Kites Don’t Fly by Themselves: Sankranthi Thoughts for Careers to Fly!

Today, January 15 is Makara Sankranthi (also called Pongal), a farm and rural oriented festival that is celebrated in an inclusive manner by all sections of the Hindu society in all regions of India. It is also one of the few Hindu festivals that falls on either January 14 or 15 each year consistently. It is a harvest festival celebrated with great gusto and many expectations of good times in the traditionally agrarian Indian economy. The day, celebrated as Solar festival, also marks the transition of Sun into Makara Rasi (Zodiac sign of Capricon), marking the beginning of Uttarayana punya kaalam (or good, holy period). It is actually the second day of a three (in some regions, four) day festival, which connotes the much hoped for transition of families into a better period, most of the expectations being boosted by agricultural harvest starting to come to hand.

Like most Hindu festivals, Sankranthi is a socially and economically inclusive festival knitting together rural and urban communities, bringing respect to livestock especially bulls and cows, the rural storytellers (Haridasulu), spreading joys to children through new clothes, bringing out kolam skills of womenfolk with a unique focus on ‘gobbillu’, and bringing a truly festive and feasting ambience into the families. The making of Pongal is a particular highlight of Sankranthi. The festival is also marked by a variety of games and sports, some of them controversial and are not necessarily respectful of livestock or people safety. Amongst these, kite flying is a particularly favourite pastime for the festival, and the season. No wonder that Amitabh Bachchan, the brand ambassador of the State of Gujarat is seen participating in the kite festival. Kites, however, have many lessons to teach us as this blog post seeks to analyze.

From fun to fear

Kites are some of the simplest of manmade inventions that are designed and manufactured to fly in appropriate wind conditions. Originally small hard papers or card boards of square or triangular shapes, reinforced and ribbed by slim, flexible wooden reapers on all sides and across, with a paper tail and controlled by an attached spool of thread, modern day kites have assumed multiple shapes, colours and styles. From a fun pastime, kite flying has now become a competitive community pastime, with seasons like Sankranthi making skies an awesome mosaic of flying kites of all shapes and hues. As with most competitive pastimes, kite flying also has become a victim of aggressive behaviour. Flying kites in residential areas has become a threat to individual and bird safety while flying kites with maanza (threads covered with ground glass) has become real and imminent danger to human and bird life, in any area.

The first lesson of kite flying is that when competitive modernity overwhelms cautious tradition, the result is an unbridled stoking of competitive intensity and aggressive ruthlessness in a society. Be it work or exercise, sport or game, moderation is the key to universal joy out of routine activities. Resources can buy us more sophisticated kites and longer, stronger threads for kites; however, somewhere along the line one loses the basic togetherness of the pastime which is obliterated by a ‘win at any cost’ drive.  Professional and personal life needs to be lived joyously despite the competitiveness of various ‘career flying tools’ like marque institutions, custom degrees and choice specializations that money and efforts can secure. Who wins in the New India with individual career kites is of lesser relevance than painting the global sky with the India Tricolour in a fun-filled manner, collectively.

Nature as ally

One may design a beautiful or aerodynamic kite but without wind a kite cannot just fly! Yet when winds are gusty and turbulent, the design does play a part in the kite sustaining itself and even riding over the storms. There are clearly some natural conditions that make kite flying a joy, for example, open grounds, vast parks, long beaches etc. A windy day is a must but a light breeze may also be helped by appropriate kite-friendly hill terrains. Design and nature make perfect allies but one should never forget that without supporting nature a kite would never fly. It is, of course, for the designs to make the kites as the tethered flying objects with appropriate aerodynamic lift, leveraging various materials and shapes.

Design as a long term sustainable endeavour has to ally with, rather than fight the nature. From the movement of allopathic medicine from chemically derived synthetic drugs to protein derived biologics, and from genetically guided personalized medicine to stem cell based regenerative medicine, it is clear that allying with nature provides more sustainable solutions. Exploitation of natural resources or impacting beach fronts and hillsides with constructions even if they are calamity resistant are known to have caused profound ecological imbalances. Careers, likewise, get established in the right way when set up to meet appropriate environmental/business conditions. The careers take flight with beneficial organizational lift. Design of careers, at the same time, has to be robust enough to withstand or take advantage of the turbulence. A savvy finance executive knows how to garner fund inflows as much as how to hedge outflows, for example.

Launchers and flyers

While there can be kite flying by just a single person, kite flying becomes optimal when a ‘launcher’ and ‘flyer’ join together to determine the right distance between the kite (in the hands of the launcher) and the spool (in the hands of the flyer), and also the right angle and the right glide with which the kite can be launched. The launcher and flyer are collaborators in the game of kite flying with the shared objective of acting as per the wind direction. They are willing to reimagine themselves in each other’s position if the wind reverses its direction. They join and enjoy the fun of running with kite, lowering and re-launching the kite as required. They support each other in the ups and downs of kite’s trajectory using their resilience to supplement the ups and downs of wind energy.

Ideally in life, just as kites require launchers and flyers, all careers also require launchers and flyers. The recruiting panel, more specifically the human resources experts, are the launchers while the managers are the flyers. Sharp identification of talent, right placement and right launch of a career with the right glide path are essential components of a right launch pad for a successful and sustainable career. The flyer who holds the threaded spool needs to understand the kite (the aspiring employee) as much as the wind (the business environment). The kite may be (and need to be) designed and made with the best of design tools, material composition and manufacturing aids but the operating skills of the launchers and flyers determine the heights to which a kite can fly.   

