The media cacophony

There is no escaping the media -and I'm a journalist saying this. Good for me, I'm a business (features) journalist or I would have wondered why I chose to be in this profession. But I do love to write - cliched as it may sound.

But what's it with my fellow colleagues in the mainstream media? They just can't seem to let go of inanity at all. They are like a dog with a bone - a bone that they have picked dry a long time ago! They go on ad nauseum about two bollywood stars and their shenanigans, or some equally vapid issue. On and on and on it goes. A minor non-issue is given so much air-time or print space that it assumes proportions that it does not deserve. Where's the sense of news judgement?

Today, more than ever, the media has a responsibility to impart news judiciously, especially in this climate of cheap gimmicks, anything-goes-for publicity and sensationalising everything to give it religious and political overtones.

Please take an intelligent call on what is a genuinely frivolous story that is not going to affect anyone's sleep (Aishwarya and Abhishek marrying) to what should really concern us as a nation (terrorism, Nithari-Noida killings, Muslims feeling sidelined etc)

I have visions of entire forests being denuded for the paper required to print stories about celebrities and their lives. And at the end of all that devastation, who is the wiser?

Do we really need to have so much written about such people, when all anyone has to do is turn on the TV or surf up the information on the net?

By all means, do report trivial stuff and lighten our days, but please don't beat us over the head with too much of it. So, will you guys give it a rest - and the rest of us a break as well!

Come on guys - get a life

Written for www.msn.co.in

BPO recipe: Quality and a dash of M&A

Every human initiative has begun slowly, built momentum and then moved on, on its own steam. The Green Revolution in the 1980s in India, the not-so peaceful revolutions in Russia and France. Innovative inventions too have caught the public's imagination - for instance Henry Ford's Model T car got people moving - pun unintended - like no other innovation did.

One man's success has been a great contributing factor to mankind as whole. Similarly, the software industry has seen tremendous growth and each contract or deal it wins, means that the industry will go from strength to strength.

Chief financial officer, MphasiS BFL, Ravi Ramu told CNBC-TV18, "That's quite right. Actually if you look at a services based industry like ours, it's made up of individuals, whether the organisation is 9,000 or 90,000 strong. But one tends to dovetail these individual performances into a solid team effort. That's where the organisation or the brand really gets the glamour into the organisation. That really is a cornerstone."

"Unless you glamourise it, the youngsters who are getting into the universities and schools will not want to get into (a) the BPO industry (b) or the IT industry. This is where the whole building block works. If I can liken it to an Olympic medallist, you know it's what China does and what Russia did so well when it was the USSR, was to pick out 4, 5-6 year olds and the aim was to make Olympians out of them."

The Chinese have perfected the assembly line theory, of putting kids with Olympic winning potential through the grind, so is Ramu advocating that approach? Double Trap Shooter and 2004 Olympic silver medallist, Rajyavardhan Singh Rathore says that even sending children to school is like an assembly line production!

He elaborated, "The pictures that you have seen on the internet of children crying is for gymnastics. Everywhere, around when you have to stretch those muscles, which need flexibility, it is painful. There is no training, which is not painful. I mean it's common knowledge. Denis Lillee said that 'if my muscles are not paining, I haven't done enough'. I mean pain is a part of progress, let's face it."

Ramu reiterated, "I must agree with Raj here because I think one needs an objective. Even as an organisation, you need one to start. Start with an end goal or a medium term goal. It shouldn't be a goal where you say, let's excel. It needs to be let's get the gold medal."

He explained, "For the IT industry, initially, it was difficult to get a phone line in this country. People used to wait six months to get one connection going. Then we had STPIs, which had all these towers, beaming messages and signals across. We did it with individual effort, with entrepreneurship, with drive, just to show that it could be done."

"The problem we have in India and we can see that in other industries is that they don't seem to take the lead. Take the example of Prakash Padukone, I saw him win in London in March 1980, he is a good friend of mind and I remember telling him that there are going to be several badminton champions. Today, we just have one Gopichand and that also was a one- off. So it hasn't become an institutionalised thing."

So, despite setbacks, how has the software industry consolidated? Ramu said, "We have done it in a very simplistic manner and that is by taking India and Indian things to compare and compete constantly with the outside world. Let's actually look at the genesis, we started selling to the best in the world. We starting doing things lower down the value chain and then moved up over 20-25 and 30 years. The BPO industry has had the benefit of competing with the best and having the self-confidence to take on and beat the best, is really what it is all about, it's not the one-offs."

"Also, one has to keep quality in mind apart from cost efficiency. Cost efficiency is not going to sustain us for too long. We have to think global and act local. There is no point in not doing like the Romans in Rome - we've got to go out, globalise but actually play the games that the locals play in business terms."

Ramu adds, "The other way would be to actually have a cultural mix. Our vice chairman is Dutch and he lives in New York. So we started off as, what one of our directors, who is professor of international business, called an 'instant global company'. So we didn't start as an Indian company, in terms of mindset, we started as a global company and built on those blocks."

"For example, two years ago, we went to China and bought a company. It took us a year and a half to really make it profitable. For it not to lose cash, to understand their cultures, we sent a person who was born in Taiwan to lead the team. We didn't send the head of operations from Bombay or Bangalore because we wanted to make them feel part of a team and yet not lose that local element."

Ramu suggests the M&A route is another way for an organisation to become a global player but very few have been successful in this regard. He says, "I think there are two things, first, there are these regulations and then the money factor - you've got to have the currency to do so. Then the other element is the mindset. You know there is this fact that 85 per cent of all M&As around the world failed. So they don't want to be in that 85 per cent bracket. I think we need to get a bit braver and more adventurous, in terms of really globalising."

The Indian BPO industry has also got to fight a perception problem. Ramu acknowledged, "Well that perception is being fought, in the sense that if these MNC companies don't do this, then they are going to lose out to the competition who does. So, if there is a UK company outsourcing to India and their competitor in the US doesn't do so, it's going to be a matter of life or death for the US company."

Written for www.moneycontrol.com

The phantom of the Parliament

After Jaya Bachchan was forced to quit from her Rajya Sabha post because she was accused of holding an office of profit with the Uttar Pradesh Film Development Corporation, a cry went out for more blood to be spilt. Predictably, the Opposition members wanted Sonia Gandhi's scalp on a salver and it made great copy, especially when people sensed another Bachchan-Gandhi tussle was in the making.

Jaya Bachchan had actually given up her post with the UP Film Development Corporation when she was sworn into the Rajya Sabha, so she was well aware that she would lose her post, if she was reinstated at the film corporation. Though, her party spokesperson has revealed interesting information.

Samajwadi Party General Secretary Shahid Siddiqui says that many MPs have resigned offices of profit to get into power and then go back to their old jobs! And what's more, it has happened repeatedly. He points a finger at the current speaker, Somnath Chatterji and says that even he's held offices of profit frequently, while being at another posting.

BJP spokesperson, Prakash Javdekar agrees that this (Jaya Bachchan's disqualification) was done in keeping to the letter of the country's laws but he recommends a review of the law nontheless. He told CNBC-TV18, "When Pramod Mahajan was the advisor to the Prime Minister and when he was chosen for the Rajya Sabha nomination, he resigned from his job because it was definitely an office of profit and prohibited under the law."

If Jaya Bachchan was going to be reinstated, then the Uttar Pradesh government could have atleast repealed the law to save her the embarrassment of being disqualified. This is something that Siddiqui agrees with, and says that she was not given the right advice at the right time and the UP Chief Minister can't be expected to know every law. He adds, "People took things for granted and now we will need to look much deeper into this."

