India Special » Business

Tata’s Nano Homes And The “Bottom of the Pyramid”

Madhavan — Sun, 10 May 2009 18:37:00 +0000

Tata group has once again caught the attention of the world media with its announcement of the launch of a low-cost housing programme. Many global newspapers, from Business Week covered the news prominently. According to the Tata Group, the houses will cost less than Rs.4 Lakh. Even though many other property developers have also built affordable houses, Tata group got huge media coverage because of the spillover effect of the “Tata Nano Car”.

According to the “Telegraph” newspaper, this is what Mr. Brotin Banerjee, CEO of Tata Housing, said “This is a huge opportunity to serve those at the bottom of the pyramid. Our inspiration is the millions of Indians who cannot afford proper housing and live in shanties.” The newspaper also says that “millions of slum-dwellers are expected to jump at the chance to own a home in a proper building”.

Tata Group aims to achieve two things from this venture – first, fulfill its corporate social responsibility and second, make profit. This is precisely what Mr. C.K. Prahlad, the renowned management guru, has been advocating.

In his 2006 book “The fortune at the bottom of the pyramid”, Mr. Prahlad describes the people at “the bottom of the pyramid” as those 4 billion people living on less than $2 per day. He argues that “If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up” and “When the p oor are converted into consumers, they get more than access to products and services. They acquire the dignity of attention and choices from the private sector that were previously reserved for the middle class and rich.?”

Mr. Prahlad cites the successes of Nirma and ITC as two best examples of profitably serving the “bottom of the pyramid” customers. While Nirma succeeded by targeting lower income group with its affordable detergents (Hindustan Lever initially ignored it but later realized the huge potential in this market), the latter combined technology and the village “mandi” to generate profit for themselves and for the farmers by eliminating the middlemen.

Now it is the turn of Tata Group to effectively use the idea of the “bottom of the pyramid”. First they came up with Tata Nano. Now they are planning to repeat the success of the idea with its Nano homes. With this, Tata Group is once again setting a great example as a company that cares not only for profits but also for people. Will other companies follow suit?

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The Boyles And The Underdogs

Madhavan — Fri, 24 Apr 2009 03:17:52 +0000

There seems to be some correlation between Underdogs and British/Scott people with the last name Boyle. First, it was the turn of Danny Boyle to direct a film about an underdog and stun the world with his rags-to-riches story. The film, Slumdog Millionaire, went on to become a huge commercial success and was awarded 8 Oscar awards. Now, it is the turn of another Boyle, Susan to stun the world.

Consider this – At the time of writing this article, Susan Boyle-related videos have generated more than 100 million views in Youtube. As you are reading this, there must be thousands of viewers watching Susan Boyle’s videos. The video that I watched had 40 million views, 162,000 ratings (all 5 stars- can anything beat that?), 613 video responses, close to 200,000 text comments. Moments later when I went back to check these statistics, I was completely surprised. These numbers had gone up significantly. There cannot be a better example of an outrageously successful viral video.

So Who is Susan Boyle? What makes her a sensational figure? You will get the answers to these questions when you watch the video. It is so self-explanatory. I suggest that you watch the video before reading further.

Watch the video here

Susan is a 47 year old poor unemployed woman who took part in the UK reality show – “Britain’s Got Talent”. She had a not so pleasing personality and was quite awkward when she was put in front of camera. When she entered the stage, people looked at her mockingly and wanted her to get off the stage as soon as possible.In short, she was written off even before she performed on the stage. But when she started singing, the audience was stunned by her sweet voice. Within seconds, she became a sensation. The audience wildly cheered for her and gave here a standing ovation. The judges were equally stunned and awarded her the maximum possible points. With that, another rags-to-riches story was born. Another underdog, in this case Susan Boyle, fought against all odds and won.

The common thread between the successes of Danny and Susan Boyles’ underdog stories is that people are so tired of bad news and any feel- good story that is soothing is warmly embraced. There are stories in the internet about how audience felt exhilarated after watching “Slumdog Millionaire”(SDM) and about people watching Susan Boyle’s videos repeatedly and weeping with joy every time they saw it. There are also critics who slam both SDM and Susan Boyle’s videos as over-hyped and opine that both are mediocre at best. And these critics have a valid point.

However, the bottom-line is, in both the cases, the audience were not “thinking” and analysing critically. Instead, they were “feeling” and giving vent to their emotions. Looks like the heart continues to be more powerful than the head. Isn’t it?

PS: Here is an article about the Susan Boyle phenomenon that I found quite interesting

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The R Word

Monika — Fri, 03 Apr 2009 12:00:00 +0000

The latest and most frequently used word in the world is “Recession”. Anyone and everyone is talking about recession.

Almost all the companies have cut down on onsite travels, administrative cost and other perks. There are no more free lunches literally. Companies are introducing Performance Improvement Plans and giving zero hikes or bonuses. Everything has only one reason. RECESSION.

