Deep Discounts or Deep Distress?

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I am as usual caught in a conundrum when I read some stories. On the 15th of August National Restaurant Association of India (NRAI) launched a logout campaign against the deep discount coupons that are offered by these five aggregators Zomato, EazyDinerNearbuyMagicPin and DineoutSince then, more than 2300 restaurants across the country de-listed themselves from these food apps claiming that “discount structure, terms and conditions, by the food tech companies are unjust and unsustainable.” The president of NRAI said that to stay competitive in the market, some aggregators give discount of buy one and get one free. Others have done the same thing differently; they have straight away offered a 50% discount, which means the same.  

The story does not end here. On particular Gold Card membership, such discounts are allowed on one itemBut our desi brain works interestingly. The people go to restaurant A and take starters- 50% discount. They go to another restaurant to take drinks- buy two get two free! Finally, they go to the third restaurant and order the main course- buy one get one free! Using this method, they get the whole meal at 50% discount which kills the business.   

The worst part of the whole thing is that the discounts are being borne by the restaurants and not the aggregators. The association wants these discounts to be removed so that customers get used to not getting high discounts. It is a sort of detox action that is essential, according to the association. It appears that both the sides have understood the problems created by deep discounts and they also know that it will take some time to reach normalcy and come out of the deep discount issue.  

You and I are naturally going to be unhappy with these changes. We have to now look for happy hours or special days to get good discounts. Now, these changes are going to take my outflow back to normal, which I do not like. But we should not forget that such gimmicks never work in the long term.  

I always felt as if I am an uneducated person, though I have run a small business for more than 35 years. Giant organisations like Amazon and Flipkart have been in the deep discount game for quite some time. The difference is that they give deep discounts from their pocket. For years, they offer deep discounts, give Prime memberships and so on. They keep on investing billions of dollars for years. Amazon has never made profits in the last twenty years. But they continue to invest in the business to get more and more customers all the time. Uber CEO has recently made a statement that Uber may never make profits. What is the business model of such companies? Jeff Bozos has become “poor” when he settled his divorce, and his wealth is at lowly US $ 65/ billions. He bought some time back Washington post for an all-cash deal of US $ 250/ million.  

Uneducated me does not understand the principles used in these businesses. Uber charges higher rates when demand is up. But I have seen that as a routine, they charge about 10 to 15 % more than an Auto Riksha in Pune. The price difference between an Auto Riksha and a car can be three lacs of rupees. Many Rikshas give mileage about 1.5 times more than the cars. 

On top of that, Uber takes 30% of the amount we pay to the driver. To me, the driver may break even, Uber’s figures show that they make losses. Other than making vehicles available quickly to us, are they running a charity organisation? Is it not similar to deep discounts offered by Zomato or Amazon?  Or for that matter, Oyo?

Venture capitalists, angel investors, put in their money in such companies. Venture capital is defined as capital invested in a project in which there is a substantial element of risk, typically a new or expanding business. I am sure that those who invest in such companies expect reasonable returns on their capital. By what I have described above, there are no returns, then why are the investments continued? Where is the source for such unlimited funds?  

There is no doubt that Amazon, Uber, Zomato are market disruptors. They have shown the world a new way of doing business, which even 25 years back did not exist. New methods, new ways of doing things make a lot of difference in day to day life. Consider AirbnbThe concept is so good that it is helping people all over the worldIt reduces the cost of travel and uses people’s assets which have been remaining idle.  

Amazon, WalmartJio are gamechanging companies which have made a big difference in our lives. But they are making these changes with their own money or at the cost of competitors. They are disrupting the market and making their competitors think; I am sure the competitors will come up with even newer ideas.  

But this deep discount business with own money or someone else’s money is not sustainable business model. I am not surprised that NRAI has revolted against it. I was talking to someone about these aggregators. It was felt that the aggregators probably sell the data of their customers to make money! When companies like Facebook have done it, what will stop the aggregators from selling data!  

Ultimately, market disruptors come with ideas and business models which were never seen before. But one thing will never changeSuch organisations have to make profits at some stage. Unless, of course, you are an Amazon or an Uber. But don’t forget that Amazon is the market leader in Cloud Computing business; so as a group, they make profitsBecoming Unicorn company (market value exceeding One Billion US $) is fine for publicity; it will help companies get more VC fundingBut if they don’t start making profits, such companies fall in the group of 95 % plus companies, which close down sometimes even without a whimper.  

 

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Recession or Cyclic downturn?

The automotive sector in India is under significant stress. Sales are going down drastically in unprecedented numbers. It is a vast sector and has already started giving layoffs, having non-production days- a euphemism for plant closures. A large number of dealerships have cancelled their tie-ups as the business does not appear to be lucrative. On top of this, BS-VI norms will be starting from 1/4/2020, which will cause further stress as no BS-IV vehicle will be even registered from 1/4/2020.

