Win-Win situation!

In life, there are many things which need a bit of tweaking or thinking out of the box. By doing so, the situation sometimes improves by some percentage and sometimes drastically. Businesses or offices want their efficiency and profits to go up. Humans wish to have a better work-life balance. Many times, these things do not happen because organisations don’t want to experiment. Status Quo is always good!

Recently I came across a couple of articles. One of them is about a  proven system, and the other one has been tried only for one month.

Around 1995, in the state of Quebec in Canada, the state government started implementing a scheme. In Quebec, French is the first language. Like all other states in Canada, there are a lot of migrants in Quebec too.

But because of French being the primary language, many ladies remained unemployable. In addition to that, there was a problem with looking after the children. Quebec is the only state who came up with a great solution. Till 1995, about 15% of  Quebec ladies used to work.

The solution was interesting. The government started offering French tuition to people either a part-time course or a full-time course. Those attending the full-time course and who were required to keep their child in a creche were paid up to CAN $1100/ per month. The payment made to these ladies encouraged the ladies to attend courses. The number of ladies attending classes increased very fast. As they learnt French, they started becoming employable. But where is the win-win situation?

As the ladies started working, many of them got jobs; they started earning salaries. In Canada, there is a high income tax, and it starts from the base level; unlike in India, where the certain initial amount can be earned tax-free. With the French education scheme, now the % of ladies working has gone up to 80%. It indicates that including men and women, the number of people employed has gone up substantially. It also shows the business activity, and the economy size has also increased. Now the Win-Win situation. All this larger working population started paying income tax. What the government did was to spend money on people to make them employable, and the people are paying the money back to the government by way of income tax. It is now well documented that French tuition scheme has become a great success wherein both the government and people both are benefitted.  The government gets back the money Canada spent by way of taxes, so almost nothing goes out of their pocket.

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Another similar story I read recently about Microsoft, Japan. They wanted to implement a four-day week work for one month, and they declared that all employees would have five Friday’s off during that month with full pay. There were 2300 employees involved in this experiment under the name of “Work-Life Choice Challenge Summer 2019”.

The shortened week led to more efficient meetings, happier workers and boosted productivity by a staggering 40%, the company concluded at the end of the trial. As part of the program, the company had also planned to subsidise family vacations for employees up to ¥100,000 or the US $920.

In addition to the increased productivity, employees took 25% less time off during the trial and electricity use was down 23% in the office with the additional day off per week. Employees printed 59% fewer pages of paper during the trial. The vast majority of employees – 92% – said they liked the shorter week.

In 2018, New Zealand trust management company Perpetual Guardian trialled a four-day workweek over two months for its 240 staff members. Employees reported experiencing better work–life balance and improved focus in the office. Staff stress levels decreased by 7%.

During the last 15 to 20 years, with the advent of computers and cell phone, the culture of “always-connected” started. Blackberry made it even more complicated by bringing the corporate email on their devices. During the night, it was essential to embrace Blackberry rather than your spouse! The global companies operated 24/7 and night time washroom break turned into one-hour email exchange session. In short, the work-life balance went for a toss. The importance of the person in the organisation was based on whether he or she had a Blackberry! The situation worsened when all smartphones could easily do what Blackberry did and more! Blackberry has now become history, but it established the culture of 24/7 into 365 days!

Are humans physically and mentally designed to work in such a culture? The answer is plain, no! Medical science says that humans need to sleep eight hours every day to work efficiently. But with global companies typically having offices in the US, in Europe, in India and China/Japan/Hongkong area, interdependent work is being done 24 hrs a day. So, on a conference call, people would be talking at 8 am, 5 pm or 1 am from different time zones.  Such calls were routine during 2-3 days in a week. On weekends along with picnic hamper, battery-pack became an essential item!

Thank god the people have started understanding the effects of imbalance, though the progress in the right direction is slow. The result of such endless working, round the clock, throughout the year brought out a lot of family issues plus health issues. Sudden heart failures, stroke or nervous breakdowns were classic symptoms. Business and offices are to be run efficiently and for better profits. But was working 24/7, 365 days the solution?

The answer is no because the human body and mind cannot sustain such situations. The new life-style added travel requirements to increase. Now, people have the internet available on flights. Before this availability, people had at least some time to themselves away from the Internet!

The experiment in Microsoft Japan is a life-changing attempt to make life easy and less stressful for everybody. Every family has its things like quick picnics, getting repairs done at home, going to attend PTA’s (Parent-Teacher Association) in their children’s school. Maybe they want to go and see a game in which the child is taking part. Once a week you may wish to take your child for music class. Over the weekend you would like to meet your parents.

Living life is a mix of work, making money and many many other things. But if you do not get the time for anything else other than work, it is not worth it. Organisations have started realising this critical aspect of life. But global organisations have offices in all continents. So, there will be issues of synchronisation. But if there is a will, it is doable. Bajaj Auto has managed to do this synchronisation in their plants. All their plants are shut on Sundays!

Microsoft, Japan’s one-month experiment, has shown very encouraging results. If it is done in the long term across the company world over, the results may not be as good as they seem at one location. There could be contradictions; there could be difficulties!

But the feeling of having correct work-life is on the increase. I have been reading about millennials negotiate work from home facility, work hours to be put in weekly is also being discussed.

We can see that the Quebec system has helped people and state both in improving people’s life. New ways of doing work in businesses and offices are also being discussed. Such actions will lead to more happy people and happier world.

What will be the perfect method? There is nothing perfect in the world, but it is good that the discussions have started in the right directions. Let us hope that people and systems will begin thinking out of the box.