From a middle class citizen’s point of view, Restaurants have become expensive, shopping malls are empty, and food prices have gone up too. The fuel prices have gone down by almost Rs10 and still the auto guys crib for more money as it is recession time. Even the local vegetable vendor blames recession for increase in the prices. (I wonder why it is only the recession that is affecting the prices and why isn’t the falling inflation causing any price falls.) Everything is going up except my income and I too blame it on recession.

Is India really going through a recession or is it just the cold we have caught because USA sneezed? Are we just projecting a slowdown as a recession? Of course it has affected India because of the outsourcing and we too had job losses. But can we call it a recession still?

There is a difference between recession and slow down. The dictionary meaning of recession is two continuous quarters of negative growth where as during slowdown there is growth but it is slow. And who says India has negative growth? The RBI is still predicting a GDP growth of about 7%.

Our banking sector is still very strong and the interest rates are still high compared to other countries. We can still pass through this recession in US without getting into it.

Of course the government is trying to make things better by reducing the interest rates, announcing stimulus packages and various other measures to pump money into the market. We can be hopeful that the various stimulus packages being announced by the Indian as well as global governments will give a boost to sectors like infrastructure, automobile, cement and metals. This will increase the business and also the ‘recession free’ politics ‘industry’ is ready to infuse money in the name of general election and that should be a boost to the economy as well.

Apart from all this we also have some responsibilities t improve the situation. We need to use our resources effectively and at the same time focus on innovation.

Recession forces people to spend less and save more for adverse situations but we Indians are not new to the idea of savings. We just need to chuck the extra credit card spending, check our expenses, promote the right things and viola we’ll be on our way out of this crazy situation. Being thrifty will surely help us get out of this slowdown earlier than others.

This is the time to capitalize on things which we are good at. Tourism is going to be hit because of global recession (obviously there will be less number of people visiting the Taj Mahal this year) but we can promote health tourism which is still a cheaper option in India with best of services available at cheaper prices compared to USA or Europe.

Agriculture is still the backbone of our economy. Let us make that stronger. We need to get the farmers back to the fields and the higher dollar value can get us more money for our agriculture exports.

Instead of worrying about losing outsourcing jobs we can start innovating our products. IT industry which has been worst hit due to dependency on US can start focusing more on product innovation and less on services. Once the situation improves we’ll be less dependent on US plus we can be a major player too rather than just being the back office of the world.

Remember how India tackled the bans that were imposed by the world especially US after the nuclear tests. We became almost self sufficient in the things that were banned by other countries.

When the next boom comes, we can reap the benefits of effective resource utilization and innovation and be ahead of other economies. We surely have the talent and means to get out this slowdown without slipping into recession.

I strongly feel this economic condition is just a wake up call for us to be more responsible and more cautious and to realize our abilities to drive away the recession blues. Jaago Re!Similar Posts:

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activecubes Wins Tata Nen Hottest Start UP Award

Kandamangalam — Mon, 02 Mar 2009 02:00:00 +0000

In December, we featured an article about activecubes in India Special. activecubes was one of the shortlisted firms vying for the prestigious Tata Nen Hottest Start Up Awards for 2008.

The Tata Nen Hottest Start Up competition was spread over 6 months and two levels, narrowing down the field from 600 companies to 30 and then to the top 5. This was based on ratings on the business model by more than 250 industry experts and lots of votes.

After some intense competition, activecubes made it to the Top 5.

It is official now – activecubes is one of the five who won the Tata Nen Hottest Start Up for 2008. Check this link for more details. activecubes was also featured in Live Mint (The Indian edition of Wall Street Journal)

According to Ajay Pulpa, Head – USA Operations, activecubes

“While the current market situation is challenging, many of our clients/ prospects have found our offerings suits their exact needs. They need to solve business problems, focusing on cost optimization and revenue generation, which is what analytics helps them with. Our ability to work on both business analytics and business intelligence also serves our clients well.”

He adds on to say,

“We are humbled by the goodwill we have been blessed with…we will work hard to ensure that activecubes is deserving of the same in the years ahead…”

It is indeed heartening to see the tremendous success that activecubes has achieved in such a short span of time and the promising future that it holds, especially when the market comes back to normalcy.

activecubes has exemplified-it is one thing to dream and another to achieve. Team India Special wishes the team at activecubes success in all future endeavours.

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Recession And Its Toll On Indian Economy

Vigil — Mon, 23 Feb 2009 18:00:00 +0000

A Recession is a prolonged period of time when the nation’s economy is slowing or it is the reduction of the Gross Domestic Product(GDP) for at least six months. The producers and consumers are the two basic people upon whom the whole economy revolves. The value of goods and services is determined by supply and demand. In case the price is too high there will be less demand and the producer reduces the price to increase supply.

Increasing demand leads to an increase in the production thereby increased supply which in turn results in increased labour ,materials and overall increase in price.Now the general feeling is good. You want to make investments and consequently the stock markets go up.

Consequently this leads to overproduction and the supply exceeds consumption.Now the attitude of the people changes to saving mentality and this can lead to a contracting economy.People spotting a negative trend on one area fears the same to happen in other areas and suddenly RECESSION is on.

