1-By Laksh, Doing Business, Strategy

Talk by ‘Subrato Bagchi’…

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Subrato Baghchi delivers an excellent talk around his new book “The Elephant Catchers”. Here is a brief capture and my comments in blue.
  1. Book premise: In India there is no framework for scale. And the book “The elephant catchers” is to provide the same with the help of case studies of companies that achieved it–ITC, Sugana (that has redefined supply chain to suit its business model), TVS, Aravind Eye hospital (that took the best practices from McDonalds), Hetero, Dr.Reddy’s Labs, LV Prasad eye institute (that chose to give away its innovative edge for the betterment of the nation by training more than 15,000 surgeons)
  2. Here the step wise framework proposed. Entrepreneur should
    1. Be comfortable with scale and treat it as his/her ally (This is the first and last stumbling block for many)
    2. Be willing to change the business model to change/evolve as per the new customer to be acquired even at the expense of losing/alienating the existing customer base. (Sometimes similar to ‘The Blue Ocean Strategy’) (Very difficult to do. For instance, a mass hero with strong domestic market pull, but who wants to cater to satellite TV market and overseas markets has to take some tough calls to re-define his customer proposition.)
    3. Scale his/her intellect; imagine a different future; imagine the new reality first in one’s head, sort of pre-empt. Important actions to achieve this could include broad basing the board with the right mix of individuals and go beyond family and friends; Hire people with different competencies; Use consultants before they outlive their purpose. (Consultants cease to be of unique value beyond six months-Azim Premji) (Coming from Mr.Premji, the No.1 no-nonsense business leader is worth considering seriously, who by the way, did employ some of the best brand consultants to change the perception of Wipro from a Vanaspathi selling company to that of solution selling)
    4. Scale one’s reputation (currency) or reputation capital: It is the reputation that saves a company in terms of crisis and forms an important part of its resilience (It depends on the size of crisis though, Mr.Raju proved this otherwise with his ‘riding the tiger’ pen-stroke, and all of a sudden Satyam (truth) was no longer what it stood for)
    5. Scale one’s people ( Most often founders end up occupying the key posts for long and become the glass ceiling for second in organizational chain. Founders should know when to let go. They should plan ahead of time) (Founders should devise an exit plan for themselves and not just for the company. They should believe in clock building as outlined in the book ‘Good to Great’. What stays behind and stands the test of time, is the true achievement. )
    6. Scale adversity. Should tide over crisis and stay put. For instance TVS group that weathered the uncertainty during the freedom struggle (Crisis and the company’s response defines the company’s character. There are lots of global examples like Johnson and Johnson, Toyota etc (pulling back bad products from the market and absorbing the losses)

Q&A related

  1. Quality is not defined by the customer. It is the company’s prerogative and planned ahead by the company. (Sales are just one indicator of customer’s perception of product’s quality)
  2. Small is beautiful when it is so good and world-class that scale cannot match it. The price of being small is excellence. Such companies should not scale. (Any thing that cannot be commodotized cannot be scaled? SVR cannot be scaled amongst actors?)
  3. Scaling of people has to be driven by the top management. Outside tools like business schools etc help, but nothing like nurturing individuals by spending white space non agenda time.
  4. If business is leading edge scaling is a must or they will be eaten away by the big players. Resource building has to be done in an unique fashion like makemytrip.com that raised money via NASDAQ listing instead of Indian bourses. What’s your story? Where does it have its most appeal? (Nothing new actually, SIFY, a brain child of Mr.Raju, was the first internet company do so. He was a master storyteller and super success, before we lost him to dark side.)
  5. Most often displacement (physical, emotional, intellectual) is the cause of entrepreneur’s success ( A hero becomes one, only when he leaves his base)
  6. Answer to a business problem may be outside the business
  7. Law is not substitute to character.
  8. Scale should be an all round, multi-level development. It cannot one mega scale but a zillion micro ‘scale’s
  9. Founder’s trap: Taking the trinity example, just imagine Lord Shiva doing Lord Vishnu’s work and vice-versa. How can a founder be expected to do everything at the level, scale demands? To let go is the most difficult thing for a successful founder (Core-competency)
  10. Innovation needs an ecosystem (Should respect research; Jugaad innovation is non-sense). Look beyond engineering. Look at themes that are defining the current human scape. Existential thinking

Book available at Flipkart and Amazon.

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An economist’s contrarian view on Food Bill (Tehelka)

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The Fear That The Food Bill Will Make A Massive Dent In Our Deficit Is Misplaced

Some of these fears are not valid. And the fear that the bill is somehow going to make a massive dent in our deficit is entirely misplaced. Our current account deficit is a little over 4% of our country’s income (GDP).  Compared to that, all of our subsidies – oil, food et al taken together are half of that – 2% of the GDP.  The food subsidies as they stand right now are only 0.8% of the GDP. With the new food bill, this will go up by, at most, another 0.15% to 1% of the GDP.

Firstly, it is not true that our economy is sinking. Our GDP growth stands at 4.8 to 4.9%. Yes, there was a glorious period for about 5 or 6 years from 2004 to 2010 when our growth rates hovered between 7 and 9%. But it has never been that high in the history of independent India. However it is true that at 4.8%, our growth rate is now at the lower end of the average since 1991 when our economy first opened up to world markets. But even at this growth rate, we are better off than most economies of the world, except China. We are still in the top 10 and have not been downgraded yet. Where we are weak is our current account deficit or borrowings versus current spending. Most countries, even in Asia, have a positive current account and ours has historically been a deficit one. This makes us vulnerable to what happens in the world market. Our deficit is largely because we import vast quantities of gold and oil.

Professor Abhijit Sen, member of the Planning Commission and an economist who has taught at JNU, Sussex, Oxford and Cambridge, has spent more than twenty years planning India’s grain policy, rural credit and food distribution. In a conversation with Revati Laul, he dispels the myths surrounding the controversial Food Security Bill. Click here for complete interview at Tehelka

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Dharavi Google

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People who know him have stopped using Google. “They just call me up,” says Rajesh Prabhakar, breaking into a wide smile. The “researcher” is amused at how locals in Dharavi, where he was born and has spent most of his life, expect him to know minute details about train schedules or school admissions. His real expertise lies in guiding crews of international news and documentary films around in one of the world’s largest slums. But to residents of the area, it may seem that a man who speaks flawless English and mingles with foreigners would, like the most popular search engine, have all the answers.

Here is the link to complete article in Business Standard

Interestingly, in the critically acclaimed novel ‘Shantaram’ there is a character by the name Prabhaker who guides the hero into the slums of Mumbai.

ET, IT…and the rest