneered by Japanese intellectuals and politicians, and espoused by Rabindranath Tagore in India. Okakura Tenshin (1862 - 1913) declared 'Asia is One' and argued that no barriers 'can interrupt the broad expanse of love for the Ultimate and the Universal, which is the common thought of every Asiatic race'. Bengali religious leader in late nineteenth century, Swami Vivekananda (1863 - 1902), saw merit in the idea, as he thought 'on the material plane, Europe has mainly been the basis in modern times' but 'on the spiritual plane, Asia has been the basis throughout the history of the world'. Tagore's idea was that Asian unity will bring peace and harmony across the world. The proposition seems common sense, as in Asia lives the greatest proportion of World's people, and exists the greatest proportion of world's mineral resources. This continent, seen as a whole, thrived on exchange of ideas and was the birthplace of world's religions and commerce. [I read, with interest, an excellent article on the The Idea of Asia by Anthony Milner and Deborah Johnson, and quoted from it. You can access the article here.]

The Japanese, ironically, destroyed the idea of Asian unity by trying to achieve an empire. But surprisingly, while the Nazi empire building showed Jean Monnet and his colleagues the need for an united Europe, the idea of Asian Unity seemed dead after the war. Asia became the playground of Cold War - China, Korea, Vietnam, Cambodia, Indonesia, Iran, Bangladesh providing one conflict arena after the other - and the Japanese, despite their industrial ascendancy, was never forgiven for their brutal occupation of Asian mainland.

In India, Tagore was largely forgotten, except in some geographical pockets, and even there, his ideas about the world was never revisited. Of course, the wave of national independence swept across Asia after the war, and the Cold War proxy fights played out. By the time the cold war is over, the world entered into a new, hot war of religious faith, again originating from, and largely fought over, on the Asian soil. In this context, Asian unity not only seemed to be an impossible concept, but even an irrelevant one.

But, does it make sense, in this globalised world? When the world is uniting, what good it is to feel 'Asian'? But then, globalization is only spatial and incomplete, and one is an 'Asian' when s/he travels down the street in London, New York or Paris. In fact, globalization has undermined our national identities and ushered us to a whole new world of thinking regionally. European Union, despite all its failings, allow the French or Italians or the Poles a new way to approach and embrace the world, with confidence. Asianness has similar impact on our thinking - looking at the possibilities inside immune us from the fears from without.

Am I out to promote an Asian federation, with a bloated non-functional bureaucracy etc and an Asian election? I do not know the form, I admit, nor I am suitably educated in statecraft to know the full, practical implications of such an idea. But I know Asia is central to our identity, and must be in the way we think about commerce, life and ideas. India isn't very good at thinking Asian, as our ruling elite was trained in the west and always tried to mould our thinking to Western ideas, but I think that is a clear mistake. India, the true one, is steeped in Asian thought and deeply Asian culturally. Our policies, our ideas, our ambitions should be aligned to Asia, not to Europe or America.

I am not saying we shut the door and stop the flights. But we must do more to Asia. We should start with the recognition that we are Asian, and promote the study of Asian culture, heritage and literature in our schools. We should encourage our students to learn Arabic, Chinese, Japanese or Bahasa, along with English they anyway learn. We should look at free trade zones and send more business men eastwards. I recall being taught in school a great deal about Hitler's Germany, but almost nothing about China or Japan; I am certain such practises continue today. We should build more exchange programmes with great Asian universities and send our business school students for study tours to Singapore, Osaka and Shanghai than to Switzerland [I don't know what they do there, anyway].

I think I have found something to work for. Asia seems nearer, more than ever.

Wednesday, February 11, 2009

British Jobs for British Workers: A Note on Latest Protests

I am travelling, but reading the reports about UK job protests. Basically, the British workers are protesting because they are getting left out in new construction projects and politicians are paying lip service to them. This is one place where I think politicans are saying what they really believe - after all, the phrase 'British Job for British Workers' came from Gordon Brown.

There is no moral objection to the fundamental proposition - British jobs should go to British workers. But to do what? Produce products and services which they would want other countries to buy? Yes, such is the level of double standards these days - we want British jobs for British workers, protest against outsourcing in America and then rail against China and India because they are not buying enough British/ American products. So, this is what the politicians like Gordon Brown expects - British Jobs should go to British Workers and American/ Chinese/ Indian consumers should buy British products. That's more than funny.