It is itself Win-Win situation as far as I am concerned.

Millennial Work-Life balance!

 

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The above image is eutopian image of working from home!

In the last thirty years, Work-Life balance has gone for a toss! But there are new generation Millennials who are changing the thinking — a millennial is a person reaching young adulthood in the early 21st century.

Work-life balance is the lack of opposition between work and other life roles. It is the state of equilibrium in which demands of personal life, professional life, and family life are equal. Work–life balance consists of, but it is not limited to, flexible work arrangements that allow employees to carry out other life programs and practices.

The term ‘work–life balance’ is recent in origin, as it was first used in the UK and US in the late 1970s and 1980s, respectively. Work–life balance is a term commonly used to describe the balance that an individual working needs between time allocated for work and other aspects of life. Areas of life other than work–life can include personal interests, family and social or leisure activities. Technological advances have made it possible for work tasks to be accomplished faster due to the use of smartphones, email, video chat, and other technical software. These technology advances facilitate individuals to work without having a typical ‘9 to 5’ workday.

People who began working until the late 1980s were docile people and would accept all the rules and regulations of their workplace. Over a period of time, the demand for work and the employee time started going up and up. Through the 90s, the work graph started going up exponentially. Over a period, it became fashionable to be in office for ten to twelve hours a day, and later it became routine. Slowly the long working hours became the norm; going home at the regular time was jokingly called “half-day” leave.

These changes, plus long travel times, made work-life balance totally imbalanced. Competition in business and rat race amongst employees gave a different meaning to this imbalance. People were getting scared to take a couple of weeks of holiday with the fear that if work moved smoothly in their absence, they could become redundant. Such situations made life even more stressful.

I will share a couple of stories, which I may have shared in some other blogs before. A friend came to my house one evening and asked me if I could spend a couple of hrs with him. It was an emergency. We went out, and he said he was doing very well in his job, but his work-life balance was so disturbed that he did not feel like to going office even for one day. I suggested that he should resign. He did resign his job in a week and got an even better job but with better work-life balance.

Another friend went to the US for work for a couple of months. His daughter was unwell, and there was a significant repair work pending at home. One day we had gone to meet his wife. At that time, our friend called and told his wife that now he had to travel to Germany and he would be in Germany for three months for work. We did not know how to console his wife!

In the first story, the friend did not have a choice, but in the second story the friend was senior enough, and he could have decided to travel back home for a couple of weeks before going back again. Workaholic? Or Who cares?

But I am pleasantly surprised to read about the way millennials are looking at the situation these days. When they look for a job, they look for prospects, salary, benefits and flexible working hours. Flexible working hours are now becoming as important or even more important than the salary. Millennials look at the job as a part of life and not the central part of life.

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Each human has the responsibilities of the family. It could be some repairs at home, Parents-teacher association meeting, helping ailing parents, supporting the spouse when the spouse has temporary additional work pressure. I also agree that these are also equally important aspects of life. Human should continue to enjoy professional work, but if the work is going to prevent the person from fulfilling other responsibilities or having a yearly holiday, something needs to be done.

We read of many examples where people accept a significant pay-cut to achieve work-life balance. If the money you are earning can never be used for enjoyment or support family responsibilities, what is the point in making that money? For many people, work has become an obsession, long hours and endless struggle to aspire to do better in job. It has caused burnout, unhappiness and gender inequity, as people struggle to find time for children or passions or  any sort of life besides what they do for a paycheck.

But increasingly, younger workers are pushing back. More of them expect and demand flexibility — paid leave for a new baby, generous vacation time, along with daily things, like the ability to work remotely, come in late or leave early, or make time for exercise or meditation. The rest of their lives happens on their phones, not tied to a specific place or time — why should work be any different?

Today’s young workers have been called lazy and entitled. Could they, instead, be among the first to understand the proper role of work in life — and end up redefining work for everyone else?

It’s still rare for companies to operate this way, and the obstacles are more significant than any company’s H.R. policies. Some older employees may think that new hires should suffer the way they did, and employers benefit from having always-on workers. Even those that are offering more flexibility might be doing it because current unemployment is so low in certain parts of the world, and they’re competing for workers, which could change if there is an economic downturn.

But such luxury is not possible for many people. People working on the shop-floor of the manufacturing industry, the police, the doctors and nurses, and many such workers cannot work from home whatever modern technology we invent. But the effect of millennials working for better and more flexibility will affect other sectors. Such cascading effect could make the life of workers better than what it is today.

Jack Maa of Alibaba had suggested to his workers to work 996. Nine to nine every day for six days a week. You may get a very high salary but when will you spend it? When will you rest? When will you have quality time with your family?

But the same Jack Maa has now suddenly changed his advice to work three hours a day four days a week.

https://tech.economictimes.indiatimes.com/news/corporate/jack-ma-says-12-hour-work-week-could-be-the-norm/70892513

With technological advances, this is possible in specific industries. Probably people are thinking in the right direction. I am quite sure that once people get real flexibility in work, they won’t mind working a few times even while they are on a holiday. It is going to be possible because your work tools are available to you, 24/7 at the tip of your fingers.

Imagine you are lying on a seashore surfing both on the sea waves and on the net! A vital customer calls you and requests you to resolve his critical issue. Maybe you will do it because your company is taking care of your flexibility needs. So why not go out of the way and help the client?

That day hopefully is not far and it will be Win-Win situation for everybody!

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.  

 

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. 

Tsunami3.png

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!