Not documented equals not done-leads to great quality or checkbox mentality?

While reading professional standards, it struck me that the basic premise of documenting a professional services engagement is that in case the professional is sued for malpractice, the working papers will prove the extent of, and diligence put in, the work done. Of course, it has positive uses also such as helping plan the assignment, building the knowledge bank for recurring assignments, and infusing a general discipline into the whole process. Also, there is always merit in having a checklist to avoid making mistakes during complex processes. Hence, I cannot reasonably argue the merits of following a checklist/process. The only issue is whether the person performing the assignment, will consider the checklist/standard as the end of his responsibility, given the protection from negligence lawsuits filed by disgruntled clients.

So now we are at a corundum. The protection from negligence lawsuits is the trigger to motivate professions to comply with service quality standards. But senior professionals themselves write the standards, so chances are they would incorporate recent memory, and rarely include future looking requirements identified from academic research. For example, India is going through several paradigm shifts in terms of introducing IFRS/XBRL/e-filing. But while ICAI has been quick to clamour for new professional work in these areas, it has been slower to issue fresh/modified guidance. And this is not a new phenomenon. New standards are often issued after the horse has bolted from the stable(viz scams/issues/controversies). For instance, while complex financial instruments valuation made the headlines in 2008, their formal auditing guidelines were published only in Oct-11. So for mistakes done before that, the auditor could claim protection. And some standards have been issued only when the ICAI has been dragged kicking and screaming. For example,the reporting standard on segment reporting/cash flow statement needed SEBI to step in, and cut the red tape.

So how do we motivate professionals to go beyond the minimal standards? There could be a best practices repository, and the professional submitting the most/top rated ones could be awarded. Or there could be awards for uncovering the highest amount of scam, mistakes, issues(subject to client confidentiality agreements) etc. Also, the data base could have a weightage while selecting auditors for key assignments and complex work. Lets see if this idea sees the light of day in my life!

Burning issues remain that way because people don't delve into data

Recently, I presented a business plan to set up a chain of rural warehouses for storing post harvest produce. Amongst the 4 member jury, 2 of them had no prior experience in the agriculture sector(investing/operations) etc, and this showed in the slightly naive questions they asked. While my team's rigorous ground work helped, it opened my eyes to the fact that people often do not seek out publicly available data on the internet, and prefer to rely on the sensational and biased media reporting. This is why several burning issues/misconceptions prevail on the net. Some of them are below

• Human rights violations by police/armed forces:-Activists are prompt to critique the 'rampant' human rights violations under AFSPA and other laws, but forget that the members of police/army are often drawn from the same poor classes whom they oppress. Also, the numbers are not analyzed(how many incidents vs overall scale of violence) etc
• Agricultural input subsidy:-Lobbies commission exquisite reports about how agriculture needs subsidized electricity, seeds, fertilizer, higher MSP, cheap loans etc. What is not highlighted is who gets the lion's share of these(not small farmers), and whether these are effective or not(Prof Anil Gupta cites evidence that non sustainable farming is costly AND a failure).
• Actual volumes/outcomes:-India has good patent laws, but very few design registrations(even though at Rs 100/design it is the cheapest IP). Similarly, the number of beneficiaries of certain schemes are quite low. It is easy to understand spending trends, but not that easy to search for outcomes. But how many of us bother to do that?
•  Election result analysis:-With a wealth of data about voter turnouts, victory margins, constituency trends, election expenditure etc, there is scope for an entire website devoted to analyzing in an user friendly way(dashboards, drill down, export to Excel) election data. But this is not done, and often the only time it happens is the day post elections. Thankfully, papers like TOI are giving this wide coverage and hopefully election analysis will soon go way past the number of seats won/vote share.
• Ticking timebombs like budget deficits:-As an equity research analyst would know under the mosaic theory, weaving together numbers from different perspectives gives a good view to avoid '7 wise men of Hindustan' type of tunnel vision. Unfortunately, only consultants/investment bankers do such narratives, and in the public discourse space, this is not done. 
• Reservations:-Few issues match this in the public divide, vitiated debate and lack of data/research. there is no way to settle this issue one way or the other. But unfortunately, worthwhile data/stats are tucked away in obscure sociological research. and are not part of the public debate sphere. 

The Way forward:-Google Scholar gives access to otherwise unreachable data, and the same is true for Wikileaks/Google Public Data explorer. It is now the public duty to delve into data, atleast for data one is interested in, and then share the results with the public via open source platforms like updating Wikipedia entries, editing Wikibooks or publishing on blogs. 

Knowledge-the major new factor of production

Knowledge is power-but only when applied and commercialized. In the minds of some, knowledge is something which is taught, discussed, published and understood-with the burden of its application passed on to those in the sordid 'industry'. But they forget that one cannot separate knowledge and its application, because what use is knowledge which cannot be applied?

History is replete with examples of wars won by superb battle strategy/tactics(Genghis Khan, Alexander's win, USA civil wars, British East India conquest etc) where smart warriors used their minds to win battles over much larger foes). In the retail industry, WalMart used its information centres and data analytics to introduce JIT/improve supplier coordination etc to improve sales and profits, while actually shrinking the need for inventory. That is a great example of replacing physical assets('inventory') with information(via RFID/barcoded inventory). An interesting example is the online retail of goods, music, books, insurance search, banking etc which have replaced the need for brick and mortar store. Yes, they do depend on a physical logistics backbone for execution, but that is much smaller than the cumulative assets they replaced.  The low carbon movement has led to a spurt in energy efficiency, green supply chain planning etc which drastically lowers the resource requirement. Even in the military era, the use of nukes as a deterrent may reduce the need/size of standing armies in future. This is true also given the new dangers of cyberwar, where a handful of hackers can bring down entire countries on their knees.

Of course, the limit to this is that knowledge is always a complementary factor of production, which would always need some other factor. That said, applied knowledge can cut resource use substantially. And that is why it is necessary to increase interest, improve curriculum quality etc of the STEM subjects(Science Technology Engineering Medicine)-since the fruits of these can really help the economy in future. But non STEM graduates also should not shirk their responsibility to think innovatively on how to replace assets with knowledge. If that leads to more virtualization, so be it.

Are shareholder value maximizing managers like Valmiki of Mahabharata?

Those who have read the Mahabharata would recognize what I'm alluding it. For the others, it is suffice to explain that saint Valmiki was originally a highway robber, who robbed others for a living. Once, he tried to rob a wise person who asked him about whom was he doing all that for. When the robber replied that he was doing this to support his family, the wise person asked him to return home and confirm with them whether they endorsed his actions or not. Hea was quite confident that the very people he was doing it for, would endorse and support his actions. To his shock, his wife and children(for whom he was robbing others) said that they did not want his sins to rub on to them. They felt that a basic living was his duty to provide, but they certainly did not want to share in his sins. Shocked by this, the robber saw his error and then reformed, to become the renowed saint Valmiki.

So what is the point of this parable? Under the garb of shareholder value maximization, other stakeholders are often squeezed. Suppliers are compelled to sell at unremunerative prices and often paid late; employees are underpaid and overworked; society is denuded of clean air/water and loaded with congestion/pollution; Governments are deprived of their due tax revenues etc. But it is often argued that this is what shareholders want! But in the absence of direct democracy for routine issues, it is not possible to ask them. But if companies did ask their shareholders, I'm sure their response would be similar to that of Valmiki's family. After all, psychological studies show that humans are not 100% rational, and are often suckers for a sob story.

Now, some may point to the 'Knowing Doing' gap i,e the importance of looking at people's actions instead of their professed sentiments. There is some truth in this because people are aware of the causes and ill effects of smoking, obesity and a host of other vices. Still, they remain addicted to it OR inertia stops them from changing habits. Similarly, in the investing context, though many investors especially the institutional ones have learnt the importance of inclusive corporate governance etc, it is doubtful that they give a damm, With the exception of Norway SWF, Calpers and a handful of other investors; few investors have behaved like Valmiki's family(censure and repudiation) when confronted with evidence of corporate wrong doing. The market capitalization may suffer in fear of economic penalties but not otherwise. So the managers may not be wrong, when they feel that they have the support of their shareholder family, in whatever they do.

The online forum users who get my hackles up.

Be it Rediff/Facebook pages/online job postings etc, one invariably sees a lot of spam and clutter. This is because of the people below.