The current protests are against immigrant European workers, but I do not think it will take long to turn this into a racist thing. Britain is a racist country, in its own insultingly patronizing way. Politicians are guilty of this more than anyone else - despite living in the country for five years and contributing in terms of taxes and taking British businesses overseas - I have always been told why immigrants like me are creating parking problems in British boroughs. I have more or less understood that this is a question of colour too, and being treated as an office boy in the office is part of life for a skilled but coloured immigrant. He will have to endure a life of daily insults and being put in the same bracket as terrorists and fake asylum seekers, and obviously, he will never be welcomed in the country.

I do think Britain will lose out significantly because of this. They failed to make their economy vibrant and innovative by keeping immigrants at an arms length, and failing to stop the talented Britons from leaving the country. The usual assumption of the politicians seemed to be that Britons are leaving the country because of increased immigration - while it seems exactly the opposite: they are leaving the country because of lack of economic opportunities, and high costs of living, which comes from years of monetary misadventure.

Living in Britain as an economic immigrant, I know the pains involved. First of all, you tend to get labelled - immigrant - and generally regarded as a crook, an illegal alien and a scavenger of public services. The company you work for takes you in reluctantly, as they do not have another option perhaps, and then treat you as a special case and an office boy, alternately. Because of the huge role government funds play in education, business and welfare, the immigrants are significantly disadvantaged against locals. They are given an unfair odd to compete against - almost labelled again for a fixed place in the society, which is to serve local companies. They have very little chance of social mobility or integration, and mostly their practises will be frowned upon or simply regarded 'un-british'.

I do think, however, such things will exact a heavy toll on the British economy in the coming months of recession. This is a time when its competitiveness will take a hit, and predictably, more nationalist feelings will emerge - leading to retaliation against British products abroad. Nationalist outbursts actually top the list of Don'ts in a recession, but British politicians apparently do not know that. I hope Britain will survive - as a politician entity, with its monarchy and pomp intact - this recession; however, this has to survive a very strong attack on itself, and pay a rather heavy price.

Tuesday, February 10, 2009

Why Recession Is Useful

It is indeed a hard thing to say, in the middle of so much hardship, that recession is a good thing. At least, to some extent. Let me explain this before I say any more.

The recessions are necessary for capitalism because they bring in creative destruction. That's the economist's term for getting rid of the dated, the tired and the inefficient. Karl Marx got ecstatic every time there was a recession - he thought that was capitalism's final gasp, and wrote about it. But capitalism emerged stronger and better every time. Creative destruction was what was happening then, actually the odd elements got swept away in recession and new, innovative forces, companies and ideas emerged.

Odd elements? Let's say, there are two kinds of surplus-making businesses - one that makes profit and one that earns rent. In economic terms, if you are earning a surplus because you are at the right place at the right time, or know the right people, or just get banks to lend you an unreasonable sum of money, you actually earn a rent. Yes, that's no profit - because profit, by definition, is the reward for risk taking and building an organisation.

Are rent-making businesses necessarily bad? They serve an useful economic purpose, by their entrepreneurship and brings in change in consumers' life. But these businesses add little value to the economy, and often, the gains are offset by the losses in terms of entrepreneurial spirit, the disincentive for innovation that the culture of easy money can create.

This is where recessions come in. They punish easy money, and wipe out the rent seeking businesses periodically. It is an automatic correction, where rules change overnight and the rent seekers are often left in the cold, not even knowing what happened to them.

Creative destruction, that is. As recessions destroy the rent opportunities, they provide incentives for innovation. They actually push innovation, make people work and think harder. They spawn new enterprises, from the disaffected employees of failed businesses, who have little access to capital but add new entrepreneurial energy to the system. So, capitalism lives on.

However, while we can celebrate recession actually as a positive economic force, it is actually the social costs of recession that one has to watch out for. It is easy to talk about the adjustments, but going through one personally is the painful one. As I feel now, everything I knew or counted upon has changed. The truth is that the recession hits hardest those people who have less.

This has many implications beyond personal pain. It weakens the faith in the system. Capitalism today lives on borrowed faith - it steals money from future generations to keep the social welfare, the feel-good mechanism, going. In the recession, those fault lines become apparent. The media turns gloomy, movies fail to lift our spirit and even sex becomes stale. All the things that we were told were marks of personal success suddenly appears meaningless. That's when one starts to question the wisdom of all of it.

