Sunday, 21 July 2013

Just Sack The Employee... And Move On - The Right Strategy?


We looked at the numbers game, and the no-emotions approaches; let me start with an example that will. highlight why emotions can and do make perfect business sense, especially when combined with a long-term approach... My normal approach when taking tough calls is to be humane, and give the other person both sufficient time as well as a chance to put his views forward. Additionally, I try everything within my power to retain - retrain, transfer etc. I have always been advised by peers to avoid being gentle, and just kick them out. I never understood why - until this case happened. It was an eye-opener for me.

This incident happened a few years ago when I was heading a large team; on joining, I first took charge by looking at the historical sales performances of the entire team. This was critical, since I was told to cut the laggards. An interesting case came to my attention; I was perusing historical sales data for the team, when I asked for longer term data beyond just the past quarter- as nearly the entire team was of long vintage. I noted a very interesting case of a top performer who had gone down for the past year or so. This person's Area Manager was insistent: he had to go, he was an underperformer with a bad attitude to boot. The bad attitude bit was spot-on; I know that myself. Additionally, the ASM was a top-notch guy, and not just in numbers... he was an excellent resource.

As is my habit, I asked him (The Attitude guy) to tell me about his performance, and analyse himself. His response left me speechless: "you tell me; why has my performance gone down? What has changed in the interim that made a top guy like me go down?". Instead of losing my cool, I asked him to elaborate. On this, he went into the history of the previous incumbent of my chair; about his screaming profanities, about the terror he was held in; about his relentless and reckless follow-ups; about his non-stop pressure. This was true; I had heard it from the back-end staff many times. This guy told me bluntly - I dont take that from anybody. Even if I performed well, and just turned in one bad day, he would be off: what about my daily target etc? That placed me under tremendous pressure.

I knew this guy was speaking the truth; I also saw where this was heading, as well as why no one takes my route: it raises uncomfortable truths, and realities no one wants to confront. People would rather let the junior guy get sacked than confront the shortcomings of a top person, or of the system. This is the reason why exit interviews are either waived or taken in written; why no deep penetrating questions are never raised, why longer term issues are difficult to confront and so on and so forth. But in this case, I could only see how a top resource was destroyed, his career wrecked by a so-called driven person. I could only see the long term repercussions such an approach entailed...

The moment you leave out emotions and the rest; the moment you let yourself into the numbers trap - you are on a one-way  spiral. While this may benefit you personally, the organisation loses out in the end, always and everytime. Look at the case above; and note how a resource has been lost, permanently. Note how a life has been destroyed; note how an attitude has become negative. Note how a human being is on the verge of becoming marked as a person with a bad attitude...

If the employee feels that the boss is not one who will entertain logic, then, to save one's job, or to ensure benefits continue, or to ensnare that elusive promotion, people start taking shortcuts; harmful shortcuts like lying to customers; over- or under-committing to close a sale; pushing goods through the trade; raising inventory to unsustainable levels; giving false commitments to partners; screaming at or sacking employees who resist your unhealthy methods and so on and so forth. This goes beyond the sales function - I have seen it in operation in Customer Care and other functions as well. Pressure begets only trouble; pressure works only in crises. I am not aware of any other situation where pressure is a positive asset.

Each person has a comfort zone in terms of work output; the key is to enable each person to reach that comfort zone. This is different from the old maxim - myth - that each person works best under differing levels of pressure. No one in my experience has ever performed his best under pressure. People perform well when they are in a positive mood, engaged with the job, the company and the task at hand - as well as with the team. If some people perform under pressure, it is because they adjust. An adult is aware of the consequences of his actions; putting pressure is pointless as well as a waste of precious resources. The key is to enable each person to reach his level of competence from within: pressure does that from outside. If a person is performing under pressure; rest assured that he will improve dramatically in his individual comfort zone. The key for the supervisor is to guage where that zone lies; in a simple phrase - Job Satisfaction

It is far easier to simply put pressure, get the job done, cut "laggards" and move on to the next posting either within the same organisation - or elsewhere. Let the next guy handle the fallout! In all this, the cost in terms of organisational resources lost, or lives wrecked, is never thought of. And it is this ultra-competitive emotionless approach that lies at the heart of most problems highlighted in the first article; the pressure to prove yourself, the fear of a loss (be it job or promotion loss), the difficulty and uncertainty being jobless entails - these combine with a lack of social security at least in India, and the overall hypercompetitive atmosphere - and create the shortcuts to disaster like we have seen earlier.