In a market economy the market is determined by demand and competition putting it beyond any control.A government has the fiscal and monetary policies in controlling the recession.While the former is on collecting and spending money and latter on manipulating the available money. Both can either improve the situation or worsen it.

According to the Halfway Rule past recessions lasted only for 13 months. So continuing with the trends the present recession is predicted to last till 2010.

A recession in US should worry India as it has major outsourcing deals.The strengthening rupee is another cause of concern.Oil prices coming down is at present keeping inflation down.The way out of the present crisis is only through a massive fiscal stimulus either by monetizing or by tax cuts.Indian Government is relying on private investments and resurrection in agriculture.

But the stress should be on public spending as advocated by Keynes who argued that the solution to recession is through reduced interest rates and increased public spending.

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A Satire On Stanford

Mukund — Mon, 23 Feb 2009 12:00:00 +0000

Until about a couple of weeks ago, Stanford (to most people across the world) was synonymous for purely academic reasons. The prestigious educational institution in California took in proud students and churned out distinguished alumni, for they occupy an arguably equal level in the esteemed echelons of the industry as say the Harvard graduates.

The law of averages, or karma (however one wishes to look at it), had to strike back at the Stanford name – it was too long for it to go on without an untarnished image! The Harvard had its fair share of recent criticism if the news coverage of the background and education that the instigators of the biggest financial turmoils in recent times had, was anything to go by. Now it was the other hand’s turn to face the music – ladies and gentlemen, enter RA Stanford.

What took most people by surprise was the quarters the name’s sacrilege came from. A relatively less well known state side until recently, Robert Allen Stanford came into spotlight more or less in the same fashion of his entry into the Mecca of world cricket – Lord’s stadium in England – amidst much fanfare, he descended in a helicopter. Much has been written about, and some even criticized it very early on, the England and Wales cricket board’s hand-in-glove extravagance with Stanford but it was all attributed to just a public display of wealth then.

There’s also been more than enough coverage as to what happened on the sidelines of the Stanford 20/20 game with the WAG’s of English cricket. Last week, the Federal Bureau of Investigation charge sheeted Stanford after a movie-like chase across the continent with reports that his attempt to flee the country on a private jet failed miserably for his accounts had been frozen the previous day. I am not about to draw conclusions as to whether RA Stanford is a sinner or a saint – there’s many paid folks whose day job it is to make that determination.

Where I find this amusing, or even cynical at some levels, is the quick disassociation of the very same people who were seen closely by his side all along. I am sure there must have been some red flags raised last year, especially when the investigating agencies say they’ve been on his trail for 3+ years now trying to gather all the evidence. The pictures of the helicopter arrival in London make a mighty and stark contrast to the long lines outside the Stanford Bank in Antigua this week ensuring the hard earned money isn’t lost.

I wonder whether the same people knew where the $20M 4-hour game was being funded from. The positives from this – another lesson on financial misrepresentations.

On a lighter note, if something sounds too good to be true, it probably is!!

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Kill Piracy With The Right Strategies

Pranesh — Mon, 23 Feb 2009 00:00:00 +0000

Today we live a stressful life and movies have become an integral part of our entertainment. I remember few years back I could watch a movie for Rs 30 which was quite under budget. No one really bothered about watching a pirated cassette and none made noise about pirated movies.

But these days people are willing to buy pirated movies than watching the movie in a theater. There are several reasons for that . I was thinking what should be done to reduce video piracy. Here are some of my thoughts.

1) Reduction in Actor Remuneration

How can a hero charge Rs.16 to 20 crores per film? If the cost of production comes down people can afford watching the movie in theaters. I see top bollywood heroes and heroines preaching against piracy. If 50% of the money I paid for watching for a movie goes into paying to lead actors, what right do they have to talk about piracy? . If they charge less production cost would come down and so would be the piracy.

If producers have right to earn Rs.250 crores by making a movie like Ghajini, actors have right to charge more than Rs.15 crores per movie, multiplexes have the right to charge me Rs 150 for each ticket, Rs 60 for a pop corn and 50 for a coke, every spectator will have right to buy a pirated DVD for Rs 30 on a pavement. Folks reduce your profits and reduce the piracy.

2) Improvement in Movies’ Quality

I made the mistake of watching couple of movies by watching the amazing trailers that were played in the break time. Trailers were superb but when I went for the movie it was as stupid as it could be. Why should I spend 1000 rupees for a family on a movie and get stranded with stupid movies, which was not even worth 10 rupees. So come out with good movies instead of coming with silly remakes.

3) Understanding Market Conditions

When market is not ready to pay more, cheap products find place. It is the producer’s job to deliver his product at the right price. Since the prices are exorbitantly high for movies, piracy has seen flourishing. The very fact that a person buys a pirated DVD for Rs.30 to 50, is a clear indication of the acceptable price range for the masses.

When a DVD player costs only Rs 3500, why should a DVD cost Rs. 500+. The cost of a blank CDs and DVDs has reduced considerably but there is not much reduction in the original CDs and DVDs. Producers and Distribution companies should reduce the cost of CD/DVD thereby encouraging people to buy originals.