Yes, I am saying that recessions forebear social change - that may not actually be a bad thing if you think about it.

Monday, February 09, 2009

Back in Manila After a Year

I am back in Manila after exactly an year from my first visit for Rutledge.I came last time on February the 12th, 2008, I am reminded, and since then, we have successfully started a centre and now discussing how we can take the business forward and spread it all across the country. In Philippines, I see an excellent opportunity to offer the training programmes. This is actually not very unlike India - there is a high level of English proficiency on the street, and the economic divide largely corresponds with Language divide too. The market is price sensitive and English training is largely commoditized, and therefore, we shall need to do packaging and branding with a whole new perspective.

I am an optimist, as always, that we shall be able to do this in the next few months, and the effort will be worth in the context of rewards it will bring. I am somewhat worried that the time is running out - my self-set timelines are as close as ever - and in the recession prone world, everything seems to be moving slower than it should.

I actually quite like Manila. It is cosmopolitan, and have great people - friendly and polite. I actually quite appreciate the filipino work ethic, though some people have suggested that I am wrong on that count. But I am already feeling sad that my work here is may be close to over: I shall possibly come once or twice, but it is unlikely that I shall see this operation in full bloom, which it will surely achieve in a few years time. It seems that I am running out of patience - how absurd - and trying to push ahead with things which require more attention and caution. It is interesting to see how set timelines are working on my psyche.

I have set a target date for exit, but not decided what I shall do next. I have never done that before in life, so this should count as a change. I have always had something in hand before I decided to exit; so this is an indication that the last five years have actually helped me boost my confidence a bit. I think it is that sort confidence which tells me that I can possibly work my out even if things are tough; I am obviously aware of the sacrifices I have to make.

The question also is why I am so decided about the exit. Two reasons, primarily. I am not enjoying what I do these days. This isn't about the stress, issues with people or anything: It is just that I am not getting the intellectual satisfaction that I have sought from all my assignments. I am not getting that satisfaction because the culture divide in this current assignment is far too wide, and my efforts to bridge them has been futile so far. I have also noticed that instead of creating solutions, I have actually become the problem - lots of time, my presence, and my peculiar attitude towards work, is obscuring the entrepreneur of his real responsibilities.

Apart from this, of course, I wanted to put myself under pressure and get things done. And, trust me, I have set myself a steep deadline even if it is almost an year away. That was, of course, the most responsible thing to do - allow time for everyone concerned to adjust to the realities and put in place a clear plan for succession. I do think my plan is working well so far - I am far more focused than I was earlier and things are getting done. Since I have also acknowledged that I shall eventually exit, I am much more responsible in structuring the deals, and ensuring that the structure of the operation become sustainable quickly. I also feel happy that I have informed my employers well in advance, for them to make necessary adjustments in their planning, and also to some of my key customers, so that they are fully aware and responsible for the purchases they are making.

Overall, I feel incredibly light and stress-free. I no longer have the burden of the future, so I am concentrating on the present. My sense of responsibility has actually increased - I have never shortchanged people who worked with me or who trusted me with their purchases - and I am feeling very good indeed that I have chosen to fashion my exit in such a deliberate, open and responbile manner. I do think my current state of mind is peaceful, and this is allowing me to do a better job.

I am indeed so comfortable with this decision that I have chosen to speak openly about this, with my employers as well as in this blog. I have not an iota of guilt as I shall leave this operation in a very good shape, and in responsible hands. Now, do I have a regret? Yes, a little - I would have wanted to see this business bloom after doing so much of hard work. But then it is too much of a compromise - it will take away a good slice of the prime years of my life, and because there is insufficient appreciation about the business we are in, the rewards will never match the efforts. I am better off putting my energy somewhere - but I know that my time of wandering around is over and all I want now is to work somewhere long term and build something worth building.

Tuesday, February 03, 2009

Talking About a New Business School

Yesterday evening, I spent time talking to someone who is planning to set up a business school in Hyderabad. It was a very interesting discussion - not just because this is a very successful professional pursuing his ideas of how business education should be imparted. He was also clear why there is space for another management school - because the demand is immense and the seats in good educational institutions remain limited. Besides, he also had a lot to say about what is wrong in the business education industry as of today, and how he wants to address the problems.