Benefits that Jaya Bachchan was entitled to:
* Free housing and medical treatment for her and her family.
* Free housing in government circuit houses while on tour.

The truth is that though Jaya Bachchan was entitled to compensation and she had not taken it, but the Bhagwat Commission disqualified her on the grounds that she had been "entitled" to it in the first place. Javdekar feels that this being the law, it was correct to follow it so thoroughly. But he agrees that the time has come to look at it and give it a broader meaning.

In the aftermath of this case, Sonia Gandhi holding dual positions as an MP and the chairman of the National Advisory Council of the UPA has also come up. But will any party take it forward? Siddiqui explains that his party has opened Pandora's box and a lot of people will be questioned. Some of them who are already being questioned are Kapila Vatsayan and Minority Committee Chairman Trilochan Singh. He also believes that there is a move to change the law.

So with all parties pointing out people in each others camps, will this be a chaotic massacre? Javdekar doesn't see it that way, but just feels that the "law should be applied to all those who've broken it." He adds, "The Election Commission should not wait for complaints but should just look at the details of all MPs appointed and suo moto start reporting and give the findings to the President."

Written for www.moneycontrol.com

Ikjot Singh Bhasin is a magician with cars

A car speaks as much about a person's wealth as it does about his/her personality. But if you want to give your car a outstanding personality of its own, or something that reflects you, in its clean lines, then a makeover is in order. A Delhi-based young designer has made reworking cars, his life's passion.

Ikjot Singh Bhasin, owner of Jyot Designs is quietly going about making a name for himself in the world of redesigning cars. With Dilip Chhabria being all over the news, this young man is waiting for his spot in the sun.

He says he wanted to do something different, right from his college days. So, he experimented on the family car - a 1984 model of the Maruti 800 and worked on it for six-seven months, before he turned the car into a more than just a mode of conveyance. He had turned it into a beauty.

He moved onto other projects, like he's coverted a Cielo into a two-door convertible and a Zen into a cute coupe! A Qualis metamorphed in his hands and came out with an X5 look. He's worked his magic on a Wagon R and Tata Sierra as well. He's redone around 18 vehicles, so far.

He told CNBC-TV18, "When a customer comes to me, they all want to be different. Few of them are practical and few of them are not. They come with vague ideas, like they want a batmobile out of a Maruti car! So things like this are not possible. But things like converting a Maruti car into a two-door coupe is quite possible. So, they settle doen to a level, where they actually want what I'm ready to give them."

Bhasin does not have any formal training but that doesn't deter him. He says ,"Every designer, whether he's a fashion designer or a car designer, the first thing he starts from is sketching. Honestly, I lack that. I'm not a good sketcher and I can't draw much. But I explain things to my guys, whom I've worked with for 10 years, and they understand it."

Unlike others, he works with metals and moulds every curve into shape. It takes him six months to do a complete makeover and he works on one car at a time. These projects could cost Rs 2 lakhs or more and there is never any repetition of designs.

He explains, "If the customer doesn't have a big budget for a makeover, then we give him a package. We give him four pieces of spoilers, which includes the front, rear and two side skirting and the spoiler ofcourse. We give it to them with the fitting and a paint job, and it sums up to around Rs 30,000."

"We also do give warranty for parts, like the bumpers or the body that we've made and for things like rusting and paint jobs." Local wear and tear and bumping against another vehicle is not included in this deal.

What began as a teenage fantasy has become a profitable business, with customers walking in based on word-of-mouth publicity. Bhasin is also working on a website to showcase his handcrafted beauties to the world. So, watch out for his labour of love, on the roads near you.


(All pictures are representational and not Bhasin's reworked designs.)

Written for www.moneycontrol.com

'Tata Motors could be the next GE'

Born in Kolkata, he got a scholarship to study in the US. He majored in economics and with a minor in mathematics from Davidson college. Today, as a Portfolio Manager for Emerging Markets Management, LLC, Arindam Bhattacharjee is one of the larger investors in India.

After he graduated he says, "I actually applied to the World Bank and after a wait got in as a consultant. Initially, with the infrastructure financing division at IBRD, which is part of the World Bank that finances big infrastructure projects and other projects in developing countries. My role was really to assess a lot of these projects with the technical teams, look at the financial aspects of it, analyse the cashflow, go and actually look at the projects in these countries."

These projects took him to Africa and South-east Asia, where the country in question could not afford to finance the project or the commercial banks were not willing to lend finances for it. He witnessed a huge dichotomy in South Africa, that is probably as apparent here - that a section of the population had high standards of living while the others just barely survived.

He told CNBC-TV18, "It was a strange dichotomy because in terms of GDP per capita, South Africa was a middle-income country. In terms of the population of 40 million people, about 5 million people led a life that was equivalent to European standards- very high per capita income. However, the rest of the country was actually a very poor country because they had almost 35% unemployment rates and the black population, (the disenfranchised) in those days, actually had a per capita income, which was probably less than $300 per year. So there was a huge dichotomy between the two."

So, while working with the World Bank, he got his business degree from the American University at Washington DC and moved to the IFC, which is the arm of the World Bank that finances private companies in developing countries and in emerging markets. It was around this time, that he began to look at equity in emerging markets with the focus being on southern, eastern and northern Africa.

But despite a measure of success in Africa, it is still a forgotten continent compared to Asia. Asia, on the other hand is steaming ahead, which is why experts are calling it the Asian century. He elaborates, "Asia itself has gone through restructuring. We started out in the early 90s, when there were economic miracles. Then, they went through a major crisis because the development model was skewed and it was not sustainable."

"It was export-oriented but funded by short-term financing and was running huge current account deficits, which the US is doing now. Clearly that took its toll and a lot of these countries went back from close to becoming middle-income countries (Indonesia and Thailand) to being very low-income countries."

"What we are now seeing is that, the basic principles are in place. The emphasis on education - a very strong, technically educated force. In a lot of these countries, English is spoken. So you have a workforce that is very well motivated, well educated and the fact that they constantly innovate in their processes and also have to work with a lot of difficult conditions in these markets. They are also focused on the fact that, the only way forward is to harness their entrepreneurial spirit in these countries."

Emerging markets are so hot right now because saturated markets are looking for a more diverse portfolio and better returns. He explains, "Today investors look at returns that are so muted from anywhere in the world, where earnings are at all-time high, return on equity, RoE, are at an all-time high, so the mature markets are really looking at incremental returns and they would want to go anywhere in the world to get that incremental return. So, the ability or the appetite for risk has increased."

"They are focusing on the future. They are saying that these are countries and companies in these countries are now having critical mass and over the next ten to thirty years, the global multinationals of the world will come from emerging markets, rather than from the US. So don't be surprised if the next GE is from emerging markets. Tata Motors might be the next GE."

He warns though that the competitive cost structures won't be around forever and that as wages escalate in India, cost erosion will take place. He adds, "The second aspect, which is very important, is the domestic markets. They are now much bigger with 10-15 years of good growth, in these markets and with interest rates have been brought down, affordability is much higher. So, emerging markets, incrementally, now provide 50%-70% of the growth - led by China and a lot of the global multinationals. So this has opened up a huge domestic market for companies."

He also feels that India is actually a more attractive destination than China. As an investor in the Indian stock market and having looked at companies from the bottom up, he realized Indian companies were more attractive.

He says, "Indian companies actually have a true cost of capital. So there is a big focus on profitability and it has been magnified in the last five years. There has been a lot of focus on cashflow generation. These are companies - while a lot of them are very small but they have the ability to scale up their business models, restructure and become globally competitive after trade barriers came down in the late 1990s.

