Free choice: Isn’t that what got you elected?

The big story that burnt the pages in every newspaper and the studios of every major TV channel last week was the debate on the banning of porn. The government of the day felt that this is bad for all of us, based on a PIL filed by an Indore-based lawyer, and decided to block 857 websites that were identified as defiling and corrupting Indian society (we were a pure and pious nation before these websites, of course).

Fortunately, unlike in the case of other such protective decisions that they have taken on our behalf so far, the government  quickly retracted the decision and limited the ban to websites indulging in child pornography.

Of course, the ban had its very strong proponents. One amazing counter to the government’s reversal came from a panelist on a recent TV debate. She claimed that the label of child pornography should not necessarily be limited to content that uses children as actors. She felt that the definition must include the access that children get to adult content. There are interesting extensions to that logic if you think about it. So you will now have ‘child beer’ (along with chilled beer) and ‘child tobacco’, as new labels for the stuff that gets into the hands of children. I was left wondering why we don’t ban those war games that children play on their handheld devices. This should then prevent the potential proliferation of children growing up to be terrorists!

The fact is that each of us can come up with tenuous cause and effect relationships for any number of activities that lead to adverse effects on children, society, the environment, peace between nations and whatever else. One US-returned academic quotes a clear link that she established between pornography and violence against women after having interviewed 300 people! 

It is understandable that as individuals with backgrounds and experiences each of us will have a view of what is acceptable. And so be it. The bigger issue in all this is with the state deciding what is good or bad for us. There is little evidence available to demonstrate that getting rid of anything is beneficial to society. Including deathrow inmates.

Even before the Internet nailed the availability obstacle 20 years ago, it was fairly evident that most things that were officially banned would any way find their way through other access points, provided people really wanted them. Take alcohol. You put an official stop to it and the bootlegging industry takes over in full swing. 

So what is the mechanism that decides what I can and cannot do? Particularly within the confines of a private citizen’s private life? Shouldn’t it be decided by the freedom of choice of the individual? As much as I have the right to avoid restaurants that serve beef or exposure to adults copulating, my neighbour should have the right to indulge in both. And as much as my neighbour exercised the free choice of voting for the party that came to rule, I needn’t have. Isn’t that the mechanism which brings governments to power?

This is ultimately what a free society is built on, if indeed that is what we define ourselves as (everyday we make free choices about what airline we should fly and which soap works best for our skin).And most well-governed free societies have enough checks and balances to ensure that the abuse of such choices are stringently blocked by law. 

We must keep in mind that democratically elected governments are the biggest beneficiaries of free choice. Why would they want to take away that right from the very people who exercised that freedom to bring them to power? 

The author is president and CKO, EQUiTOR Value Advisory and can be reached at ramesh@equitor.com.

(This story was published in BW | Businessworld Issue Dated 07-09-2015)

Should Apple Buy Out Greece?

GOT YOUR ATTENTION, DIDN’T I? But seriously, if it weren’t for this sovereignty business wouldn’t you give it a second thought? Think about it. Apple has enough cash on its balance sheet to acquire a few distressed assets like Greece without even resorting to leverage. Business governance as demonstrated by an Apple could turn around an under performer like Greece in a reasonable time. I say this because I believe it isn’t a lost cause. Just one that is poorly run. It is one of the oldest and strongest brands in the world. And in no time Apple shareholders will get a fair return on their investment. Seems like a plan.

Not quite. This is turf and entitlement. You expect others to bail you out for your sins. Not unlike the “too large to fail” logic proffered for the massive subprime bailout. Everybody had their fun. Everybody knew exactly what they were up to; and lined their pockets till the money ran out. When it did run out and everyone stood exposed, it then became the turn of the hardworking taxpayer to cough up. Because if they didn’t these important institutions would crumble. It’s laughable that someone like Richard Fuld took home $400 million for destroying a 200-year-old legacy like Lehman (please watch the movie Margin Call).