The question is whether it is possible to achieve success by being - shall we say - straighter, more humane, more process-focused? Unequivocally, yes. If that was the case, a good many of the scandals and scams would not have occurred. Furthermore, a more open atmosphere will ensure a 2-way and fearless feedback channel in operation, as competitor moves and market changes get communicated faster.  Not only that, implementation will be easier as well.

You cant avoid screaming or putting pressure 100% of the time; that is not the point of the article. The point is that instead of pressure being a way of corporate life, it should  be reserved only for real emergencies. Before anyone laughs, whether or not you realise it: pressure is there. It can be seen in rising lifestyle diseases; it can be seen in rising psychological cases, it can be seen in rising rate of job-switching; it can be seen in the rising rate of scams and scandals shaking corporate India; it can be seen in the later and later work-hours in prevalence; it can be seen in the lesser frequency of holidays and leaves; it can be seen in the rising divorce rates... it is ubiquitous, and ever-present. And remember: pressure distorts perspective.

Just a tinge of empathy taken with a few tonnes of process orientation is all that is required; employees will still have to be pulled up; they will still have to be sacked; they will still have to be held accountable and so on and so forth. But you can make it process-bound rather than person-centric. This will not lessen the control of the boss; it is not needed for the boss to be a despot. All that is required is that employees understand that they are allowed to make mistakes; that their mistakes will not be held against them; that they have passed the selection process - and are in here for a long term. All that is required is that the employee understands that if he does something horribly wrong, or performs badly due to mistakes of his own, repeatedly made  -  arising out of tasks under his direct influence - he can lose this valued position. In place of this, we hire for the short-term; for the immediate task... with the boss being the be-all and end-all. The boss, then, in place of being a person with superior performance as well as greater knowledge, becomes a thing to be feared; not an advisor to approach in a tight situation; not a controller who will direct you in the right direction when you are going wrong...

And thus we let the organisation and the victimised employees  feel the brunt of the loss; the former over the long term,and the latter over the short term!We are after all, humans - and will  respond positively to positive stimuli. Why should the corporate be any different? In my experience, 70-80% of of my reportees have responded positively; which is a good number to start with. To my mind, a perfect case for a more human and process-centric approach.

And in the hands of someone more skilled and mature than I am, well, that number might even be 90%. And the benefits commensurate with the percentage...

Thursday, 18 July 2013

Corporate India: Prevalent Operational Myths - 1

http://www.business-standard.com/article/companies/wockhardt-medicines-banned-in-europe-113071000888_1.html

"According to the Medicines and Healthcare Products Regulatory Agency (MHRA), responsible for regulating medicines in the UK, the deficiencies identified during inspection in March included “a risk of cross-contamination and evidence of data falsification”


My mind again went back to an incident from 7-8 years ago; I was preparing a data-set of my territory related to precise retailer mapping on individual products, using billing data from my channel which quoted specific unique item codes. This would give us a handle on the entire market, and enable payouts as well as monitor sales precisely. Now far too obviously, this is a time-consuming exercise if done properly. My manager at that time was furious, and screamed - yaar, cant you fabricate a few records?