"In China, on the contrary, what we see is that the top-down picture is very attractive. The government has been very sanguine on getting investments and we all know that China gets close to $70 billion of foreign direct investment, FDI, and great infrastructure. But the quality of the companies are much inferior. A significant portion of the domestic markets are state- owned enterprises, that are heavily mismanaged and those that have been privatised are also having significant corporate governance issues and low profitability. I also think that the realisation that minority investors actually look for profit is not there in China. That is the biggest difference."

But that apart, China will actually pick itself up from any economic slowdown and continue to be a dominant global power. Meanwhile, he says, if India gets all of its reforms and restructuring in place, then India could actually take some of that burden from China and provide the growth engine into the next century.

While, he looks at companies balancehsheets, he also checks out the management and sees if they are cost competitive, have a niche in the market, have innovative technology and can it hold on in a fight for marketshare, when it comes down to it. Also, whether the management has actually delivered on promises they have made matters.

He explains. "Actually spending time with their clients, their supply chain managements and their vendors helps us to see what do they think of the management, because sometimes that is a great indicator of their capabilities. If their clients or their suppliers don't have confidence in them, then as investors we shouldn't either."

However, for the moment, he is bullish on India. He says, "Our allocation to India is almost about $1 billion at current NAV. It is actually a very fairly diversified portfolio. We run fairly concentrated positions in terms of the number of holdings that we have in the portfolio, but it is diversified across various sectors. Among the holdings, we have a lot of midcaps or smallcaps companies and a combination of companies that we believe would grow into a largecaps over a period of time."

Another region that he thinks is an upcoming emerging market is Latin America but on the whole, he affirms, this century does in fact belong to Asia.


Written for www.moneycontrol.com

Three men and The Wanderers

People who have close friends, who they don’t lose touch with on the long journey of life are truly blessed. But when friends team up to start a travel agency that specializes in offbeat holiday packages, then it’s going to be a fun-filled voyage, alright!

These three, Ashis K Das, Rajinder Singh Khalsa and Abhik Dutta are all directors of their travel agency, The Wanderers and they explain what made them want to start a travel agency, when there were established players like Thomas Cook and SOTC in the market.

All three confess to feeling bored with their existence at some point and decided to throw up whatever they were doing and go for their dream job. So, Abhik Dutta, a commerce graduate from Calcutta City College chucked up his job with Yellow Pages. Rajinder Singh Khalsa is a science graduate who had his own computers bsuiness but travelling was a passion with him.

Dutta told CNBC-TV18, "In my family, no one is a businessman. All of them are very highly educated and they are all doing great jobs everywhere. But the moment they heard that I was chucking up a job, they were all very skeptical initially. My parents were worried. But beyond a point, they said fine, if you want to do something, go ahead."

His family’s worry seemed justified because when they put out an ad for The Wanderers, there was no response! Rajinder Singh Khalsa recalls, "I think we placed a couple of ads and nothing really happened.. I think the first thing that took-off was a promo with Crossword. I was browsing in Crossword and I don't know how the idea came, that we can do something with them."

"So I spoke to Sriram and he immediately agreed. In fact, he went out of the way. He sent mailers to their database that we were offering some lobby discounted tours to their customers, and there was some in-house promo."

From then on, The Wanderers have not looked back. It is still as a much of a passion as it used to be, but with success comes responsibilities – for the people they are sending out on the tours. So there has never been a dull day and everything has been a learning experience.

To run the business well, responsibilities have been divided among the three. Dutta explains, "What we do is, Ashis takes care of the entire operations, finance, accounts etc and of course, helps a lot with the sales as well. Rajinder is taking care of the entire sales effort and what I do is, apart from the sales, I do a bit of marketing. I try to let them do all the work, so I can have all the fun!"

The Wanderers’ USP is that they believe that they are meant for the discerning traveler. They encourage their clients to discover a land and its people. With a loyal clientele that they have built over eight years, they customize each plan to their client's needs and usually wouldn't recommend any place that they haven't checked out themselves.

Dutta elaborates, "I think we are very different from most of the other operators. First, is the passion all of us share, not only the three of us but by every person in the organization. We sit with clients, we talk about the entire programme and we are available throughout."

"Most of our clients have been with us for the past 7-8 years and they come to us because they can call us at 10 in the night and talk to us because that's the time when they are free. They probably come to us again and again for the personal touch. We are passionate about travel as well, so they can kind of identify with us."

But they are one more travel operator in a sea of similar players. Apart from SOTC and Thomas Cook, there are others like Kuoni and Raj Travels, so how have they stayed afloat? Are they only putting together travel packages for the corporate sector?

Das says, "No, it's all a part of it. But first, all profits come from individual travellers and it's all for exotic destinations and that’s where we stand apart." But, now they are looking to expand their operations and will diversify into corporate travel, where team-building progammes and conferences will also provide lucrative business. Also, in the pipeline are incentives that will be offered to corporates.

With all of them and their wives being so fond of travelling and discovering new places, they also have some favourite destinations. Das loves Sikkim while Dutta is fond of the towering Himalayas. Khalsa finds New Zealand perfect. He calls it the "Himalayas with better infrastructure."

But apart from travelling, all of them have other interests as well. Dutta is an avid birdwatcher, even though he hasn't been able to identify any bird other than the lapwing. Khalsa is the more serious of the three, who does yoga and meditation to keep calm, while Das learnt fishing from his pal, Abhik and has now overtaken his teacher. He can be spotted at a lakeside on a day off, reeling his priceless catches in.

For more on The Wanderers travel packages:
http://www.indianwanderers.com

Written for www.moneycontrol.com

The man with the Midas touch

Warren Buffett is a man who has made millions but he also started working at his father's brokerage when he was 11 years old, that's an age when most other kids were playing hide-n-seek and didn't know how to spell 'brokerage'. This financial wiz is by recent estimates, worth USD 46 billion but how he got there is the fascinating story.

It all began in the family grocery store back in Omaha. Buffett's great grandfather started the store in 1869 and it was in the Buffet family until 1969, till his uncle finally retired. But it's at this store, where he began going around his neighbourhood selling gum. This was before his stint at his father's firm.

Warren Buffett told CNBC's Liz Claman, "My grandfather would sell me Wrigley's chewing gum and I would go door to door around my neighbourhood selling it. He also sold me six Coca Cola for a quarter and I would sell it for a nickel each in the neighbourhood, so I made a small profit. I was always trying to do something like this."

From small beginnings come bigger things and so after selling gum, soft drinks and working with his father, by age 14, he had bought a 40 acres farm in Washington, Thurston County. But he confesses that he never enjoyed the farm as much as he enjoyed investing in stocks. But the first stock he bought was "Citi Service preferred stock. I had three shares and made all of USD 5 on it. I had bought it at USD 38.25 and then I sold it around USD 40, it went down to USD 27 in between and after I sold it at USD 40, it went to USD 200!" From that poorly timed stock sale in 1944, he learnt a lesson that became his legendary investment strategy - which is essentially - patience pays, so buy them and hold them. He figured out two other critical things about himself in the 1940s - what he is good at and what he likes to do.

This pivotal moment in his journey came in 1956, when he was just 25 years old. This man who was rejected by Harvard and now armed with contributions from family and friends and USD 100 of his own money starts a limited partnership with seven people. Over the next nine years, Buffett turned a USD 105,000 into USD 26 million - a stunning 24,000% increase! He had invested mostly in textile companies, farm equipment manufacturers and even a company making windmills.