• The Q jumper:-This person does not bother to use the 'report abuse'/'customer service ticket' options but straight away plugs in a forum message
• The spammer:-This person advertises their product/services ranging from Nigerian letter fraud to work from home to online retail for certain err..drugs.
• The English challenged:-This person posts rants in broken English. Nothing wrong in that per se, just that I dislike it.
• The Agenda pusher:-This person has a rant against a person(say AzimPremji/Sonia Gandhi/Congress/missionaries) and whatever be the topic, somehow finds a way to insert their views into the fray and create a mess. 
• The CAPSLOCKER:-This person imagines that by  writing everything in caps, they will somehow get more attention. Nothing can be farther than the truth.
• The hoarder:-When a kind soul states that s(he) will email/share a resource with all those who email them, the hoarder is too lazy to send an email, but instead decides to
• The potential social engineering victim:-This person gives their personal details like name/address/contact details and even account numbers, hoping that the customer care person will take care of it OR that the

The Vocabulary premium-part 2

The limits of my language are the limits of my world-Ludwig Wittgenstein(Philosopher)
 
Earlier, I blogged on the importance of vocabulary(http://andy161.blogspot.com/2011/09/vocabulary-premium-how-digital-words.html). This post takes those sentiments forward, as I take a break from completing those umpteen assignments in the twilight days at IIM-A.

As a kid, my parents and teachers emphasized the importance of having a good vocabulary. What I am today, is significantly attributable to my reading habit, which stoked a virtuous cycle of curiosity driven reading. Yes, I did miss out on watching the TV serials/comics and other junk, but I think it was a good bargain. Of course, for some periods in between, I did get addicted to fiction, which then became a hobby. Thankfully, that hobby did not break the mental concentration and interest necessary to complete a non fiction book. I know people who can spend the night reading the latest best seller, but get bored of reading a non fiction book after just 30min. And that is NOT because of the dry writing style.

While any kind of reading will improve vocabulary, some kinds of reading are better than others for that purpose. Reading biographies, classics and the kind of stuff which could be mandatory school readings; not only improve vocabulary but are also time tested ways of boosting critical thinking and analytical skills. Therefore, do not think that reading that pulp fiction bestseller will confer that vocabulary premium, but do widen your reading,

Corporate Governance and Political governance deficit-the similarities

In 2010/2011, several scams rocked the Indian political scenario right from the mother of them all(2G spectrum allocation, Karnataka mining licenses, Adarsh housing society etc). Chief Ministers were dismissed, inquiry commissions set up and heads rolled. The media gleefully credited their reporting and publicity as a deterrent factor. All that was to change when the spurt of corporate scams errupted. Just recouping from the FY09 Satyam scam, multiple scams were exposed right from the mining licenses(Jharkhand, Karnataka), land acquisition(for SEZ, projects), Radia tapes, bribery, cases etc. While some CEOs were arrested/dismissed(Gautam Doshi, Everonn CEO, Money Matters, LIC Housing Finance), industry forums were quick to pass them off as rotten apples. But on deeper reflection, one should not have been surprised for these scams. After all, the inconvinient truth is that corporate governance reflects the society it resides in. And the common reasons are

• No separation of powers:-Like how most political parties are one man shows, so are most companies. The CEO-Chairman position is not separated.
• First past the post:-Like how 30% voting share is often enough to win seats, the same is true for companies as well. As there is no proportional representation, the shareholders with even 30% voting power can often control the Board easily.
• Redistribution focus over governance:-Few Indians would genuinely expect their MP/MLA to debate larger issues in the assembly/parliament, at the cost of giving attention to local issues. Similarly, investors do not expect their directors to show exquisite coalition dharma viz corporate governance; but instead expect share price maximization
• Opaque funding/controls:-like how political parties benefit from anonymous contributions and exempt income, often without tax returns scrutiny; company promoters benefit from related party transactions that enable major siphoning out of funds. 

However, there are major exceptions also

•   Contest ability is much more in politics than in companies, where hostile takovers are quite rare. Companies can be defeated at the market place, but rarely are corporate power battles(especially takeover bids) fought in public.
• Coalition dharma is much more relevant in companies than at the assemble level in politics. While the company must juggle the interests of workers, investors, employees, government(at the bare minimum!!), the politician is often content with jugging the interests of his voters(or atleast appearing to do so).

This analogy is so relevant that next time we blame the Government for anything, it is better to take a hard look at our corporates, to see whether we are committing the same sins or not. 

Assisted Access to e-governance services-will this be its Waterloo?

Corporate and Tax laws/procedures have been significantly modified to allow for e-governance. Some examples are mentioned below

• All excise/service tax returns must be filed online irrespective of amount etc
• Significant chunk of income tax returns are filed online 
• All company law forms/returns are filed online, and payments
• Many state VAT laws now mandate electronic filing of returns/audit reports/registration

To ensure greater data integrity, the initial mandate was that certain practising professionals(CA, CS,CWA) could pre-certify the filing, using their digital signature. But the issue then rose about accessibility. After all, not all are techsavvy, even fewer have a good broadband connection etc. Therefore, the concept then arose of Certified Filing Centres(CFCs) for both corporate and tax laws, which essentially provide administrative support for filing including scanning, uploading, reformatting etc. The primary responsibility of the filing remains with the filer though. These CFCs may be run by professionals themselves or by private parties.

The Code of Conduct of the respective professional institutes may ensure good quality work by professional run CFCs but the issue is whether this is sustainable? After all, such work does not need a CA to do it, and would result in higher fees than compared to non CA/CS/CWA doing it.

But if one throws open CFCs to persons not regulated by their respective professional councils, then the issue comes about compensation for erroneous filings etc. No amount of security deposit can really suffice, nor can the amount be readily computed. To strike the balance between public interest(lower fees) and information integrity, a good midway could be online checks/validations which would avoid gross errors, as well as random confirmations in case of outlier numbers. This is done for TDS returns, MVAT returns etc, and can be extended to all. I'm sure the IT industry would be ready to help set up and design forms allowing for live validation checks and confirmations. If this is not done, then the inevitable errors when publicized, may lead to loss of faith in the new system

Where familiarity breeds contempt-the case of IT engineers

At the outset, let me clarify my immense respect for those engineers/other graduates who have helped India's ITES companies become world beater. As someone said, success is not an accident, and the ITES industry success is due to excellent skills in management, control, quality, knowledge management etc. While these functions are often siloed, the professionals working in those companies, if having done the work sincerely, do pickup those skills especially disciplined approach, domain expertise etc.

Then why is the apparent bias against them, when it comes to MBA admissions? Read any interview of the Admissions Director/faculty of Bschools, and they all stress on the need for diversity. Now, diversity can be viewed through many lenses(education, gender, experience)-but it is usually boiled down to rejecting male engineers who have worked in ITES. Granted that they make up a large chunk of the applicant pool, but it may be too much of a logical stress to argue that consequentially they think alike, and so should be weaned out.

I must confess to an initial bias that engineers in ITES switching to MBA, were self selecting themselves out of the rat race there, and so 'were not the cream'. This is true for freshers(especially IIT/NITians) where the 'creme de lae' often study abroad or pick up plum jobs post engineering. However, despite that, the ITES guys and IIT/NIT freshers often 'kick ass' the collective derrieres of the others. Is this a reflection of their quality or indictment of the education system is hard to say, but needs some thinking.

Still, I conclude this rant by stating that before passing value judgements on a 'typical' IT guy turned MBA aspirant's CV, we should understand the person's work domain(support/coding/sales..), client work(which sectors), work appraisals(awards, promotions) and quality(say 1yr+). It is difficult because appreciation letters are dime a dozen,something like some army medals/service awards in the USA. But that does not deprive us of the responsibility of taking the time to understand the 80:20 rule to shortlist CVs etc.

So what are priority sectors anyway?

A careful listener of the annual Union Budget speech(and related commentary/analysis) would hear the term 'priority sector' used(overused?) ad-nauseum, in the context of tax relief, subsidies, soft loans etc. Some known sectors are textiles, agriculture, renewable energy, gems etc. While the rationale for some of these are political like for sugar(powerful barons in Maharashtra/UP) or wheat(powerful farmers in Punjab/Haryana), the reality is that some are prompted by quite logical considerations.  The National Manufacturing Policy of Oct-11(http://dipp.nic.in/English/Policies/National_Manufacturing_Policy_25October2011.pdf) gives an interesting analysis of priority sector, in the context of proposing sector specific interventions. To quote from Section 7 of that document,The priority sectors as identified in the Planning Commission and NMCC papers are:-
a) Employment intensive industries like textiles and garments; leather and
footwear; gems and jewellery; and food processing.
b) Capital goods like machine tools; heavy electronic equipment; heavy transport, earth moving and mining equipment; high technology equipment like telecom, power, ICT and electronic hardware.
c) Strategic industries like aerospace; shipping; IT and electronic hardware;
renewable energy; solar, wind etc; defence equipment.
d) Industries where India enjoys a comparative advantage like automotive; pharmaceuticals.

While the socialist legacy of India politics would explain (a), (b) & (c), the post liberalization budgets have slowly begun to push sectors where India has a comparative advantage viz (d). One would like to believe that the above sectors are favoured for logical reasons, and not just for crony capitalism. Hence, the purpose of this post to try giving some credit to the Govt.

