Good Governance in India: Gandhian Economic Philosophy with Digitally Connected India

One of the election planks of Narendra Modi’s campaign has been ‘Minimum Government-Maximum Governance’. It is befitting that the elected Government of Narendra Modi has organized an essay competition for school children on good governance. Governance is a word that has become important in a business context as well. Corporate governance, for example, is taken very seriously by all progressive corporations. Governance is applicable for any and every organization, for that matter. At a broader level, of course, governance at a national level is the most relevant factor for national development. This blog post seeks to delve into the definition of governance and explore what could governance for India’s development and strategies to secure and institutionalize good governance.

Governance defined

The word ‘govern’ is defined in a national context. It means legal control of a country or its people with the responsibility for introducing new laws, organizing public services and managing economy. Governance is the activity of governing a country in terms of its various facets. At a company or organizational level it involves setting its articles and memorandum of association, forming its code of conduct, and establishing and operating the company as per the articles, business code and all applicable national and international laws.  Governance at the country level is extremely important for India as governments are formed by the parliamentary and legislative representatives of democratic India elected by its people as per the constitutional processes. With 29 States and 7 Union Territories having local State level governments and the nation as a whole having the Union government at the Centre, governance in India, however, tends to be quite plural.

The central theme of good governance is economic growth with social equity. There are, of course, other supportive themes such as gender equality, poverty elimination, people empowerment, modernity with tradition, globalization, employment generation, universal education, healthcare and sanitation, housing for all, rule of law etc. All such themes can be defined as integral inputs or outcomes to the central theme of economic growth with social justice, and in short - development. While people’s aspirations are expressed through elections, they can only be achieved through governance by the elected representatives. The structure and processes of governance are determined by the constitution while the strategies to execute on governance are determined by various laws, policies, schemes and procedures (together, governance tools). While the bureaucracy both creates and executes the governance tools and is accountable to the elected governments, they, in turn, are accountable to the people.       

Gandhian Governance

Mahatma Gandhi advocated a concept of good governance that emanates from the grassroots level. He held that the village is the smallest microcosm of the nation which must reflect good governance through empowerment and self-rule. His concept of Panchayat Raj is the structural definition of his concept. Gram Swaraj for Mahatma was very much a part of his concept of Poorna Swaraj for the nation. In one of his writings, Mahatma said, “Panchayat Raj represents true democracy realized. We would regard the humblest and the lowest Indian as being equally the ruler of India with the tallest in the land”. Successive governments have tried to provide constitutional and legislative enablement to Gandhi’s concept of Gram Swaraj and Panchayat Raj. That said, even after several decades of Indian independence, the rural population and the underprivileged continued to be left out of the mainstream of development which is reflected in recent governmental initiatives such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

MGNREGA seeks to guarantee 100 days of livelihood security to the population meeting prescribed criteria. While it is welcome, Mahatma’s goal of generating wealth through economic activity and good governance remains unfulfilled. Gandhiji gave several avenues, under the broad umbrella of Sarvodaya, to achieve economic self-sufficiency at the village level. He advocated ending poverty through improved agriculture and small scale cottage industries across all villages. Gandhian Economics focused on economic self-sufficiency at rural community level. He not only advocated Sarvodaya but gave relevant tools such as Charkha and Khadi to generate employment. Large scale industrialization that emphasizes machine made products vis-à-vis handmade products has pushed Gandhian economic tools to the background. The call by the Prime Minister Narendra Modi for Indians to patronize khadi is indeed a welcome exhortation. Good governance initiatives of the PM have a greater probability of success with a digital connect that would restore both gram swaraj and Gandhian economics.

Five principles

Governance, in its fundamental ambience, represents universal inclusiveness, transparency, access, simplicity, objectivity and ease. If we agree that India still lives in its villages (as it is true) and true empowerment must start with the indigent and downtrodden, whether rural or urban (as also it is true), whatever ideal governance we have must satisfy the six principles of inclusivity, transparency, accessibility, simplicity, and objectivity. Law and procedures, projects and schemes, structures and processes, administrators and enablers must have a system of governance that works for the layman as much as it does for the erudite. This can be achieved by imbuing simplicity in each second component of the four pairs mentioned above. For example, while laws would perforce need to be complex to envisage and address all eventualities, procedures at least must be simple and intelligible.