  

Thread of accountability

The kite is flown with a very fine balance of freedom and control. If the individual were to let go of the kite, it may fly higher initially but will quickly drift to hostile terrains (trees or hills, for example) and eventually destroy itself. On the other hand, a kite which is held always tightly will never soar to the heights which it can rightfully soar to. In some case, tight handling of thread may damage the hands of the flyer himself! The thread and the holder are the enabler in wind conditions that are right, and also are the protector in wind conditions that are hostile. The one who runs with the kite, constantly assessing the winds and the heights and the topography, enjoys kite flying with safety and fulfillment.  In fact, under certain circumstances like wind not being there, the holder himself feels accountable and responsible to generate wind flow for the kite by running vigorously, and keep the kite flying.

The thread of accountability and empowerment in organizations and career development has a lot to benefit by mimicking the above analogy. The manager (the flyer) should have a fine understanding of the individual and his or her competencies (the kite and its design), the business conditions (the atmospheric conditions) and the flexibility the organization provides for career progression (the length and strength of the thread). The strategic skill of the manager lies in understanding all the dynamics and providing the employee with the right balance of empowerment and accountability. Like with kites that fly to greater heights, mutual ownership and timely readjustments are an essential part of careers soaring to greater highs.

Kites don’t fly; no ‘kite-flying’!     

One of the principal features of successful flying of kites is a readiness to quickly judge the relative wind velocity and letting the kite fly. Hesitant and repetitive testing of winds perpetuates a low level kite flight as the conditions tend to be ever-dynamic. From high winds to no-breeze through mild breeze, there is both challenge and opportunity to keep a kite flying. Organizational kite-flying of a different nature, of testing the waters through speculative intent and expression, can never let careers fly. In fact, ‘kite-flying’ which also connotes testing a thought for response based on which it is executed or disavowed is probably a legitimate practice in political discourses challenged by extreme plurality. Kite-flying of that nature in purposeful organizations can, however, render them, and the team members political and disoriented.

Kites are great to experience, simple to make, easy to fly and attractive to watch. Likewise, employee careers in organizations are a joy to individuals and beneficial to organizations. But like kites, careers cannot fly by themselves. As this blog post proposes, careers need to be seen as vehicles for joy and fulfillment in life but with needed appreciation and competencies. Careers need to be competitive for business growth but should not be supportive of self-destructive aggression. Careers, like kites, are enabled to fly by a host of natural considerations, design aspects, collaborative skills and managerial skills. The key for managers and employees is to appreciate the fulfillment that could accrue from a fine operating skill marked by a judicious balance of accountability and empowerment. Indian business like the Indian environment has lot of natural energy and business drift that can help careers fly, and firms scale greater heights.

Posted by Dr CB Rao on January 15, 2015

Big Five Personality Traits and Employee Behaviour: The OCEAN of Challenge in Organizational Development

“We value our people” is the almost universal averment of all progressive corporations. To give benefit of doubt, corporations and the leaders who espouse this corporate value are sincere to the statement. In day to day recruitment, performance management and talent development, however, there tends to be an in incredible emphasis on recruiting good candidates, rewarding good performance and helping employees become better, respectively. A number of behavioural tools are adopted to enable individuals better understand themselves and contribute to their improved individual performance and logically therefore better corporate performance. Firms also go to significant lengths to define the desirable characteristics in the context of the business the firms operate in. Over the years, the concept of team as being the overarching concept took root but the emphasis on individual has not faded, rightly so. 

Over the years, businesses have become more complex with competition for scarce resources and yearning for extraordinary growth. Businesses have also become more globally networked with pressures for multi-cultural outlook and compulsions for global competitiveness. The traits one looks for success in, and through, individuals have become a legion making one wonder whether organizations have started looking for super-humans as managers and leaders, if not as employees. There is, of course, the other view that if the company has clearly articulated goals, robust strategies and plans to work to, and a relentless focus on execution, all with clearly defined structures and processes, individuals as well as teams would deliver. Several models are popularized to drive team and individual performance at a firm level. This blog post proposes that all of these expectations and models work only if the Big Five personality traits are recognized and encouraged at the firm level.

Exciting diversity

Prior to delving into the subject further, it is apt to appreciate that life is actually made more interesting by the variability in human behaviour. If everyone were to think and act exactly like each other, life would be robotic. As we cruise through our schools, colleges and organizations, we are able to perceive, see, feel and appreciate substantial differences among our friends and colleagues. Such variability introduces a rich diversity of culture and lifestyle into a society. A principal reason why a foreign national, or even an Indian, gets both flummoxed and excited about India is the rich cultural tapestry across the States and the varied behavioural nuances amongst the individuals of different regions. It is sobering to think that no amount of education or indoctrination can morph the behavioural approaches of varied population. This, for example, is as natural as a Japanese not thinking or acting like an American, and vice versa. Yet, successful business gets done between culturally differentiated nations.   

That said, when organizations are established with specific objectives of focused performance for shared goals, it is necessary that inter-individual differences are kept within certain tolerance levels, much like a product characteristic is measured and reviewed in statistical quality control. Also, the behavioural volatility within an individual must operate within an acceptable amplitude for organizations to work in a harmonious yet exciting manner. All the theories of management, despite their elegant constructs, do not provide an authentic basis for understanding why employees behave as they do. An understanding of the structural basis of inter-individual and within individual differences in human behaviour and cognition would be necessary. Such an understanding would help organizations and leaders neither dismiss such differences as ‘noise’ nor accept them as ‘destiny’.