There is this neat piece on the Greek problem doing the rounds on WhatsApp about Mary the bartender. In short, her drunk and unemployed customers were spending less and less and her business was looking poorly. So she has the idea of giving them ledgered credit which they willingly accepted, resulting in a huge upswing in consumption and therefore sales numbers. Her bank structured the debt, creating bonds and selling them on the securities market as Drinkbond and Alcobonds. It all comes apart when the risk manager at the bank decides to call in the debt from the unemployed drunks. To save the bank, the government steps in and bails it out. The bailout comes from taxes. Then the government asks the taxpayers what they think... you know what happens. 

Can Air India ever be privatized? Why not? Because it is the endowment of the entitled. Which politician or bureaucrat in this country would agree to give up the benefits of a free ride like that. But at minus Rs 40,000 crores they expect the taxpayer to continuously cough up for a deliberately ill governed carrier that was once the pride and joy of this country. May JRD’s soul rest in peace. 

Can Air India be given a bailout package with tough conditions attached? You have to be kidding. I have heard of one of our Cleopatras who used to go to her favorite hairdresser in London first class on AI. This is her right, of course. Why should any bailout package rule otherwise. Why would her husband agree to such a bailout?

If India is not a Greece, it’s only because of the millions of tax paying toilers like you who work their shirts off to keep the boys club covered. Think about this: nearly a third of India’s corporate debt stock is in the name of companies that do not have enough profits to cover interest payments. Public sector banks (who hold three fourths of these assets) have a dodgy loan ratio of 12 per cent. Think of what that means in money terms for a lender with a Rs 900,000 crore book size! Too big to fail. But who will underwrite these Titanics?

Whether it’s Greece or India or Air India the story is the same. Sovereignty brings entitlement. Which is always the opposite of governance. Which, in turn, is the opposite of government. 

Apple may not be allowed to buy Greece but a good OS could be the answer to its problems.

The author is president and CKO, EQUiTOR Value Advisory and can be reached at ramesh@equitor.com.

(This story was published in BW | Businessworld Issue Dated 10-08-2015)

Two Minute Recipe For Resilience

IN THE MIDDLE of last week, my immediate team had pulled out a couple of big rabbits. So we went down to this favourite little Bengali snack joint in Domlur for a chhota celebration. They have a menu which is plastered on the wall. What caught my eye was the status of the much-maligned Maggi on that menu. It didn’t have a cross against it, nor an apology for non-availability. It just said, “Back Soon.”   

Personally, I dislike the stuff, and I couldn’t care less whether it was banned or banished. But that menu did provoke my working instincts. In the many years I have been involved with, or taught brands, I have seldom seen more powerful but quiet evidence of resilience.   

One of the most underrated elements of strong brands is their ability to bounce back. The owner of that shack was no Philip Kotler, I’m certain. But he knew two important things: first, the faithful who gathered every evening at his shop would not accept the absolute demise of their favourite snack, and second, it is too early to write off equity of this history and geography. Imagine walking into a mobile store and finding a notice about Apple phones being banned for high radiation or some such thing. The shop will be boycotted. People don’t want to hear that.   

I’m not a fan of Cadbury’s either. But most of the faithful will not even remember the last crisis it went through. However, when the worm controversy broke a few years ago, surely the management and staff of the company must have had a bad scare. Finally, they roped in the mighty Bachhan to let people know that they are basically good guys who would never mess with your favourite chocolate. Did they need to? 

Singapore Airlines experienced one of their worst nightmares in October 2000 when a 747-400 crashed soon after take off killing almost a 100 people. According to reports, it was a clear case of flouting weather safety norms. But most regular global travelers will not be able to recall an SQ crash. Singapore Airlines crash? Really?    

One of the brands that would stick out of any CV I could write would be ABB. After having worked on that brand for many years we were suddenly faced with a public interest litigation accusing the company of having worked the system to get a big government order. My view even then was to avoid a prolonged battle with the press. Soon enough, the centre of gravity of that crisis shifted to the folk who were managing the deal, veering away from a company with a spotless reputation for cutting-edge capability in electrical engineering.  