Similarly, while projects must be based on an overall developmental magnum opus, schemes must be those that touch the lives of all in a simple manner in an immediate and recurring timeframe. Again, in a large federal country like ours political and administrative structures cannot anything but be complex. However, the processes must be simple and speedy. Administrators who are required to work with multiple political systems may be cautious by instinct and training but those who are heads of agencies (district collectors, departmental secretaries or public sector heads) need to focus on being in touch for speedy delivery. This duality of foundation and purpose or of the institution and the individual requires that the back-end of the governance mechanism could be as complex is the wont but the front-end of people contact must be as simple as it can be. This balance of internal complexity and external simplicity can be achieved only with digitization.

Digital governance

Digital governance is a system of governance in which all laws, procedures, projects, schemes, structures, processes, administrators and enablers are connected with each other and the individual across India in a seamless way. This requires that the whole of India is a wifi village with broadband, fibre optics and tower systems connecting all of India. This also requires that every individual has a Unique Personal Identification Number (UPIN) and every institution will have a Unique Institutional Identification Number (UIIN). Needless to say, India is moving into a new future in that direction with the Central Government sponsored Aadhar Project. The governments would like to connect subsidies and benefits to Aadhar number, for example. AP Government has made supplies of sand for construction purposes a digitally enabled process administered through women self-help groups. However, much more needs to be done for total digital governance at a national level, in terms of hardware and software.

In the full digital model, every individual will possess at least one electronic device, one smart phone and one tablet. He or she would have Internet access wherever he or she is in India. Every transaction requiring interface between the individual and government would have an electronic form and processing system. Every individual would have opened a new Jan-Dhan Bank account or would convert one of his available accounts into a Jan-Dhan account. The entire landscape of laws, procedures, projects, schemes, structures and processes would be in the form of multi-language ready access portals, with easy to manage forms and processes for applications and approvals, queries and responses, and self-certifications and random evaluations. Every minister and public official should have a position-linked email ID based on which he or she can be communicated with. Each Minister and Officer should have an information processing assistant to handle queries and responses on a prioritized basis. The objective would be to enable a person of even ordinary literacy be a helpful and helped member of pan-Indian digital governance.

Connected India

Connected India is possible with a mammoth collaboration between global and Indian digital giants. The recent days have seen such global majors making a beeline to the Prime Minister Modi, Central and State Chief Ministers and officials. India must conceptualize collaborations between global majors such as Google, Facebook, Twitter, Microsoft, Cisco and such other digital enablers on one hand and Reliance, Bharti, Idea, Tata, Infosys, TCS, Wipro, HCL Technologies, Cognizant, BEL and such other Indian telecommunications and information technology companies on the other to develop a digitally connected India. Just as ‘Make in India’, ‘Connect India’ must be a campaign and execution platform for global and Indian corporate majors to receive support from India’s Union and State Governments.

Connected India would fulfil the Gandhian economic dream of Sarvodaya whereby the most distant and grassroots individual could be connected with the rest of the country and the highest echelons of the governments. It will connect the producers with the marketplace, and help identify and integrate inputs for producers and outputs for users. India has wrought an information technology revolution for the world; it is time that India did something digitally for itself. The Government may need to establish a major collaborative fund, with contributions by global and Indian governments and corporations, to finance the Connected India program. The programs will provide economic returns to contributors in terms of hardware and software sales. The only ask should be that the costs of connectivity should be extremely affordable. Gram Swaraj, Poorna Swaraj, Sarvodaya and Gandhian Economics and Good Governance will merge with, and enable, each other in a completely Connected India.

Posted by Dr CB Rao on December 28, 2014

    

Buying and Selling in a Digital World: From Instant Satisfaction to Distant Nirvana?

Economic and social development is based on exchange transactions; more specifically, buying and selling transactions. Every moment of our lives, we buy or sell something. Most times such buying and selling transactions cover tangible products and services but they also cover intangible factors such as goodwill and brand equity. Many times, buy-sell transactions get known under different nomenclatures such as deposits and loans, in the context of a banking transaction, for example; but a closer look will reveal the embedded buy-sell nature of even a banking transaction. In certain other times, the presence of intermediaries and channel partners obscures one from the realities of buy-sell transactions. From the very established situation of physical buying and selling that has been in vogue till recently in an exclusive manner, electronic commerce has brought in completely varied hues to buying and selling. Two ubiquitous variables, one an outcome variable called value and the other a process variable called bargaining, influence the arithmetic of buy-sell leading to either profit or loss.