Both the above real-life incidents - one with very serious repercussions, as it entails a potential loss of Millions of Euros to a company; and the other with a potential to disturb retailer payouts leading to dissonance and consequent loss of marketshare - have their origin in the same set of attitudes and myths that are prevalent. Let us examine a few of these in detail


NUMBERS ARE SACROSANCT
This is one oft-quoted statement across functions: in finance, in customer care, in sales - everywhere. This is ubiquitous, and omnipresent. In sales, it is sales targets every month. In customer care, it is number of closed calls, or percentage of closures. And so on and so forth - till the top levels, where it is the sales volume of the year, share price, etc. In all this incessant talk on numbers, one tends to forget that Business is not primarily about numbers; numbers are only a criterion of judgement of success. Numbers are not an end unto themselves, they are a barometer of measurement - and are only one parameter in several.

Business is, beyond even a shade of doubt, first about survival, then about continued survival - or growth. All the rest follows from the above; all strategies and tactics have to be subordinate to the overall organisation goal of growth. And that is not about numbers per se: it is typically a qualitative idea, and is only supported by numbers. As an example, the size of the targeted segment, the growth percentage of the segment, the potential etc are only numbers that support the original idea: that xyz is the targeted segment for the organisation. The sales volume achieved is only a supportive number that is an aid to judging the overall direction that is being taken; it is not an end in itself. For example, 100% sales growth in a doomed segment, or degrowing segment is not the same as a 10% growth in a new upcoming segment.

And yet manager after manager paces inordinate emphasis on numbers; while numbers are important - it is equally important to see how are the numbers achieved! Let us take another example from the real world; that of an consumer company where I was employed a few years ago. This company (or the managers there) focussed exclusively on numbers. So long as numbers were coming in, all checks and balances were ignored; pressure became the order of the day. Over time, issues with the channel partners cropped up - cheque bouncing, returned material, complaints. It was subsequently found that there was a litany of false commitments to the channel, forced sales, high inventory levels, unsettled channel claims etc. The company had settle several lahs worth of claims... 

The most critical part is that I have seen such scenarios several times in my career; this is not a one-off happening. In a large portion of such cases, the real perpetrator had either been promoted - or had left for greener pastures, leaving the new teams - which have no idea of the oral commitments, the genesis of the problem or indeed their severity - to sort out matters. In all cases, the organisation lost a huge amount of money; marketshare; market reputation and other issues. 


BUSINESS AND EMOTIONS DONT MIX
This another little beauty that is oft-quoted in organisations; and this is another myth - a total myth. We are humans; and humans have emotions. You cannot separate emotions from the business process; the implementors are human beings. There is no escape from this simple reality. The key question is not whether business and emotions mix; it is how to harness emotions for the greater good of the organisation. Let us, once again, take a look at 2 real examples of how the 2 can mix

The first case is from the late 1990s; a major company I worked for had a channel partner whose business went through a tough time due to severe personal stress; instead of sacking the channel partner - the Regional Manager of the area, looking to his troubles and past record, supported him, took a business hit, gave full support to this distributor in his time of dire need. Within a space of 2 years, he bounced back. The company retained a performing partner; the partner came out of the bad phase. 

The second case is a classic: an old-time distributor once informed the company of his business plan - to quit the current business in 3 years, and advised them to take a call on the current business. He clearly stated that he is sharing this plan due to all that the company had done for him over the years. 

In each of the cases above, note how business logic has taken a back-seat; and in each case the organisation has gained. Business and Emotions can and do mix. If an organisation acquires a bad reputation of ill-treating employees or partners, the ramifications are felt far into the future as key employees quit; key partners both quit, and stop sharing market intelligence, stop taking additional stocks in times of company need, stop tolerating routine problems that can and do occur in a business relationship. The entire trust is lost, and the employees as well as organisations stand to lose. The attendant atmosphere of fear that is generated destroys employee morale, creates undue stress and hinders performance. A very large percentage of business issues, employee resignation and losses can be traced to ignoring this vital aspect of business

THE LEARNING
The learning from the above unconnected myths mentioned above both point to one direction: the importance of due process in any business decision and situation. The moment when the process is abandoned, it leads to trouble. The key point is that there should be an established process with proper checks and balances designed to prevent excesses as well as prevent miscarriage of justice. In the first example, a simple process of sufficient weightage to accounts receivables, range selling, number of retailers billed, documents received - like account statement sign-offs etc, channel and reportee complaints, reportee average stay in organisation, exit interviews, proper adherance to guidelines for distributor changeovers, Distributor ROI monitoring and claim settlements etc would have prevented lakhs of rupees worth of loss, as well as enhanced the organisation' reputation.

