Do the IIMs need to build brand equity abroad?

When the Indian Institute of Management Bangalore, IIM-B, decided to open a campus in Singapore, the Union human resources ministry vetoed the idea because they said, it didn't adhere to government norms but now they have relented somewhat, and say that IIMs can go abroad, but first they should cater to domestic demand, which they have not done properly so far. So, are the HRD ministry's concerns valid?

Sunil Alagh, who is on the board of IIM-B wants to clear the air. He told CNBC-TV18, "The very first day it was decided, we should do this and make a case to the government, get their permission and then go forward. So the misconception that there was any question of going ahead without government approval, should be removed instantly."

"We are not asking the government for extra funds. If anything, we will create income. Once the income comes in, then institutes like IIM-Bangalore will have less reliance on the government and the government can use the same money to create more IIMs."

Alagh honestly doesn't see what the conflict is all about. As he says, IIM-Bangalore cannot create IIM-Kanpur, that's what the government has to do. But what IIM-B can do is expand its own campus abroad, which is what it is seeking to do.

He explains, "The need of the hour is to establish a brand name with authority. If you want to be part of the global system, if you have the stamp of IIM outside - even if it is a 3 or a 4 month course - you are only adding to the brand equity."

Number of seats per institute

IIM Ahmedabad - 250
IIM-Bangalore - 260
IIM-Calcutta - 300
IIM-Lucknow - 300
IIM-Kozhikode- 180
IIM-Kanpur - 180


Commenting on the issue, Professor at IIT, Kanpur, Pankaj Jalote says that most of these institutes are stuck in the 1980s scenario, where demand for MBAs was low and what IIMs/IITs were producing, was not getting used. At the IITs, he says, it took them 20 years to double the output. He feels these institutes should play a more active role.

He explains, "Playing an active role does not mean that you start opening new campuses in Kanpur or wherever, but upgrading the education that is being imparted." So he feels that the IIMs have not catered to domestic demand.

He adds, "It is not just about increasing seats. We are the leaders in these fields and we should lead the people and not just create more capacity for students. There is point that one can do both, but looking at the faculty here (in Kanpur), I know that we are so stretched in various ways - so one can go to the US or to Singapore and expand in India also, but by and large, I think your bandwidth is limited."

Alagh elaborates and says that what has been overlooked is that, the MBA course offered abroad will be a short-term course and not a 2 years course, like in the Indian IIMs. And he says that they won't be stretched for staff and teaching resources because not the entire staff of the Bangalore IIM will be sent to Singapore, but only one or two professors will be sent to get the campus going, while the rest of the teaching could be done by Chinese or Malaysian professors.

He concludes, "It is not like you are taking the staff from India and opening a branch. So for to say that, we must not export until we meet domestic demand completely is being very myopic. I completely agree that we need to expand the Indian scene, or else how else can IIM Bangalore expand? They can only do that by taking more students in Bangalore but cannot create an IIM-Bangalore brand anywhere else."

Written for www.moneycontrol.com

Women's faces just got Lowe's attention

Lowe has released a book called 'Faces' which has studied changing consumer profile among women. With the urban Indian women being the target of most retail advertising these days, her disposable income is being eyed with eager anticipation. President & COO, Lowe, Pranesh Misra agreed and told CNBC-TV18, "If you look at most of our clients in the FMGC space as well as the durables space, the main decision-maker tends to be the urban Indian housewife and we felt that rather than looking broadly, just focus on this target audience."

The book describes five categories Mrs 'Hasmukh' (Popular) (27%), Mrs. 'Pataka' (Cool) (12%), Mrs 'Meri Awaaz Suno' (Attention Seeker) (31%), Mrs 'Gharelu' (House Proud) (18%), Mrs 'Hey Bhagwan' (Moaner) (12%). The question is how is an advertiser going to use this information for his brands.

Misra explained, "For example if you have your brand and you cross-analyze brands across different segments and you find that your brand is doing well, in the segment of Mrs 'Pataka' Cool and you want to influence those women a lot better. Then what you do is, you go deeper and you study what makes that woman buy (that brand) because there is a lot of data in the study, which talks about her lifestyle, her media behaviour, her attitude towards life - all that linkage data is available. So you are able to get a more holistic picture of this woman."