Thirteen years later, Buffett forms another partnership that becomes one of the greatest teams in the history of investing. He convinces longtime friend Charlie Munger to quit his investment partnership to join Buffett as his Vice President of Berkshire Hathaway. And now with the 82-year-old Munger, Buffett sits on top of the greatest holding companies ever. So, it's understandable that this man is looked up to for investment and business advice all the time. But what's the secret gift he's got? How does he pick the right investments all the time? He explains, "I look for something that I can understand to start with, there are all kinds of businesses I don’t understand. "

"I don’t understand what car companies are going to do 10 years from now, or what software or chemical companies are going to win/do ten years from now but I do understand that Snickers bars will be the number one candy company in the US - like its been for 40 years. So, I look for durable competitive advantage and that is hard to find. I look for an honest and able management and I look for the price I'm going to pay."

While Buffett’s big acquisitions have made headlines; wise investments in companies like Coco-Cola, the Washington Post and Gillette have provided the capital to make those acquisitions possible. Since taking control of Berkshire in 1964, the company has acquired 68 subsidiaries. In March of 1964, Berkshire acquired its first insurance company National Indemnity.

In 1972, See’s Candies for USD 25 million, in September of 1983, Nebraska Furniture Mart and Borhseim’s in 1989. In 1998, Berkshire acquired Dairy Queen and Geico in January, Net Jets in August and General Re Corp in December. In April of 2002, Fruit of the Loom and most recently Buffett is looking abroad for new business.

Recently, he bought 80% of the Israeli Metal Works Company and he did it without even seeing it. He was approached by the promoter via a letter and what was in that letter convinced him that 'this was the kind of the person I wanted to do business with and it is the kind of business we wanted to own.' How does this 'daring bit of investment fit in with his usual careful way of investing? He explains, "I had to size up the business but that’s a background of being in stocks. If you put your whole net worth in stocks when you are 20-21 years old - you have not visited the businesses but you are really analyzing their financials, you are trying to assess whether they have durable competitive advantage, assess the quality of the management and the integrity of the management and then you try to figure out whether you are buying it at a reasonable price and that’s it, that is all we do."

He's never had anything lacking - his acute business brain has made him a lot of money. He also feels that the youth of today are living better than John D. Rockefeller. His own style remains the same - he lives in the same house for 48 years, carries no cellphone, has no computer on his office desk, does not move around with an entourage. As he puts it, "I have had everything I wanted all my life. At 20, I was having the time of my life doing what I did. Today, I'm eating the same things I always eat - burghers, fries and cherry coke. Only my clothes are more expensive now but they look cheap when I put them on!"

At 76, he married his long-time companion, Astrid Menks at a low-key ceremony at his daughter Susan’s house. He is also amazingly healthy for someone on a burgers-coke diet. He's also surprisingly down to earth. He moves around freely unencumbered by a security detail. He does have a few guards with him during the annual shareholders meeting but he says he doesn’t feel the need to put himself in a cocoon. Which probably explains, why he wasn't nervous about visiting a factory in Israel, which is close to the Lebanese border. He says of that visit, "Our plant there is about 8-10 miles from the Lebanese border and there were maybe a rocket or two that hit the parking lot or something like that but it can be dangerous being in this (US) country as well."

Buffett is comfortable in Omaha in part because people leave him alone with the exception of a random fan or two. This billionaire doesn’t even have a chauffeur - he drives himself around in a 2006 Cadillac DTS, recently purchased after he auctioned off his old Lincoln Town Car, which was famous for its Thrifty license plate. And no, he does not want a yacht or many mansions. He just wants to be left alone to enjoy a good football game in his sweatsuit on a big screen television - with popcorn.

It’s really no surprise that America’s most prominent investor chooses to live far from the nation’s wealthy-elite in New York, Los Angeles, Chicago and Miami. He says that when he was in New York, he had about a 100 ideas about where to invest but it was over-stimulation. In Omaha, he needs one good idea in a year and he feels he can think better and with less distraction. He feels there is a sense of community in living there.

His investing theories have been talked about ad nauseum by almost every business/finance writer and is a cottage industry all by itself. But one he finds closest to reflecting his views is a book written by Larry Cunningham - 'The Essays of Warren Buffett - Lessons for Corporate America' is required reading in a one of a kind course start at the University of Missouri School of Business. The course is called Investment Strategies of Warren Buffett. It turns up Buffett is hot on campus too. The class now in its eighth year and is the brainchild of Buffett’s friend Harvey Eisen.

Harvey Eisen recalls, "This course is a breakthrough in terms of reality meeting academics. I said why don’t we have a course like this and the academics scratched their head and said 'well we don’t' and I said 'why don’t we' and then we got it done.' Dean of the University of Missouri School of Business Bruce Walker bought the idea. He says, 'We want our students to be exposed to many different approaches to investing."

The Buffett playbook is taught, analysed and written about but it is best summed up like this. Harvey Eisen explains it, "Number one - Don’t lose the money and number two - don’t forget rule number 1! Number three - look for unique companies that are hard to replicate - he calls that a moat around the business. Number four - he talks about the circle of competence, which means in simple English, do what you know. Everybody in the stock market knows about the economy or about the Federal Reserve. Warren focuses on what he knows and he has made enormous successes at that."

He does not want his managers to report in at any committee meeting of any kind and he lets them get on with the business of running their businesses. But there is one thing he requires of each CEO. Buffett says, "I asked them to send me a letter, that I would keep in a private place that will tell me what to do tomorrow morning, if they are not alive in terms of their successor." But what about his own successor? He says, "The succession plan is very simple. Our board met a few days ago and we talked about that every in single meeting and we have at least three people inside Berkshire, who in many respects will do my job better than I do. I can't give you the names but the board knows which one of those three they would pick, if something happened to me."

Warren Buffett has also given away USD 31 billion of his fortune to the Bill & Melinda Gates Foundation and he "hopes it will accomplish just what they have set out to accomplish. I have observed their Foundation very carefully and Bill and Melinda decided initially they were spending about a billion a year. They have decided they were going to try and figure how they are going to save the most lives, relieve the most human suffering."

Ultimately, that's what money is really meant for, isn't it?

Written for www.moneycontrol.com

How to keep career blues away

Every business goes through a cycle of birth, growth, stagnation and regeneration. The same is true of people who are at their jobs and professions for long. They could be sportspeople who suffer a feeling of insecurity, every time they do not play well or even students who are tired of studying because they feel their doing it all the time!

To keep going, you need to find renewed inspiration and sometimes a bright spark could just turn into a great business idea. New strategies can be planned, tried and tested during this slowing down period. Then when the pace picks up, you are already ahead of the pack because you started your homework earlier.

Chairman, Godrej Group, Adi Godrej told CNBC-TV18, "I don't think you should wait ever, even when things are going well. Change is very necessary all the time and improvement is something that should be continuous, whether it is in cricket or in business. So I think an improvement orientation is very important. But I don't think that one should react very negatively when things are bad either. It's the time to get the troops together, get morale improved because bad morale can create a vicious circle. I think good leadership and good strategy allows you to prevent too many slumps."

Former cricketer Javagal Srinath agrees that for performance to be good, being prepared is essential. He says, "There is a glimpse of hope when we go abroad. There is a chance that Indians can do well abroad. But fresh ideas need to come in. I think every cricket team starts working out the other opponent in the dressing room itself. That homework I think has been done excellently by most teams. I think the Indian team is probably lagging behind in this aspect, that's because for the last six months, some of the main batsmen are not in the form, so they are more worried about their own game than thinking about the opponents. I think seniors should sit and (discuss/debate) strategies for opponents in the dressing room first."