How does Infibeam make money on Pi2?

While browsing the Infibeam website, I noticed that they had launched their new ebook reader with a touchscreen, to rival Amazon's Kindle. They price it at Rs 9999, and give 10 vouchers of Rs 1000 each. Hence, effectively, the kindle seems free. This strategy is not unique having been followed earlier by Gilette(sell the razor and earn money on the blades). A friend tells me that Amazon's Kindle costs over $150. Assuming that Infibeam can manufacture at the same cost(despite India's higher tax and cost structure), that means it would make a 20% gross profit on the same. Given that Infibeam's discount on books is 25%-40%(on average), it would not make more than 15%-20% gross profits on books. So they are effectively giving away their profits and making no profit on no loss on the transaction. So what is going on here? Why would anyone do it? The reason in my view is that

1. Boosting revenue multiples:-When dotcoms are valued on revenue multiple basis, then there is no reason why Infibeam should not book Rs 20,000 despite the transactions cancelling out each other
2. Shrinkage:-As any coupon seller knows, not all gift cards/coupons are used. Even taking a 30% shrinkage, that is money directly to the bottomline. And to encourage that shrinkage, Infibeam has
1. Limited the usage to 1 voucher/transaction=>If an item costing>Rs 1000 is purchased, then the user ends up paying cash for the difference. 
2. Relatively low limit(Rs 1000) for the voucher
3. Time limit of 6 months to use 10 vouchers. That implies an order once every 18 days!
4. Limited book selection of academic/other low profit books like NCERT etc! 
3.  long term customer value:-Anyone who places 10 orders of books/ebooks is likely to come back for more. This would expand the market and 10orders would increase their faith in Infibeam.

 However, one important disadvantage of this is the potential of misuse for institutional purchases. If I was a librarian, I would order Pi2, and use the infibeam gift vouchers to make purchases which I may anyway have done. So the concept of incremental customer value may be defeated.

Another issue is that are 10 orders enough to make the Indian into a book buyer? Few Indians read, fewer are willing to pay. And the surfeit of pulp fiction costing less than Rs 100 has devalued the category. Would more expensive books cause Indians to pirate them online? On file sharing sites, one can download illegally the latest version of books even costing $5 or less. I think that after exhausting the vouchers, it is optimistic to expect an Indian reader to purchase ebooks rather than download them from filesharing websites.

Anyways, I shall follow this matter with interest, and update you all if I purchase that reader

Chemical pesticides, antivirus software, education and medicines-conflicts of interest galore

While analyzing the business models of the chemicals, pharma and technology industries, I began to connect the dots and notice some interesting common threads, some of which I explore in this post.

Chemical pesticides are needed if the seeds are inherently weak or are not able to cope naturally against their pests. Agribusiness companies often produce both the seeds and pesticides, thus sparking an inherent conflict. Better seeds resistant to pests need less pesticides, which affects the business performance of that division. And pesticides ARE likely to be more profitable, because they cannot be reused/recycled unlike seeds(as Bt terminator gene is not widely used in India). of course, there are likely to be be Chinese walls as well as specialized seeds and pesticides companies which will keep a healthy competition-but care should be taken that consolidation sprees does not destroy that.

Similarly, writing robust code slowens the time to market and reduces the demand for anti virus. Why not kill two birds with one stone by leaving known errors, which you can then solve with your proprietary anti virus? A few techie friends of mine accuse microsoft of this.

And while pharma companies do not(yet) sell food, they do sell nutritional supplements of doubtful efficacy. And given the low awareness even among medical professionals of the interaction effects of drugs, cocktails of drugs may cause resistance and other unknown effects, thus boosting the demand for new drugs to combat that issue as well!

Some Indian education majors like NIIT, Educomp, Everonn, EdServ, Manipal Group etc are present/entering into both school/college education and also coaching/tutorials. This begs the question-which segment will be canibalized? Will a good school remove the need for tutorials or vice versa?

In all the above, the risk is greater when conglomerates take over independent and competing businesses. Therefore, having independent focussed players cuts the risk for consumers.

Is Kindle the new Napster?

Napster killed the records industry. When customers discovered that they could listen to unlimited music online without being forced to buy bundled tracks on vinyl CDs, they defected en-masse to P2P sources of pirated digital music. Though the records company legally fought back and got Napster shut, it was clear that digital music was an idea whose time had come. Hence when the Apple Store decided to sell most songs for 99 cents, music companies reluctantly joined the party because they realized that the customers had now tasted blood, and would not return to the old system. But despite the 99 cents thing, I can say from empirical evidence of both Indian and foreign friends, that the quantum of pirated music is mindboggling. Students already cash strapped with high tution, rent, mess and other expenses, are most willing to cut their spend(not consumption!) of music/films. Also, going online does make our ethics a bit more elastic. The person who would never dream of stealing 5cents from a blind beggar on a desolated street, has no compunctions downloading media content worth thousands of dollars. Whether it be rock music, Hollywood films(or even Bollywood for that matter), torrent sites and DC networks on college campuses/apartment complexes lead to large scale revenue linkage.

The books industry is quite similar. It also depends on backlists(old content that sells as classics like Enid Blyton, old classics etc) and on blockbusters(Harry Potter, fiction franchises). And given the higher entry barrier for books(literacy, time investment), people saw it worthwhile to spend on physical copies, given that they could use it during the downtime of commuting, breaks etc,. But the disruptive innovation of ebook readers like the Kindle, ensured that now ebooks could be as convinient as books. In metros, the factor of not having to endure traffic jams/long distances for buying books, is a factor. And though online shopping and free delivery of physical books is now a global phenomenon, ebook downloads allow for instant gratification,at prices often lower than physical books. Given that adults are likely to read books at best once(research shows that upto 40% of books go unread!!), ebooks are value for money, and save the space crunch which results from having huge collections of physical books.Not so long ago, children's books were the most expensive because publishers felt that children would prefer the paper and ink version of books. That assumption may no longer be valid. Kids used to their screens(TV, mobiles, PS3) may readily accept a fourth screen. And the Kindle costs just $79(around INR 3900). Infibeam's version of the Kindle costs Rs 9999-but they give 10 vouchers of Rs 1000 each, which are redeemable against purchases of books/ebooks within 6 months. So cost is no longer an excuse to avoid buying an ebook reader. And the high battery life(upto 1 month) and ease of handling makes the ebook readers suited to Indian conditions. And publishers(especially niche books) find that ebooks leapfrog the poor and often expensive distribution chain for physical books.

But as the music publishers found, the costless distribution of digital content is a two edged sword. Any level of digital rights management pioneered so far, has been unlocked by pirates. The publishers have been losing the cat and mouse battle with pirates. Cloud computing may hand the technological victory to the publishers, because they can control and revoke access at any time, and have on the clock information on WHO is reading their content. Still, given the vast ebook piracy which Kindle allows for, it can be said to be the new Napster, for more reasons than one.

Few Business systems see genuine goal subordination

Today, I opened a systems textbook and noticed the idealistic definition of system where a set of interrelated and interdependent sub systems, work together to achieve a common goal. And perchance if the sub system's individual goal(s) conflict with the overall goal, then the overall goal takes precedence. For instance, if the company's goal is to achieve maximum profitability, then it may conflict with an Operations Goal of 100% stock-in/Sales goal of 100% client coverage/Production goal of 100% capacity utilization. But it is naive to expect the respective functional heads to bend over and take it, just because of an idealistic sense of honour. After all, if their function underperforms, they can kiss their bonuses/promotions good bye, specially in the pay for performance mindset of today. Hence, controls and systems are set in place to ensure that sub units act as per the invisible hand to achieve overall goals. For instance

• Top Down Planning:- This ensures that sub units can only plan and execute within the overall boundaries laid down by management, consistent with superior goals
• Profit Centre and Transfer Pricing:-Profit Centre approach can ensure individual sub unit optimization, but may affect overall margins. That is why transfer pricing sets ground rules and dispute resolution for interactions between units, to ensure that the squabbles do not harm the organization too much.
• Cross Selling:- An acid test of the extent of integration between sub units, is the extent of cross selling done by SBUs. This metric is important especially for banks. Hence, encouraging cross selling will improve peer interaction, and boost overall profitability.
• 360 degree appraisal:- If peers have a role in appraisal, then atleast more civil behaviour and bother for overall goals will ensure.