The first - numbers - is easy to grasp in terms of process. The second - is not. Take a close look at the example: how could the manager in that case take such a decision that leads to a certain loss in the short term? There obviously had to have been a process behind it; approvals were sought, logical and verifiable explanations given, past history of the area documented. The local teams were controlled by the regional and  national teams, with a process - that changing the channel partner requires proper approval. This process provided the guideline for the regional team to put forward their case. Similarly, in the second example stated the business owner had to have a back-up plan in place, as it entailed an immediate loss of revenue in case the company took an immediate call. Again, evidence of a process - and how emotions have been mixed in to enhance reputation.

When the due process is abandoned, we get, at the extreme, cases like the one mentioned in the article enclosed, when all checks are subverted, all emotions are forgotten at the altar of achievement, and the manager becomes but a number crunching machine. The moment you learn to overcome emotions like regret, morals, conscience, empathy for the other person and start to focus only on numbers and achievement - is the moment when the door of disaster opens for the organisation. Organisation after organisation has paid a heavy price because they took to these 2 myths - that emotions and business dont mix and that numbers are sacrosanct. 

Emotions are a vital part of the human identity as well as the business transaction. For example, empathy for -  and regret for the ill-effects of actions on -  those who will take your improperly checked products, or for the nation which will have to pay the price, or your reportee who will lose his income, or your channel partner who will lose his business... is what prevents bad deals and amoral and illegal acts. The challenge for the organisation is to devise a process that will cater to this; you cant measure or adjudge emotions. But you can derive a business process that will have sufficient checks and balances to prevent such happenings. You can measure the entire process, not just the end - result; for it is only safe, sound long term tactics that can ensure long-term stability and business performance. You can shift your focus from numbers to strategies ;strategies win market battles. Numbers dont. 

In the second part of this article, I shall take a look at why due process is abandoned, and determine the factors that lead to unhealthy trade practices...

Sunday, 14 July 2013

Book Review: Tinderbox - The Past and Future of Pakistan by MJ Akbar





http://www.mjakbar.org/mjbiography.htm

MJ Akbar is an Indian Journalist with a wide-ranging experience of more than 40 years cutting across Media, ranging from The Times of India to Headlines Today. He is a prolific Author, with several books to his credit...

 "The actions by the Pakistani Government to support them - actively and passively - represent a growing problem that is undermining US interest and may violate international norms, potentially warranting sanction. In supporting these groups, the Government of Pakistan, particularly the Pakistani Army, continue to jeopardize Pakistan's opportunity to be a prosperous nation with genuine regional and international influence - Admiral Mike Mullen, 17th Chairman of The Joint Chiefs of Staff"

The above excerpt from the conclusion makes the overall approach abundantly clear - blunt, straightforward, factual, and racy. This is a book that is a must read for Indians, as it is among the most authoritative books that I have read on the subject of Pakistan. It is full of insights and facts that will surprise the Indian citizen, The book takes you deep into the quagmire of what is modern Pakistan, and how it got to this sorry state of affairs. It starts from the very beginning - AD 712, and traces the Pakistani claims of connections to Ghori and Somnath; it picks up from there, takes it all the way to 2011 - and enables a deeper understanding of one of the most enduring tragedies of modern times- Partition, as well as the India-Pakistan discord.