If an original good quality DVD did not cost more than Rs 50 then there would be no piracy. If the production house distributes its content close to the prices of pirated ones, piracy will have to take a dip. Moserbaer’s initiatives in the right direction is worth emulating. Instead of selling 10 DVDs for 500 each, sell 1000 DVDs for Rs 50 each and you will make the same profit. This network of pirates cannot be wiped out in a few months’ time as it has become their reliable source of income and there is a need to convert them into legitimate distribution centers of entertainment products

4) Availability Of Original DVDs

Production houses should release original DVD to the market as soon as the movies are withdrawn from theaters. The window between theatrical release and the home video release is too wide a gap for people to wait and watch them at home. People don’t have patience to wait for a good movie and they would rush to the pirated dvd vendor or will download a copy from the net. So release your DVD as soon as the movies are taken off the theaters.

I hope the movie makers realize this soon and come up with ground breaking strategies that would help everyone – the movie makers, the audience and the middlemen.

Anyone listening ?

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A Reality Check On Six Sigma

Suraj — Mon, 16 Feb 2009 02:10:52 +0000

Let me start by saying this – I have never been a big fan of Six Sigma all my life. That said-I don’t hate it and I don’t love it, either.

The irony is that in my last 4 years of corporate life, there has never been a single month or a single project where I have not applied Six Sigma tools and techniques at my work. I like Six Sigma for many reasons e.g. its break-down approach, the training, the change that it brings about in a person’s life etc. There is no denying the fact that those who go through the rigorous training end up becoming experts at Statistics and other quantitative and qualitative tools. It is also a fact this extrapolated jargon has created thousands of jobs. Yet, I am not satisfied!

The only complaint that I always have about Six Sigma is that it kills creativity, spontaneity and intuition – the three things that you need to take crucial decisions which help in running a successful business. The approach of Six Sigma is a very structured approach where it breaks down the problem to different modules and tackles the individual module separately. Some might differ with me, but essentially that is what it is and in the process, the time delay in getting the right solution is so much that the purpose of the whole problem is dissolved.

In today’s competitive world, if you had minutes to try and solve the problems, how on earth can you afford to waste time to break the problem into pieces, define, measure, analyzes, improve and control ? Yes, this will help those organizations that have large cash pool which can afford the waiting time and the combined wisdom of selective individuals who give their ways of solving it. This is not meant for businesses and individuals who rely on quick, creative and intuitive solutions

If you sit in a Six Sigma brainstorming discussion, the way the problems are resolved, might lead you to ask yourself “Is this something that I don’t know of ?” They are nothing new. They follow the simple rules of cause and affect, the various failure modes and mitigation of risks that come out of it. You don’t need Six Sigma for that. All you need is Common Sense.

Some might argue that Six Sigma is a disciplined data driven approach, where the historical data gives you indication of a future behavior. It is an approach that tells you how your performance have been over “X” period and if there are failures, it will point out at what levels and what needs to be done to mitigate that. To put it simply it is a name given to a statistic tool.

I might sound a bit negative here, but the point that I am trying to make here is that at the end of the day what matters most is how effective you have been in your decisions. Have your decisions given results? If so, great. If not, you need to take a look at your fundamentals. No amount of Six Sigma training or Management training can give you what you need.

The importance should be given to create a strong foundation to the fundamentals that build you as a leader. That is,

a) When in doubt, ask ? Ask the right questions

b) Get to the root cause of the problem and its effects

c) Weigh the options and choose the right one

d) Implement it quickly, efficiently and effectively.

If you have got all these ingredients right, it doesn’t matter what tool you use or what you name the “tool” as. All what matters is the result and that is what counts.

This might lead us to another question about “What” and “How”, though..More on that, later.

Enjoy the rest of the week!

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Infrastructure Development – The Next BIG Thing For India?

Kishore — Fri, 30 Jan 2009 19:09:21 +0000

Can Infrastructure development be the next BIG thing for India?

The year 2008 will be remembered for the havoc created in the Global markets because of the Global Credit Crisis. Global Manufacturing and Services sector were significantly impacted by this crisis leading to major companies either filing for Bankruptcy or laying off their staff. Going by the estimates given ILO or the IMF, situation can become worse in 2009.

If one looks at the patterns of economic crises & recoveries, the major financial crisis recoveries have been stroked by a new business model or emergence of a new sector. To stroke economic recovery, India can look at developing its Infrastructure.

For years now Infrastructure Development has received a step-motherly treatment by successive Indian Governments. But looking at the current economic crisis, the only aspect that can possibly rescue us from this crisis is Infrastructure Development.

The major problem with Infrastructure has been that, the whole of our infrastructure has been divided into multiple segments like Power, Roads, Transports etc, with no method to synchronize the developments in these segments. Sometimes Transport segment faces a major bottleneck because of some issue with the state policies.

For instance according to an assessment done, on an average a truck covers only 250kms per day whereas their counterparts in the west cover at least 1000 kms in one single day. Apart from bad roads one major reason for this is the waiting time at the check-posts all around the country. Now if this were replaced by an online system or a SIM card based that will reduce the waiting time at these check-posts and in turn reduce the transportation time. So instead of each segment working independently of each other there should be a way where in each segment of infrastructure keeps the other synchronized.