But the best laid plans often fail. Top down planning without a strong internal audit function, often remains a paper tiger. Transfer pricing can be tweaked by smart management accountants, or rendered useless by faulty data/analysis. And cross selling is not always in the SBUs control, and may lead to misselling/fracturing the primary unit client relationships. These things are a reality of life in organizations, and how they are handled often determines 

Why politicans should make good managers

Those who have studied organization structure(right from Robbins onwards) agree on the pivotal role of organizational politics. To rise to the top level, besides competence and luck, one does need a very good ability to navigate organization politics. In both India & USA, several politicians have strong business interests/affiliations, which often predate their entry in politics. Indian examples are the Reddy brothers of Karnataka, Maharashtra sugar barons, Dhanbad coal mafia, Goa ministers, Jindals etc, while USA examples would cover a large chunk of the House of Republicans. So why does this happen? Below are some ideas

• Sociologists hold that where people need to divide limited resources among themselves, they start politicking to maximize their share. Whether the arguments be rational('economics'), spiritual('religion'), social('democracy') or by force('muscle power')-politics is the common strain. This limited resources fight is true for organizations as well. 
• The trend in India is to build a coalition of friends(and a few enemies) to keep out the common foe. These coalitions navigate several minefields, but are the way ahead in India atleast. Even in organizations, the manager needs to coordinate various functions, and have them work in harmony, or atleast work on the coalition model of acting on common minimum program(organization goals). Even outside the organization, the tendency to form alliances is now growing beyond the technological world, and entering areas like auto(Renault-Nissan) and pharma.
• By playing the divisive politics card of caste/region/creed etc, politicians instinctively know how to divide and rule. This skill would serve them well in organizations, where under the pretext of 'segregation of duties/maker checker concept', different sub units are designed to check and neutralize each other's over reach.

Balaji Wafers-David vs Goliath turned on its head

I recently read on Gaurang Kapupara's blog(http://gaurangkapupara.blogspot.com/2010/05/wafer-sultan-mr-chandubhai-virani.html) about the success story of Balaji Wafers. It did not strike me with much surprise, because I've witnessed this phenomenon during my travels in Maharashtra, Gujarat and Rajasthan. While its competitors(Pepsi/ITC) own the distribution relationship, with Haldiram having the premium branding, Balaji Wafers has carved out a value positioning('cheap at its price' in MBA jargon). And now, others struggle to match it despite their fully depreciated machinery and existing relationships, or maybe because of it.

Another player(Samrat Namkeen) has taken the chips market by storm. While others offer a measly airfilled 35gm potato chips pack, it gives 60gms pack for Rs 10, that too masala flavoured chips. No wonder then, that its stocks run off the few shelfs they are kept on('few' because the price differential is so much that retailers know they will not be able to easily sell the other stock if they keep Samrat).

So what do these teach us? It is essentially conventional marketing turned on its head. These players do not spend(waste?) money on branding, and instead let quality and price do the talking. This was the earlier(non American) way of doing business before the marketing/advertising craze caught on. So will these players remain or be brought out/turn into contract manufacturers? There is plenty of material for a MBA case here, if only people will bother to step out of their ivory towers and smell the roses.

Legalizing speed money-the global trend?

Today, we had a guest lecture by one of India's renowned intercultural consultants, Sreemathi Ramnath(http://www.linkedin.com/pub/sreemathi-ramnath/4/946/539). While mentioning the different cultural attitudes towards bribery, she made a distinction between speed money(paying to get your legal right faster) and bribery(getting what you are not entitled too). I dissect this issue further in this post.

1. Any temple of repute has a 'special darshan' where well heeled(or well connected) devotees can avoid standing in the serpentine Qs, and instead finish their darshan in a jiffy. Initially, this used to outrage me because if devotees are not equal before God, then where else are they equal? Then it struck me that those in a hurry would devise some way to break the Q, and end up enriching the guardians/priests. Instead, this system ensures that the temple grabs that economic surplus. 
2.  Another example is the tatkal reservation system in trains, which replaced the earlier manual manipulation of reservation charts to benefit those in a hurry. Now, tatkal transparently allocates seats to those willing to fork up that extra bit of money. 
3.  Even for that citizenship identity(the passport), those in a hurry can pay an extra fee and legally get their application processed faster.
4. Inventors in a hurry to publicize their patents, can pay the Patent Office an extra fee to get their patents published on a priority basis(and thereby signal their belief in its commercial utility and validity). 
5. The Ministry of Company Affairs can now approve company formation in less than a day, provided the applicants use a professional to pre-certify the application forms. Granted that the professional runs the risk of penalties and disbarment for wrong filing, but for the most part in routine cases, this provision allows the professional to extract a 'rent' from the company-a refined version of speed money. The applicant pays the professional extra fees, so that the processing is done faster

But then, this practice is not that new fangled. Banks, Photography studios and courier agencies have a hallowed tradition of charging more for faster delivery. The modern science of activity based costing has merely justified this practice, as has another favorite consulting jargon of value based pricing. 
Takeaway:-Try spotting more such practices around you, and do not get pissed off. It is just economic logic-the system captures the rent instead of corrupt people within the system.

What gets measured gets done-some unintended consequences from poorly designed metrics

Whether as students, employees, business persons or investors; we are measured by, and measure others by, metrics. The standard rationale for that is to use a standardized way to be more ‘objective’. But wrongly designed metrics have unintended consequences 

• ·         Research/Industry Interface/Foreign experience/Perception being given weightage in B-school rankings encourages colleges to encourage creation of poor quality research, invite industry personnel to ‘sell their company’ on campus under guise of industry interface and market the foreign student exchange as a fun trip instead of an educational experience.
• ·         The expectation to beat the street consensus EPS was a factor pressuring CEOs/CFOs to cook the books and focus on that metric, to the exclusion of cash flows, profits etc
• ·         Customer service has been given lip service in Indian service organizations(so ironic that the same outsourcing companies who win rave reviews from foreign clients do not seem giving a damm for their Indian clients), and now the regulators(IRDA/SEBI/RBI) have had to step in. If the investors/regulators/’Best Company Rankings’ had taken this factor into account earlier, surely there would have been some improvements.

So how to get it right? Like everything else in life, this is an art. But some get it right, by aligning the metrics to its strategy. For instance, the premier engineering conglomerate L&T has expressed its intention to divest some subsidiaries by 2015. Hence, the compensation plan of its top executives adjust the reported profits to exclude any divestment gains/losses, which are not wholly decided by them.

Takeaway:- List the Critical Success Factors, find the performance measures needed to address them, and then numerically express those measures as KPIs. And then you MAY begin to get it right. 

Why is the reading habit dying?

·         Expensive books-we are poor(!)

·         School Libaries-in the budget strapped scenario, that’s the last priority.

·         General dumbing down of syllabus-it is possible for State Board students to clear the Std 10 exam(maybe even get a distinction) without having read a single book.

·         Comic Books-the general introduction to reading- replaced by those same comic serials.

·         Reluctance to spend on non academic books-seen as timepass and not worth it even for food. This reluctance to spend on CPE/self development extends beyond books, perhaps because the quality of programs/training is not that good

·         Attention deficit-TV has really reduced our attention span and made us used to instant gratification.

·         Multimedia-books not multimedia. Ebook reader allows colour BUT audio books still quite expensive and presently impracticable

·         ‘Uncool’ since reading associated with being a studious type which teenagers don’t like

·         Parenting-not all literate, nor do all give time to read to their young children(best way, it worked for me atleast).

·         Indian editions out of data(both academic and others).

·         Indian ‘pulp fiction’-Gresham’s law-Wheeler’s stalls as examples-'good' books are driven out by the pulp fiction of today priced under Rs 100(I'm not meaning to sound elitist it is just a fact)

The light at the end of the tunnel

·         Libraries which supplement corporate librarires

·         Libariries on wheels-free home delivery

·         Ebook readers.

·         Comics on mobile/relaunched

Presenting data properly-some dos and donts for power point PPTs

After years of seeing poorly presented data in slides, I thought it was time to design my own.pointers for that. This post is more from the MBA side of me. Comments are welcome. 

·         Zoom in to fit within the screen:- Else within the time you scroll to and fro for making your point, you have already lost the audience.

·         Proper use of decimal rounding-Please do not show stuff like 1.348575 on slides, it really slows down the reader’s pace of comprehending.

·         Color Code cells aptly:- For cells containing key assumptions, results and information, you may like to highlight them for the audience to look at

·         Embedding is fine but check that it opens:- Embedding the spreadsheet as an icon is elegant and good, but test that it opens on the system you are presenting on. Otherwise, it could be a flop show.

·         Stick to slide wherever possible instead of opening workbook:- People have done their homework and should be convinced by your story enough to avoid demanding that. If you can present the key aspects of the spreadsheet as a slide, it will avoid breaking the flow of the PPT.

·         Appropriate units:- As per audience level and background-applies both to unit size(MM/BN/Crore) and currency($/INR)

How CAs are like doctors, archaeologists and other professionals.