This helps now because more "women are getting into the workforce, as they are getting independent incomes, as they are exposed to more television, which is a good way to learn about a way of life. I think they are getting a lot more independence in their thinking."

Leo Burnett has been doing this kind of work internationally. In fact, last year at the Cannes Advertising Festival, they presented 'Miss Understood', this was a study on how advertisers are getting women consumers wrong or misunderstanding them. The key findings in the international study would help Indian advertisers.

Chairman & CEO, Leo Burnett, Arvind Sharma elaborated, "The key finding is to stop thinking of women as stereotypical homemakers. They want to enjoy humour as much as men or children do. They are described as emotional and therefore very often advertisers think that showing portrayal of emotion on the screen is enough. Now, you have to evoke emotion, not just show emotion and that's the difference between hugely successful advertising and an attempt at being a good advertising. They are participating far more in economic decisions. Earlier, they were participating in FMCG type of decision-making, then they started participating in durables decision-making."

Misra added, "We polled about 10,300 people and of that I think about 1,500 are working women. So now we have the ability to cross analyze and see what is the difference between a working woman versus a non-working woman."

All of this is an effort to involve women in the adverts being put out in the media as now they have greater control of their incomes and chose to spend it any manner they want to. Sharma elaborated, "In absolute numbers, in India, there aren't very many marketing plans that have been tailored to them. The financial sector is beginning to do a bit, automobiles is not yet doing it. But around the world, automobiles do that and you expect the change to come in. But on the other hand, you could argue that indeed they are beginning to get their due, though in a slightly different form - if you go to any of the shopping malls, the proportion of women will be higher on an average day."

Misra explained, "I think the main lesson is that don't look at Indian housewifes as a uniform mass. There are different strategies that can evolve, depending on who you are after and I think traditionally, marketing has been looking at urban housewives in the age group of 25-30 years. I think those kind of variables of target audience should evolve and you should be able to say now, okay what kind of mind does she bring to the party and therefore, how should my brand strategy evolve to fine-tune itself to the mindset of that consumer." Sharma agreed and says, "Stop looking at women as women, look at them as people."

With so many women working in advertising agencies, their perspectives have yet to permeate to the ad campaigns they create. Sharma said, "Men need to change their attitude and we certainly need to give women bigger voices in the campaigns that they are creating."

Written for www.moneycontrol.com

Her life's been a happy, karmic happening

She's an heiress from a reputed family down South - the PSG family who have founded many educational institutions and hospitals through the PSG Trust in Coimbatore or Kovai. This city is famous for its textile industry and is called the 'Manchester of South India'.

Born to wealth and with a silver spoon in her mouth, she's fittingly now overseeing the sugar industry. Rajshree Pathy is the President of the Indian Sugar Mills Association and is also the CEO of Rajshree Sugars and Chemicals.

But her business apart, she had responsibilities to fulfil that women with family's are familiar with. She had to cope with bringing up two children - Aishwarya and Aditya - almost single-hanedly because her husband's work kept him in Bangalore, most of the time. Her father's sudden death at the age of 52 in an accident and her mother's subsequent ailment, kept her extremely preoccupied.

She believes that life is a "karmic happening." It probably explains that she chose to branch away from the family business of textiles and go ahead in the sugar business. She acknowledges that the sugar industry was "highly volatile" and there were huge losses initially. She also had to get people to trust her but she had faith in herself.

She had always been creatively inclined. She wanted to become an architect or a dancer but her parents wouldn't allow her to go far away from home - in this case Mumbai - to study! But not having done a architecture course hasn't cramped her sense of style at all. She's built a beautiful home for herself in Coimbatore. Her retreat from the world. She told CNBC-TV18. "My house is a constant love affair for me and the house has evolved just as I have because when I built this house, I was expecting my son and he is 19 today."

The house is also symbolic of her breaking free. She admits, "Breaking-free and living the life that I always believed I wanted to live - a life of great freedom of thought, of conviction and a great sense of fulfillment."

As expected, she also supports young artists and her beautiful home is a repository of some of their work. She plans on opening a private art museum in the future. But this interest apart, she carries the same principle to her factory floor - where young engineers on the shop floor have risen to become general managers.