If one analyzes the current Global credit crisis, one finds that this crisis is because investors have lost trust (Financial: Credit) in the current existing businesses and sectors. So to stimulate this investment cycle it is very important to win investor’s confidence. This can be done if they find any sector to be interesting or any sector that would be worth investing. So if there is some specific sector which is shown interest by a government of a country then it might stimulate interest of the Investors.

So if this development in Infrastructure can be fuelled by government, by aggressively introducing a package by either contributing completely or through a Public Private Partnership, which can fuel a major inflow of FDI. Also in a country like India where Human Capital is abundant this can be used to provide employment to many people. This inflow of FDI and employment opportunity can also help other supporting industries like Manufacturing and Financial Services to slowly come out of this crisisSimilar Posts:

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The Business Of “Attrition”

Nars — Fri, 23 Jan 2009 13:45:36 +0000

Attrition, for a long time has been a taboo word in the Indian employment workspace -primarily driven by the fact that there is a lot of hush hush and secrecy surrounding this. India is probably the only employment market in the world where there is no published industry data for this. If you still doubt it, ask the consulting giants.

They will give you an apple hood mother pie statement saying “Well, attrition in India varies from 10% to 120% – this is driven by a host of blah blah!”. Oh Jeez – That’s a 1100% range spread! (Range spread is (max-min)/min expressed as a %)

I don’t know if it is for the right or wrong reasons – this gets a lot of attention. People in the higher echelons of power want to review this every day, “clients & business partners” who are constantly worrying about the service quality as a result of attrition thankfully want to review it on a monthly basis and there are a host of other stake holders who want to slice and dice this information for statistical joy!

So how does one define attrition? “Someone leaving a firm on his/her own accord?”

How should organizations compute and report attrition?

What I was taught in school by the profs was to look at the number of people who left in a period, upon the average headcount

((no of people who left)/ (opening headcount + closing headcount)/2))

For a long time, this was the way firms were reporting attrition (at least that is what I think). With the rise in attrition numbers during the boom days, firms obviously were under a lot of pressure. Apart from the analysis of the data that separate teams were commissioned to do, there were multiple meetings to discuss this and task forces created to manage this. The numbers were so large in some cases that companies set up separate teams to do the traditional exit interviews – yes, they created a new department in the HR function!!

The thought leaders of the business obviously didn’t like the numbers they were seeing. With no immediate fix to the problem in sight (no one saw the recession in the hay days), they asked the fundamental question – is this the right way to compute attrition?

Now that’s a subtle way of the management saying, “listen, reduce the number!”… Wow! Talk about radical thinking!

In July of 2008, I was in a NASSCOM HR summit in Chennai. The Chief People Officer of a large Indian IT major, also a very good friend of mine was a panelist to speak on a topic titled “HR Leadership: Paradigm shift from process recruiters to business leaders”.He shared the dais with the heads of HR of two of India’s largest IT services firms. (Satyam wasn’t there ok! ).

While delivering his address, he looked at one of these speakers and said “I don’t know how you compute attrition, but the 10% number you report is incredible”.

While the speakers themselves burst into a chuckle, this was greeted to a rousing applause and roar from the near 3000 strong HR audience. The point to underscore here was the HR community, through their reactions, reiterating the fact that the methodology of computing is something that is rampant. His counterpart didn’t answer the question by the way!

Let’s get a sneak peek of some of the techniques that I have been exposed to:

Number of people who leave – Can we relook at the reasons for people to leave on their ” own accord”
Someone wants to resign and asks for leave. Manager says “NO” – the guy absconds. Great! He didn’t leave on his own accord
All leavers in the last two months of the performance measurement cycle are rated as “below par performers”. They would have been asked to leave anyways and hence must be considered as not having left on their own
What’s the ideal time to leave – first 30 days is not counted as this amounts to bad hiring. This is in some firms a HR metric and the poor recruiters are held accountable for this.
Process improvements on the above – 30 days is too little – let’s determine something between 60 and 90

Those were some of the ways to reduce the numerator. Sadly, the denominator can’t be changed – unless of course, you are Ramalinga Raju and decide to fudge headcount. Average headcount remains as it is. So where are the changes?

Here they are. While the formula gives you the result for a month, what does it look like for a year? The solution is in “annualizing”. Read on for some of the industry best practices!