A practicing CA and a visiting Prof to my college Prof FCA Gokhale sparked off this thinking with his repeated analogies comparing the medical and CA professions.  That got me thinking to other analogies, and this post was born.

·         CAs and doctors:- A good doctor reads the patients symptoms(indicators) and tacitly elicits information(like management representations!).

·         CAs and archeologists:- Given that a statutory financial audit is on transactions which happened in the past, the CA does not have a time machine to go back and check that everything was done 100% in order. That is why the assurance is ‘reasonable’ not ‘absolute’, and hence the need to triangulate evidence as good archeologists do(carbon dating, historical records, land patterns..)

·          CAs and lawyers:- Despite the abundance of lawyer jokes out there, good lawyers DO exist, and they tell it to the client as it is-merits/demerits of case, chance of winning and cost-benefit analysis. Also, they generally operate on fixed fee irrespective of case outcome. That is what CAs are supposed to do in most litigation support and advisory assignments.

·         CAs and statisticians- Statistics is all about presenting data in its most relevant and useful form. And that is what adds value to plain numbers. After all, any MIS/report is ultimately numbers sliced and diced in a context. And beyond descriptive statistics, the huge data volume and resultant sampling requirement is making CAs master the nitty gritties of statistical sampling, test of hypothesis and other inferential statistics. Ultimately, all audit standards are a fine balance between Type I and Type II error

·         CAs and detectives:- Detectives(as those detective novels/CID/films would have told us) excel in finding patterns and looking for the unexpected. In case of audits, the obvious thing is the final entries/vouchers. But the invisible stuff(non J/V adjustments, cost allocation spreadsheets, computations & recomputations, reconciliations) is often more valuable, as is peer analysis.

·         CAs and historians:- Like many other things in life, financial statements audit is a path dependent process. As generations have discovered(and will doubtless discover in future), those who forget the past are bound to repeat its mistakes. Therefore, the auditor’s permanent file provides some continuity to the audit to record the cumulative learnings/client insights. 

Are we are slowly losing our ability to think?

During a discussion with my IIM-A strategy Prof Sunil Sharma, in the context of dependence on spoon feeding, he mentioned a very interesting point that we are slowly losing our ability to think. That got me thinking, on several recent events.

• During the Lopkal bill debate on campus and even outside, I'm sure that less than 10%(even that is generous) people commenting on the issue would have read the bill and its competing versions, to form their own opinions. Yet, everyone and his uncle was commenting and liking Facebook status messages, and demonizing those who did not agree.
• When asked to submit comment papers/letters on economic, legal, taxation and even public interest matters, the number of individual comment letters are quite few. This is sadly true even for professionals who do not take time out to critically analyze draft documents relating to THEIR work. 
• The reading habit is dying, in favour of short spurts of concentrated entertainment.
• During lectures at IIM-A and elsewhere, few people put in meaningful class participation. And even fewer have the temerity to seek clarification/question a Prof or a student presenter. This is true even for public seminars/talks/conferences.

Taken together, this trend is not an encouraging one. Thinking critically is not just for analysts, journalists or others but is for everyone, if they want to avoid being classes as sheeple. 

My ideal professional reference book

After referring to many books for projects, MBA course work, CA/CMA preparation etc, I think I'm well equipped to comment to how an ideal reference book should be. Hardly 10% or fewer of books I've seen meet even 50%+ of this wishlist.Note that this does not cover books intended merely as textbooks only.

1. Bridge the gap between theory and practice instead of leaning too much towards one side;-Some industry experts like Taleb critique nearly all academics, while most academics works do not refer much to practice. Hence, a book written by a professional with some academic background(to ensure proper referencing/language use) is often the middle way out.
2. The 'inaccessible' material like quant stuff is contained in an appendix/online version. This is done successfully by John Hull's landmark book on Options, Futures and Other Derivatives. This reduces the printing cost, while allowing more detail to be put online.
3. Spreadsheets/Simulations to practice the material, preferably with data also. This may be either on CD or downloadable/playable from webite. I've seen this in OM books.
4. Downloadable data tables:- Instead of giving the data in PDF/text, how about being brave enough to give that same data(especially economic ones) as a supplement? That would let the student do some checking on his own as to the conclusions. 
 

 

Meet the true professionals.

During the past two months, I have interacted with several finance & other experts. While all of them are undoubtedly experts in their fields, few would qualify to be called professionals. And the reasons are manifold.

1. Right from law firms, accountancy firms, medical practices etc, all have been tainted by the profit motive. Pro bono work is rare, and is given undue media coverage. 
2.  Earlier the conception of a professional was that of a person who would have service motto as the driver, put clients first due to which profit would follow. But now, under the guise that clients are big boys who do not place reliance in them, investment banks have made a fine art of disclaiming any fiduciary responsibility. Clients have become counter-parties. 
3. Under the guide of CRM/value based fees etc, clients who cannot pay much are relegated to the background, both quality and availability wise. Or those who work on those accounts view that as a punishment posting. 
4. The unwritten social compact for professions was that in return for sacrificing some prime years in low paid public service(articleship, rural internship, clerkship), there would be material rewards later. But now, professional aspirants wish to avoid rural medical internship, do dummy articleship or go only for premier clerkships-and still they expect that same level of status/earnings. 

Show me a 'professional' who is content with 'grunt work' and low pay, and I'll show you a liar! But I met some professionals in every sense of the word, who make life better for everyone they meet. The unfortunately small list is below.

1. Publications Counter guy at WIRC-ICAI:-This guy sits behind a counter and dispenses the ICAI books/material to those who want to buy them. But his job is not that easy. Navigating the byzantinere requests of often non English speaking people, he goes around his work with a smile
2. Those helping with probono work:- Prashant Bhushan is an excellent example of this, irrespective of what his other motives may be. 

Anonymous blogs-the best way for industry professionals to share knowledge.

During my 2 month summer internship in the Singapore branch of a UK based investment bank, I tried my best to keep myself updated-besides 'on the job updation' of course! Word documents got filled with the notes I had made during my reading, work, leisure etc. But however much I tried, the process of converting rough outlines to blog posts was much harder than it seemed. Putting pen to paper is much easier than putting finger to keyboard! And the reasons are not far to seek. When a person is in the academic domain, he may not have the information explosion of the busy trader/structurer/research person but he has the benefits of

1. No compliance limitations on what to write(eg-not on companies under live deals) and when to write(not during blackout periods etc)
2. Lesser egg shells to tread on warily. When a professional writes(specially someone in industry compared to Big4) more so on controversial issues in variance with his employer's line, it does create awkwardness for everyone concerned. 
3. No fear of divulging trade secrets-practioners must strike that fine balance between revealing enough to establish their reputation/evoke reader interest, but not so much as to lose competitive advantage.

Navigating these 3 limitations takes more time than it seems, For example, during my internship I had strong views on certain structured products. But voicing them openly on a public forum(a blog IS a public forum) would not have been the best thing, and would have been probably prohibited by some fine print nested away in that contract. Hence, those views will probably not see the light of day for quite some time.

An anonymous blog may still divulge 'trade secrets', but in the small world of finance, innovations rapidly spread through clients/pitch book forwarding/grapewine/new hires etc. So the risk of this is lower. An example of an anonymous blog is one on M&A/markets/finance in general(epicureandealmaker.blogspot.com/). It is quite widely followed. 


The benefits of these blogs are that once the professional is willing to 'come out', he may be deluged with book deals, consulting requests or merely popularity. And for blogs with active commentators(unlike this one!), the author can also learn and refine his thinking. That is why even Seeking Alpha permits this.

Why Indian service businesses need tighter regulation

There was a time when a fool and his money were soon parted, but now it happens to everybody.
Adlai E. Stevenson

If you are a typical Indian, chances are that you have been hit by VAS charges for services you did not ask for, have called 'free entry' contest numbers @ Rs 10/minute, been levied bank charges for patently unfair situations, seen your general insurance(auto/mediclaim) claims contested to the last penny etc. And if you also an investor, then don't even get me started. The charlatans and cheats far outnumber the honest people(if there were any in the first place). While NSE did limit the extent to which the brokers could fleece the public, they found other mechanisms via power of attorney, unauthorized trades, PMS services etc.
  
Athithi Devo Bhava applies while serving expats from Indian BPOs. But when it comes to domestic service, then customer is the king-in the same way that a joker is the 'king' of the carnival-where everyone pokes fun at him explicitly or otherwise.

Thankfully, regulators(IRDA/SEBI/RBI/CCI/TRAI) are all waking up to this reality and are tightening their regulations to provide for SLA times, escalation procedures, penalties, opt out(do not call registry in telemarketing, explicit consent for levying VAS charges, banking fee prenotification etc).
But there is a lot more to be done in this space. And that is why I have no sympathies for Indian service providers when they bemoan the declining customer loyalty. They have dug their own graves.