To be honest, while I found his opinions interesting, his policy prescriptions, at least within the short span of discussion we had, were limited to introduction of blended learning. So, he was one of those who thought introducing an amount of technology will actually solve most of the problems the B-Schools in India face today. In my opinion, that is a rather simple view, and more must be done to enable a skills leap in the Indian industry.

For example, India, so far, has done fairly well in followership, picking up ideas and perfecting processes for the Western companies and governments. This has surely contributed in our development, but to move beyond this current point, we must develop talent to innovate and to lead. This is a challenge: Indian culture prompts people into group thinking, and when people are plucked out of group-think, they become terribly narrow and selfish, incapable of meaningful contribution in a team/ organization context. So, the primary challenge of modern education in India is to prepare people to have a balanced view, a questioning and innovative attitude and a penchant for leadership - an intent to do things differently, whatever the cost. There are established methods in Business Education which allows this already - case study based approach, for example - and the B-schools in India must put in the necessary curriculum development money into sourcing and developing such pedagogical tools.

Technology will surely help, but upto a point. A conscious attempt must be made to move into participative learning technologies rather than authoritative systems, such as an LMS, which should dovetail into the overall approach to developing leadership and independent thinking.

Also, as I look into the British universities, I do think post-experience Business Education is a great idea. This gives the learner a perspective beyond the theoretical bounds of a curriculum, and makes the case based studies much more relevant and productive. I am sure a way can be found to create a shorter, 12 month or so, intensive post-experience programme for the Indian market.

The problem in India is actually diametrically opposite to that of creating a successful school: In India, students actually expect little and rarely challenges whatever is handed down to them. This makes it even more difficult to tell the wheat from chaff, and provides even less incentive for investors to innovate in education offering. However, hopefully, the recession will do some good here - by expanding the number of students heading to B-School, but limiting, somewhat temporarily, the number of positions to be filled. This will eventually lead to performance pressures on competing schools, and as the economy peaks again, innovation will be the name of the game. I wish the entrepreneur in question all the best, and hope he finds the answers before everyone else has started jumping into the same boat.

Monday, February 02, 2009

Local Brands in India

The all too familiar trajectory of Indian businesses is to go national, almost immediately after start. I am on the same side, all my business plans always had a pan-India ambition. Of course, most Indian businesses worth its salt are 'national' businesses, and even suppliers, customers and regulators usually equate national presence with business maturity.

However, beneath this 'national' surface, lie three important facts: One, India is diverse and states and regions are very different from one another - so going national is almost as complex as going international in another country context; two, there are many very successful local brands, which are doing very well by their own right and are fabulously profitable; and three, the concept of a homegrown corporation is adored and championed by many Indian states, look how keenly Satyam was supported by Andhra Pradesh government and how closely Infosys is associated with Karnataka or NIIT with Delhi. True, all the companies I mentioned here grew out of their base and became truly national companies, but they received a fair amount of support and adulation in their home states which enabled them to go into the breakout stage stronger.

I think this is an important story which we often miss. The Indian identity is based on a bias towards a strong union, and often the state/ regional roots are downplayed. In fact, many times, it is perceived to be politically incorrect, and media will usually shun great regional champion stories. But, this is possibly a flawed mindset, and a brand marketer, particularly working on brand introductions in India, may need to plan for regional differences more seriously than they do today.

I also think that the regional differences in India are widening. This is happening despite the rapid economic integration of the country, and unprecedented movement of labour and capital from one region to another in the recent years. The Indian society has gone through a rapid shift, including a rapid rise in interethnic and commuter marriages. But, at the same time, the ethnic characteristics are being further emphasized and becoming relevant for business. This is the perennial paradox of globalization: Once the economy becomes more global, the cultural identity becomes more local. On a micro level, someone told me that she appreciated her Marathi roots more once she got married to a Tamil, and lived happily thereafter with two separate cultural spheres in the family.

In this context, there is wider scope in creating great local champions. I can talk about dozens of local/ regional brands, like Subiksha/ Trinetra in retail, Karrox/ Brainware in education and P C Chandra in Jewellery in West Bengal. Each one of them created very powerful brands, without having much influence outside their home states. These businesses actually present powerful templates to follow, though the media and public policy-makers have to wake up to the possibilities of the local champions.