More difficulties will come up during this year and maybe even next year. The reasons for this is that CAFÉ norms will come into the picture from 2022. There is already a discussion of auto companies going slow on investments, but statutory requirements are mandatory, and these companies cannot avoid them. BS-VI norms and CAFÉ norms will increase the prices of cars. One thing that never comes into the discussion is the sale of old vehicles. It is not that people are not buying cars. People suddenly don’t change their habits. But people become practical and smarter.

George Mathew

I will tell you what I mean. I read an article from Indian Express which was discussing the sales pattern in the industry in general. The data in the table is for two thousand plus companies. The table above shows the business figures for April-June quarter comparison of 2018 and 2019. Sales of AC’s are generally seasonal. But other items like TV’s, Microwaves have not shown any decline. Sales are almost normal and have only shown seasonal changes.

I want to write a disclaimer. I cannot “read” the financial data, and hence, I cannot analyse it too! But as a layman, I thought there is not much difference for these two years. The sales have gone up in 2019.  Operating margins have reduced slightly. Depreciation is quite high in 2019, indicating the investments done in the that year. Hence interest paid has gone up maybe due to investments in plant and machinery. Proportionately tax paid has gone down, and profit has gone down. These figures do not show any drastic changes happening in the market. Companies considered in this table exclude banking and finance companies.

Then why is the auto sector in distress? I have mentioned that people have become smarter and practical. In the last financial year, the total number of vehicles sold was large. But the sales of new cars have come down. There is a secondary market where people buy used cars. The total number of old vehicles sold was four lacs more than new cars. Why is this happening? Small cars like Alto are now sold more in three-tier towns. Young people in big cities want to buy bigger vehicles. I understand that a 3 to the 4-year-old big sedan is now available for the price of an Alto. The trend of buying used fancy cars is affecting the sale of new cars.

I am not arguing that there is no recession in the auto sector. But we should not forget that it is one of the most protected sectors in India. Customs duty on cars below US $ 40000/ is 60 % and above this value 100%. The used cars have a customs duty of 125%.  For various reasons, this sector has remained inefficient. After many international companies started coming to India and opened their factories in India, the auto sector had a tough time. Some Indian companies took 15 years to reach the quality levels of global companies. One company that followed a correct way of doing business is Bajaj Auto. They currently export 1.8 million motorcycles every year. It gives them a buffer when the local market sales dip!

Some of the reasons for the downturn could be that main barrier for transport vehicles like octroi has been removed. The action has speeded up the turnaround time of vehicles  substantially. The effect would be that the number of trucks needed to transport material would be less than those previously required. Another reason that is making rounds is that demonetisation effect causing the sales to drop. Is such a large industry dependent on cash? In the rural areas cash was being used to buy vehicles; even large SUV’s were bought using cash. If people had so much cash with them why did they not use bank instruments to pay? The answer is obvious. Not paying taxes honestly is a habit that does go away quickly.

What was the auto industry turnover 20 years back? How much has this industry grown? The auto industry has made decent profits all these years, so I am sure they have reserves. Pollution norms have been known to everybody, so no point in raising hue and cry about investments needed.

Any sector that is in stress always talks of alarming results of the recessionary trends in their business. Should the government give selective help to the stressed industry? Is such action fair to other sectors which are doing okay in their business? The financial stimulus can be a solution, but such money gets diverted from equally essential areas. We should not forget that high tariff on imported vehicles has helped the industry for a long time.

All the companies in the automotive sector are large organisations, and they have the wherewithal to overcome current tough times. Asking for a reduction in GST is a short-term major and is taking a myopic view of the situation. In the last couple of years, the government has been receiving feedback from business about GST. Government has already made changes for the benefit of both industry and the government. Making changes for a specific industry for a short duration is an incorrect way. The auto industry has been generating decent profit for the last few years. Some things have changed; some new variables have come into play. There are who experts can find a solution and suggest corrective actions. I am sure the industry will come out of it.

Raising the alarm, making statements like “It is the wake-up call for the Government of the day” does not solve issues. But the government help should be an exception but not a rule. There is an interesting story about General Motors and Chrysler. When they were in serious financial trouble, a decade ago, the senior executives of both companies were called to Washington DC for discussions. In the initial informal chat, they were asked if they reached Washington the previous night. The surprised executives said, “Oh, we landed only about 45 minutes back. We chartered a plane to come here.” The government official was aghast!