Why no one wants to work in a factory anymore

Yesterday, I went to a well known synthetic fibres plant on the outskirts of Mumbai. This plant, owned by a premier Indian business group, had seen its haydays in the 80s. But now, with expansion planned elsewhere in India (Uttaranchal, Rajasthan etc), there's a recruitment freeze. New workers are taken on a paltry sum on contract basis, and made permanent after 5 yrs. No wonder then, that even a low paid worker wishes his children to do anything but follow in his foot steps.

Of course, people are still dying for work, and the 'no one' whom I refer to would be the English educated(not necessarily English speaking!), cosmopolitan metro living generation. A B.Sc prefers to work at Wipro rather than be a chemist at a factory. The pay differences are stark, but what is even more compelling is the sheer 'shame' of confessing to your friends that you work in a factory.

A friend of mine got placed at Asian Paints straight out of IIT JEE, and was desperately hoping for a change. Residing on the outskirts of Mumbai, he had little enthusiasm in telling all and sundry that he would be working at Bhandup/Ambernath. While his story had an happy ending(he got into one of India's best Bschools), this is not true for everyone.

Well intended policies,unintended consequences

1. People are better educated, live longer and face a better quality of life
2. Phrased this way, this is difficult to argue with these propositions. 
3. But when thought of as
1. Poorly educated unemployable students unwilling to get their hands dirty with 'real work', deferring joining the workforce for masters degrees of questionable value. 
2. People living healthier life, consuming more food/resources AND facing income deficit in their old age, with more claimants on land. 
3. Infrastructure encouraging more cars, higher fuel import/subsidy bill, pollution etc
4. Then it would show how the healthcare, education & infrastructure boom may implode India
5. Already, some signals of these consequences are apparent
1. Farmers in the grain belt(Punjab/Haryana) incurred more wage cost due to competition from NREGA, so they suffered lesser yields AND higher costs, so now want a drastic hike in MSP, which will increase inflation, and in turn the inflation linked NREGA wage. Vicious cycle
2. The war for minerals being played out in the poorest tribal areas, is partly due to this increase in resource demand, due to consumerism

      As one of those consumers in the above post(though better educated hopefully!), I cannot really condemn         this income levelling measure. All I can say is that if the consequences of some policies were thought out
     and debated as extensively as the Lokpal Bill is, these effects may have been reduced.  

Prof Anil Gupta-the true face of modern India.

Before joining IIM-A, I had heard about Prof Anil Gupta's yeoman work in the Honeybee network, Shodh Yatra and traditional knowledge. All these issues being related to 'rural India', I'm sorry to say that I imagined him as a do-gooder fuddy duddy, who espoused the traditional way of Indian life.

But when I got to know more about him(he has given 2 TED talks and takes 2 electives at IIM-A), I was quite stunned at his extent of tech savviness. Be it his Blackberry, netbook or extensive use of online databases, Prof Gupta really leverages technology to the fullest to achieve his objectives. And while others give lip service to open sourcing, Prof Gupta believes in using students/academic associates to the fullest to help his National Innovation Foundation, update course material, co author research etc.

And when you hear him speak or lecture, the extent of erudity is simply amazing. Not that other IIM-A faculty are any less, but simply he's in a different league altogether. Instead of launching into another anti West tirade, he backs up his arguments with logic and facts. And his philosophy to learning is more the Socratic way-that the students critically question their peer's presentations(instead of mutual back slapping).

So why do I annoint him the true face of modern India? As we immerse deeper into the modern technologies, the risk of losing touch with our traditional language, values, customs etc increases. But the ideal way is to use modern technologies to enrich the rich cultural heritage. For instance, Geodisic purchased the rights of the famous magazine Chandamama, and plans to leverage various platforms to fully monetize it. Likewise, Prof Gupta uses novel approach to keep traditional knowledge from dying, and straddles the new world and old India with equal ease. 

Beating the 'Knowing Doing Gap'

Action is the real measure of intelligence.
Napoleon Hill

The premise behind universal education, financial literacy and other forms of training is that if people know the right thing(or even what is considered as wrong), then they would ensure that the right things happen. But is it true? If it were, lesser people would be obese, addicts, procrastinators etc.  


In investing, this is especially relevant. In boom periods, investors readily succumb to herd mentality and irrational exuberance. But when the bust presents attractive buying opportunities, then they freeze and fall prey to analysis paralysis. The best laid plans fall apart, and they sit on the sidelines. Now, one way to defend is that one should not catch a falling knife by investing before the bottom. But given that markets tend to upward correct very rapidly, the chances of losing out on the rebound are more than being stung on the downward spiral. Of course, buying should be done only when the valuations are otherwise quite attractive. Some real life examples in the Indian context of these happening-at different times in the past 3 years

• False rumours triggering crash:--ICICI Bank, Orchid Chemicals.
• Stock trading to less than near cash value of investments:- Piramal Holdings
• Dividend Yields > 8%;- Shipping Corporation, Ashok Leyland.
• M&A concerns leading to steep fall;-Tata Motors, Ranbaxy, Patni
• High grade debt at high yields:- Tata Steel/Tata Motors NCDs issued in 2009

James Montier and Dr Atul Gawande straddle different fields-investing and medicine-but both agree on the importance of a disciplined process. And that is where checklists and preset actions(buy orders, investor lockin periods, SIPs) help ensure action where it is justified rationally during normal periods, but where fear may stall it during burst.

In non financial contexts-losing weight, deaddiction etc-external support in form of counseling, support groups, family backing etc have been shown to help. But finally, will power and certain preset actions(charity to those one detests for breaking the 'knowing doing' gap, delayed gratification) carry the day.

Do process poor companies pay their people higher?

The title would seem quiet controversial and academic, so let me clarify my stance. I have empirically noticed that as the maturity of an industry improves, the average compensation falls. While this may be attributed to lower profits, the reason according to me is that as the process maturity goes up, the value added by the individual employee is lower. No wonder then, that organization stress 'process' and 'knowledge capture' and are wary of the lone ranger. Below are the examples I adduce in support of my theory

• Investment banks and consulting firms are very profitable, but explicitly put their people over process, this increasing their dependence on stars. While retail banks/commercial  have refined their processes to such an extent that nobody is indispensable. This in my view is a contributory factor to differential pay.
• New entrants in a market pay supernormal wages to lure established people from their competitors, to set up processes/systems. This is another form of substituting people for process in the short run. 
• IT companies used to be the best paymasters in India till their process maturity attained stellar heights. And then they realized that they could easily find people to fit the process. Hence, expanding the talent poor(Wipro hiring B.Scs, training) became the option to offering huge salaries to poach. 
• Market leaders(HUL, TAS, HDFC etc) are rarely the best paymasters. In fact, they deliberately benchmark themselves at lower than 100 percentile of industry pay, because they feel they are giving valuable training in return.  

This topic seems interesting enough to do a time series analysis-maybe it already has been done before. But the takeaway from this is that before career decisions, take this factor into account as well. 

The vocabulary premium-how the digital words rewards command over keywords

The other day, I was reviewing the statistics of this(and others) blog of mine, and it struck me that the most popular posts were the ones with jargon/keywords(thus increasing the traffic from Google and other search engines). The reason for this was perhaps that those posts showed up prominently in the results of certain keywords.

Other non trivial examples of this in practice are

• Journals insist on keywords for ease of indexing, but increasing with them going digital, these keywords are often most valuable to quickly locate the paper/article or to invite serendipity by browsing all content under a particular keyword. 
• Google Advertising has a successful 'Ad Words' program where advertisers bid for the right to exhibit their relevant content alongside the search results for certain keywords. 
• As the cybersquatting and legal domain name sale data shows, those who are creative enough to register popular domain names well in advance, can mint millions. 
• Blogs have a special term for keywords as 'tags','categories' etc so that the blog visitors can see similar content grouped together. 
• As veteran search engine users would have uncovered, an ounce of correct and comprehensive keywords can save a pound of laborious searching over hundreds of pages.  
• For patent landscape analysis or corporate name search, one needs creativity and a good vocabulary for finding out 'simillar' categories and names. 

An Indian Disney-a far fetched dream

Few kids(atleast middle class ones!) would have grown up without seeing/hearing of the famous comic characters Mickey Mouse/Donald/Goofy, and watching a diet of famous children's films Snowwhite/101 Dalmatians etc. These content examples are eternal, which is a testimonial to the quality of their creator and IPR managers. For decades, Disney has stuck to its proposition of clean family oriented media, and has profitably monetized it. Every generation discovers that content anew, and often even veteran cynics would get goosebumps from watching some of those films/serials. The runaway success of dubbed versions, show that Disney has managed to transcend barriers to communicate.