 Tata Finance (TFL) faced and conquered a similar crisis in 2002. TFL was accused of a cover-up job with the active collusion of their very reputed audit firm. The public just refused to swallow it.   

Here’s the deal: these are names that have earned a special place in people’s consciousness over a long time. It is then inconceivable to them that these entities are fallible. Why would Maggi deliberately put lead in my snack? How can SQ ever crash? Tata and financial impropriety? Now, I am not arguing the veracity of any of these possibilities. Just pointing out their incredulity to the vote banks.    

Unfortunately, it is only in a crisis that we really recognize this invaluable dimension of brand strength. And that too only after it has blown over. With a sigh of relief we recall the depth of that reputation. For my money, brand resilience is one dimension of a business that truly reflects its long-term value. It is something that deserves our ongoing attention in terms of nurturing and measurement.   

Like a good insurance policy, it not only pays off when required, it also reminds us with every premium that this is something really precious we are protecting.    

The author is president and CKO, EQUiTOR Value Advisory  and can be reached at ramesh@equitor.com

 (This story was published in BW | Businessworld Issue Dated 27-07-2015) 

Worldwide Is Not World-Class

Momofukus started as a single noodlebar in New York, arguably the toughest food and beverages (F&B) market on the planet. When they opened their doors for business in August 2004, Manhattan already had over 13,000 places to eat. But Momofukus obviously found their niche quite quickly with a reputation that went far beyond New York City. With that they later expanded to locations as far away as Sidney. It is a testament to their obsessive commitment and standards that their 37-year-old founder, David Chang, is the only Asian chef to make it to TIME magazine’s list of the 100 most influential people in the world.

Many businesses have limited locations and a finite set of clients. But a few of them choose to subscribe to exacting standards far above the norm for their business. These could be in design, manufacturing, packaging or customer experience. One or more of these will be of a level far above the demands of the limited catchment that they service.

And at times this could be a virtue. Theobroma in Mumbai is a fine example of a small but rapidly growing bakery business that is obsessed with maintaining its impeccable product and innovation standards. As a result, I suspect, they have a fervently loyal set of regulars who are driving growth through thoroughly well-deserved advocacy. It’s very difficult to play catch up with an obsession like that.

On the flip-side, there are any number of businesses which have achieved international footprint by a combination of scaling and acquisition. We know through hard experience that many of these “global businesses” trade in standards in exchange for market presence. Or at least fail to keep pace with the increasing demands of an expanded play in their rush to conquer new territory. I dare say, the undoing of two of the biggest handset brands had less to do with the advent of Apple or Samsung than a comfortable sense of numbness about what they were serving up each year.

Last fortnight, we explored the cross-border ambitions of Indian aspirants. An increasing number of players, in an ever widening number of categories from metals to automobiles and even consumer goods, are planting their flags on foreign shores. There is an unfathomable urgency amongst these worthies to get going as soon as they land. A ringside view will reveal the need to convince an impatient shareholder that it was indeed worth the investment.

Many of them come apart quite quickly. And this happens primarily for two reasons: either there is little understanding of what it takes to play in more complex environments, or worse, there is a substantial dilution of already existing standards in their anxiety to cover new ground. For example, domestic leadership in Indian telecom doesn’t necessarily equip you for the African market!

Most well-meaning firms struggle with the ability to retain (or build) the exacting standards that are absolutely essential to retain the essential character of their businesses. The  quest for fresh value from new markets, new consumers or even new offerings, are all risks to running performance. It is only the firms that can scale the standards that can overcome the pangs of expanding globally.

The reason why so many of the Fortune 500 still come from a clutch of Western nations is not hard to find. They set high bars. They are relentless about raising that bar and they usually are uncompromising (with the entire ecosystem) about adhering to these in letter and spirit.
Going worldwide is not the same as becoming world-class. There’s a world of difference.