So where is the vendor conference this year? Italy, Las Vegas, Macau? How can you have the conference inside your factory? Cost cutting is for others. I have attended General Motors vendor conference once in Pune. It was at the Oxford club and there were at least six helicopters used by GM bosses to arrive at the venue! It is not a surprise that GM closed their shop in India.

Bricks and Mortar!

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Pyare Khan from Nagpur!

4G then 5G! One TB storage space and 100Mbps speed. VCs and Angel funding! Till very recently G was about gravity, Storage space Cubic Meters and speed was 100 kmph! The numbers have remained the same but suffixes, if I may call them, have changed. Yes and VCs were Vice Chancellors and the Angels you generally met after death!

In the sexy world of IT, VC, Angel funding the Ooomph is there. The real-life talks about loans, mortgages, illnesses, loss of jobs, and what have you. But we all forget one crucial thing, this is real life; the sexy side of life is more of a service industry. These services make bricks and mortar functions efficient, they create services which at some stage were not even thought possible. For example, Uber, Air BNB. Who would give his or her own house on rent to people unknown? The beauty is even after these people used the home, you never came in touch with them, ever. For that period your home was converted into a service apartment. There is one product which the IT industry has created which is not brick and mortar, the computer games. To add to this, unfortunately, there are virtual frieships instead of real ones.

https://indianexpress.com/article/india/auto-driver-to-iim-case-study-his-journey-on-uncharted-highway-5807065/

The story of Pyare Khan from Nagpur is shared in the above article. His brick and mortar story must be shared with all. He was born into a low-income family and started working at the age of eighteen by buying a bus. His business failed, and he sold the bus. Then he started driving an autorickshaw at the age of 21. He went to a bank and asked for a loan to buy a truck. The loan amount was Rs Eleven lacs. The amount was way above his level, with no way of providing any other collateral. But somehow the bank manager was convinced in the end and the rest, as they say, is history! Khan’s company’s current turnover is Rs 400 crores (or four billion Rupees). He uses his 125 trucks, plus 3000 other trucks ply under his company. A financial institution from Dubai is now offering him a loan of Rs. Eighty crores (Eight hundred million Rupees). As usual, when he had no money, getting a loan was extremely difficult, but now that his company is doing good, people on their own are offering the money. The funny part is that IIM, Ahemdabad selected his case and gave him first prize! It was chosen over all the other fancy startups funded by, who else, venture capitalists! Other participants were from all over the world. The beauty of the whole thing was that Khan was not even aware of what is IIM!

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Old Amrut Tulya Tea Vendor!

There is a similar story happening in Pune on a smaller scale. It started with a family called Yevale. They branded of all the things, ready to drink tea! In Pune, there has been a tradition of selling tea in shops called Amrut Tulya tea! (It means as good as nectar from heaven) Such tea houses are a conventionally low-cost shops which could be equivalent to Pubs, where people meet to gossip. Tea houses also serve select bakery items. Yevale family turned this business on its head. They started probably with a similar inexpensive shop but created a different business model. They kicked off with their first modern shop on 1st June 2017, and as on 17th October, 2018 have opened 30 th branch in Pune and around. All they serve is tea! They have their recipe perfected. They give franchises. Their monthly sales are now Rs twelve lacs or 1.2 million. Annual turnover is 14.4 million Rupees. They sell their tea in elegant small cups. The quantity they serve can be finished in about three large slurps — the same as the Expresso, which is even less quantity. I have paid Euros 2.25 for an Expresso in Turin! Look at the maths. They charge Rs ten for each cup and sell 120,000 cups of tea a month. Wow and wow!

New Yevale Amrut Tulya Outlet!

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Such businesses or enterprises are what can be called as Unofficial India Inc! Not many people know about them. The promoters have the zest and the verve to succeed. They don’t use laptops, generally don’t change their lifestyle! Such people simply start a business and keep on successfully running them. I do not know the percentages of success and failure in such enterprises. But the percentage is more than the “Startup” model of business, where the success rate is less than 1 %, but the hype is more than 100%!

How many examples can we discuss now? These are mostly in the so-called parallel economy! They don’t pay taxes; Oh come on, how many organised sector companies cheat on taxes. How many ditch the banks on loan repayment? No point in blaming smaller businesses on this matter. It will be a good idea to bring smaller establishments into GST and Income Tax net. Now with the computerisation, this linking is simple and easy to track.