The book can be viewed in 2 parts - the period leading upto Partition, and the modern state of Pakistan. The period leading upto Partition looks at the entire scenario in a very different light - tracing the roots of the discord to the Muslim psche that was punctured when they lost their hegomony in India. Subsequent events, which lead to them losing their rule just about everywhere, has also been looked at, and identified as a key aspect that lead to Muslim demands in the 1920s - 1940s period. This is a logical approach - one that has been explored to some extent by Pankaj Mishra in his book; but that work was Pan-Asian in outlook. The book under discussion is exclusively about India, and this makes for a deep and wholesome appraisal of this entire issue. The rise various thinkers and philosophers, and their impact on the Muslim psyche right from the 16th century to the 20th century is a superb section, as it enables a deep look into the happenings in Muslim society in those days. The slow radicalisation of the society, and the role of the British has been brought out into the open - which paints a picture that enables you to understand the how and why of the rapid deterioration from the 1920s

The only negative aspect I could detect in this section was the aspect dealing with the Nehru Report of 1928, and the Cabinet Mission plan. I cannot understand why some people regard them as good; both were recipes for certain disaster. The Nehru Report ceded residuary powers to the states, and gave the Muslims reservation in both minority as well as majority areas; why should anyone have reserved seats even when they are in a minority? If the logic of protecting minority rights applies to Muslims, it applies to Hindus as well! And why cede residuary powers to the states? That would weaken the center! Similarly, the cabinet mission plan - with its 10-year joker, giving the option for leaving the  Union after 10 years - for a sure-fire recipe for Balkanisation! I know that this desire of the Author has no connect with religion; I have read a similar opinion from a Non-Muslim as well; it is more of a romantic hoping, a what-could-have-been feeling. However, in my humble opinion, given the circumstances unveiled in various works spanning Pankaj Mishra, Akbar, Jaswant Singh, IIC (India and Pakistan- The Great Divide : My next review) - it seems more and more certain that the partition of India was not avoidable...


Even so, this section is an awesome piece of research; it virtually gives you a look into the situation within Muslim society as it existed in those days, which enables you to understand the subsequent years much more easily. This is what makes this book a cut apart from most other books I have read. The part after independence is a searing indictment of the 2-nation theory, and makes the telling point: the hunt for an identity by Pakistan, and its citizens - drove it inexorably towards increasing Islamization of its society and institutions. This hunt for a common identity - and its internal differences right from Muhajir to Shia-Sunni-Ahmediya etc- drive a nation struggling to stand on its own feet to its nadir. You can literally feel the destruction as page after remorseless page piles on the story: a frankly tragic story of a people hunting for their identity in the past and in religion - instead of moving on from what has happened, and setting up reliable institutions.

The book traces how the idea of Pakistan went sour right at the very beginning; it quotes a telling and prophetic statement by Maulana Azad, who had clearly spelled out the coming destruction in 1946. You are left shaking your head in despair as you are taken into the middle of the quagmire, such is the power of the narrative. The deeply disturbing sequence of events that lead to the plunge of Pakistan into disrepair is a sad sequence: as, over time, India has had to pay the price for the same. It takes a deep and long look at how player after player played the wrong cards; how the radicalised society came into being, with the first challenge right after independence, when clerics demanded a fundamentalist Islamic state; how they succeeded...  a story of unmitigated disaster, told in a fluid and telling narrative.

It rips into the USA, and takes it apart in 2 chapters; how the US studiously looked the other way when Pakistan was going Nuclear, quoting facts as evidence of the US knowledge of Pakistani activities; in fact, there is a section which clearly states that the USA would have found in Pakistan all that it was looking for in Iraq. The book rips apart the US-Pakistan duo on terrorism, tracing the rise of terrorism, and how even Osama Bin Laden was a US-Pakistani creation. Most telling is the fact that Pakistan was on the lookout for the Nuclear option even before India's test... which puts a rather different light on our own Nulcear Tests in 1974..., as well as the attendant isolation - but that is another story. All in all,  a superb book - this belongs in your library, and is a collectors' item!