Neuroscience

In scientific circles, neuroscience has emerged as an important branch of study which can help identify variability in perception, thought and action between individuals and within individuals. Methods that provide measures of brain’s neural activity (such as functional MRI or fMRI, electroencephalography or EEG, positron emission topography or PET and magnetic resonance spectroscopy or MRS and diffusion tensor imaging or DTI) have been used to study the neural bases of individual differences in cognition. Journals dedicated to neuroscience, psychology and psychiatry routinely carry several scholarly and research based articles on how such methods can identify the structural basis for inter-individual differences. For example, one of the critical parameters of leadership is decision making capability. In decision making, fast decisions in most cases come at the risk of reduced accuracy. This phenomenon of speed-accuracy trade-off as well as the switch between cautious and risky behaviours have been studied in neuroscience wth fMRA studies of certain brain circuitry.

Neuroscience offers explanations why certain individuals would have more specialized skills than others. It even explains why grey matter in a physiological sense is important (rather than joked about) for determining various cognitive capabilities of different individuals. While neuroscience may offer great clues to explaining human behaviour patterns it is unlikely to be of any real time help to corporate leaders in understanding and managing individual and organizational behaviour. MRI scans cannot obviously be the recruitment filters; nor can MRIs be installed to select members for collaborative or competitive team formations. Just as psychological assessments of human behaviour have their limitations in assessing managerial potential even the more diagnostic neuroscience studies can help select employees who could possess the desired cognitive capabilities. That said, neuroscience studies may throw light on the personality and intelligent traits that could be of relevance in specific organizational contexts.

OCEAN of Big Five

While there exist over 100 personality traits in management literature, the Big Five Theory of human psychology hypothesizes that five core traits make up human personality. These five traits are used by psychologists to describe the fundamental dimensions of personality traits. These comprise four positive traits and one potentially negative trait. The four positive traits are Openness, Conscientiousness, Extraversion and Agreeableness while the negative trait is Neuroticism (together referred by the acronym OCEAN). Research has shown that each of the traits correlates with certain anatomical dispositions of different regions of the brain. Psychometric questionnaire inventory seeks to quantify the level of each of the fundamental dimensions and more recent research is attempting to establish a correlation between results of questionnaires and results of brain imaging studies. While the research is welcome, the enormity of task in relation to multitudes of international cultures and billions of individuals makes it a practical impossibility if universal applicability is desired. Rather, it behoves organizational experts to define them in organizational context, and help employees appreciate their traits in terms of individual amplitude and inter-individual variability with a view to harmonize for individual and organizational effectiveness.

Extraversion (or extroversion) is the trait of being lively and confident and possessing the quality of enjoying being with other people. It is characterized by sociability and talkativeness as well as assertiveness and excitability. Extroversion is seen as a key leadership enabler. Conscientiousness is the quality of taking care to be able to do things carefully and correctly. It reflects dutifulness and self-discipline. Openness is the quality of being honest and not hiding information or feelings. It is also about the quality of being able to listen to, think about and accept other people and other ideas. Agreeableness is the quality of being pleasant and easy to like. It reflects a tendency to be empathetic and cooperative. Neuroticism is a core trait with shades of negativity like being worried and being prone to experience and express unpleasant emotions easily (like anger, anxiety, depression and vulnerability). If an employee needs to be successful the positive four traits of emotional stability and affinity must be strongly displayed and the negative trait of emotional instability must be minimized.

Big Five Challenge

The challenge of maintaining a beneficial balance between the positive four and the negative one traits is that the life is so stressful and competitive that constantly the positive traits are suppressed and the negative trait stoked by people, events and processes. As the rewards and recognition systems in organizations are governed, by and large, by the final outcomes with little to differentiate on which traits worked for the winners, the tendency is to adopt personality traits that provide winning outcomes. With the proliferation of ‘trait theories’ there is also a greater emphasis on visible and surrogate traits rather than the fundamental traits. It is important that conscious and persistent efforts are made by individuals and their stakeholders (be they parents, friends or teachers) to instill (or enable the ability to enhance) the positive traits and minimize (or instill the ability to moderate) the negative trait. As one’s consciousness increases with age and education, focus should be laid on the importance of the Big Five traits.

The biological origins of the basic personality traits cannot be ignored. Research has shown how the grey matter in various segments of the brain correlates with the level of each of the five fundamental traits. This, however, is a biological reality for an individual. What one can do, however, is to be cognizant of the traits and work on them. Literature suggests several methodologies to do that. Observation and introspection are the universally applicable methods that are simple yet effective. These, however, require some of the basic traits themselves. For example, without being open one cannot introspect. Without being extravert, one may not have the people group to observe at all. If one is not agreeable as a person, one may not receive feedback at all. By the same token, if one is neurotic, one would miss the perspectives of objectivity and analysis. The importance of constantly working on the five core traits in life’s progression is self-evident.

Ancient Indian science

To circle back to where we started, organizations do value people. However, it is to be understood that people are valued, in a true sense, for the positive traits they display and stand for. All outstanding leaders are epitomes of positive traits (besides, of course, technical, scientific or professional competencies that are called for). While an individual is, by and large, responsible for his or her own development, organizations can gain a lot by creating ecosystems that promote positive traits in employees. What the typical organization seeks by way of competitiveness can be achieved only when it has employees who are open, conscientious, extraverted and agreeable and non-neurotic. This blog post demonstrates that rather than get diffused over multiple traits, it would be sensible for individuals and organizations to focus on these five core traits to reflect upon and develop. 