Godrej adds, "I think innovation is very important. It's a key to success and as more and more of the standard leadership and strategy issues become fundamental, innovation is what really works."

Businesses and sports, both need to keep grooming fresh, young talent to fill up any vacancy and also to keep pipelines moving with better products and ideas. Says Godrej, "I think it is extremely important. I think the greatest asset of any good company is its people. Even when you talk of companies with great brands - the brands, after all, have been created by the people. So how you manage people, how you encourage people, is extremely important. There should be training programmes too. I think in India we spend far too small resources on training. In fact, I feel there should be as much spent in a good company on training, as on R&D, even more perhaps. Unfortunately in India we don't do this, it is increasing but not enough."

In the context of cricket, Srinath said, "The feeder system into international cricket is not well defined in India. The Indian 'A team' touring abroad, I think, has brought some credibility to the feeder system. And number two, is the National Cricket Academy, which is doing something substantial. I think Ranji Trophy is not really producing the necessary things for international cricket or to the feeder system. We need to address the issue at first class cricket. Once it is done, you will probably find some solution."

Godrej reiterates, "What I would like to see is much better leadership in the management of cricket in the country and management of sports generally. I think it's poor. There is a lot of political interference. It's not professional. You should have a very highly paid CEO who runs the cricket board. He should be one of the best CEOs of the country and then you give him a three-year contract, let him run (cricket), extend the contract if he does well. But we don't see much professionalism in the way (the various) sports are managed in this country. While cricket attracts lot of money and it could easily be able to afford this professionalism. I don't see it."

Another hazard of any profession is that brands need to be worked on and perfected over time, which may not always occur. Success may breed complacency and no improvement may be in the offing.

Godrej elaborates, "I think in business, we don't focus enough. Many businesses do things, which are not their core competence, try and build too many brands. I think it works much better in business if you focus on what you are good at, add value to the strong brands that you have. Build new brands only when you must, not because you think you just need to do that. I think cricket is a little different. Strategy in business and cricket, or any other sport, is differentiated by the fact that in one you have to take the strategic decisions very-very soon. In business you have much more time, so I would say business strategically is much easier than sports."

Srinath added, "Innovation is extremely important, as important as for corporates. I think it is extremely important in the sporting field as well. We introduce technology into sports. Now when you introduce technology, it gives different pattern of information. How do you work on it? There is new talent coming up, how do you really sustain the talent? There are different ways of handling pressure situations. You got to change the batting order, bowling order etc, these are what innovation is all about. You got to bring in new physical training methods, you got to bring in fresh ideas from the psychologist. These are the innovative things and these are never ending. It can probably go on and on."

Finally, when the going gets tough, the tough get going. People are called into account, mistakes made are acknowledged and corrected. But where does one draw the line at non-performance and deal with it, be it on a corporate team or sports team.

Godrej replies, "We do two things. We evaluate the person and then give him a chance, coach him, guide him, set targets and targets must be achieved. If targets are not achieved. We have a policy in our company, we rank everybody in terms of performance, especially managers, the bottom 5% must leave the company every year. It's only a relative ranking, that's the only way we can encourage the lowest 50% to strive not to be in the bottom 5% and in the top 10-20%, we give them a very strong career path. So I think you must have a system, which incentivises performance very strongly, which I think our cricket lacks."

Written for www.moneycontrol.com

How to avoid infighting in a family business

Family run businesses were in the limelight some time ago, and for all the wrong reasons. The most public fracas was definitely what's happening between the Birla family and RS Lodha. The Bajaj brothers - Rahul and Shishir - have also had their tiff. A lot of these business empires are run by third or fourth generation heirs, who may have let the spirit of individualism overtake their desire for discretion over their family matters, where their businesses were concerned.

Business advisor and Management Consultant Ram Charan and Godrej Group's Chairman, Adi Godrej discuss the pros and cons of running a family business, in this age of dynamic startups and maverick entrepreneurs.

Adi Godrej believes the role of a family in a family-owned business is of a shareholder, with more of a personal stake than an outsider. Godrej said, "From a shareholder's point of view, they should provide inputs and obviously, the management, whether it is family managed or is professionally managed by non-family professionals, they must look into shareholder interest."

Ram Charan agreeds. "I really think that Mr Godrej really hits this part. Now over time, as conditions change, you modify, but the key thing I just want to underscore what Mr Godrej has said - put the structures in. Structures will then modify the things as they go forward. Nobody is going to have one thing for eternity. So it's a very important point."

Families have to be responsible shareholders, if it is not managing, but only owning the business. How does it calibrate its inputs? How does it ensure it plays a constructive role? Charan adds, "The lessons are really simple. First, as Mr Godrej mentioned about having a council and having a structure because that has interaction, with management, with the board, and that instruction guides any change in condition."

"Two, the family has to think through, is the business for perpetuity? So the interests are broader than just the shareholding of the family. Those interests are or not just all shareholders' (interests) because if you do things, that are not in the interest of the community, that could come (back) to haunt you, and the shareholder size is very important."

Given that families will have proprietary interest, is over interference or too less interference the way to go about doing things? Charan elaborates, "My major observation is in the US context and what I am finding is that, families believe that because they are part of the (business) family, they have a birth right, that particular assumption needs to change. They are going to say we guided collectively, we interacted collectively, we figured out collectively what needs to be done.

Typically, in family businesses, the creation of a family council is a wise move to head off any future, potential disasters. So what issues are most likely to crop up? Godrej says, "It could be things like, what is the criteria by which you will allow family members to join the family business or not. It could be how the surpluses of the family businesses are to be utilised, how much do you want to re-invest into the business, how much do you want to provide for expenditure of the family etc. In certain cases, we even bring non-family people to make presentations to the family, if they have a greater knowledge of the issue than the family members who are on the boards."

Putting together a team of people to helm the board also needs to be done keeping in mind the business's long-term goals. Charan says, "I think the family has to think through to long-term goals. Having said that, finding the people who are trusted, who give wise counsel, look at the broader perspective, engage the family in a constructive dialogue, and at the same time, when the time comes, select the (right) CEO. Those are (what) the good boards do. So, those are the kind of things, you look at when you compose the board, so that they also help you to professionalise going forward. Implant the right seeds at this point when you have a chance and let the process work over time."

Not having perfected the art of putting together a proficient board, mistakes have been made and companies have paid for their mistakes. Charan explains, "The key mistake of a family business is that, they really don't have the structures. 'I know all the answers' is the kind of attitude. Second, having a board is basically a legal requirement and not making use of it (is how family businesses may get into a soup)."

"Third is interference, that, because I am part of the family, I can go inside. And that creates disturbance, especially if they begin to talk to the press about the CEO and they leak these things. That has happened in a number of situations in the United States."

Godrej adds, "I think, it's even more important for a family CEO to have a strong board that can guide and advice, than it is for a non-family professional CEO. This is because for many reasons, a family CEO has the power structure within the company, where it's difficult for people to criticise. Therefore, a good strong board, with people he respects and people who are willing to go out of the way to make the right suggestions, to point out what the CEO's weaknesses might be and where he needs help from outside etc, can add tremendous value."

So what is the best way to construct a board in order to give the professional CEO reasonable freedom, but with the right coaching and the right input? Godrej explains, "Well, whether I was a non-executive chairman or an executive chairman, it wouldn't make a difference. I think, first we need very strong independent directors. None of them should be personal, close friends of mine, which is very typical to invite on to a board. That is a big mistake to my mind. They should be professionals, whether they are professional CEOs or whether they are professional advisors, whose advice can add tremendously to the board."