She elaborates, "I always believe in promoting from within, as opposed to bringing in an outsider. It gives the employees a great sense of belonging. At the end of it it all, what do you want in life? It’s not just a big pay packet."

Rajshree's sugar business has provided one of the most backward regions of Tamil Nadu a source of livelihood. The farmers started planting sugarcane as they were assured of regular, fixed income. So, they have been able to open bank accounts and send their children to decent schools, thanks to her.

But the journey began in 1989, when her father was granted a sugar licence by the then chief minister, MGR, who wanted him to develop a backward area. She's her father's daughter and she's proved her criics wrong - especially the ones who advised her against going ahead with it after her father's death.

She recalls, "He died while the project was still not completed and obviously people had trusted him and his reputation and lent money, so when he passed away suddenly, there was this onslaught of lack of confidence from institutions, from bankers and from the public in general. People were calling up my relatives and saying, how can she succeed in this business, it’s such a male dominated business because it’s very political even now and it means dealing with farmers. It’s a rough business for a woman."

"So people suddenly felt that maybe I should sell out and other people who have been in the sugar business for many years, should take it and run it or they wanted my in-laws to stand guarantee on the bank loans and so on. All of which I refused, I said I built the factory, I may not know the business but I know the factory, I know my area, I know my farmers, having worked with them for two years before the factory was completed, I was the one who tied-up the laws and always with my father’s guidance, but I was the one who was physically managing the project."

"Therefore I said, give me a fair amount of time, give me 11-months because it takes 11-months for one cutting of a sugarcane crop. So I said give me that one 11-month period and I will show you that I can run this factory. For a factory of this size, I needed a minimum of 27,000 acres and at least five lakh tonnes of cane crushing per year. We had 30,000 tonnes of sugarcane for the entire year."

She had to go around in a jeep, sometimes with her little kids in tow, to the villages and convince them to support her and grow sugarcane. She explained to them that it was needed for both their survival. The farmers had already grown sugarcane for another private company, whose factory was next to hers. The factory had incurred losses and the farmers hadn't been paid at all for their crops. So they were understandably wary. But they did put their faith in her and now they have reaped the benefits.

Today, their children go to a school set up by Rajshree, which imparts a high quality, english medium education. She wanted them to get a level-playing field, when they were applying for higher education. Her dream is to sponsor some of them to the IITs or even send them abroad.

She affirms, "I believe that this industry can do so much. We are the second largest producer in the world, next only to Brazil and we are the largest consumers in the world. With those kind of inherent strengths for the industry in the Indian economy, there’s lots that we can do." She wants the sugar industry to be deregulated and open to increasing capacities. Also more investment in byproducts like ethanol, bagasse and power would certainly help.

She says, "Brazil deregulated as early as 1977 and they went in for ethanol production and made it mandatory since 1931, and we are talking about it in 2005. So if only the government is broadminded enough and if they really want to help the agro industry, sugar should be on the agenda and a priority on that agenda." She's been successful in ensuring that the Indian government re-install the ethanol programme.

On her part, Rajshree is moving into other spheres that interest her. She's moving into ayurveda which she says is a "pet project of mine, it’s not a part of Rajshree Sugars, it’s a collaboration with friends and I have always believed in natural healing and alternate medicine."

"However, I would I like to get into organic sugarcane, which we have already started. We have also laid out lands for organic herbal production of plants and for medicinal purposes. But at this point, we have very well-defined set of people for the sugar business, which is our core business. So, we are looking at acquisitions anywhere in India, wherever there is cane and if we find the environment is conducive for growth, we will be there."

So going from strength to strength seems to be her motto and she's surely setting a great example for others to follow her - notably her 23 year-old daughter Aishwarya, who has been closely watching her moves and has taken tentative steps to move into her mother's shoes. Well, the flame has begun to be passed on and it will only burn brighter.

Written for www.moneycontrol.com

The new cafe on the block

There is a new cafe and bakery that's just opened about two months ago and it's in an unlikely area - Worli - where it's not going to be inundated by the tourists anytime soon, (unlike Cafe Mondy's, Leopold, the Baristas or Cafe Coffee Days). This is mainly because it's not on any Lonely Planet guide yet and Worli doesn't see as many tourists loitering around.

Well, good for locals like me, but not good for business I suppose!