     

While modern science has provided imaging and neuroscience as two potent aids to understand individual traits and intra as well as inter individual differences in traits, they are still confined to research domain; they are also too expensive and too impractical to be of use on a routine basis. Fortunately, ancient Indian science has provided a much simpler and more universally deployable methodology to develop one’s traits positively. Yoga and meditation are established to be of help in shaping the Big Five traits with positive bias. Enlightened organizations have, therefore, started giving importance to yoga and meditation. The recent Gyan Sangam, the high level two day meet of India’s top bankers in Pune, was flagged off with a session on yoga and a leadership lecture by Swami Sukhabodhananda who is well known for his coaching on value based leadership. This initiative may be symbolic but is a powerful one at that!

Posted by Dr CB Rao on January 10, 2015            

   

   

Multi-polar Strategic Management for Unlimited Growth: The “Scale-up with Start-up” Model for India

Theories of strategy and execution are replete with exhortations of how focus and specialization help deliver growth and value to corporations. There are, of course, several examples of companies trying to do too much by way of diversification and achieving too little by way of sustainability. Such eventuality is almost akin to one individual being inadequate as a hero for all occasions and events. This criticism of doing more for achieving less is often made against Indian firms which have a strong urge for growth and an almost obsessive compulsion to get into any field which happens to be the flavor of the season. Such critics point to the example of Apple which has a leadership position with a focus on just five product lines and only one or two products in each product line, even cumulatively over a period. The implication obviously is that by focusing so sharply and executing so perfectly, a firm can achieve industry leading growth.

Apple, however, is an exception rather than the rule. One has at the other end of the spectrum 3M which believes in a continuous flow of innovative products every year. Professor Michael Porter tries to tackle the conundrum by hypothesizing that once we define an industry we operate in, there could be a slew of generic strategy options that the firms in the industry can successfully pursue. He says that diversified firms can be as successful as focused firms. However, even Porter does not answer if unlimited growth is indeed possible for any firm and a law of diminishing returns from excessive expansion or diversification does exist as a hard fact of industrial economics. Many business leaders opt for either cocooned specialization or wild diversification without applying appropriate logic. This blog post proposes that multi-polar strategic management which pursues multiple business lines is possible, and is indeed relevant for India, if a ‘scale-up with start-up’ model is adopted.

Limits to growth

There are certainly limits to growth but there also exist limitless options for growth, especially in India. Natural resources in the planet are finite; be it land space, ores and minerals, oil and gas or water and vegetation. These determine the limits to growth. At the same time, there are natural resources that are abundantly or seasonally available be it solar power, rain water, natural winds and there are usable resources than can be recycled, including all man-made products. By focusing on which resource can be prudently leveraged human ingenuity can continue to push the limits to growth at progressively higher levels. Over the years, alternative materials and products have been discovered, adapted and commercialized. The emergence of shale gas an alternative to conventional crude oil and solar power as an alternative power source are just two examples. 

Steering clear of the nature’s limits to growth, there are various other limits to growth that operate through disingenuous corporate or human behavior. The first is aspiring to grow without understanding economic, demographic and technological fundamentals which generate the basic demand. The second is seeking to grow without having the patience to last through an economic cycle. The third is pursuing growth without a sustainable competitive position within the industry. The fourth is pursuing growth in an industry which is already well catered to by several firms. The fifth, of course, is a risk-averse organizational culture. The fifth factor is important because all growth entails risk and the risk taking ability of an organization determines the gearing for growth. The sixth factor is one of leadership myopia with leaders failing to see a broader vision and accordingly failing to develop multiple leaders who can establish and scale up multiple businesses,   

Opportunities for growth

In an emerging market like India, opportunities for growth far outweigh limits to growth. The very basic needs of infrastructure of various sectors (transport, housing, education, water, sanitation, power, water, oil, healthcare, banking and food, to name a few) are enough to trigger mammoth growth in infrastructure and a host of downstream industries. If we add to this the desirable goal of getting these to international service standards, the growth opportunities would be even higher. An economic environment that supports growth is all that is required because unlike Japan or US, India has a huge domestic market that needs to be satisfied while providing more affordable products and services for other global markets. India’s own growth story, however halted it may have been at the Hindu rate of sub-5 percent growth, illustrates this fact.

In a growth paradigm, nothing succeeds like success. India’s first industrial revolution, in the post-independence period of 1950s and 1960s, of heavy industries and massive river dams has created the first profile of a middle class that can be benefitted by economic development. The later stage green revolution of the 1970s and 1980s brought some uplift to the rural population even though it was skewed in favour of the landed class. India’s Information Technology boom of late 1990s and early 2000s, post-economic liberalization, has created a whole new youthful middle class with significant purchasing power and a capability to stimulate the growth of various sectors such as housing, automobiles, consumer durables, consumer goods and apparel. Social and economic infrastructure development from now on would provide an even more powerful and more multipronged opportunities for growth in India between 2015 and 2030, by the end of which period India should be the third largest economy of the world.