The author, Ramesh Jude Thomas can be reached at ramesh@equitor.com

(This story was published in BW | Businessworld Issue Dated 13-07-2015)

The Indian MNC. Really?

Fifteen years ago, it was a proud moment for corporate India when the first Indian advertising hoarding went up in the middle of Paris. Titan watches was on offer literally at the centre of the fashion capital of the world. That took courage of a different order. Had Indian design arrived in Europe?

The bourses cheered when Tata Tea snatched away Tetley in a fiercely fought acquisition bid against no less an adversary than Nestle AG in 2000. Could we grow inorganically in the West? Jet Airways was the first Indian airline since privatization to go international in 2006. Could our aviation business regain Air India’s original glory from the 60s and early 70s?

Since these watershed events, much water has passed under the proverbial bridge. Corporate India no longer believes that it is confined to market leadership in India. However, most of our multinational capers from Amtek to Zain Telecom have struggled to make any headway.  

But is India alone? Toyota was the first Asian brand to break into the top ten of Businessweek’s most valuable brand table. But Toyota and other Japanese automakers struggled in the US market throughout the 70s and early 80s. 

Did anyone make it? To really understand the challenges of succeeding in mature global markets, it might be worth looking at the Indian companies who made it. 

What did a Tata Motors get so right with a dead duck like JLR? First, it was considered a trusted acquirer. Second, it didn’t take an Indian view on the future. Or an English view for that matter. It just decided to go out and create a new product for the most attractive automobile market in the world that is China. The Evoque single-handedly turned the company around. 

This might be difficult to swallow, but long before we could even pronounce ‘cross-border acquisitions’, Air India was considered to be the gold standard for punctuality and cabin service across the world. One popular story has it that Geneva airport set its clocks by the arrival of an Air India flight!

Are there some fundamentals that we are missing here? From available experience and material, there seem to be three broad themes that will make or break our globalization efforts: they can be summed up as engagement, standards and compliance. Let’s consider each of these.

Engagement: I have seen any number of articles on how we need to build truly global brands to create an MNC. Certainly necessary but not sufficient. One chairman we worked with on an $800 million cross-border acquisition insisted that only an Indian CEO would be able to understand what he wanted out of it. To be a global company, we need to first develop a truly multinational mindset.

Standards: Since the advent of total quality management in the early 90s in India, the notion of having a quality standard became de rigour. But the true spirit of what Demming and Baldridge taught us is yet to take root. Decades before ISO was known, JRD Tata used to personally check the quality of the meals served on board an Air India flight. His letters to the catering department, so well documented in Russi Lala’s tomes, are now legend. How many Indian CEOs are that particular even in their domestic market?

Compliance: This is one area in which jugaad does not and should not work. Ask Ranbaxy or  Rajat Gupta. Respecting each of your operating environments in letter and spirit is fundamental to being respected in that market. Being seen as a good corporate citizen is only a by-product. 

I don’t doubt we have what it takes to build products and services for the world. But it’s time to think about world-class organisations as well.

The author, Ramesh Jude Thomas can be reached at ramesh@equitor.com

(This story was published in BW | Businessworld Issue Dated 29-06-2015) 

Sinking Societies, Shrinking Markets

Last Saturday night, between some lovely blues pieces, one feisty activist from Amnesty suggests to me that the Tatas are not as holy as one thinks. I thought about it and asked her if, in her view, the Catholic Church was defined by the number of pedophiles in its ranks. The argument soon faded away in the bars of the next BB King masterpiece. It set me thinking for the rest of the weekend. There’s an old English expression about how everything looks like a nail to someone with a hammer. Perfectly well-meaning folk with a mission may just be blindsided to the large amount of good sitting behind some explicable (though not justified) anomalies.   

Both institutions, like others you could come up with, have undoubtedly had their share of questionable decisions and some rather dodgy leadership too. But it is equally true that these entities over a period of history have done more to reduce inequities than most. I have to disclose that at heart I am a capitalist and not anywhere close to being converted to socialism. This is not about the wealthy versus the rest, but about an environment in which the “rest” is sinking further. The macroeconomic question here is whether this makes for sustainable marketplaces. 