The buy-sell transactions are a key aspect of human, organizational, social and national behaviour. Like a coin has two sides, all these entities have buying and selling as the two sides of their personalities. Resources, especially natural and financial resources, being finite it is impossible to specialize and excel only in buying or selling. One needs to be adept at both simultaneously. Organizations tend to believe that buyers and sellers have characteristics that are different and differentiated; rarely one does see a head of procurement becoming a head of sales, and vice versa! There are some who believe that the underlying characteristics are the same, the differences are caused by the respective universes that the buyers and sellers operate in; the buyers operate in a limited supply pool and the sellers operate in a huge market place. In respect of a bank as an example, the buyer of a fixed deposit has only a few banks to choose from while the bank has millions of customers to sell its deposits to.  

Buy-sell characteristics

Buyers do not exhibit homogeneity. A buyer who is part of an organization tends to be methodical seeking high quality for low cost. The same person as an individual tends to be less analytical and more emotional while exercising his or her buying decisions. An organizational buyer tends to operate within a budget while an individual buyer prefers to be influenced into purchasing with elastic budgets. An organizational buyer tends to be a responsible and held-accountable buyer while the individual buyer tends to be a responsive and self-empowered buyer. The organizational buyer is motivated to save costs and increase profits for his organization as part of an integrated organizational goal system. The individual buyer is inspired to fulfill needs and increase esteem as part of a diversified social aspiration system. Industrial buying and individual buying have completely different ecosystems and behavioural triggers even if the operating person is the same.

Sellers also do not exhibit homogeneity. A seller who is part of an organization tends to be methodical seeking high price despite low cost. The same person as an individual tends to be less analytical and more emotional while exercising his or her selling decisions. An organizational seller tends to operate within a budget while an individual seller prefers to be influenced into selling with a view to deleverage, save or buy something else. An organizational seller tends to be a responsible and held-accountable seller while the individual seller tends to be a maverick and self-compelled seller. The organizational seller is motivated to offer discounts and raise volumes or prices for given volumes with a view to increase profits for his organization as part of an integrated organizational goal system. The individual seller is inspired to fulfill needs through better buys later and increase esteem as part of a diversified social aspiration system. Industrial selling and individual selling have completely different ecosystems and behavioural triggers even if the operating person is the same.

Premium-discount-loyalty-volume mix

A trained organizational buyer and an experienced individual buyer have one common characteristic though. He or she invariably seeks premium at a discount. A trained organizational seller and an experienced individual seller have also one common characteristic in a similar manner. He or she invariably seeks volumes at a premium. Both premium and discount generate loyalty. Loyalty, in turn, generates volumes. The buyers and sellers have a convergence play in how premiums and discounts are structured for a given specification and quality level. The selling strategies of organizations and the buying strategies of individuals vary depending on how the premium-loyalty, discount-loyalty and loyalty-volume relationships are structured. It appears that within this convergence, a divergence is developing between physical stores and virtual stores (or brick & mortar sales and electronic sales). There are essentially two points of view; one from a premium repositioning angle and the other from a discount repositioning angle, both of which attempt to increase purchases and sales, without losing the premium tag or accruing discount scorn, respectively.

The premium repositioning hypothesis is that the higher the perceived premium in a product or service and the higher the discount obtained on such product or service the greater is the value (and the volume). Even entities and channels which wish to play on premium are therefore forced to simulate, if not exactly offer, discounts.  The increasing trend of same store gift or discount certificates of premium retailers (Lifestyle, Home Centre, Shoppers Stop) or the same channel loyalty points of premium corporations (Taj Hotels, Sheraton Hotels and Lufthansa) are designed to encourage long term repetitive buying behaviour on premium products without sacrificing the short run profitability that could have come with discounts on premium pricing. The discount repositioning hypothesis is that the lower the perceived premium and the higher the discount obtained on such product or service the greater is the value (and the volume). Even channels which wish to play on discounts are therefore forced to continuously enhance the discount experience. The increasing trend of flash discounts by e-commerce channels and Uber style cab services are designed to continuously refresh the value-volume equation even with discounts.