In contrast, India has very few such examples. Barring Ramanand Sagar's famous 'Ramayan'/'Mahabharata'(which are now sold by Moser Baer in DVD form), Amar Charitra Patrika comic characters(Suppandi) & Chandamama, one would be hardpressed to name such long lived content. Now, kids grow up on a diet of dubbed Western serials(like Disney ones) or else Hollywood films.

I recently watched the 1991 blockbuster 'Saudagar' starring Dilip Kumar & Raj Kumar. The film is a bit too long for today's standards(3hrs+) but has 2.8lakh views on Youtube(http://www.youtube.com/watch?v=JRTgTzUa-aA&feature=watch-now-button&wide=1). The film tags at heartstrings in multiple ways-music(that haunting song imli ka bhuta), friendship, enemity, becoming friends on Holi, romance, betrayal and death. This film, as many others before it, make today's films seem shallow by comparison. I hasten to clarify that the old school films(pre 1990s) were quite unrealistic(even in Saudagar where do you have a king ruling in 1991 India?) but met the viewers taste. In contrast, today's viewers especially the multiplex crowd(an increasing number) like to read/watch stories about themselves. And shorter the movie the better. That cuts the scope for the director to comprehensively tell a story. A Bheja Fry or a 'A Wednesday' are certainly great films, but are unlikely to stand the test of time, like how Saudagar/Sholay have done.

Why should we care? Media companies(book publishers, film producers, newspapers) are increasing facing shorter life cycles and viewer saturation. Deprived by piracy of the once monumental initial week collections/book sales, they are dependent on backlist and extended period content exploitation. Given this scenario, quality should be at a premium. Of course, who defines 'quality' is a tricky question. If the sole objective is to take out a 1yr P&L, then even a low budget masala B grade film will do. But for creating a sustainable media empire, a Saudagar is likelier to do it than a Singham.

What the film 'Rajneeti' can teach us about business and life

What do you get when you cross the 'Godfather' and the famous Indian epic 'Mahabharata'? An awesome hybrid called Rajneeti, made by one of India's best independent film makers Prakash Jha.  Read about the film on Wikipedia(http://en.wikipedia.org/wiki/Raajneeti). It resembles Godfather in the characters(2 brothers-one hot blooded like Sunny Corleone and other cold blooded planner like Michael Corleone who reluctantly takes power after the death of his brother), action scenes(policeman trying to murder the godfather, revenge, death of characters in car blast). Mahabharata resemblance is in the successor nomination(favouring brother over son like how Pandu was seen the successor,  abandoned child(like Karna, Ajay Devgan), Krishna like Nana Patekar, Duryodhan like Virendra Pratap Singh etc.I could go on and on but it is best to read the books/watch the films.

But some lessons one can takeaway from this.

1. Even the 'good guys' play bad:- vote rigging, murders, suppressing dissent(thus provoking cousins to revolt), tampering with electoral nominations, false promises 
2. Playing to the gallery:- The public court was used to great effect in the film('janata ki adalat') and it applies even more in this media savvy age
3. Organization counts:- Nana Patekar's character proved the difference between the two warring families, as he supplied the cash/brainpower/organizational on ground power. He played the dual role of Shakuni(supporting his nephews, grey area) and Krishna(convincing his nephew Samar to shoot the character representing Karna). 
4. You get burnt if you play with fire:- Entering politics(or business for that matter) means your actions will be endlessly scrutinized. Personal and business attacks become part with the course. 
5. Crush the enemy even after an overwhelming win:- In the film, even on the eve of the landslide victory, the enemy is lured to its death. This ensures no lose ends. Even in life, going that last 1% is important('attention to detail'!) to ensure 'no comebacks'. 
6. Good and bad is shades of grey: Most versions of the Mahabharata(barring Ira Pande's Yuganta) lionize the winners(Pandavas) at the expense of the losers. Prakash Jha's sensitive shooting and plot, does show the viewers that injustice was done on both sides, and that it is the winner that dictates the history books!

 This post is atypical for me, and probably more on the cynical side. Still, this is what I feel.

Is Facebook becoming the new Orkut?

I know Orkut is still quite popular in Brazil and a few other places; but Facebook is the 'in thing' for quite some time. But unless it reins in the commercial aspects from marring the user experience, it runs the risk of losing its way like Orkut. When launched, Orkut was the only social networking site of its kind, and soon became a craze even in India. But if things proceed at their present

Facebook WAS designed initially for connecting campus residents closely, but now incoming batches make this a circus. People whom you have barely met before(like long lost school juniors/seniors), those whom you have not seen(incoming junior batch), distant relatives-everyone joins in the feeding frenzy to befriend as many people online as possible. A person who makes 300+ Facebook campus friends, may not even walk till the next dorm to chat in person. And this ruins the experiences. Would YOU want random friend updates from someone whom you hardly knew, but whose friend invite you had accepted for fear of not upsetting him/her? Like how Facebook allows you to filter your information for a select circle, it is high time for doing so when it comes to updates.

And then, the ever ballooning apps irritating updates, privacy controversies etc, do nothing to enhance the reputation of Facebook. They have remained 'cool' so far largely thanks to the user friendly interface and hip image, but if the number of ad breaks/commercial space usage increases, I for one would reconsider.

Takeaway:-Facebook/Orkut(ok to be fair most social networks) stretch the meaning of 'friend'. It is a personal choice whether you want a small network whom you know well/have met in person; or whether you want the equivalent of a huge visiting card collection of strangers. 

We do not need an Indian Lee Kuan Yew-not even Anna Hazare

As people well acquainted with Singapore would know, its first prime minister Lee Kuan Yew is credited with transforming the marshy swampland into the world's best island state-a centre of finance, tourism and business in its own right. Yet, this has come with some costs. Mr Yew's party, the People's Action Party(PAP) has a dictatorial electoral hold in Singapore. And to a large extent, Mr Yew's approach towards the opposition has helped this iron hold. In the May-2011 General Elections, when a constituency Aljunied voted in the opposition,, Mr Yew said that the voters would 'repent' and that their locality would eventually become a slum. While he later apologized, those remarks exposed the depth of contempt he felt for the opposition. I draw this analogy with the present Lokpal bill morass in India. While perusing the Lokpal bill version of the Civil Society members, the overall tone and proposals struck me as patronizing and insulting. Sample a few of these proposals:-

1. The Lokpal Commission chairperson/members should have a history of fighting against corruption
2. The retiring members will have a role in selecting their successors
3. Even the Prime Minister/Executive is expected to accept without demur, the Lokpal resources demand etc. Yet, they expect total independence from the Government. 

I accept that the very need of the Lokpal has arisen because of the breakdown of other civilian institutions, and that only an independent institution answerable only to the President is likely to survive the test of time(Election Commission/RTI Commissioner etc). Also, the bill clearly aims to preempt the delay tactics which the bureaucrats are so well known for(like not notifying bills into law, filling up vacant positions late etc), and also aims to confer true powers and independence to the Lokpal. 

We need a strong yet 'moral' person to carry this out. Anna Hazare would probably make a good Lokpal, but there are certainly others out there more qualified in governance, with better track records. Also, history is filled with examples of initially well intentioned initiatives, which later degenerated. If we are unhappy with the quality of our legislators/bureaucrats, then the way forward is electoral reforms, criminal law reforms, justice delivery changes, policy framing etc. Leapfrogging them, is not a good suggestion because democracy works on the basis of representativeness. 'Unsuitable' representatives get elected(like criminals), so the solution is probably to impose eligibility restrictions then. 

As it stands today, the Lokpal will be a super body. While the threat of dismissal by the President always holds, the moral standing then may not permit such a thing(especially if the President is like minded)!. And this is quite risky. 

The world's only technocratic dictatorship-the unique tale of Singapore

While reading the Economist's article(http://www.economist.com/node/18586804) on how Singapore had successfully made itself into a finance hub, some of my experiences here(as well as observing the election ruckus here) led me to write this post

1. Singapore IS a one family dictatorship:-If you define dictatorship as a oligarchic single family rule, then Singapore does fit the bill. One man(Lee Kuan Yew aka Minister Mentor) ruled Singapore till 1990, and is accused of squashing politically opposition to the extent that when the opposition won 6/87 parliament seats, there were claims of 'paradigm shifts' happening. MM's son is the present Prime Minister, with little signs of succession change. To be fair, they have achieved this de-facto(and not by military force) because they have performed.
2. But it uses technology well:- As any user of the public transport system would attest to, it has been designed with the user in mind-as have ALL public utility services. Not many places can claim that. And the public services use technology amazingly well like SingPass etc. Also, the broadband speed, power, water supply etc is all good.
3. And has low corruption:-Barring the usual crony capitalism examples(ministers/MPs holding on to Govt corporation posts despite being the highest paid politicians globally), Singapore corruption is virtually non existent(I say virtually only because no system is 100% safe)

It does allow political dissent(that is why concerns are aired in the press AND I can write this post). But in a system where a party getting 60% of the votes can win 81/87 seats, there seems something wrong with the system itself. I'll leave you to Google the electoral system here.  As someone famously said, why care what colour the cat is as long as it catches mice?This Faustian bargain seems to exist here, and had lasted for seeming eternity till the first cracks surfaced in 2011(post economic crisis) leading to the loss of a parliamentary constituency(5MPs). For the sake of the world, I do hope this unique experiment continues. After all, this is perhaps the best functioning and cheapest run Government in the world and it is a pity to see it fall.