Thomas Piketty, in his book Capital in the Twenty-First Century, makes a compelling case for re-examining our apathy to the current contours of wealth distribution. Through his brilliant expression R > g, he argues that if return on cornered capital (R) is going to be perennially greater than the growth (g) of the market, there is little hope for the little people. So in the end, just who will the rich sell to? 

Just like climate change or any other disasters of instability that we relentlessly continue to build, unsustainable economic environments are a reality we are creating through a cockeyed approach to wealth creation. My driver, on way to Kolkata airport this morning, makes this childlike attempt to explain the earthquake, suggesting that it’s all this digging we are doing to build flyovers and underpasses that’s causing dangerous shifts under the earth. A naive oversimplification perhaps, but you get his drift. 

I recall a thought-provoking documentary from last month entitled Born Rich. An amateur attempt by the Johnson & Johnson heir to give us an insight into the attitudes of those (not so meek) who have inherited the earth. It is a telling commentary on how there is a concerted effort, assisted by lawyers, trustees, wealth advisers and the lot, to keep it all in the family. Nothing wrong with wealth preservation, but if it means that the benefits of Piketty’s “R” will be restricted to the small club of capital owners, then we must be prepared for the long-term effects on the economic climate. Unfortunately, like climate change itself, it happens in inches and we won’t quite get it until a tsunami like the Wall Street crash is upon us. Immediately thereafter, some barricades like Sox and Dodd Frank will come up, after which life goes on as if nothing ever happened. 

Now, it is in this context that my young activist friend’s angst must be examined. Entities like the Tatas and the Church have undoubtedly generated vast quantities of wealth and managed much of it well. But equally, consider their approach to redeploying it. Not only have they been abundant in targeting their billions, but have ensured that large swathes of those communities have been educated, healthy and thereby prospered (Howard Schulz openly declares his intent to create in Starbucks a microcosm of the US he dreams of). In the bargain, these organisations are creating massive, thriving markets that have kept them alive and well through generations. Is there a lesson in this for all of us, individuals, business leaders and policymakers?   

(This story was published in BW | Businessworld Issue Dated 18-05-2015)

Driving in God's own country- God help us

Last week my colleague, Siddharth and I landed in Kochi’s Nedumbaserry airport on our way to a town called Valapad. Believe if you will, but it was for a client meeting. The only thing in that town was the client. Not unlike Bentonville and Walmart.

I’ve been travelling to Kerala since I was a toddler and I had never heard of the place. We land at 9.15 and we have an 11 am session with the CMD and all those who directly report to him. We can’t be late. Sid asks very confidently at the prepaid counter for a car to Valapad, just to check for familiarity. He isn’t sure from the transaction, so he asks whether the driver knows Valapad? “Ohh, yes, yes. Driver knows very well,” came the answer, without skipping a beat. Then he asks if he would know the client’s office. “Ohh, yes yes… very well.” So we were on our way.

We get into the car. Sid is still not very convinced, so he asks the driver in his inimitable style, “How long does it take to Valapad?” Anywhere between three and four hours, we are told. (We know it’s not more than 90 minutes.)

Finally it turns out that Sid had to navigate him all the way to Valapad on his GPS and I had to keep him on a tight leash — with my broken Malayalam) within the boundaries of safe and legal driving.

The incident from that morning left us definitely irritated but got us to introspect as well. We were chatting on the way back and concluded that it must have been socialism at work. What did it take to shift us to a driver who knew Valapad? No, that wouldn’t work. That driver had to book that fare. Damn whether he knew the place, or even to drive.

So, I have forever wondered, for an Indian state that boasts some of the world’s best social and human indicators, why Kerala has remained an economic laggard. Why has it not attracted serious capital since Independence? It has always produced some seriously talented folk. Why did they all leave? Why has it been unable to create jobs to provide its very bright and educated young people?