Close touch to virtual scan

Electronic commerce, including electronic auction, has redefined the buy-sell characteristics. The foundations of close look and trial performance of physically available goods that have been the solid foundations of physical buy-sell experience have been replaced with the 360 degree compasses of universal scan and analytical evaluation of endless arrays of portal-linked goods. The physical buyer has become a more focused and circumspect consumer while the digital buyer has become a more empowered and maverick consumer. The physical seller is challenged with the task of re-establishing the relevance of brick and mortar store while the digital seller is challenged with the task of delivering to promise of digital platform. The physical buyer and seller are in a state of rediscovery for the next level of interaction with the physical sellers attempting to find other value enhancements besides look-feel (digitized shopping follow-up, for example) and the digital buyers seeking to find other credibility alternatives besides direct interface (digital price matching, for example). The digital buyer and seller are in a state of evolution with the digital sellers attempting to find other value enhancements besides discounts (same day delivery, for example) and the digital buyers seeking to find other credibility alternatives besides discounts (reseller warranties, for example).

The big corporations and the small consumers in both physical and digital buy-sell relationships are thus in a state of evolving expectations. As the chairman of Hindustan Unilever, Harish Manwani, stated recently electronic commerce cannot be wished away. The physical sellers may decide or influence their channel partners to list what can be sold through digital channels; the long term success may, however, lie in supplementing and complementing rather than in competing and substituting one for the other. This could include own e-commerce sites or contractual tie-ups with independent e-commerce sites to make available what is not physically available. As the consumers of e-commerce sites recently experienced what is most sought after digitally is rarely available freely. The digital buyers may patronize the digital portals for instantaneous buying gratification; the long term satisfaction may, however, lie in bringing in some of the discipline and practices of physical buy-sell to digital platforms. This could include more voice-verification opportunities, product reservation facilities, cancellation options and product return policies. Both flash sales in digital platforms and progressive sales in physical platforms require media advertisements, a trend likely to continue for long time – until a time point is reached when buy-sell is as embedded and as contractual phenomenon as a family, school, college, club or job relationship is. A completely integrated buy-sell ecosystem is what the future evolution is likely to be, as Apple Pay and Google Wallet may indicate.

  

Digital nirvana

In the extended digital age of the future, buy-sell will undergo a major transformation. A few principles of buy-sell nirvana will determine the evolution. Firstly, all buyers will be sellers, and vice versa. Buying intentions will be to buy as now but only to use temporarily and sell eventually.  Selling intentions will be to sell as now but only to induce repetitive buying through a variety of means, including buyback. Secondly, all physical will be digital and all digital will be physical. Buyers will seek seamless transfer between digital and physical buying and selling. Sellers will redesign and throw open their call centres and warehouses to buyers (akin to factory outlets). Thirdly, modularity and scalability will be used to extend product lifecycles. Designers will be encouraged, or even required, to use as much portability as possible. Fourthly, value will be determined by neither premium nor discount; it will be determined by exchange feasibility. Fifthly, buyers and sellers will weave themselves into integrated ecosystems in which phones, tablets and computers with banks and telecommunication providers will connect the buyers and sellers. 

These principles could lead to a new ecological logjam. The more one buys the more one will sell, and vice versa. With digitization while paper and trees are saved more plastic, metal and rare earths are potentially being generated, consumed and wasted.  If this trend accelerates, as it looks to, the planet could be burdened with profligate consumption of resources and excessive hoarding of products of multiple generations. As buyers keep looking at the earliest points of sale and resale, rather than maximal points of use and extended use, and as sellers keep looking at the earliest points of purchase and repurchase, products will only multiply exponentially.  Accelerated buy-sell (of a range, from physical goods to financial instruments) which is seen today (and possibly for several years, and even decades to come,) as an inevitable driver of socio-economic development will be seen as a fit case for accepting some philosophical and spiritual caveats relating to the limitations of the planet. A buy-sell nirvana could be a theme that would encourage ‘optimum development-optimum conservation’ (if not, ‘minimum development-maximum conservation’). Nations would have ombudsmen, corporations would have offices, societies would have crusaders and families would have thinkers who will reflect the principles of a responsible universal digital age that focuses on design optimization and resource conservation.