I will share a few more such examples briefly. Near my home, there used to be one Vada-Pav vendor (Potato patty Sandwich). I used to buy a couple of these items once a while. So I got to know him. On asking him how many plates he sold, he was initially hesitant. But then he said that he sold 600 to 700 plates a day, and up to 1000 plates in a day on busy days. Each dish would cost Rs.12/. To eat two of them were mini-meals, and one was a snack or breakfast! One family ran a Kachori business in Kanpur, I think. Father, two sons and two employees ran the business. They could barely stand in the hole which they called their shop. Income tax department tracked them and found out that during the peak time of the day it took forty-five minutes to serve you, in regular times about twelve minutes, and in quiet phase about two minutes. After fifteen days they found out that their yearly income was about Rs eighty lacs. (Eight millions)

My point is, why are these so-called family businesses more successful. They do not know much about the business aspect; they do not get funding. They have no guidance. Whereas the Startups get financing, the folks are educated and polished. They are funded based on a rational business plan. I assume this because the VCs have their own experts to whet the plans. Based on the study, startups are funded. But most of these businesses don’t talk about brick and mortar stuff. The world runs on brick and mortar things. The IT stuff makes brick and mortar businesses better, more efficient. The Kachori Wala and Wada-Pav wala have good knowledge about the product they are making. If these businesses are run inefficiently, the profitability will be less; there can be more headaches and many businesses fail too! But businesses still run. So my question is why these types of companies are not funded by angel funders? Is it because it is not very attractive to discuss in parties? When the success rate in IT areas is so low, why not finance “Real” business? The only answer I can visualise is God Only Knows!

India Shining Silently!

Among the political upheavals, hyperbole things are changing in India, slowly but surely. There was a political slogan, India Shining,” sometime back. But India is silently shining. The surprising part is that the change is happening on the Engineering side of life. The engineering feats are not sexy like IT, where smart men and ladies market their achievements.  

I read a couple of news items today. I found them very interesting for a different reason. One of the articles was about railways, and the other was about DRDO. 

https://indianexpress.com/article/india/indian-railways-piyush-goyal-premium-trains-rajdhani-shtabadi-5796304/ 

I will talk about the railways one first. When we speak of railways, we visualise historical systems, dirty platforms, and bogeys. In general, we get to remember inefficiency everywhere. But this article shares details about how a 20-year-old problem was resolved by Railway Engineering arm. The problem was about LHB coaches which were put into service; these were imported from Germany. There was a problem of coaches shaking, giving jolts while braking or at a higher speed. Railway team found a solution locally. There were about five thousand coaches involved. They replaced the Center Buffer Couplers with new design couplers. They also found that the usual braking method also caused these jolts. Hence they asked the drivers to use regenerative/dynamic braking system when speeds were above 30 Km/hr. With a combination of these two, jumping teacups and jolts have become history. There were 5000 such coaches, but with proper project management, the work on all of them was completed in two years. These stories don’t come out with fancy celebrations; these projects were done as part of routine practice. Great story to make everyone proud. 

https://indianexpress.com/article/india/india-israel-spike-anti-tank-missiles-drdo-5796306/ 

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The news above is another silent development of a highly complex military requirement of anti-tank missiles. Initially, the order was placed with Israel, who had a fierce competition with the US. This order was placed in 2014 for 351 launching systems and 8000 plus missiles worth US $ 500/ millions. Indian organisation DRDO (Defense Research and Development Organisation) was also in the process of developing the missiles locally. After successful second stage testing at Ahmednagar, the government decided to cancel the contract with Israel and go ahead with DRDO under Make In India initiative. These weapons are highly sophisticated and use infrared technology which has been proven during testing in hightemperature regions of Rajasthan deserts. No fanfare, the sheer hard work is the key to such success stories. Again this is the story of excellent project management where DRDO will deliver all the systems by 2021 as per requirements of the army! Kudos to DRDO. 

At the end of the second world war, Japan and Germany had lost, and many of their factories and cities were destroyed. All the treaties that were signed ensured that they would not resurrect rapidly. But somehow these nations rose literally from ashes like the Phoenix bird! All this was achieved due to the dedication, will power to excel and love for the nation.  

India, as we know today, became one nation for the first time at the time of independence. With the diversity of people, religions, languages, cultures, it was like Europe or much more complicated. Getting people together itself has been the greatest achievement of the last century, though we do not realise this. India has another significant problem. Our diverse culture has been very mature and has an old history of thousands of years. So, specific thoughts and beliefs are ingrained very firmly in our minds. We take time to change. Added to this was the large population. That India has survived and prospered is a miracle by itself.  

Slowly, we have started to learn to keep the diversity at home and now work together with professional pride as a single proud nation. Reading the above stories gives great hope to me about our great nation and people.  

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The viaduct of Pune Metro!

There are many such stories which are known to us, and we have started taking things for granted. Metro railway is an institution built singlehandedly by the doyen of this technology E Sridharan. He was also instrumental in developing the Konkan railway system. The system was one of the most stringent projects to build because of the tricky mountainous terrain. What Sridharan did was a technological marvel, management marvel. All the projects handled by him were always completed on time.