Compute your monthly attrition and multiply by 12. (That means my numbers will change on a monthly basis. If one month’s number was high, then I am dead)
Let’s look at calendar year – Annualized attrition is sum of attrition over 12 months. (Attrition will be high in the beginning of the year if it happens, but will reduce as the year goes on. Expect to have a few good months – read as low attrition)
Calendar year is a bad idea – let’s do rolling 12 months. This is a more holistic representation (peaks and troughs will get ironed out. This is my personal favorite as this is the right way to do it)
An American multinational with a long standing record, pioneers in the outsourcing space and an American giant, absolutely statistically inclined uses this method. Compute the monthly attrition; divide it by the number of the month (1 for Jan, 2 for Feb, 3 for March and so on) and then multiply this by 12! Wow.. how confusing. Is this were the adage of saying, if you can’t make someone understand, confuse them comes from!
I bumped into this Indian American in my last job. He was well educated and his gyan around attrition was like this. There’s a financial concept of Risk Adjusted Rate of Return. When you compute return on an investment, you discount the risk and look at the absolute return. So let’s assume that the risk on an investment is 10%. Your return on that investment is 15%. Therefore, your absolute return is 5%! So, define a risk adjusted target and knock off your attrition by this number. Eureka Eureka!! This is THE way in which my attrition will be the lowest. By the way, how defines the Risk Adjusted number? Does this change every month? What happens if the number goes negative? While I don’t have answers to this, he made me do it. I didn’t have a choice so to speak as he was well connected and I hence had to budge!

I don’t know if I want to go on here. There are a few more methodologies here!

I’m left with two choices.

A) Hire a smart techie and a smart MBA graduate as interns – have them develop a “cute” methodology to compute attrition in a manner that the outside world will see this as scientific, rationale, thought through, scale proof and all the other management jargons that I know! (Hopefully this will be a big hit and I will be called a Management Guru. I will call this the Nars methodology of computing attrition and will become world famous. If I am not dreaming, I’ll be invited to talk around the world in forums, colleges and companies!)

B) Write to Bill Gates and have him incorporate another function in Excel – ATTRITION (RANGE) where there is a standard method across and organization will hopefully be more willing to adopt!

While I know which way I am going, do you want to take a guess?

Attrition is maddening by the way eh!

I just got a note from someone here late last night saying they want to quit! What a way to start the day!!!

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A Level Playing Field

Narasimhan SL — Mon, 19 Jan 2009 19:27:52 +0000

I had a couple of very interesting conversations over the weekend.

1. A cousin of mine who works for a Global MNC in the IT space was home. After all the courtesies that were exchanged, she was speaking to me about the changing work place and how the recession has slowed down things. The conversation started when I was asking her if her firm was recruiting. She said, “No”..We are going slow and there isn’t much happening… and after a little pause, she said, do you know how arrogant the HR guys have become? My eyes popped out in near disbelief. I said, ‘say that again!”, and she went “yes, the HR guys have become very arrogant these days. From running behind us and saying yes to everything we asked for, they now say, “if you don’t like it here, you may leave – and they say this for even trivial things!”

2. My brother-in-law is based in Plano, Texas. An IT Project Manager by profession, he manages a fairly large team. One of his team members came up to him asking for a 3 week leave to go home. According to their company policy, 2 weeks is the maximum that one gets if he/she had to go home, irrespective of level. The guy was looking for a deviation and was not happy when his Manager said that a policy needed to be followed. He whined, threatened to escalate and was murmuring away in the backdrop when the issue was escalated to his higher management. The senior relationship manager was apparently candid and said, if the guy can’t come back in two weeks, we don’t need him. He had large enough a bench strength to get a replacement overnight. The guy then promised to return in 10 days hearing what his higher ups had to say.

A few months ago, I could have been fast asleep and still said which way both these conversations would have potentially gone. So what’s changed? Oh well – it’s pretty much everything!!!

In the beginning of what a lot of experts predict is a 12-18 month recession, organizations are whipping up actions aimed at improving operating leverage at a pace that one can’t imagine. From projects coded with alphabets aimed at rationalizing the size of the workforce, to communicating openly that pay raises and bonuses are on hold / depleted as the case may be, to the discontinuation of quarterly incentives, to the slashing of fun budgets, it’s all happening – happening in real quick time too.

As someone who’s enjoyed the exotic spread of options available in the seven course buffet and expecting that this was a given every other day, the employee finds it hard to live with just bread and peanut butter alone.

Let’s get back to the two conversations again for a second. I think it’s unfair for some in a position of authority to exploit current market conditions. Businessmen and business logic talks about being rationale, for me, it’s always about being fair and doing the right thing. So if someone in the HR team was getting opportunistic to turn the heat on an employee, I think that’s unfair. With the kind of scale that some organizations have built in terms of size, policies and procedures lay down the rules of the road. I think they are essential and need to be respected and followed – it’s much like driving (yes, I know we never drive by the rules here in India – but let’s talk about that another day!). To get upset and whine when someone talks policy is again not done.

It is here that the much touted maturity element comes into play. The more mature folks understand that this is a passing cloud and lie low, letting this pass – the not so mature ones whine and complain – much like my cousin. (I’m not calling her immature because she said that the HR guys were arrogant!)

I hate economics but remember a couple of things from whatever I studied – Demand and supply determine worth or value or whatever you want to call it. When supply far outstrips demand, the law of diminishing return sets in (someone correct me if I am wrong! I am talking from memory that is over 11 years old).