Sorry to digress, but in closing, please do tell me why (as per the opening quote of the Admiral) did terrorism and Pakistan become flashpoints now? Why was the world silent when India was bleeding? Why was the world looking the other way? But that is another story. Problem is that this "another story" is tied up inexorably with India. While the book doesnt quite question the west, it draws much the same conclusion, forcefully making the point that, for the USA, there is only 1 real partner against terror in Asia - India. Will USA wake up to Pakistani duplicity? Doesnt seem like it, while we in the subcontinent, to quote the book, "we are staring, transfixed, at havoc beyond repair..."


Friday, 12 July 2013

Shortcuts, Managers, KRA -Focus and Business Loss

A small incident in a retailer's outlet today has set me thinking... I was asked by this retailer in Mumbai about a brand in telecom (a new local brand). I immediately replied that my experience of this brand in MP has not been too healthy; we had a common distributor, who was running to huge losses on account of several issues in terms of service failures and product failures. I shared this experience with him, and accordingly advised him to be careful. Note how a chance interaction in Indore has impacted a business deal 600 Kilometers away. I could not do otherwise: I, too, had a business dealing with him- and for the sake of that association, and maintaining trust - I had to be truthful with him. But this has impacted the other totally unconnected brand... 

And yet, corporate managers tend to disregard this for shortcut methods - only to attain short-term numbers. This is not an isolated incident: my mind went back some 12 years to when I was managing a packing assembly at Visakapattanam port. I was getting jacked daily for bagging losses, and was at wits' end as to what to do. To cut a long story short, I was able to prove that the losses were due to a reason entirely out of my control, and slam-bang in procurement. The pressure eased; but no appreciation or regret was ever shared with me for the tough time I went through. In another incident, I came across a market that was destroyed on account of claim pendency and push-sales; from a high of 7200+ units, sales had crashed to negative 1100 units; the company concerned had to shell out huge amounts to the channel, and suffer business losses from that territory. I asked the supposed perpetrator as to why he did such foolishness - his answer floored me. "I survived for nearly 3 years, and have moved on. They (the bosses) were saying do - or quit. So, I did it, took the benefits and quit!" Such is corporate life.

Each of the 3 cases - real life, true cases - highlight how the company at large - which is supposed to be above the individual - has been taken for a right royal ride by individuals focussed on self, and used short-term tactics to further their own ends. The third case highlights how it is a chain, and how the pressure distorts perspective, and leads juniors on the same path. The cases above span functions - from procurement and materials to sales.  In each case, the losers are the employee who has been sacked, or not promoted; and the company, which has lost profit and marketshare. This is a simple truism - and yet short-termism is rampant - as Cobrapost and Ranbaxy as well as many, many other scandals have recently highlighted.

Quite simply, this is a systemic failure cutting across all functions; KRAs are not designed well enough to capture or arrest this reality; internal checks and balances are not identifying, isolating and checking errant behaviour; internal systems are not in pace with the external market. This is what is evident in most scandals as well as the cases above- the pressure to perform, and the fear of a job-loss is leading the weaker (or smarter - depending on your viewpoint) employees to take recourse to short-term tactics. 

How is it an acceptable business practice to send erroneous bagging material to a plant? How did it go unchecked? How is it a good business practice if your product fails 38% of the time? How is it an acceptable practice if your sales are growing at an alarming rate on the back of pressure sales involving heavy discounts, shy-high inventories, sky-high cheque bouncing, unordered material being pushed in, abject lies to channel partners etc? How is advocating - shall we say - innovative ways to save tax - an acceptable business practice? How is falsifying documents and data an acceptable business practice?

Unhealthy business practices ultimately hit the company and the economy hard: witness the Sub-Prime scam, and how falsifying documents and chasing crazy targets led to the greatest crash of modern times. The people who paid for it were not the ones who committed the errors: as my friend so glibly stated. The ones who pay are the customer who buys your faulty product; the employee who misses on a deserved raise, or who gets sacked, or who gets his career royally screwed. 