Maybe we need to look beyond the social and human indices. I’ve said this before and I will say it again for good measure: Kerala may be God’s Own Country but when the Creator wants to chill, he probably goes to Goa. I wonder whether He would consider, “His own country” to put in long-term capital?

God’s Own Country was a clever reference to the landscape. It is breathtaking and it was indeed God’s gift. 

I wonder what instructions God gave to the people running “His country”. Did He tell them that customers do matter? That engagement is a key element in building an economy? That chemistry is important to people who bring in long-term capital to the state?

I keep hearing from the locals about how the state provides people who are intelligent, highly-skilled and of high integrity. I cannot disagree from experience. But these are only ‘hygiene’ factors to creating an attractive economic ecosystem.

Bangalore became the Mecca of the job-seeker and the international investor in the 90's. This was not only because of its climate, but also because it had a welcoming, hospitable core and an engaging style. I still carry fond memories of how RTO officials put me at ease when I first went there in October 1991. I was pleasantly surprised and grateful that an Indian city held out hope for the future.

It wasn’t as though Karnataka had economically evolved to the level where it could afford to be less socialistic. It was still finding its feet. Bangalore was the new kid on the block. It didn’t stop them from offering engagement and empathy.

I think God’s Own Country can do with a few neighborly tips. What say?

( This story was published in BW | Businessworld Issue Dated 15-06-2015)

We can be reached at ramesh@equitor.com

Does the Nation really Want to Know ?

A warm welcome to 2015. I thought we might  begin the year by considering the evolution of a true blue media phenomenon.

Super prime time is a phrase coined by Times Now. To indicate that no other news channel, and in fact very few programs, compare with the TRPs generated by Times Now. But think again. Can Times Now itself compete with the Newshour, aka Super Primetime. Not a chance.

So all the evidence points clearly to one man. The one and only

He is in equal measure derided and adored. One story doing the rounds is about a gentleman who tried to call him on his phone. I believe the voice on the answering machine didn't allow him to complete his request!! The other day, when I related this story at some forum I had two folks from the audience who chided me during the coffee break for ridiculing their all time favorite TV personality.

What makes him the standalone phenomenon that he has come to be in the world of broadcast news?

To a lot of people he is the ultimate loud mouthed loose cannon. Many would question his ability to conduct a decent tea conversation, leave alone a television debate. Did I mention that in real life he is one of the most polite and charming listeners I have ever run into? (Disclosure: I have had that opportunity precisely twice). Once at a speakers' enclosure of some seminar I watched him charm the hind legs off a handful of politicos (including a particularly supercilious know all) and some sundry tycoons. He listened, engaged politely and had them eating out of his hands in ten minutes.

Surprised? Well I was almost in shock. Is this same man I see at 9 pm conducting a daily bar room brawl on television. Making jingoistic accusations across the border, browbeating politicos et al. You bet it was.

After many conversations with the other side, i.e. those who cannot digest their dinner without the Newshour, I finally thought I had him nailed down. He is the master marketer. He has opportunity, psychographics and market sizing mapped out to a nicety. He has responded with product, positioning and place to perfection.

Here's my take on the genius of the man: he invites you every day over dinner for a game of bloodlust. He carefully gathers people that some of us would like to really have a go at. (I keep wondering why those Paki generals and some party spokespersons keep coming back for more). And then he does exactly that. He takes a full blooded swing at them on your behalf. The dinner tastes much better, digests easier and you love the man. You can't get enough of it. He extends the Newshour to the Ninety Minute Lynch. You scream for more. And there you have it: Super Primetime!! Indian Television's Magnum Opus.

Is this a lucky strike? Is it a momentary blip?

I don't think so. Somebody at NYU's media discipline recently wrote that everywhere in the world there is " a market for bias" based on mass insecurity. Politicians, religious leaders and smart media people understand this very well.

Does the nation really want to know? I'm not sure. But many of us certainly want to throw a few blows.

You can bet your bottom advertising dollar on that.