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Konkan Railway Bridge on the river Panval

My classmate Shashikant Limaye was the chief engineer for bridges on the Konkan Railway project. Shown above is the bridge designed by him on the river Panval (Yes it is supposedly near my native place Panval, where I have never been!). This bridge is 80 meters high from the ground level. It is considered a significant technical achievement in the project. How do people like Sridharan achieve such things? Looking into the smallest of the details has ensured everything works like clockwork on these projects. There is an exciting story about Sridharan. As the Metro lines started becoming operational in Delhi, he would visit different sectors every day to begin his work. Where he would go was not known to anyone. As he entered the station, he would bend and check if there was dust on staircases and escalators by wiping with his hand. What was the result of this dedication? Delhi, Jaipur, Kochi, Bangalore, Chennai, Mumbai, Nagpur, Pune, Hyderabad, Lucknow are all having Metro lines or are in the process of installation. All projects have always been completed on time.  

These projects have proven that in India, we can do worldclass technical work and have excellent project management abilities. In the example of bogeys, do not forget that these bogeys were not in one place but spread all over India. The work was completed without hampering the regular services.  

We have been doing great things in Technology. ISRO has already proven that it is India’s showcase worldclass organisation. It competes and beats others from the world in quality, performance and equally importantly, costs! 

On the business side Reliance has done a fantastic job of creating world-class large business; they have proven the same again in their Jio venture too!

But somehow we are not able to go up the value chain in other areas where we can do it. I am talking about the IT industry. They started doing well in ’90 s of the last century with Y2K! They started making big money and started getting large service contracts. Such contracts led to making even more money. In 20 years, these companies became very large, and have so much money that they did not know what to do with that money. Recently they started buying back their own shares from the market. The buyback indicated that they had no plans for developing new skills and gaining expertise in more modern areas. They have still not shown the willingness to go up the value chain. They have the people, the money but lack the will! I sincerely hope that these companies invest some money, human resources, and efforts in creating world-class products! Don’t just become Billionaires; become proud owners of great products!  

 

 

 

Administrative Reforms Tsunami!

 

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The above slide depicts the difference between a specialist and the generalists. India currently is administered by Generalists where now the need is for both Generalists but in many places that of specialists.

https://indianexpress.com/article/india/plan-to-import-talent-a-third-of-deputy-secys-from-outside-govt-starts-work-to-induct-400-directors-5776102/ 

This news item from a newspaper must have sent shock waves through a particular section of the administration in India. Prelude to this was the appointment as External Affairs Minister, of Mr Jaishankar, recently retired career diplomat who had handled his work with aplomb during his career. Instead of appointing a politician, Jaishankar, the domain expert was appointed.  

The British ruled us for 150 years. They created an administrative infrastructure to suit their needs and not the needs of India. At the top of the pyramid were the elite IAS service and other such allied services. Their job was to ensure that the British rule and its arm functioned smoothly. Their main targets were to ensure that the taxes were collected on time, to break the agitations against the British government and nip them in the bud. (Remember Jalianwala Baug?) An example of different priority was the cultivation of opium in Bengal and Bihar. British made sure that all the produce was sold to the government and at one stage British sold Opium worth Seven Million British Pounds in a year to China from India; for opium growing areas officers were expected to give top priority to opium fields over all other functions. Anti-mutiny work and Opium farming were a couple of services which indicated that the system was designed to run in ironclad fashion with no allowance for deviation. It was a sound system, and it served the purpose of the Britishers. We inherited and continued with the same system even after the Independence was achieved, which helped us initially. It served its purpose till the last colony, the one in Goa by Portuguese, was driven away in 1960.  

As usual, everybody was happy with the status quo. Why repair something which ain’t broken? Out of all central services, the IAS was considered top echelon even above the Police. As administrators, they advised the government on every subject under the Sun. The system continued to remain ironclad with all the keys safely with the IAS team. They decided rules, regulations, salary rules, transfer rules everything. It ensured that Civil Services always had the best deal. They continued to have a group of staff to support them at home with many other facilities. As per the rules, they were generally transferred every three years or less to make sure that special interests were not created. So from district administration to finance, finance to technology, technology to Land reforms and the law was the typical journey. They were considered experts in whichever department they were handling.  

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I started thinking about persons who appear for a competitive examination at the age of 25. Based on this examination and interviews, they are selected to become an officer to run a district, the state and the nation. The system was probably alright till the ’70 s of the last century. But slowly, with the advent of computers and India getting linked to the global economy over a period, their “expertise” was found wanting though was never challenged. Most of the selected persons have been smart people with reasonable intelligence. But the situation has changed so much in the last 25 years or so that everybody realised that we must have domain experts to run the government departments too!  