Growth deliverers

The Government of India with its belief in a public sector led self-reliant socialist economy delivered the first wave of growth. A more agrarian oriented Government with the goal of food self-sufficiency delivered the second wave of growth. A largely private sector led information technology revolution that moved from a start-up scale to a globalized scale delivered the third wave of growth. The prospective infrastructure led growth wave would now require a powerful combination of the big business houses, established public and private sector corporations and intellectual think-tanks to deliver epoch making growth, progressively by 2030. The concern in the current scenario, however, is that the big, established entities seem to have lost the flair and passion to grow adventurously and aggressively as they did only a few years ago (just to recall a few examples, Tata Motors, Tata Steel, Ashok Leyland, Mahindra & Mahindra and L&T at a company level and Ambanis, Hindujas, Jindals, Dhoots and Birlas at a business house level set scorching paces of growth from the 1970s in spite of the licensing limitations of the period).

    

In addition, a host of public sector companies expanded and diversified aggressively all through the 1960s to the 1990s while certain government wings provided growth impetuses significantly during the same period; for example, SAIL, BHEL, ONGC, GAIL and IOC as companies, and oil, power, banking, steel and space as sectors. Growth in this context connotes not merely increase in revenue but scaling up of new product lines and business lines as well. In contrast to India’s own past performance and the current air of global expectancy on India, all of the entities seem to have lost the mojo to grow through diversification. It is worrisome if the mantra of focus continuously articulated by management gurus has resulted in the current cautious approach. With the unveiling of new initiatives such as NITI Aayog (National Institution for Transformation of India) by the Prime Minister Shri Narendra Modi, hopefully the impetus would return. However, large corporations, whether private, public; and Indian-owned or foreign-owned, and business houses must start owning up leadership perspectives that enable multi-directional business growth. 

Diversity beckons

India is a land of development opportunities. There is no reason why Tatas need to be content with just one aviation initiative; the group by itself can initiate and compete for a number of other infrastructure projects too. In collaboration with other related groups like Shapoorji & Pallonji, Tatas can form a collaborative alliance to tackle the challenges of resources for infrastructure development while leveraging the capabilities of existing group entities. When Ratan Tata can bet on e-commerce initiatives through personal investments, there is no reason why Tata group cannot bet on e-commerce. There is also no reason why Indian software giants cannot diversify into electronic hardware. The only reason that can be attributed for such big groups not being as entrepreneurial as they should be is the management logic that focus alone would pay at a standalone corporate level, and core and non-core distinctions must be made at group levels.

There is another school of thought that says that being ‘asset light’ makes better economic sense. That may be true for developed nations but India needs productive assets to generate wealth creating activities. India needs to create huge capacities in multiple areas to lead development. Banking and financing paradigms must be restructured to encourage asset heavy investments that are long term value generators. Banks must be allowed to capitalize with cheaper foreign capital and backload the repayments and interest payments from the Indian infrastructural investments. Among the established Groups, probably Virgin Group of Richard Branson is a role model for entrepreneurial diversification of large scale enterprises. Virgin venturing into commercial spaceflight is an example. The only tenable argument for large companies and groups being non-entrepreneurial is that their structures and processes no longer allow the nimble-footed competency which a new start-up activity demands.

Start-up to scale-up

India is in the throes of a start-up culture. More graduates of premier institutions are willing to opt for start-up careers. Directors of Indian Institutes of Technology and Indian Institutes of Management are of the view that the shift towards start-up culture is what the country needs. A closer look at where the start-up culture is shaping up points to services and e-commerce sectors than anywhere else. It seems to be another needless flight of technical talent to areas less warranted. Over and above that, infrastructure is hardly the domain in which individual start-ups can gain a toehold, let alone grow. If India is to be infrastructure-endowed there is no alternative to big groups and big companies launching their own infrastructure start-up units. The need for infrastructure start-ups is dictated by the need to combine entrepreneurial spirit (which only a start-up organization can provide) with infrastructure financing (which only big business can provide).   

India’s own tryst with some of the biggest infrastructure successes proves the point that when large establishments start up big infrastructure projects with entrepreneurial leadership and processes there is a greater chance of successful infrastructure development. Konkan Railways, Delhi Metro Rail, Mumbai Metro Rail, IRCTC, Airport projects in Hyderabad, Bengaluru, Delhi and Mumbai are examples. Many times, some of these projects are cited as successes of privatization. The real reason for their success, however, is the power of big business combining with a start-up entrepreneurial culture to start small, and scale up rapidly. There are 500 top companies in India with annual revenues upwards of Rs 1500 crore, and reaching as high as Rs 500,000 crore, covering both public and private sectors. If each of these companies, on an average, establishes 10 infrastructure start-up companies, thus totaling 5000 start-ups in total, and progressively scale up with their resources, India’s infrastructure would be dramatically upgraded.

Posted by Dr CB Rao on January 3, 2015

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

    

From Being Different to Becoming Differentiated: A Cumulative and Aggregative Technological Model for Smart Differentiation

A popular view is that in an industry, there tend to be only a few leaders and several followers. Another view is that a typical industry structure comprises one pioneer, a few innovators and several followers. A more refined view is that a typical industry structure is better defined by a pioneering innovator, a few incremental innovators and several followers. In emerging markets such as India where barriers to entry are low and barriers to innovation are high, and where technologies are imported and replicated, the typical industry structure is fragmented with several look-alike players. Yet, industries in emerging markets are characterized by intense competition with look-alike products or services trying to be similar and different simultaneously. Some industries in India such as consumer goods and pharmaceuticals are archetypes of industries where look-alikes wage a no-holds barred war to be different.