Posted by Dr CB Rao on November 2, 2014

Engagement and Focus in a Digital World: Need to Retain the Evolutionary Learnings

The growth of civilization is traceable to a single minded pursuit of an avocation, discovery or innovation. From the times of caveman who never relented till the art of making fire was discovered through the times of agriculturists who pursued farming as a life avocation to the times of scientists, technologists, and industrialists  who invented and refined products and processes and finally to the overarching times of administrators and businessman who pursued social and economic progress diligently, there has been one and only one factor that drove success - the relentless and singular pursuit of an objective. While nature, chance and serendipity could have played certain roles in all of these activities, and their successful outcomes, there is no denying that engagement and focus had been the success drivers.

Organizations have been the first instrument of providing institutional framework to single minded pursuit.  As organizations and businesses became complex, strategy became the route for firms to pursue success on many dimensions. Organizations then had to be recast to provide single minded pursuit through appropriate structures and cascades of objectives (“Structure Follows Strategy”: Alfred Chandler). Still, complexity remained to be surmounted effectively.  Management theories, not illogically, began to advocate specialization, focus, core competence and competitive strategy as the key tenets of success, in any avocation or domain. The 20^th century concluded thus with an organizational and strategic construct of focus and specialization as the mantra for success in any type of organization; single business or multiple business. The new digital world, however, seeks to upturn all of individual and organizational evolutionary facets, partly for the good and partly disabling in the process.

Connected disruption

Electronics had transformed mechanical, electrical and electro-mechanical devices over the last fifty years. Communication and computing have further diversified personal devices and enhanced mutual connectivity over the last twenty years. But along with the strides in the ability to archive and process terabytes of data and the flexibility to connect and communicate with anyone virtually across the globe, the pursuit of digital efficiency at work and beyond work has become the new single minded pursuit. With the advent of smart phones and tablets over the last five years, devices have become the eternal companions of individuals. The net result of all the digital developments is the opening up of globe with a touch or click.

The ability to communicate in a viral fashion with huge global social communities has brought about a sea change in social living. Facebook posts have reportedly been instrumental in reuniting a family member lost eleven years ago with his family recently. Concerts and music shows are now not averse to audience keeping their cell phones on so that they could snap and send the snippets to global communities. One need not have lifetime guilt of missing an important family wedding as the event can be easily webcast now. Facetime brings generations across miles closer home. For the working executive as well as the home maker, perpetual connectivity through a variety of devices is assured. In short, one can always have instant and perpetual touch with the digital community he or she is part of.   

Much as digitization has led to manifold increases in productivity, it has also become a disruptive force in human life. From birth, a child is exposed to digital power and dominance. As one grows up, the reliance on digital devices increases exponentially. At work and home, the ratio of devices to an individual has increased significantly. It is not uncommon to see individuals possessing multiple electronic devices; televisions and music systems in a house, and  desktops, laptops, tablets and smartphones in an office. While technology allows all of these to be seamlessly synchronized, deriving convergence from out of diversity, what is alarming is the influence of digital devices on the human mindset. The influence has indeed been disruptive already.

Portends of change

The way human race conducts itself in the increasingly digital world is set for a profound change. Over the centuries, the human race came to be divided, in common viewpoints, between ‘haves’ and ‘have-nots’ or ‘urban’ and ‘rural’ or even between states and nations. Similarly, organizations came to be divided between ‘profitable’ and ‘unprofitable’ or “specialized and diversified’ or even as national and multinational firms. Today, the human race seems to be set to be divided between ‘engaged’ and ‘distracted’ people and organizations between ‘focused’ and ‘diffused’.  At the heart of this divide lies the way the human brain is getting rewired with access to multiple devices and functionalities. Whether it is advanced countries or emerging markets, it is evident that the ecosystems are digitally geared to disengage individuals and diffuse organizations.

The human brain has the ability to store and process millions of data bytes but is wired to execute sequentially because of the need to coordinate the brain and the parts of the body. If a person is walking, the brain and body are equipped to conduct the activity of walking alone with the best assurance and safety, with brain processing the traffic and road conditions and body walking in a trained fashion with occasional course corrections from the brain. The moment the person starts walking while simultaneously talking on the cell phone or reading a book, the neurological and physical activities become distracted with serious disservice to both the activities and even more fatal disservice to the person’s life itself. The temptation of multi-tasking is probably the biggest bane of the new generation of digital life. However, the impact in terms of adversely rewiring the human brain could cast a shadow for generations to come.