At a business policy level, it is actually prudent to treat India as an aggregation of markets, rather than one market by itself. It is more relevant than past today, as the regional variations will become more prominent and the need for political correctness will disappear. The state government policy will also go through a notable shift - from an open-doors business policy, it will move to the promotion of local champions; not necessarily through protectionism, but through support and incentive of local entrepreneurs.

Sunday, February 01, 2009

What To Do With Pakistan?

We are already talking about a MacArthur solution for Pakistan, because it indeed presents the dangerous mix of nuclear capability, a failing state and continuing military sponsorship of terrorism. The key argument is that it is no longer enough to throw money out of helicopter and expect Pakistani government will be able to break the back of terrorists. So, what is needed is an international engagement - with a figure like General MacArthur [Tommy Franks, perhaps, or are we talking Colin Powell] taking charge, and rebuilding the country bit-by-bit like post-war Japan.

Despite the obvious appeal of this doctrine, I think there are at least three clear flaws in this thinking:

(A) Pakistan is no Japan. The Japanese adventurism was an aberration in its history - Pakistan's existence is based on its islamist identity. Japan's problem was its wartime leadership, which was replaced effectively by General MacArthur. Pakistan's issues today are of identity and purpose - much more complex issues to solve.

(B) Japan had lost an war and went through two nuclear explosions as General MacArthur walked in. The country was devastated, its leaders discredited. If anyone went out recruiting a Japanese Resistance that time [I am unaware anyone did], he would have been returned empty-handed. Pakistan today has a strong military with nuclear capabilities. Its covert/overt strategies are actually helping Taliban win the war against Americans in Afghanistan. It is a neighbour to, and keeps good relationship with China. This is no cakewalk for the modern-day MacArthur, if such a man can be found at all.

(C) Post-war, Americans were the victors - undisputed Masters of the Universe. It was easy to claim a moral, economic as well as military supremacy. Today, the picture isn't that black and white anymore. If anything, Barack Obama needs to limit America's commitments abroad. Americans do not have the appetite for another lengthy occupation, which, if it happens. is indeed going to be more like Iraq than Japan.

Also, the war that is being fought in Pakistan, on a closer look, is not between the Western civilization and an oriental, Islamist one. The war is between the state as we know it, and non-state communities which will increasingly form an alternative to national affiliation, for good or evil purposes. We are so far losing the war because our solution thinking is statist - invoking General MacArthur is a classic example, and the Bush administration's failed Musharraf policy only aggravated the situation. What we actually need is an alternative solution - one that addresses the real issues on the ground and bring the people back on the side for the rest of the world.

Am I saying that people in Pakistan has gone onto the other side and become blood-thirsty monsters? Not at all. In fact, despite the fact that the Pakistani state was created as a 'homeland for Muslims in South Asia', the Pakistani electorate shown maturity and poise and never let an Islamic fundamentalist party win a popular vote. In fact, Pakistan's current Islamic stance can be traced back to the time of dictatorship, during the last MacArthur experiment with General Zia-ul-Haq, and not to any popular will. However, progressively, Pakistani people lost faith on state, their state, and turned to non-state formations or became generally disinterested.

The state has failed in Pakistan. And, the blame goes, if one studies history, to external meddling than to the connivance of Pakistani people. It is the policy of regime engineering of the West, which has actually created the troubles in Pakistan. It has alienated its people - as secular and as decent as anyone in the world - from its own state and from any other for that matter. I am saying that we always tried a MacArthur solution for Pakistan. Though counter intuitive, but it is time to step back and let the country return to democracy.

One thing about Democracy that George Bush [and all others who think like him] do not understand. We can not have the luxury of dictating the process as well as the outcome. Whatever his faults, Bush believed in democracy, possibly genuinely, but could not give up the hawkish attachment to outcome [otherwise, he would have talked to Hamas - that would have solved a lot of problems]. We hope that Obama will be more preoccupied at home and therefore, more pragmatic. So, I am not sure we shall be looking out for a new Governor General in Pakistan anytime soon.

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"Far better it is to dare mighty things, to win glorious triumphs even though checkered by failure, than to rank with those poor spirits who neither enjoy nor suffer much because they live in the grey twilight that knows neither victory nor defeat."

- Theodore Roosevelt

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And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

- T S Eliot

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