But, this new addition to Mumbai's leisure hangouts, is so refreshingly different - the Banyan Tree Bakery & Cafe has a huge banyan tree overlooking its outdoor seating area, hence the name. It's got wooden tables, with orchids placed in vases, on every table. A soothing waterfall - that tumbles over a fountain that's shaped in the form of leaves. All this on the outside.

On the inside, the wooden flooring, the cane chairs with cane and glass-topped tables, the old fashioned gas lamps, the divan in the corner with throw cushions is just the ideal place to curl up with a good book. A ceiling fan, imported from Italy that absolutely gels with the decor and the name of the cafe because the blades are intricately shaped like...well.. a leaf! This is a made-to-order piece and the attention to detail shows. It was almost the first thing that caught my eye, the first time I stepped in.

So, if you want to discover a new place and get some downtime all by yourself - or curl up with a good book or actually hear what your loved one has to say - without all the usual cacophony around you - then this is the place to go to. It's where you actually feel you can unwind in pleasant silence.

The first time I was there, there was just the soft cadences of Italian songs giving me company, the second time, just the soothing fountain and the beat of bass of some English song, which barely registered. That's what I like, the buzz is just low-key enough without taxing anyone's nerves.

While this is a cafe, so by definition, it doesn't do a 'proper' lunch or dinner but I would recommend their Black Forest Cold Coffee. They do have a line-up of pastries like strawberry cheesecake, cherry muffins, brownies, chocolate mud pies, doughnuts etc, what shouldn't be missed is their sandwiches.

The breads (a variey of them are available: like, rye, whole wheat, multigrain, pita, masala, French baguette) are baked right there at the cafe, which has its own bakery. So, the bread is fresh and soft, and you can take away loaves, for your next day's breakfast. Believe me, the whole wheat bread I tried was a melt-in-your-mouth experience, especially, when you have hot butter to help it slide it down your throat.

But don't count on efficient service because I think the staff is still finding their feet and there should be more supervision over the quality of service provided. After all, the food is anything but cheap. You get the feeling at times, that they are just moving around aimlessly, when they should be getting your order instead.

You may find yourself standing in front of the pastry counter, having placed your order but the staff is taking their own time about getting it for you. The proprietor is a young woman with no real experience of running a cafe and so I feel she should hire professionals to run the place for her.

But all in all, don't skip Mumbai without visiting this new haven, and you can find it here: Krishna Worli Sagar, Ground Floor, Shop No. 10, JN Palkar Marg, Opp Podar Hospital, Worli, Mumbai. Tel no: 022 64527222

Written for www.msn.co.in

Apocalypto: A warning sign?

'Apocalypto' is such a visually beautiful film that it grips you from the start. If anyone has already seen the trailer, they will know what I'm talking about. Mel Gibson's previous films - Braveheart and Passion of the Christ - were both spectacles on a grand scale. Apparently, on both occasions, studio bosses scratched their heads and said it wouldn't work and well...the movies did work their magic at the box office... and spectacularly at that.

So, one has to go with Mel Gibson's choice of subjects and his style of movie-making because he does a good job with both. Then there is the bonus of some good acting by lesser known actors. I noticed Jim Caviezel in High Crimes, only because I thought he did a superlative job as Jesus Christ in Passion of the Christ.

Apocalypto has a lot of relatively unknown actors from Mexico City, who have done a great job of speaking their dialogues in Yucatec Maya - one of the many native languages of the Mayans - on whom the movie is based. Just like Gibson brought the Aramaic language to life on big screen in Passion of the Christ, which gave the movie so much authenticity - the same is felt when one watches the young and promising leads in the Apocalypto talk with one another in that haunting sing-song cadence.

The cast is well chosen with everyone having very Indian-Mayan features and they all slip into character with effortless ease. Their bare-minimum costumes, the intricate head gear and nose ornaments, the setting in the forests...all add up to the feel of the film.

Rudy Youngblood and Dalia Hernandez play the young couple in the film - Jaguar Paws and his wife Seven respectively. Youngblood holds the glue to the narrative because he is the first to spot the other tribe that has been dispossessed of their lands, his people are then taken prisoner and force marched and he's almost beheaded, but for divine intervention. So, he is present throughout the journey and you see the story through his eyes.