All domains have become multidisciplinary where even technologists can find going tough. For example, GST involves knowledge of taxation, law, commerce, computers and project management. Aadhar card needed software knowledge, database expertise, data science; fortunately, we had Nandan Nilekani to handle this.

Rajeev Gandhi recognised the lateral entry need in government when he was the PM. He invited Sam Pitroda to suggest the ways and means for India’s entry into the modern telecom & electronics era. That was a masterstroke, and India did start moving in the right direction under Pitroda’s guidance. But such entries were infrequent. Pitroda had direct access to Rajeev Gandhi so he could put aside objections from the administrative framework. The massive behemoth of administration prefers the status quo to anything else. The people were Subedars in their domain. They would try and not take decisions or move the files backwards and forwards. The administrative infrastructure was like Khan Market gang, privileged, with everybody knowing each other. India moved at a snails pace if and when, in spite of the group. Twentyfive years back, the Indian growth story started, so did the need for the specialists.  

Who could break the shackles of generalists? Dilliwalas? No way. In came a confident Narendra Modi, a rank outsider from Gujarat with a background of a tea-seller. A common man but a man with zeal to take India forward. In his first term, he broke shackles and started with improving efficiencies. All the subedars had to swipe their cards in the office at nine am. Time frames were decided for specific actions and achieved. 

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Now in the second term, the government has realised that only the advisors and consultants are not going to make the government more efficient and successful. Executives also must be specialists where needed, and this is what the government has started. Now if you reread the above article, you will realise the importance of specialists. I am very much aware that every system needs both specialists and generalists. For understanding social issues (and many such issues) and tackle them, generalists will continue, and they may be essential also. But the government is trying to fill 1/3 of the positions with specialists.  

Two critical points to be remembered are that the empire is going to strike back looking for rules, loopholes and ways of preventing lateral entry from happening. After all, the entry of specialists is directly affecting their career prospects and importance. Reservations is another issue that needs to be handled. In allowing the lateral entry, reservations need to be kept in mind. When the first nine such positions were filled, the HR department decided to advertise each post as an independent post and not as a pool of secretaries. Single post declaration allowed HR to overcome reservations requirement. The change will cover a large population in India. Though the number of entries being discussed currently is only 400, unrest can start leading to agitations. 

Friends, the modern world, say in the last 30 years has changed so much that the specialists and subspecialists will be needed everywhere. How can the administrator decide which fighter plane India should buy? Should we have Shinkansen or Maglev or TGV trains for India? How to improve and ensure that modern electronics goods are manufactured in a big way in India? Even specialists are going to find it tough to understand such things. But this change is going to create a big Tsunami for the administrators whether they like it or not!

Emergency, Emergency!

Some of you may consider this as the second part of my blog 996 or else! Possible, but it is a comment on modern working methods not restricted to any specific field.

https://panvalkarpramod.wordpress.com/2019/04/30/996-or-else/

I read an article about school teachers in the UK. With WA groups and email, parents of the children started getting in touch with them regularly and expected an instant reply from teachers.  The late response caused anger in parents and anxiety in teachers. Teachers perform many more activities other than teaching in the class. They set exam papers; they correct the answer sheets. They check essays and have some administrative work too! They have a personal life like you and me! On top of this modern communications have created such pressure in some teachers in that particular school, that some of them wanted to resign and some protested strongly to the management. A parent finds time to communicate at 10.30 pm and expects a reply immediately.

I will tell you about the procedure followed in my granddaughter Rhea’s school. They do not allow the parents to communicate with teachers at all either by meeting or by electronic communication. They have a group of administrators who are available to meet the parents. Parents can meet them, and in most cases, problems get resolved at administrator level itself. Parents can have one meeting with teachers once every term and group meeting every quarter. I was delighted to see that at the end of lower KG this year, Rhea was analysed for twenty different personality points with details. They have a WA group for parents where circulars etc. are sent. Half the parents have no time even to read these circulars.

The same thing happens in other professions. Colleagues send you an email at 6 a.m. and expect a reply asap. WA has made matters even worse! You also know whether your message is read or not. One tends to read the boss’s note right away. But is it right?

First and foremost, there is a need to create a set of WA etiquettes. Secondly, every organisation should give a rethink and decide policies based on previous experience! What did they all do when modern methods were not available? Emergencies were handled even in those days. Years back in Jaya’s office a mainframe computer was being installed. Nobody had previous experience in this field. A call came from her office at 1.30 am, and Jaya mumbled some reply on a minor issue. Next day Jaya and I talked about this while having our morning cuppa! I told her that there would be a call again tonight but let me handle it. When the call came at 2.30 am, I, said, “Please make calls at night only when the fire alarm goes off.” No calls came ever again.