Easy living, changing genetics

People who are aware of the course of evolution understand that the several ways in which the human race conducts itself have solidified through compulsions of preservation first and actualizations of achievements. This involved exposing and training all of human faculties from motor skills and sensory acuities to emotional connects and intellectual capabilities. The devices that the current generation is addicted to are designed to make life easier to this generation of human race which has mercifully acquired the skills and acuities the hard way. To the extent that the very same devices are being deployed for use by the just-born and just-growing generation, the new array of digital devices carry a huge risk of rewiring the human brain to the detriment of intrinsic faculties honed over generations of tough living and consistent learning.

Let us review a few examples. When a baby or a child listens to lullabies, stories and songs  rendered by alien voices and people through electronic media rather than through the mother’s voice, the emotional connectivity between the mother and the child, which used to be the bedrock of wellbeing and assurance is permanently eroded. When the child is encouraged to play with a robotic pup than a real pug, the million ways in which a devoted companion will respond to care and love will never be embedded in the child. When students, in schools and colleges or employees, in offices and factories, are asked to browse their lessons from computer tutorials, not only the teacher-taught relationship vanishes but also the learning processes of spontaneous questions and contextual explanations become scarce. When people at work or at home communicate through devices rather than looks and words, that true communication is all about personal feel is never understood. The list can go on, but clearly if the device-influenced lifestyles snowball as happening now it is likely that the future generations will be rewired to be intrinsically less self-sufficient. New generations may then most likely require a new set of digital devices that help them get their skills and acuities back!    

What applies to individuals applies to organizations as well. From the long lost direct emotional connectivity to the end-customer in the marketplace to the replacement of human thought processes by heuristic algorithms and computer simulations, the ‘brain’ of a typical organization is replaced by a ‘CPU’ geared to generate and process metrics than appreciate the drivers and implications of the metrics. Increasingly, organizations are compelled to operate in all of the product-market spaces; even the mighty Apple which made maximal impact through minimal products is no longer an exception. Despite the concepts of vertical specialization and horizontal collaboration, organizations are more diffused and dispersed than ever. The power of computing, connection and collaboration provided by the digital technologies have made the organizations lose their customized survival and growth skills that were imbibed the hard way through competitive learning processes. 

Human and organizational implications

The need for regaining the balance in the new digital world is clear; individuals need to be engaged to be effective and successful. Organizations need to be focused to be competitive and profitable. Individuals who continue to demonstrate a continuous high performance learning ability and firms which continue to thrive or rejuvenate themselves in the digital world validate the several hypotheses of this blog post. In the interests of larger social and economic good, however, engagement and focus need to be more universal phenomena.  

In respect of individuals, the fundamentals of genetically primed and neurologically wired learning methodologies that have provided skills and acuities to successive generations must be insulated from the onslaught of digital devices. The mother to a baby, the parents to a child, the teacher to a student, the boss to a subordinate and the mentor to a disciple are essential instruments of human learning which provide the needed emotional connectivity, ethical guidance, creative learning, practical knowledge and leadership evolution to a human being. In a similar manner, exposure to ethereal nature, endurance under physical work and empowerment with mental acumen are essential to develop a well-rounded personality. As an individual grows, he or she needs to be singularly engaged with the fundamental task at hand than dabbling in multiple activities.

In respect of organizations, the fundamentals of competitively learnt and institutionally embedded management methodologies that have provided competencies and adaptabilities to successive corporations must be reinforced with a prudent combination of human ingenuity and technological perfection. Organizational strategy and structure must remain the prime vehicles for firms to pursue diverse businesses and multiple priorities equally successfully. Firms would increasingly need to be diversified but cannot afford to be diffused. Firms also need to be focused but cannot afford to remain narrowly specialized. The optimal balance at the enterprise level is achieved when firms develop organizational structures that bring operational simplicity and focus to address business complexity and diversity. Focused organizational structures, within the ambit of a product-market agglomeration coupled with singularly engaged human talent, within the ambit of a competency-specialty network would ensure competitive success.   

Posted by Dr CB Rao on August 4, 2013