   

The unique nature of industrial development in India (probably even in China and other Asian markets) which promotes small and medium enterprises facilitates regional development of local enterprises which clone a few national companies. The emphasis is on being different in terms of branding and packaging or in terms of marketing and promotion. Multiple brands with little to claim by way of differences in product characteristics compete to be different. In most cases, the channel becomes an enabler while packaging, promotion and pricing become differentiators; the core product or service has little to differentiate itself. Even highly technology driven products find it difficult to remain differentiated as technology and manufacture become commoditized. The smart phone industry which was a technology flagship is a classic example. This blog post proposes that an approach that accumulates and aggregates technological developments in terms of five smart differentiation principles is the key to sustainable differentiation.

Defining differentiation

Differentiation is not merely being different. When every smart phone has a rectangular profile, the beleaguered BlackBerry has come up with a square design. It is different certainly but is not seen to be offering a new benefit that could make it a popular smart phone. Samsung’s Note 4 has an edge design to bring differentiation to the ageing phablet line-up and so does LG curved smart phone. These are different designs certainly but are seen to be complex to operate. The rotary Wankel engine brought a revolutionary engine to automobile design but had little to offer as a differentiater to the customer. In contrast, the phablet, although in one sense a large scale small phone or a down-sized tablet, became a differentiated product. Extending 2 wheel drive to 4 wheel drive has become a differentiating factor for rugged all-terrain SUVs.  

Differentiation arises primarily from a unique combination of innovative product design and superior functional utility.  It can arise also from superior customer service which often emerges from deployment of unique technologies. In some cases, companies get associated with certain industry leading characteristics that extend beyond products. Good examples are Apple getting associated with product elegance, Toyota with product quality, Shinkansen (Japanese Bullet Train) with timeliness, L&T with construction quality, Tatas with ethical business, and Harvard with management education, for example.   All of these position the product or the company in a differentiated manner in the eyes of the consumer, evoking trust and confidence. Differentiation leads to respectful recall of a product or service by the customers at one level and expectant anticipation of a new differentiated product or service at another level.

Cumulative and aggregating  

Differentiation is rarely a one-time occurrence. Like learning, differentiation is a cumulative experience. Continuous differentiation alone can place a firm or a product line as truly differentiated. The challenge here is one of ensuring a raising bar of differentiation, and leveraging design, manufacture and marketing to raise above the raising bar through successive product introductions. One of the most striking examples of such differentiation has occurred in the field of medical imaging and radio/laser therapy domains, with successive developments achieving sharper imaging and more precise surgery respectively. Incessant march of technology is the principal support for continuous differentiation. This includes a clear understanding of the deficiencies of current technologies and development of gap-filling technologies.

Like learning, differentiation is a judicious combination of specialization and diversification. A door locking mechanism can become more specialized in terms of mechanical sturdiness, key grooving complexity and multiple turn locks. A door locking mechanism can also be made different through number locking or biometric locking (finger print or iris). By combining the features of all of the four approaches, however, a truly differentiated locking mechanism can be developed. The success of the lock maker as a differentiated lock maker would thus depend on specializing in the core locking technologies and integrating diversified locking technologies. The same has been true for watch making too. Mechanical capabilities are integrated with a range of digital technologies, including GPS technologies. The next frontier in watch making is opening up with integration of cellular and medical technologies.  Differentiation is a resultant of cumulative and aggregating technologies.

Smart differentiation

Differentiation would appear to pose challenges of a highly investment-intensive and design-specific technological process. Firms believe that huge upscale investments in R&D would be required to be a differentiated firm. As a result, many firms would choose to be fast followers or licensors rather than pioneering differentiators. The reality, however, is that differentiation is as much a function of smart use of technology as it is of intense development of technology. There are certain principles of smart differentiation which can help firms become and stay differentiated even with reasonable investments in technology. Observation, Sensing, Imagination, Learning and Timing (OSILT) are the key to smart differentiation.  The following five principles of the OSILT model of differentiation illustrate.

Observe a future

One of the fundamental drivers of smart phones has been the camera technology. Integration of camera functionality of increasing sophistication with higher megapixels and photo editing software has differentiated successive generations of smart phones. However, until recently all makers gave increasingly superior technology (up to 20 megapixels level) to rear cameras and allowed the front cameras to languish at a 2 megapixel level. Clearly, the established notion that cameras are only to take pictures of others has been so deep-rooted that even the most innovative smart phone makers perpetuated the past despite the hugely increasing popularity of selfies for the last few years. It is only now that a few makers are providing an equally capable front camera in smart phones. The lesson is that the key to differentiation could be so obvious that it escapes attention. Smart observation can help utilize available technologies to achieve substantial differentiation.

Sense a future

Sensor technologies are emerging to be game changers as computer chips have been. Virtually any product can be refined or re-engineered with sensor technologies. Some of the earliest applications have been on the shop floor with sensor driven line logistics.  Today, driver-less cars are a practical reality due to sensor technologies (coupled with imaging, navigation and telecommunication technologies). Biological sensors would be the next frontier in sensory technologies helping the individuals and healthcare sector provide proactive and effective healthcare delivery.