But then some people want to keep and show their importance to the organisation. I know of a guy who got married in the ’80s of the last century. Before marriage, his director called him and said, “Please, don’t travel out of Pune for Honeymoon; we will sponsor your stay in a five-star hotel, in Pune.” The guy did not travel. Later in his life, I have seen people calling him to find out if the knob on a panel is to be turned clockwise or anticlockwise!

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Are things moving in the right direction? As usual, the answer is Yes and No. Every few minutes some hot shot guy is born and wants to change the world yesterday! He goes into midnight email mode. The credit for starting this trend or you may say discredit, should go to Blackberry phone. Blackberry was the first cell phone which brought professional emails on the phone smoothly. Blackberry became a status symbol! People in those days would not say, let me check the mail. They would say, “Let me check my Blackberry!”

I won’t go into details of how email usage on cell phones has become routine, but now this usage is pretty standard. There is some discussion going on about rules and regulations that need to be followed. Unless some infrastructure is created and an attempt is made, things will not change. Some companies are doing their bit, and others are not doing anything. But it is not about the organised sector, but also in the unorganised sector, the change in thinking has to take place.

I will share an anecdote from very early days of email, about limitations of the fundamental knowledge of the systems, about usage, etiquettes. In a large organisation, people would mark a cc to many people. All the emails were replied as “reply all”. The storage made available to individuals was meagre. When I was talking to a friend, he said that his capacity is full every two hours. He did not do anything, no more emails for some time! Nobody had told people how to use email, as the IT people’s knowledge was also limited.

Even today, in the corporate email setups, there is a lot of limitation about storage etc. People when in difficulty, ask for details on personal emails and then download them! Now people have enough technical prowess; systems have understood limitations and discrepancies. But it is the management team that does not form policies where even during “out of office hours time,” communication goes on. It is simple. The system can always “not allow” communication beyond certain times. People should be given “right not to reply” after office hours! Same rules should be made to be rigorously applied for WA and telephonic communications. As usual, these things need to start from the top! There is a saying in the corporate world. If the chairman of the company asks about some delay in a project, the last guy in the value chain gets threatened of losing his job!

A good beginning is already made. France has passed a law, a couple of years back, on the right to disconnect after office hours. Daimler and Volkswagen have a facility where emails sent to employees on holidays get auto-deleted so that after coming back to work employees do not face a flooded email box. Our NCP MP Supriya Sule has introduced the “Right to disconnect” bill in Loksabha. In a small way, attempts are being made to make life easier.

But what about small sectors, professional individuals in business? Doctors get a call from patients at an inconvenient time, and people are upset when they do not respond. It is ok in an emergency but what is an emergency? A good idea would be to send the doctor a message. (They do check messages as all of us do, and respond when needed. They do not return if they are in Bali on holiday) They will decide and act if they feel it is an emergency. I am also told that these same patients do not call doctors if they are getting late for an appointment.

Every work, every profession has its standard timings for doing work. Each individual fixes his/her schedule based on the requirements for personal and social activities. Availability of technology does not mean that the communications channels should be used in “the personal timing” of any individual. Do you call your grocer at 10 pm? Do we call our milk vendor at 9 pm? Yes, I know of someone who went to wine sellers’ home on a dry day!emrgency1 No, I don’t think so. Why? Because in the case of these service providers there is no emergency! Thank god!

 

996 or else!

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You must be wondering if I am going to start writing blogs in the digital language of 010101. Don’t worry; I am not doing it! But what is this 996? Chinese companies now expect their employees to work from 9 to 9, all six days of the week! For workaholics that sounds like great news. But 996 workaholics, by choice, are rare. People do work longer hours. But can that be the reason enough to work 996, all the time? I don’t think so. No sane person can follow that schedule. If you work 9 to 9, all six days of the week, where do have time for family life, time for personal chores? Time for enjoyment and time for quick picnics. Spending time with spouse and children on the seventh day is out of the question because it is likely, that one will sleep it out on the seventh day! Below is the status of 996 people on Sunday!

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How has this come up? Competition? Dictatorship? Fear of losing the job? Unrealistic goals? Or probably it is a combination of all the factors. Add to this, for international companies, with headquarters in America, and offices in Germany, Israel, India and China. Working with colleagues in different continents can play havoc on the lives of the people. In any organisation, the work is done by different teams in collaboration with each other. Hence there is a need for telephonic meetings regularly. But does it mean that 996 should be the norm? How longer hours will complete the complex jobs shown below, more efficiently?