But, as scam and scandals have shown, it is the organisation who stands to lose the most - over and above all these. The economy will recover, employees will find new jobs and move on (again, like my friend) - but the company is stuck with the fruits of its past negligence. The company has to face the ire of regulators, of customers, of employees - everyone; and that too on a daily basis. The company, on occasion, loses its existence even - as innumerable examples will tell you. The company loses sales, marketshare and profit; it loses employees as well as market trust... 

And yet, there is rampant short-termism; it is everyone for himself... Anyone thinking of the organisation as a whole????? Doesn't look like it - for if that was the case, these corporate scandals would not have happened. Furthermore, gone are the days when bad  tactics and their ill-effects could be limited to one area, as the opening example shows. The impact spreads, thanks to the free mobility of people as well as through the internet and social media. And it spreads fast, blindingly fast. There is no way you can limit the damage. 

In a city I visited, all the Channel Partners in the entire market had got together in a forum - the result was the the company was not able to find a distributor. Reason? sky high inventory holding, unsettled claims and lack of trust. Before you could adjust to this new reality, this forum had spread to the entire state. Instead of asking itself why the dealers and the channels ganged up, why were the claims not settled - the firm pulled up the local, regional and zonal sales teams! Excuse me, you dont settle claims, force 120 days stock down a partners throat, dont settle service issues in the entire product basket- and ask why did the forum start? All this, when the concerned Regional Manager was consistently following up on issues, and warning of things getting worse? The learning for us is the speed of the spread - it had even led to the entire central zone meeting up at Nagpur - all this in a matter of a short time. In the modern world, the power of the channel is increasing, lessening the ability of the short-term gamers to play their games. But, yet again, internal systems and employees are slow to respond. Too, too slow. 

And in all this, it is Brand India that is suffering... it is not my case that all of cororate India is like this; but the above are examples that I have observed often enough across industries, functions and levels. I can also state glorious examples from corporates - but that is not the purpose of my blog. I want to engender change - and one does not bring in change by skirting the real issues. And the real issue is that the market has changed, leaving companies behind. The reality is that short-termism needs to be stamped out ruthlessly - even at the cost of numbers and short-term targets - or you pay for it later. 

Jaago, Sonewaalon!

Saturday, 6 July 2013

The Indian Economy: further problems ahead...


Our continued silence is a matter of extreme concern; unless the Indian citizen wakes up, and addresses the corruption that is now endemic to society as a whole, we are going to continue on a one-way spiral to the bottom. Let us consider the economic climate, and how it has been impacted by corruption and fiscal profligacy.

We are facing a scenario of a broad-spectrum decline in all aspects of the business environment, cutting across sectors and indicators. The reasons, as given in my earlier posts, are on 2 sides: implementation hurdles and Policy stasis. Both need attending to; without that - we can expect a further slide. We are facing a BOP crisis in April 2014: how much of the $162 Billion can be rolled over is a moot point. This is short term debt coming due; add to this CAD, capital flight etc - and you are staring at a crisis situation of unprecedented proportions. If something is not done - we can expect a further correction. 

Research reports from across the world have pointed out only one reason for the decline: corruption. Businessman after businessman has openly stated that it is very hard  to continue to do business in India. The result is that while our investment needs go unattended, you have an amazing scenario of Indian MNCs, who are actively investing abroad. 

With pressure building up in their home markets, FIIs and international firms will first pull out cash from high-risk areas; which is what is happening. Europe is a basket case; US is under extreme pressure; China always was suspect. And India... has been ripped apart by scandals. At home, each and every sector lies in a shambles - having been ruthlessly exposed as corrupt. The list of scandals include almost every sector for core to consumer goods to medicines to services: Adidas; Cobrapost; Satyam; Telecom; Ranbaxy etc in drugs; mining; land; power - and this list is from the top of my mind. With a few hours of research - I can add to this list with ease. 