Imagine a future

Differentiating individuals or entities are good in imagination. They constantly imagine how life can be made better. Magnification technologies have revolutionized surgeries. Cellular labeling could provide even greater precision in future. The emerging use of drones for a number of applications is a practical example of how imagination provides new differentiated solutions.  One may imagine how a Bed and Pillow Combination (BPC) could move from being just a sleep aid to being a health monitor and wellness provider. Given that sleep of 6 to 8 hours, on an average, is the typical daily routine of an individual it is easy to imagine that BPC has a much better potential to provide wellness than an annual medical check-up!

Learn a future

Future is built by individuals who learn constantly. Learning comes from a host of inputs. A designer who is entrusted with differentiation, however, has a special responsibility. While books of science and engineering, design laboratories, simulators and testing arenas are all essential for the designers to learn and develop, the greatest learning comes from the practical behavior of current products in the field. The linkage between the designer and user has to be set in the real time world rather than through observations and analysis of market researchers. In differentiated companies, individuals of all departments, including the CEO, learn from the marketplace on a continuous basis.

Time a future

There are two views on innovation-led differentiation. One is that an innovation would be off mark if it is commercialized ahead of market preparedness. The other is that prompt introduction of innovations creates its own markets. If any or all of the above four methods of are utilized to develop a differentiated product or service, it would be an injustice to socio-economic development to hold back on such differentiation. That said, certain geo-political or socio-economic considerations dictate or influence the timeliness of innovations. Given India’s developmental aspirations, innovation and differentiation that support development of smart cities, good governance and Make in India would be timely for a new future for India.  

OSILT as a design faculty

Competitiveness of a business accrues from superior faculties. Adoption of methods of sharp observation, sophisticated sensing mechanisms, imagining the use of ordinary to deliver extraordinary, learning from the past as well as the present and timing the innovations ought to be developed as a core faculty for designers. This would imbue them with the ability to make products or delivers services that are not merely different but more importantly truly differentiated. Development of such an OSILT faculty needs to be a strong cultural facet of differentiated organizations.  

Posted by Dr CB Rao on December 25, 2014           

  

  

APT (Andhra Pradesh – Telangana) Model of Development: Apt for the Whole of India?

‎Ever since the constitutional division of Andhra Pradesh took place early this year in June 2014 with the carving out of a separate State of Telangana, an interesting competitive battle of development aspirations has been going on between the Government of Andhra Pradesh (GoAP) and the Government of Telangana (GoT). This battle is based on models of economic development being pursued by the respective governments. Although appearing to be competitive, the two models actually reflect a single integrated model that has socio-economic development ramifications for India as a whole. This blog post names this model as the APT Model of Development (APT being an abbreviation of Andhra Pradesh - Telangana)‎ and examines if the APT model is also apt for the nation at a macro level.

With the formation of the State of Telangana, India has 29 States and 7 Union Territories. The organization of India into several States based largely on linguistic and micro-ethnic considerations got challenged as a concept in November 2000 with the carving out of certain regions of the large States of Uttar Pradesh, Madhya Pradesh and Bihar into the States of Uttaranchal (later renamed as Uttarakhand), Chhattisgarh and Jharkhand, leaving the residual states as well in each case. The linguistic basis has been challenged even more with the recent AP and Telangana division. Some believe that this trend towards smaller States could continue in future. Political considerations apart, the APT division brings out an economic model of development that needs to be understood better in the Indian context.

Aspirational icons

The APT model has been driven by developmental aspirations and political expressions thereof. The respective Chief Ministers, Nara Chandrababu Naidu (NCN) of Andhra Pradesh and K Chandrasekhara Rao (KCR) of Telangana became iconic leaders aspiring for, and articulating, transformational change in the two States. NCN and KCR have been aggressive in talking about development and welfare schemes almost on a daily basis. Given the natural endowments on one hand and the development deficit on the other in the residual AP, NCN has felt inspired to conceptualise more schemes than his counterpart. In fact, he calls the State of AP as the Sunrise State. Some of his aspirations have been economically compelling as well as financially audacious; development of a chain of 12 ports on the Eastern Bay of Bengal corridor, creation of a new super capital in the Guntur-Vijayawada region, development of multiple smart city, metro rail and airport projects, for example. 

Although having Hyderabad as the continuing capital, business hub and wealth generator, KCR does not wish to rest on the past laurels either. He has dreams of a magnificent Hyderabad with the world's tallest tower and a host of skyscrapers around the Hussain Sagar Lake, establishment of a new pharma city and development of multiple industrial parks in and around Hyderabad. On the development front, both the Chief

Ministers are committed to write off the loans of indigent farmers (this being their principal election plank) and provide a host of updated welfare schemes (health and water, for example). AP has since tasted some success in securing some greenfield manufacturing projects in the largely agrarian regions (eg., Hero Motor project) while Telangana is hoping to build on its strong business and industrial base (eg., Amazon in Hyderabad). Clearly, both the CMs are leaving no stone unturned to keep developmental aspirations high on people's agenda.

Development passion

This aspiration-articulation model is a sort of role reversal for the traditional polity. For the first time, super-projects of a mega scale are being talked about, almost on a daily basis. Also, for the first time, silent functioning on electoral promises has been replaced by articulate focus on the promises made, and more. Apart from the traditional “look towards the Centre” approach for funds the two States have been trying to directly canvas with developed nations like Singapore and Japan (and industries therein) for development of super-projects in the States. AP even wants China to look at a bullet train project for the State. Part of this new approach may be attributed to the desire of the NDA Government at Centre to enable greater financial and economic devolution to the States. That by itself does not take away the merit of the self-inspired passion for development that the leaders are projecting.