In business, cycles exist and hence the challenge of demand and supply, the point of diminishing returns and whatever other crap that was overhead transmission from what I learnt or was supposed to will always exist. The ideal situation would be striving for right balance. A right balance will set up a level playing field. The trouble here is that this does not exist in business either. We are not in regulated economies and that isn’t coming any time soon either.

Overdoing something or under doing something always has its ups and downs. So what’s the right amount? I have no clue myself – it’s in a lot of ways a million dollar question that I am looking at answers for. That said, I hate it when people are opportunistic – I’m referring to the HR guy who was opportunistic in asking a pretty young girl to leave it if she didn’t like it, trying to use current market conditions. I also hate it when people can’t appreciate and learn to live by the rules. I think you don’t belong in this society if you can’t learn to live by rules. It’s the difference between being civilized and uncivilized.

Isn’t that every Indian’s crib with Pakistan not acting on our evidence?

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Is Raju taking all the blame on himself?

Kandamangalam — Thu, 08 Jan 2009 20:09:39 +0000

Many of us have been talking about Ramalinga Raju and his candid confessions. Spare a moment for the man who built the country’s fourth largest IT empire and gave livelihood to over 50000 families for over two decades and hope for millions of shareholders.

Don’t get me wrong – I am not siding with Ramalinga Raju for what he has done, nor with Satyam’s pseudo corporate governance which is fairly and squarely to be blamed for.

All I am asking is – Is Raju the only one to be blamed for ?

From the letter, it is apparent that he is taking all the blame on himself. Should we not look beyond what is seen in black and white ?

Common sense tells me that

a)    CFO is to be equally blamed for
b)    External and Internal Auditors did not do their job properly
c)    Banks also played a role
d)    Regulators for not having the right oversight
e)    Independent Directors of the company

…and may be some immediate family members who were privy to such information.

I also suspect the claims of some of the Directors who say they were shocked and that they had no clue about what happened.

How can you not know about something of this magnitude when it is orchestrated by those with whom you spent several hours in a day discussing the various aspects of business, for several years?

Is that you did not pay attention or is it you are not intelligent enough to ask the right question?

Any which ways, these Directors also will have a lot to be answered for.Similar Posts:

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Nokia Leads The Green Way-Recycle Your Phone!

Uttkarsh — Sun, 04 Jan 2009 21:36:35 +0000

India may have the fastest growing telecom market. It most certainly has the jazziest mobile phone users. It’s not unusual to see a rickshaw-puller pull out a snappy flip phone or to hear the latest ring tone or caller tune. Love it or hate it - mobile technology is here to stay.

As this market comes of age, India wakes up to another reality. The ever growing devices that need to be disposed. Electronic devices including mobile phones and computers use several metals, some of which are very harmful if not disposed off properly. It would not be an understatement to say that over 50% of our mobile users were completely ignorant about this and an even higher percentage unaware of recycling.

In this much needed era of awareness, Nokia announced their recycling campaign for the Indian region. The program encourages mobile phone users to dispose of their used handsets and accessories (irrespective of the brand) at any of the green recycling bins, which will be put up across Nokia priority dealers and Nokia care centers. What’s more, Nokia will also plant a tree for every handset received!

Its about time we started to think about our future! If the industrialized nations polluted the earth in the last century, let’s not take that credit for the 21st century. After all, small steps make a humble beginning… and there is a lot we have to achieve. Thank you for leading the way Nokia! I hope the others come up with such innovative ideas too. And yes, don’t forget the real rural India – that’s where the awareness is most needed!Similar Posts:

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Buy Land-They Don’t Make It Anymore!

Ramesh Menon — Thu, 25 Dec 2008 20:36:20 +0000

Mark Twain very famously once remarked

Buy land, they are not making it anymore

Personally, I feel, never has any real estate investments been better advised than above.

My good friend, Ajay Dabas returned from the USA in 2005, and we huddled together to identify the areas where he could invest his hard earned money. The brief was clearly to focus on three factors, on which to scale the investment strategy.

Risk

On a 5 year horizon, how much would each investment avenue Grow / Stagnate / or depreciate

Terms

Entry level pricing to be benchmarked against the stay-in period of investment over a 3-5 year window

Liquidity

How easy would it be to profitably exit, in parts or in whole?

Our detailed study & exercise led us to the conviction that land is less volatile compared to mutual funds, stocks, equities, investment trusts etc. Haven’t we all experienced and witnessed the massive erosion of wealth & valuation in the past few months, on most investment instruments mentioned above?

Ajay Dabas is not one of them. He is rather happy for his strategic decision to choose land over the other mediums, as the preferred investment three years ago. As for valuations, his investments have already ppreciated over 300%, and still going strong.

It would be a good idea to share the seven reasons why we feel that investing in land is the best option within real estate compared to the much more “touted & publicised options” of built up spaces in buildings.