Jaywalking, eating in buses and other tales of Singapore

After my earlier posts on the whole process orientation of Singapore, some of you may have got the impression that Singapore is nothing more than Big Brother in the way it monitors its citizens. Well, the reality is a bit different. I saw people jaywalking with impunity and even sometimes eating food in the buses. Now, given that the police are so scattered, and that CCTVs rely on sampling with little monitoring, it is understandable that people can break the law without getting caught. But the penalties for getting caught are immense. The SGD 500 fine for eating in MRT/buses for instance, ensures that the person will have his costliest meal IF caught. The deterrent factor apart, I noticed that even law abiding citizens do follow the lead of the first rule breaker-this is particularly true in case of jaywalking(crossing the road even when red light to pedestrians).And that is why I guess Singapore has this zero tolerance to such low impact offenses, because they are similar to Stephen Leviit's broken window analogy-if left unattended will encourage the repetition of these offenses. 

Some interesting quirks about Singapore

To an Indian(or any other South Asian for that matter), Singapore does take some time to adapt to. Some apparent oddities do get sorted out once you take some effort to understand why. With that in mind, I elaborate on the following things:-

1. People wear very short pants/shorts close to jockey length! This is apparently due to the heat but then India sees worse.So I guess it is a cultural thing. Do not pass any cultural judgements on people here for merely wearing skimpy dresses! 
2. Fresh food is costlier than packed food because Singapore imports virtually everything(save bread) from milk to apples to meat, from Malaysia/Australia etc
3. Veg food is costlier than non veg again because per gram of imported raw material,non veg is 'chunky' and yields a better return
4. Drinking from the tap is safe unlike some other places
5. There is silence in the public transport/places because people are hooked on to their smartphones all the time. Unlike other places where complete strangers can(and do) strike up conversations on the commute, here people are too engrossed in their mobiles(in general) to do anything else. Do not get too lonely but find something else to do. When in Rome..do as the Romans do!
6. Elections are virtually a farce here with little voter interest, a strong ruling party(in power since independence) and a fragmented opposition. To its credit, the ruling party has not faced any corruption scandals or major issues, and has guided Singapore through thick and thin. So I guess there is something to be said for good governance. The only minus is that though political debate does exist, it barely translates into a constructive political opposition
7. There is virtually no home news here. Since Singapore is this goody-goody place with little crime/turmoil/active politics, there is very little interesting news. And the selection of domestic newspapers is quite low, most published by Singapore Press Holdings(SPH)
8. Right from the modular furniture, to the garbage chutes/bins in apartments, everything is mechanized to the last T. You could conceivably live without ever dealing with a human being! To its credit though, this plug and play approach makes it easier to settle into.

Avoid that $30phone call-and other money saving tips in Singapore

As shown by the remarkable lack of price comparison sites, Singapore is NOT a price sensitive shopping hub-and these tips may seem incongruous-but they may be valuable to new expats and so I'm posting it.

1. Veggies please check that the cheese spread you buy does not have garlic. Generally it does
2. That 'curry' flavored noodles you may pick up is NON VEG and it has a weird taste.
3. Purchase household need/food items from Mustafa Centre. Even electronics/durables are often cheaper there. For example, milk packets costing $1.7 there sell for $2.7-$3.5 elsewhere
4. The minimum cab flagdown fare is $2.8, so unlike India, even short distances do not make sense by cab
5. Use the gothere.sg site for superb directions(including waiting times) on how to use public transport to commute to places unknown also
6. The amenities here are so easy to get-even an apartment/condo will do and a service apartment is actually a waste. The entire set up is virtually plug and play with extreme ease of getting internet, TV etc
7. Take photos at home-here the passport photos cost $6 for 4 copies(!) and the normal ones are not much cheaper.
8. Use the ISD code provided by your operator(like 018/021 etc) to get that concessional ISD rate to India, else pay $2.5/minute or more. I speak from experience.
9. Do your shopping in Fairprice shops rather than 7-11s(of course Mustafa is first option)
10. For shopping in the Orchard Road/other electronics shops, do your price search online for atleast a start. Then you can haggle down the rates which are as high as Lamington Road/Fashion Street(initially)

The quest for 'interesting work'-will it ever be met?

This genesis for this post came from a recent debate with a colleague about the linkage between interest in work, attention to detail and the resultant mistake(s). In that discussion, I realized that like many others of my generation, I was guilty of wanting to pick the work I wanted to do, and paying 100% attention only to that! When I spoke informally later on this subject to the recruiters, even they voiced the view that interact with the younger generation(school/college/post grad etc) and one resounding message which comes out is the zeal for work that 'adds meaning', 'is interesting' and is non routine. While I agree that few people would want monotonous clerical jobs by choice(when they are capable of much more), the fact remains that no one can be a CEO from the entry level itself-unless he sets up his own organization. In any setup with division of labour, people at the bottom end of the totem pole('entry level') do get the short end of the stick, in terms of initially mind numbing routine tasks till they prove themselves. After all, what better(and safer) way for the employer to assess the obedience, commitment and dedication of the employee, than to assign such work? That is why fraternities have 'rites of passage', student bodies have 'hazing'-all with the intent of making the new entrant 'pay his dues'. Assigning routine work at entry level is an organizational way of making the new entrant pay his view. Think of it this way, the existing staff are devoting their time/efforts on you. Taking burden/pain off their heads is a way of repaying the 'guru dakhshina'.

So when you want to resign your job to escape that mechanical/routine work, look for that light at the end of the tunnel before putting in your papers. That interesting work you looked for, may just come your way with some well timed moves/organizational shifts. But remember that with the increasing trend towards automation/process driven tasks, there is more chance of work becoming routine, than of it becoming more creative/involved. So try to find fun in your existing 'routine' work-light the candle instead of cursing the darkness.

Surviving as a veggie in Singapore

Its nearing the 2nd weekend of my internship-and yet I see no convenient solution in sight to the food issue. As I blogged in some of my earlier posts, the veggie food options are few in the area I stay. I can choose between, and there is very little variety/customization as one is used to in India. Still, I must have put on 1-2 kilos since coming here, and the reasons are outlined below

1. They have a 'kaya toast' with ordinary toast but a yummy stuffing which melts in your mouth and tastes heavenly. $2-3 worth of toast will fill your stomach
2. Funnily, a flavoured milk brand(Dutch Lady) costs less than ordinary milk! So I slurp up 0.5-1Ltr a day, all on the pretext of calcium intake
3. On office days, there are many food plazas and restaurants nearby so there is no problem in eating. The real issue is on weekends where the only Indian restaurent nearby does not do home delivery, and the ones in Little India take upto 2 hours. So using ready to eat/cooking at home seem the only options
4. While I felt(in India) that processed food was a rip off, I thank MTR, Kohinoor etc for the abundant options in the frozen segment. Whether it be roti, paratha, naan, dal, bhaji, paneer, pulav, puranpoli etc, virtually everything is available in ready to eat, at a quality comparable to hotels, and at an unsurpassed convenience. Try ordering food at 10pm in the night, and you will get what I mean
5. Breakfast is not an issue with eggs, bread, cornflakes, milk, flavoured milk and fruits all on the table
6. Fruit stalls are few but the selection of fruits is good in them AND at the local Fair Price super market. And thank to South East Asia, there are some exotic fruits like durians etc which I intend to sample over the coming weeks.
7. Luckily, I am not finicky about eating in places where non veg is served/present in proximity else it would not be possible to eat in most places!! For those who like non veg, Singapore has all kinds of exotic cusines and dining out would be a pleasure
8. As in other aspects of Singapore life, processed bakery goods are much cheaper and better than those served in shops/stalls. I had yummy bread buns, cream rolls, cakes etc for a reasonable sum, as well as cold coffee from 7-11 for just $3. So buying off the shelf is both convenient and better.

It is now that I realize that even the IIM-A mess type food would have been welcome here-and that is saying a LOT! Still, it is an experience and I guess I'll come out with intact health/waistline albeit with a lighter wallet  Nothing beats home food though, which I'm looking forward to!