He continues, "Second, don't have short board meetings, they never work. To my mind, they must meet, at least once or twice a year and should be two-day board meetings because those are the ones that really add value, whether it is a strategic one or it can be an HRD review or whatever is the topic."

"But you need to have board meetings where people have the time and the inclination to really get into details on things that matter. I agree with Mr Charan, you can't have an agenda with twenty different points. There must be a few important points. Strategy and selection of a good top team including the CEO, whenever necessary, are the two most important parts of the board's responsibilities."

Written for www.moneycontrol.com

How the 'TDC model' helped Satyam

One had a agricultural background and the other was in the construction industry, but somewhere they both dreamt of technology and what services could be provided to the world, by an Indian IT firm. They are brothers with a single, united vision and the combined abilities to make it all come true.

B Ramalinga Raju is a modest man and his humble beginnings are shrugged off - not out of shame but more out of simplicity. Founder & Chairman of Satyam Computers, B Ramalinga Raju told CNBC-TV18, "I can't claim that I dealt with agriculture directly and I was behind my father in the early days, but otherwise, it is the education opportunity that I have got and I am sure Rama has gone overseas and got to do an MBA and acquire some skills."

He recalls, "Once I went to the US, the whole environment was so different, wherein you for the first time went into a shell - you said what is this, where am I? Am I in a different world or am I in the same world - and in my opinion, that has made some of the dormant gray cells active and I became very introspective and once I came back and became part of the business world, we were doing a number of things and to my mind all of them appeared to be very mundane. It had nothing to do with knowledge businesses and we were in the background, wanting to do something exciting."

So a general dissatisfaction with the way things were working out led them to come up with a business plan. Co Founder & Managing Director, Satyam Computers, B Rama Raju elaborates, "I still remember those days in 1991 because when we started, we took a different approach, compared to any other company which started in Hyderabad at that time. So we thought, whatever little money we had, we will invest in people and we sat together and said, are we doing the right things, but I think we stuck to it and the rest is history."

Initially, the small beginning that was made almost embarrassed Ramalinga Raju and he almost didn’t mention it in an application he sent out to Harvard!

Ramalinga Raju says, "In 1991, I distinctly remember attending a programme at Harvard University and they required you to send your resume and we were into a number of businesses and we had just started this company and we had a revenue of less than maybe USD100,000 or USD200,000."

"I was quite embarrassed to list certain computer services as one of the businesses that we were in, but I decided nevertheless to list it and I am glad that I did that. We spent almost 5-6 years thereafter, to move away from other businesses so that we could focus on this business."

But, back then, even the Indian bankers were skeptical about these upstarts and what they wanted 128 acres of land for. B Ramalinga Raju says, "The banker said, how many employees do you want to have – maybe a couple of hundred - and why do you need 128 acres for that, you can construct a multistory building and place all the terminals that you want and what purpose does this serve, that was the outlook."

Today, their technology centre is sitting pretty in 128 acres of land that they have developed. There is also a development centre, a golf course, a helipad and even a deer park! Satyam has managed to create visible signs of prosperity, in order to convince global clients.

B Ramalinga Raju explains, "Recently, I was reading this book called ‘Blink’ and it came very close to many decisions that we have taken in the past. To us, it was a simple-minded approach. We told ourselves that the only asset that we have are the people, and that their ability to do productive work, would be to convince them and to delight them. What was going to delight them? The quality of the people and the environment around them."

The two complement each other very well, One looks at operational issues, while the other formulates visionary strategies. B Rama Raju agrees, "From the beginning my focus has been on the operational issues and Ramalinga has focused on strategy."

"Apart from this, I would say that he is a great visionary. In 1995, we were less than 500 people. At that time, during our internal meetings, Raju used to say that we should be 10,000 people by 2000. Most of us, including myself, used to come out of the meetings and laugh, but I think it is quite satisfying that by the year 2000, we could get close to that mark."

So what has made Satyam the company it is? B Rama Raju says, "I think if you want to talk about the one strength about Satyam, it is distributor leadership, which we very strongly believe in.” B Ramalinga Raju explains, "Today, this distributed leadership concept is being referred to as full lifecycle businesses and within Satyam, we have 1,400 of them. Every process in the company is dealt with as though it is a business by itself."

The knowledge industry, like any other, has witnessed a boom period and a period of inertia. So what are the management strategies for the short and long-term put in place? B Rama Raju says, “In the last few years, there has definitely been a bit of a slowdown and things are looking up again and looking quite good."

"The way globalization is taking place and we work with Fortune 500 global customers, so in the last 12 years Satyam has started moving up the value chain. So there is some kind of consolidation and customers are clearly seeing the value-addition, in the services we are providing."

B Ramalinga Raju remembers, "In March 2000, the market capitalization of Satyam had touched its peak and that was the time when Bill Clinton was in India and he visited Hyderabad. People were saying after he goes back, all the prices will double because the confidence in India is so high and so forth. By June, it became very clear that we are not going to be able to continue this business because things have changed and there was a dramatic downfall in the markets and in outlook."

"So one fine morning, we all got together and discussed what we had to do. We took a decision that all the senior leaders who were sitting in the comfort of the AC room had to be closer to the customers and therefore one decision that was taken was, that Rama can continue to be in India, and I will move to the US with my family."

That would explain the 'TDC model' prevalent at Satyam. Where 'TDC' stands for 'thinking, doing and communication'. B Ramalinga Raju claims to have moved on in matters relating to ideas and issues because he tends to get bogged down with details. So he leaves it to Rama Raju.

B Rama Raju says, "We had JV with GE Industrial Systems and the CEO of GE Industrial Systems was here and he was saying that his job is the difficult part of dreaming, and he said the easier part of implementation was left to the team! So, I think all great visionaries and leaders are very unreasonable in their demands."

But their vision extends to beyond the boardroom and as a measure of Satyam’s corporate responsibility, the company has adopted 142 villages in Andhra Pradesh. They have got truly involved in the welfare of these villages in the last four years but say politics is not for them.

They have also launched emergency services. In the US, the emergency number 911 is so commonplace, that everyone knows about it. In India, such integrated services don’t exist. So, Satyam decided to put in place such an integrated service. That’s how the emergency number 108 was born.

B Ramalinga Raju gives credit where it’s due, "The communication ministry has been quite kind, to have set aside 108 and the state government has been very kind to sign a public-private partnership with us and a few days back, 30 or so ambulances have been put on the road."

At the end of all this hard work, do they see themselves slowing down? Retirement plans are made and then put on hold but B Ramalinga Raju does take the time out for a little snooker sometimes. Otherwise, mostly reading and meditation occupies his leisure time.

Even so, retirement plans can be put in cold storage for the time being but dreams and visions live on. B Ramalinga Raju agrees, "Now we would like to position ourselves to be one of the select few companies which is respected for the quality of work that we do. A company, which is seen as creative, is seen as addressing the higher-end of the value chain, while it has the ability to integrate things in a comprehensive manner. So we have lot of positive challenges ahead of us."

For more on careers at Satyam Computers:
http://careers.satyam.com/c_introduction.html

Written for www.moneycontrol.com

Is the world geared up for global Islamism?

A book 'Rethinking Islamism' written by Lord Meghnad Desai was published last week. This book looks at and analysis the ideology behind global terrorism. The book makes a distinction between Islam the religion and Islamism - the political ideology. The book claims that global Islamism poses the most serious military challenge to the world and according to Desai, will continue to do so for the next 20 years or so.