Land is an evergreen, ever-growing asset. Brick & mortar assets like buildings (mall space / office blocks) deteriorate with time, whereas land only appreciates with time. Remember, some studies confirm that the value of any commercial building becomes ‘Zero’ in 27 years. Even when the building is useless & demolished, what is left behind is land.
Land is an asset from day one. It has very little lead time to mature from purchase to progress. For e.g. If you are an early bird buyer for a residential or commercial property, it typically takes 3-5 years for your asset to be registered in your name, and to draw returns from them. One keeps investing money & time for 3-5 years, without returns. Land can be registered immediately, and can start delivering returns.
Land is one asset which affords the most flexible options, within the real estate products. You can choose to buy any size & dimension, any value, anytime. Besides, land can be put to multiple use during the period of ownership. Let me elaborate. Agricultural land if invested into; can be used for farming. Post zoning, land use can be changed and commercially used. Anything build on it can be redeveloped, for e.g. the same piece of land could end up being used as warehouse premise, commercial, residential, etc.
Land affords simple investment management. Once bought, it doesn’t incur high costs compared to built-up products. It is most likely that the land bought is self sufficient in deriving the maintenance cost, whereas, the other products attract a continually incremental maintenance.
If we analyze the supply vs demand for real estate products in our country, land as a commodity would remain in demand for the next couple of decades. There is an acute demand for finished products, which would have to be constructed on LAND. Hence, investments in LAND are bound to grow, provided the buying strategy is right. For e.g: Delhi as a city state is forecasted to grow from 136 lakhs to 240 lakhs of population in the next decade. That necessitates almost another few thousands of hectares to be brought under development. Hence, invest in land today, rather than wait for appreciation at a much later date; at much lower returns.
With the economy projected to grow at a fast rate, and with disposable incomes being higher, aspiration of green living, bigger houses, better amenities, affordable luxuries etc. would take over. Those can be achieved on bigger land chunks being brought under development. Hence, invest in land today.
Land affords the “right balance in your real estate portfolio“. While investing in real estate, one needs to have a right product mix to hedge the risk, with one or two products which are low on risk and high on returns. That is what land promises to be.

Having said the above, we also advise our clients to exercise the right amount of caution and source expertise while buying land. Seek out experts rather than take the ‘gut-feelapproach’.

Analyze-understand-replicate success stories in land as a portfolio rather than try to re-write a success story. Remember, all leading developers in our country grew at this scorching pace on valuations, using land as the growth engine.

Happy Land-ing!!!Similar Posts:

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activecubes–Is It The Best Indian Start Up Of 2008?

Kandamangalam — Sat, 20 Dec 2008 16:01:36 +0000

What happens when some of the best brains in the industry come together and venture to solve business problems by providing competitive advantage to the clients using the power of analytics?

Well, you know it – Companies like activecubes are born!

The story of activecubes is rather interesting.

activecubes started their operations in Jan 2007. Rajesh Varier, CEO activecubes and Kiran Venkatrapragada started their first office at Bangalore STPI with 2 laptops and a truck load of enthusiasm. Over the next few months, the founding team (7 of them, a co-incidence that Infosys had the same number of founders?!) fell in place and from then on there has not been no looking back. The core team has professionals with 15-25 years of experience from organizations such as Infosys, TCS, adidas, Matrix Labs and Sensis – with rich experience across most industry verticals.

The Economist talks about how the Middle Class India is celebrating entrepreneurial success. It writes

When Nandan Nilekani, the Joint Chairman of Infosys, asked Mr Varier why he would make it alone, he replied “Because of you”

When you have encouragement from the likes of Nandan Nilekani and Narayana Murthy, you know where you can reach, right?

Anand GCP, Head-Sales and Marketing, speaks about the projects in activecubes with elan

We are in the midst of exciting projects in Australia, India & US. We’ve developed a Customer Retention Strategy for a Lifestyle Beauty Clinic, we’re working on a project for a top Rugby Team to increase their Win Ratio…with a leading Pharma R&D Company on their Supply Chain Vendor Optimization…with a Global Beverage company to help improve Market Share for a specific product. Other engagements are around building a robust business intelligence solution

Within a year of operation the company seems to be spearheading its way to success – A headstart many of us only dream of.

So what does activecubes actually do?

activecubes help clients take better business decisions by validating hypothesis & gut feel based on statistical data analysis. This data could be internal transactional data or from external sources (like syndicated data, competitor data, etc).

activecubes works across function lines and verticals, since solutions to most business problems span the company. Since a holistic solution also cuts across business and IT functions, a typical team has domain consultants, statisticians, econometricians, technology architects & IT programmers.

The USP of activecubes

Very few firms have a complete set of service offering in analytics ranging from ‘consulting to statistical analysis to technology’. The intellectual arbitrage of great minds across the globe, coupled with working from cost arbitrage locations helps offer optimal solutions to its clients.

activecubes surely exemplifies the desire to build a firm that is for the long haul and the team is definitely on track to achieve this.

Can activecubes become India’s hottest start up of 2008?

We’ve known that activecubes has been shortlisted to be in the Top 30 of Tata Nen Hottest Start Up and they are pitching to be amongst the Top 5.

We at India Special are certainly voting for activecubes for its Vision, Management, Positioning and the USP to be India’s Hottest Start Up.

Are you ?

If so, what are you waiting for ? The last date for voting is 22nd December 2008. Hurry up !!!

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