Development is at the centre stage of political debate and economic governance in the New India. ‎ The programmes, projects and schemes announced by the Prime Minister Narendra Modi such as Make in India, 100 Smart Cities, Jan-Dhan Yojana, Swatch Bharat have led to a new renaissance in economic thinking as a driver of political consolidation. However, at the APT level, development has assumed greater focus and urgency given the local issues and higher visibility (of either performance or non-performance). There is an effort to implement in five years clearly visible development projects that could support electoral wins in the next elections. This approach is both laudable and self-propelling. Clearly, what does not exist in India but has propelled growth elsewhere (bullet trains, broad band, smart cities, 24X7 power, for example) must come to India but without any disadvantages that have been noticed elsewhere.

From PPP to GTG

The history of economic development in India has started largely in the public (government) sector in the 1950s but moved to public-private partnership from the 1990s. There is, however, a perception that even the private participation is backed only by funding from State-owned ‎banking system (the latest being a plea for bailout of the financially distressed low-cost airliner SpiceJet by Banks!). With the banks already burdened with stressed assets as a result of backing private and public sector infrastructure, the need to find the required resources of mammoth proportions is a huge challenge. If the external diplomacy of the Prime Minister and APT Chief Ministers is an indication, there is a well merited intent to move towards a global Government to Government collaboration to meet the funding needs. All international governments recognize that India is the only emerging market that is set for strong and sustainable growth, which realisation must be leveraged by the Indian governments, Central and States, as a new model of Government to Government (GTG) collaboration.

While the advanced nations may have a lower ability to import and absorb Indian products‎ due to their lower economic growth, they are in need of finding new markets for their infrastructure equipment and capital goods. Bullet trains and metro rails as well as power, mining, drilling and construction equipment are prime examples. India needs to find a new paradigm by which Indian development needs provide a market for such industrial and infrastructure products but are also made in India to the extent possible. The good old phased manufacturing programmes of the 1970s and 1980s that were successful in getting new technologies for the Indian automobile industry need to be revived in an appropriate capital goods format model. Starting with Completely Built Units (CBUs) through Semi-Knocked Down (SKD) to Completely Knocked Down (CKD), phased manufacture is the way to go. However, CBU and SKD imports should be tied to long term interest-free aid, and only CKD imports should be allowed on commercial basis. 

Growth with division

The APT model has certain important lessons, each with latent pointers. The lessons are as follows. Firstly, division of States could lead to a competitive urge for development. Secondly, smaller geography, in each case, could lead to greater governance. Thirdly, natural resources hitherto neglected in a broader State emerge as ready reckoners for development. Fourthly, the development deficit stares at the people more starkly bringing out a greater development urge. Fifthly, the resource crunch brings out novel models of development. Sixthly, people and governments no longer see development merely as a transaction; they would like to remain as long term stakeholders to enjoy fruits of development. Seventhly, politically triggered division could be accompanied by economic sops. These lessons have certain pointers too.

The pointers are as follows. A competitive passion for development need not necessarily wait for a division of the State. For example, even in the erstwhile combined State, building of new capitals (for the regions of coastal Andhra and Rayala Seema) could have been considered. Development of coastal and industrial corridors or new industrial and business hubs should have been as relevant in the undivided State as they are in the divided States. Long term stakeholder concepts could have been part of all development projects (dams, SEZs and capital cities). If Centre had the financial wherewithal to grant new IITs and IIMs post-Division and grant special financial packages, they could be provided even otherwise.  There is a factor, therefore, that is beyond all this that is making the APT Model work despite all the financial challenges. And, that is iconic leadership.

Iconic leadership

In a recent event at Visakhapatnam (“Andhra Talks Business” organized by Fortune India), the Chief Minister of AP unveiled his mission to make AP the best destination in the World in stages. He said that he wanted to make AP one of the three top States in India by 2019, the best State by 2029 and the best destination in the world by 2050. He referred to his characteristic of converting challenges into opportunities and outlined various missions and development projects he had in mind for the State of AP. He also disclosed that various international governments such as Singapore and Japan are keen to collaborate with, and invest in, AP. He also brought out his camping in Visakhapatnam in the wake of Cyclone Hudhud and working ceaselessly with his government agencies and people to restore power, telecommunications, water and food supplies and, more importantly, public confidence in a manner that no national or international Government could do thus far. The progress and success of APT Model and the Sunrise State concept of AP as a preferred global destination will be keenly watched by experts and laymen alike.

India is a land of natural resources and enterprising people. India is peace loving and growth oriented. The developmental aspirations that were triggered, and further unleashed, by the division of Andhra Pradesh into two States of Andhra Pradesh and Telangana are common across all the States of India. India needs every infrastructure and every development that is promised in the APT Development Model by the CMs of AP and Telangana. APT Model of creating new capitals, new smart cities, new industrial hubs, new business districts, new entertainment parks, new coastal corridors, new metro rails, new bullet trains, new power plants, new IITs and IIMs, so on and so forth is indeed apt for the whole of India. It is apt to leverage India’s huge land, water, solar, wind and mineral resources for development. It is also apt for the Governments, Central and State, to consider global governmental collaborations to generate the massive investments and access innovative technologies. However, nothing is more apt than having iconic leadership that is passionate, expressive, committed and diligent about India’s development options. In the overall, the APT Development Model is certainly apt for the whole of India.    

Posted by Dr CB Rao on December 21, 2014