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Jack Ma, the big boss of the Chinese company Alibaba, says, “The 996 schedule – which means working 9 am to 9 pm, six days a week – is “a huge blessing that many companies and employees do not have the opportunity to have.” He further says that if you don’t work this way when you are young, when are you going to work hard? The question comes to mind what the definition of young is In a group of 100 people if 80 members are young and 20 are not so young, then can you have different timings for young and the not so young? He also feels that such a work regime has allowed Alibaba to become a giant on the world stage.

Why do we work? To win our bread and butter, to learn new things, to go ahead in our careers. How many of us are bothered about the last aspect? The main thing is to achieve, is to steadily get our bread and butter, to pay our bills on time. Educate the children and pass life peacefully. Not everybody is looking to become highly successful in life. Would such people be interested in 996? Would they be able to sustain 996?

I remember about a young engineering graduate who was in the US for his master’s degree, for a couple of years. He joined a company in Pune, where the atmosphere was not 996 but hectic. It was a group of smart engineers working to do some great technical work. Three months later, he went and met his boss and said, “I cannot work with such a smart group of people; probably this is not my taking.” Later he started playing bridge and made his career as a professional bridge player!

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Is 996 feasible in the long term? I don’t think so. There is murmur going on, “family or ICU?” The 996 types of lifestyles are bound to create issues — even our 9 to 6, five days a week lifestyle is against the fundamental requirement of the human body. Before the industrial revolution, our lifestyle was based on nature. Sunrise and Sunset would decide the daily routine. 9 to 6, five days a week lifestyle also involves travel, business dinners and late meetings. So even this lifestyle is hectic. What made Jack Ma think that 996 is sustainable in the long term, I would not know.

Following two paragraphs are taken from a webpage

https://hub.packtpub.com/developers-lives-matter-chinese-developers-protest-over-the-996-work-schedule-on-github/

Working long hours at a company, devoid of any work-life balance, is rife in China’s tech industry. Earlier this week on Tuesday, a Github user with the name “996icu” created a webpage that he shared on GitHub, to protest against the “996” work culture in Chinese tech companies.

The 99icu webpage mentions the Labor Law of the People’s Republic of China, according to which, an employer can ask its employees to work long hours due to needs of production or businesses. But, the work time to be prolonged should not exceed 36 hours a week. Also, as per the Labor Law, employees following the “996” work schedule should be paid 2.275 times of their base salary. However, this is not the case in reality, and Chinese employees following the 996 work rule rarely get paid that much.

These two paragraphs indicate what is happening at the ground level. Can the developers come together and fight the system? I doubt, and it may not be possible even in the US as well as in India. But probably breaking laws in China appears to be blatant. Companies are getting away without being prosecuted by the authorities. The latest information says that 996 will be replaced by 10107! Ten AM to 10 PM seven days a week.

I understand the aspect of profitability in business. But will 996 achieve those numbers? It is evident that people are continuing this out of fear, and also because of no immediate options available. Years back I had met one engineer from Wipro on a flight. He said that his job was quite laid back, but every day he felt like changing his job. After office, he took 2 to 3 ½ hours to reach home. In 996 and 10107 the commute time is not even considered. I read on the website that someone changed residence and moved into not a very decent home, to reduce commute time.

Many companies are not into 996 or 10107, yet. But the number of hours put in plus the commute time makes it terrible. If both husband and wife are working, then the practical solution will be to look for jobs in areas nearby and move residence near the workplace. I know of a couple whose total daily commute time is six hours daily, minimum. One of them has a health issue and is required to exercise daily. But this is not possible due to commute time.

The Chinese colloquial term for a developer is “码农. Its literal English translation is “code peasants” — not the most flattering or respectful way to call software engineers. I call them white-collar workers on the lines of blue-collar workers. Mr Anand Mahindra, Chairman of Mahindra group, had tweeted, “I feel as if I am a businessman from Dinosaur times.” He made this comment after he read a statement by Uber CEO that Uber will never become profitable! I have a run very small business all these years; I am also surprised that Amazon has never made any profits, ever! I am told that these are 996 companies!

Mr Naraynamurthy of Infosys had sent an email to all Infosys employees to make sure that they leave office on time. But his instructions have never been followed in the spirit! I have discussed with people working in larger companies, especially the coders. All of them have said that they can concentrate on their job for not more two hours at a time. If 996 culture is followed how much will be the real productivity is anybody’s guess.

996? 10107? To me, none of these makes sense but what is the option? We had apartheid! We had slavery! The only difference is that compensations are high in the new bondage! Hopefully, there will be an organised movement against these systems, so let us wait and see, fingers crossed!