You see the death of his way of life and the disappearance of a his people - a great civilisation - (as the movie correctly points out) because of the infighting between warring and pillaging tribes and also due to sheer ignorance, where human sacrifices are called for when there has been a drought for a long time. Where slave labour is used to build a city. And where his simple existence in the forest is all that he wants to preserve - for his sons and grandsons.

As if any proof was required, this movie shows the futility of war and bloodshed, more than anything else. All viewers can and should glean their own meaning from the storyline - but to me, it stands as much for how useless killing (or bombing somebody out of existence) is today, as it was for the Mayans. This movie forces us to watch out for what could happen to humanity as a whole, if things are allowed to go beserk.

What's more chilling is that, blaming the Spanish was not an option that the Mayans could exercise because they didn't know 'who' or 'what' they were. Today, we do it for them, with 20/20 hindsight. But, who will do it for us, if we all go the Mayan way....and disappear?

If we don't want to go down that destructive route, then watching this film could be a good start.

Look at a preview here: http://www.youtube.com/watch?v=qF3-CYBGJcM

Written for www.moneycontrol.com

Get that extra edge at this charm school

Mega deals have been making front page news almost daily. Indians are making those deals and that goes to show, how confident they have become about stepping up and taking what they feel should be theirs to own and expand. This may prove that Indian businesspeople have the smarts to make such big moves. But are they as confident about the softer skills that go with such success?

Do they know how to handle themselves in jetset company? May be this is second nature for the likes of Lakshmi Mittal or Ratan Tata but there are many dealmakers, who could benefit from some well meant and good advice. And that's where the image experts and etiquette gurus come in - they take you under their wing, guide you, teach you the nuances of refined manners in extremely la-di-da society and then set you free - to conquer even more mountains - with even more charm and finesse.

That's is precisely where The Edge Academy comes in. It's motto is "sharpening your corporate image for the global market' and promises to make you a more complete corporate man or woman. This academy has been started by theatre director, Raell Padamsee, advertising guru Alyque Padamsee's daughter. He is also a member of the faculty. Raell Padamsee’s interactions with several corporate head honchos brought to the fore, that there was a great need for their teams to be well versed in the soft skills, as well as hone their presentation skills in the global arena.

Core faculty team consists:

-Alyque Padamsee – Marketing and advertising guru. Theatre director and Padmashree awardee.
-Sabira Merchant – An icon in corporate finesse and well known theatre personality.
-Raell Padamsee – Has designed and executed a wide range of exclusive events.

Therefore, the point of setting up such an academy is that most of the first impressions are non-verbal and create an image in the client’s mind. So, if employees look and act the part, it strengthens their value and brand, giving management the image of confidence, credibility and success. As adman, Alyque Padamsee told moneycontrol, "There are hundred percenters, and then there are the rest, which do you choose to be?"

The programme will have Raell leading all the meltdown exercises, working on shedding inhibitions, team building, creative visualization in the key business areas. Alyque Padamsee will impart his knowledge on how to generate a powerful presence, command attention and make a killer presentation among other things. The third person of this core triumvirate is etiquette coach Sabira Merchant, who will do what she does best – groom students on social etiquette.

So, the certified course that the Academy provides has a range of corporate modules that aim towards enhancing the professional corporate image of the entire workforce. The courses are designed and customized to match a company's needs and all its requirements. So, if a bunch of young yuppies have just swung a good deal for a coporate, then they could be on their way to global postings, and that's where the etiquette training will help...in abundance. Noted theatre personality and etiquette coach, Sabira Merhant says, “Etiquette is the key that opens us to a broader life, so that we can find social happiness.”

These corporate grooming courses are tailored to meet all different levels of management, including the hospitality industry, BPOs, businesses – anyone and everyone who wants to improve their own image or that of their company. The programmes are available in the following grades:

o Platinum

o Gold

o Silver

o One on One (individually designed to suit requirements)

What's more, is that, The Edge Academy has roped in experts and special consultants like Salvatore Ferragamo, Aigner, Fratelli Rosetti, Christine Valmy International School of Aesthetics, Reid & Taylor, Westside, Pantaloons and The Rudra Spa.

For more details contact:
Manju Utamchandani
Tel : 022 22842845/6/7/8

Written for www.moneycontrol.com

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