The well known economist and Labour peer, Meghnad Desai told CNBC-TV18, "Islamism to me is an ideology and one which has to do something with either human behaviour or political power. The ideology, I'm interested in is global Islamism which is an ideology that claims that Muslims have been badly done by to in history, and that the time has come for Muslims to get power back into their hands."

In his book, he describes three forms of Islamism - moral Islamism, national Islamism and the third is global Islamism. He explains the difference between the three and says, "Moral Islamism says that a Muslim majority country ought to behave according to the tenets of Islam. National Islamism says that, if there is a Muslim majority, the government should follow the Quran as its guide and Sharia law and so on. While global Islamism is a very different idea. It says that the a decline of Muslims in the 20th and 21st century was due to the Crusader western powers, and the Muslims will have to understand it and fight to reclaim power."

Also global Islamism has distorted Islam's values and exploited the religion and Desai agrees with this because he says, "it'a story of Muslims worldwide. About how they have been done down by western imperialism rather than any other community. Now I should say this about Sunni Muslims, not any others. They believe that they are badly done by, so it's not their fault by someone else's." The Muslim community believes that their problems and grievances began with the collapse of the Ottoman empire. They blame British and later American treachery.

So, how justified are their grievances? Desai feels that it's a simplification of a very complex problem. He explains, "The simplification arises in saying we are all one and there are no differences among us. There is a single villian and all our constraints are due to that villian. So, to get us out of this miserable state, get rid of the villian and then all will be right."

When the Ottoman empire disintegrated, the Middle East was partitioned by a League of Nations mandate between Britian and France. Then Britain promised the Jews that they would have a homeland in Palestine after World War II and thereafter Jerusalem goes into non-Muslim hands and all the problems that this gives rise to. In addition, they also feel that all the problems in places like Chechnya, Kosovo Kashmir etc are due to the West.

So, what global Islamism does is - first simplifies and then exaggerates. This simplification ofcourse, ignores the injustices that Muslims have heaped on one another, like the Iran-Iraq war and first Gulf war. But since the enemy has been pointed out to the Muslims, they feel they should avenge themselves on the Wset anyway they can - and guerilla warfare is their chosen method.

According to the book, another setback that disheartened Muslims, was the disintegration of the Soviet Union. They had looked forward to socialism providing them a way out of their problems - economic and political - but when the Soviet Union collapsed, they didn't know what would fill the vacuum. It was not going to be western capitalism, so they turned inward and looked at their religion for help. And that's where global Islamism and fundametalism stepped in to fill the gap.

Another global phenomena that made Muslims feel like there was a western conspiracy to undermine them and an extention of American power was the "spread of globalisation". Desai agrees and says, "Not only Muslims but a lot of people see globalisation as American hegemony, spreading much wider after the collpse of the Soviet Union. They do not see themselves as competing with the US, like India and China is able to compete with the US. They see globalisation and liberal capitalism purely as American manipulation visited upon them."

Desai also feels that India should recognise the fact that global terrorism will be as much of a headache for India as the West because Osama bin Laden sees India as part of the crusader West. He adds, "He sees Kashmir as a basic battle that Muslims are fighting against the West." So, the big question to ask from India's point of view is that, is India prepared to take on global Islamism? Desai feels that India might still be deluding itself that it can claim immunity from Muslim wrath because of her history of supporting Muslim dictatorships, being part of the non-alignment movement and also because of her sizeable Muslim population.


Order the book here: http://www.newsfromnowhere.org.uk/books/DisplayBookInfo.php?ISBN=1845112679

Written for www.moneycontrol.com

The world is Dr Reddy's oyster

Almost everyone has heard of Dr Reddy's Laboratories or DRL. It is India’s second largest pharmaceutical company, which has just come out of a fairly challenging year and their mission now is to convert DRL into India’s first pharma company that makes drug discovery commercially viable. All set to do this are GV Prasad, Executive Vice Chairman & CEO of DRL and Satish Reddy, who is Managing Director & COO of DRL.

Both men are brothers-in-arms and brothers-in-law. GV Prasad is the intense one who "networks professionally" while Satish Reddy is the social butterfly who also loves travelling. Prasad admits to having been biased to his work over his family and he knows they have been understanding about it. But along with being a workaholic, he is also a nature lover and still manages to find the time to promote a bird sanctuary.

Prasad came from a construction business family and had started a bulk drug business in Hyderabad, which was then acquired by Dr Reddy’s. He then moved out of pharmaceuticals for a few years and went back to the family business. Then in 1990, one of the companies that Dr Reddy’s had promoted lost its CEO, who wanted to pursue his aspiration separately and then Dr Reddy’s asked him to come on board.

Prasad told CNBC-TV18, "Creating new businesses has been one of my strengths. It’s just the excitement of creating something, that didn’t exist and see growth, flourish and become self-sustainable and this is really what drives me."

Satish Reddy came into the business in 1993, and there was a bit of a crisis situation at that time. He admits he was not ready for the responsibility and it was more like being thrown in the deep end of a pool and told to learn to swim. He came back from the US with a Masters in medical chemistry and then went to work learning the ropes with Prasad.

Reddy elaborates, "I think the situation itself was such that it did put a lot of pressure on the company. So I did come into a situation which demanded quite a bit. In a sense, a core R&D team which really was the backbone of the pharmaceutical business because we were pretty much a bulk drugs company then, had left and they didn’t leave that much behind, except the old products which were there. So, you know to put the team back together to get new products back online - that was a crisis situation."

He says of Prasad, that he's very intense about things. Prasad says, it is about "passion and involvement, when I get caught up with an issue." Reddy confesses to being more moderate, someone who delegates a lot and is more of a people's person.

He says, "There are situations which require his (Prasad's) kind of personality, which really require someone who is hard driving and who makes sure that things get done and all that. Most of the times, we really complement each other."

But what have they learnt from Dr Reddy, about this business? Prasad says, "The two big lessons I've learnt from him are, one is to look at the forest always and be aware of the larger picture and not worry too much about the details and I think that’s something which has had a big influence on me."

"The other one is, to delegate and empower people. He has delegated to me and Satish. We can make huge mistakes as long as we are doing the right things for the organisation, he gives us so much power. So his faith in people is something which has been a big lesson for me."

Reddy adds, "The other thing is, he is extremely focused. If there is a certain job to be done, he just pursues it so hard, it really drives people crazy until the job is done. At the end of 1993 and early 1994, the company was a bulk drug company, he was very clear that it had to migrate into being a more of a finished drug company. He said we have to be a Rs 200 crore and the number five company in India. It was as simple as that. So that’s exactly what it turned out to be."

DRL did get there but how it got there is as much of a story. Prasad says, "First, I think is the commitment of the senior management. Dr Reddy himself personally drives this whole agenda for research. Second, the amount of resources we commit to this space with very little expectations of success because drug discovery by nature, is a very risky game. And third, the ambience we provide, the intellectual freedom we give to our scientists and the whole work culture that we built around our research organisation."

"Even before we went into the drug discovery, while we were doing bulk drugs, these are still very much research driven. So the organisation is very committed to research and hence creating a place, where scientists really love to be in, has been a fundamental defining point for Dr Reddy’s."

Reddy adds, "We empathize with the chemists much more because we have worked with them more closely, both he and I in different parts of the company. So, I think we tend to empathize with them in terms of what they need."