Add to this the lack of a correct approach: in Human Development Index parameters, we have the unique distinction of being listed alongside, or even below, Sub-Saharan African nations in several parameters. We have a younger generation growing up without food, health or education access. We have a massive mis-use of environment and land resources, stalling nearly 100% of all infrastructure projects. And, instead of attending to this environment, we are still focusing on short-term populist measures, while infrastructure, health, education all lie in a shambles. 

Uttarakhand has come and gone without a dent on our national ethos; it does not require a doctorate summa cum laude in Biology to figure out that deforestation on a massive scale in hilly areas is a recipe for certain disaster - even a 11th class student will confirm that roots act as binders in hilly areas. Add to that uncontrolled projects, unimplemented laws and ignored common sense: and you have a disaster. Everything was known to us; we chose to do nothing, continuing our cocooned existence. This approach - carelessness - is leading to a stasis with 100% of all projects being blocked. South India is already in a power crisis, for example. HDI parameters as another example.

All this is extremely relevant - it is what is hindering investment. Investment happens when there is a climate conducive to investment - and we dont. Simple as that. In place of that, we are only creating further problems, like the food security bill ordinance, rather than  invest that 124000 crores in education and health... but no, we dont and cant do that. When there has been no furore over Uttarakhand, it is being foolish in the extreme to expect a furore over small matters like investment in productive assets as opposed to fiscal profligacy. There is total silence on the leak in all government schemes: how much of this 1.24 Lac Crore will reach the public? A small amount. No one is questioning the government with any degree of sincerity as to why they are doing this in an election year. What were they doing earlier? Sleeping? But no, we are silent. Why is there a total silence in terms of serious pressure on Uttarakhand problems? 

Our silence has a cost: a heavy cost. You only have to look around you... 

Jaago, Sonewaalon! 

Thursday, 4 July 2013

And So Life Continues...

Our capacity to forget is truly amazing. It has taken us just 14 days to move on; just 14. But why should I find this surprising? This is par for the course; the average Indian capacity to absorb punishment is almost legendary. The list of man-made disasters and scams we have forgotten makes a very interesting read indeed, one we can justifiably be proud of - having managed to first mis-manage and then forget all the mismanagement for any number of "achievements" of our political masters, bureaucrats and big business. Be it the man-made Uttarakhand, or AMRI Fire case or be it the Satyam or Cobrapost scam; we are very quick to move on.

It doesn't concern me; It doesn't effect me. I am alive and well; I am healthy and have a job... that is all that matters. My life is hunky-dory, and great. Why should I care? These, and similar opinions are the general rule. We are armchair specialists: commenting with zeal on each expose and tragedy; shaking our collective heads with shock and concern immediately after each such tragedy or expose. We read the investigative details with anger, and cry that corruption is bad. Oh, how we scream and de-cry all and sundry during the heydays right after any event. Any and every event. From afar, it would seem that we have been shaken to the core; that our collective conscience has been shaken out of its revery.

But fast-forward to a few days later - and everyone has forgotten; everyone has moved on. There is no real recollection of the corrupt nexus that led to deforestation in Uttarakhand. There is no realisation of the criminal negligence that led to warnings being ignored. There is no memory of the negligence that led to AMRI and Mumbai fires; there is little realisation or recall of the corporate managers who featured in Cobrapost or in the Ranbaxy episode. There is no recall greed and negligence combining to create Satyam. There is no recall of how bribes allowed trucks to go unchecked into Mumbai... nothing. Life moves on, as if nothing of import has happened.

Please continue your stupor, India: please dont wake up just yet. Not now, not yet. There is still much that needs to be destroyed; there is a lot that remains to be done before we are completely destroyed. Corruptions scams have just derailed the India story, please wait for it to be gutted totally. Please let your politicians and other vested interests enjoy themselves. Your silence is needed by your family; your silence is needed by society. Stupor is feeding you and your family; and that is the only thing that matters, after all; that you be happy. Mother India deserves what she is getting...

Enjoy, Everyone! Silence... please. Total Silence...




Shhhhhhhh!