With the pressure of results and being responsible to shareholders, the management has got to learn to explain about long term goals and short-term projects. The challenge has been to allay fears if litigations arise, or soothe ruffled feathers, if gestation periods for a new drug takes too long. The most disappointing moment is ofcourse, when the clinical trials fail.

But perseverence is the name of the game. Prasad explains, "I think the big thing for me is to establish the company as a global player in the generic space and become meaningful in terms of size in that area. The second thing is, to really commercialize our innovation, to convert drug discovery into a business and third, to really prepare the organisation for the next generation of leaders and the next wave of growth."

Reddy says, "Right now, it’s still a very generics company. All the revenues we derive today are purely from selling generic products. We want to make the transition to an innovation-based company. We still don’t have any sales from innovation. So I think ultimately, a dream would be fulfilled when we actually see our own discovered molecule in the market across the world, that’s what really everybody is waiting for."

Dr Reddy's Labs is looking to grow organically, and is especially looking forward to being a global company in fragmented European markets. It is also open to making appropriate acquisitions, as and when the valuations are just right for their pocketbooks.

Prasad concludes, "As a industry, India has not seen innovation in any major way in any of the industries. I think the pharmaceuticals industry will be the first big industry to discover drugs and put them on global markets."

Written for www.moneycontrol.com

A legacy that's going strong

Shivinder Singh and Malvinder Singh have a lot in common, apart from names that sound alike. They went to the same college, St Stephens in Delhi and did their MBA from the same university and then branched out, but again in related areas. They don't seem to venture very far from each other. Malvinder Singh credits their parents for giving them the value system that the brothers have imbibed.

Shivinder Singh says the reason he's literally been following his brother's footsteps is that, both have such similar thought processes. They both like facts and figures, both want to get to their goals in a tearing hurry and ofcourse the common values, they grew up with.

Both had inherited the now internationally known, pharmaceutical firm, Ranbaxy, but Malvinder took up the reins as it is more his field of interest. While, Shivinder has branched out to providing healthcare services and has given North India, its very own, world-class hospital, Fortis Healthcare.

A vision became reality

Ranbaxy was a successful Indian pharmaceutical company, long before Malvinder Singh came on the scene. True, he's taken it into unchartered waters and given it a higher profile in the world press, but initially, did he have to battle perceptions that success had been handed to them easily?



Malvinder Singh and Shivinder Singh

Malvinder told CNBC-TV18, "At the time. When our father passed away, we had just been allocated a piece of land in Mohali, which is where our first hospital is today. Shivinder was still doing his MBA. we hadn't really made any significant investment in healthcare. It was also at that point in time, where we had a 500 sqft office in Delhi with only five people and both of us had a decision to make - whether we wanted to remain only in pharmaceuticals or we wanted to get into other areas of healthcare."

"I think both of us were very clear and very unanimous that this (the hospital) is something we wanted to do and we were going to do it. At that time, Fortis Healthcare was a 50:50 joint venture between the family and IL&FS. Dad brought them in at that time because he needed a partner as he wasn't well and both of us were young."

"But I went up to IL&FS and told them I want to drive it in a particular way and that I was willing to buy them out at a premium, and we did that. Today, it's a completely different story where we have a very clear gameplan on the healthcare side in North India."

Malvinder feels his father and Mr Brar made a very good combination, who were able to bring up Ranbaxy, to be the company it is today. He elaborates, "My father was a great visionary, who thought well beyond his time. I think what Ranbaxy is today, is primarily driven by the vision he and his team had."

"For him to really foresee and say, look I am not going to be limited to competing in India, which is only 1.5% of the global pharmaceutical market, but really want to go outside and compete where the markets are, which is in the US and in Europe. He did it, in a very phased manner and I think if you look at Mr Brar and my father, they are a very good combination as a team because he (Mr Brar) was a great executor."

Shivinder adds, "What Dr Singh gave us, was a great company as a legacy and a great vision. What we have today is, two other great companies, that were not there or virtually absent. Fortis Healthcare, which was a piece of land and SRL which was not there in our fold. Today, SRL is Asia's largest pathology network."

Burden of expectations

Now, with Ranbaxy aggressively moving into foreign markets and is sort of taking the competition to the enemy camp, the President and Executive Director of Ranbaxy, Malvinder Singh must be feeling the heat, with expectations being sky-high.

He says, "I think clearly from an expectations perspective, people would really want to look at you and see can Malvinder deliver, is he good or is he there because he is his father’s son. But that’s something I knew was going to happen, but it didn’t really bother me or make me very conscious of that fact. Right from the start, I have been fairly hardworking and I went about doing my job, just like anybody else in the organisation."

"I worked harder because I really enjoyed what I was doing. I had a dream and passion for what I was doing and wanted to really be a part of Ranbaxy's growth. But at the end of the day, I really started from the bottom as a management trainee and therefore, there was so much to do and so much to learn and Ranbaxy is a very exciting organisation."

He admits to having thought of a different career. He elaborates, "I actually started my career in the financial services industry with American Express and I worked with them as a management trainee in Delhi and Bombay. So when I started my career, it wasn’t in Ranbaxy and I did that very consciously because I wanted to work in a global organisation."

"I wanted to work outside Ranbaxy, so I could really learn and understand and be one among the many without really having anybody to see or feel that he is the boss’s son. Then there was the fact that I really wanted to and enjoyed working in the financial space."

"And if it hadn’t been for my father’s health, I would have probably worked in the investment banking arena internationally for sometime, but eventually come back because I had always seen my father, my grandfather, live and breathe Ranbaxy right through my childhood. It was something I wanted to carry forward."

Focus on healthcare

Shivinder Singh supports his brother's keenness for Ranbaxy's welfare and success, and says he's taken to it practically from the day he was born! On his part though, he knew pharma wasn't quite his cup of tea. He explains, "Maths and computers apart, pharma was just not something that clicked with me. But healthcare just happened, they are very connected but there are two fundamental differences."




Shivinder Singh (l) with director of Fortis
Healthcare, Harpal Singh

"First, it is a service organisation and second, is that I didn’t like the idea of not dealing with the customer directly. One big disconnect that I had with pharma was you deal with the doctor, and doctor deals with the patient, you really don’t get to know what happens and healthcare gives both of them, on a platter."

Challenges

Having inherited Ranbaxy, did Malvinder run into an entrenched system or people who didn't take to change eaily? Malvinder says, "Making people change when they have seen success by what they are doing is a challenge. But I think as an organisation we are mature, we have people who understand that we are living in a very different environment today and therefore what’s going to take us to the next level, is going to be different, from what got us here."

In contrast, Shivinder Singh got it easy. He explains, "I was sent to Mohali in Chandigarh as the head of the hospital and there was actually nothing there, there were no people! So I recruited every single staff, the culture, the attitude, the working style. So that way I had it much easier, I have had the chance to do it my way from scratch."

Shivinder, who is Joint Managing Director of Fortis Healthcare, is looking to make Fortis Healthcare an all-India presence sooner rather than later. That famed family restlessness is at work!

Malvinder explains, "I think we both push each other and he kind of challenges me, on many aspects, from a macro perspective and I challenge him. I think both of us are aggressive in our own ways and we want to ensure that we are growing fast, if not faster than what we can do. So, I think that really keeps both of us going."

Tycoon speak

Heard Donald Trump say 'You are fired' on his show 'The Apprentice'?
Here is some choice soundbytes from the Singh brothers:

Do you have any weaknesses?

Malvinder Singh : Weakness, what is that?
Shivinder Singh : How do you spell that word?
Malvinder Singh : I don't know!

Famous last words these.

Written for www.moneycontrol.com