Friday, 30 October, 2009

Ancient forces

Caste-based politics in India, tribe-based politics in Kenya, special interest groups in USA… What’s the difference? 

Monday, 26 October, 2009

Why management-speak

The language of management is either jargon - when you’re trying to impress the professors - or ad-speak - when you’re trying to write the next bestseller.  Either incomprehensible and boring or clich├ęd and boring, but always trying desperately to sound wise.

When we’re going to spend the rest of our lives doing the stupidest thing known to man – chasing money for its own sake – that probably makes sense. 

Hey, we exist

“We are in the knowledge economy now. Products don’t matter. Anyone who wants anything can get it from somewhere in China…”

Hold on, professor, please. Where’s China? On another planet? Who are the Chinese? Robots? Products do matter in China, don’t they? And the Chinese do rise and fall by what they produce. They’re one in six of humanity and they aren’t in that knowledge economy yet, as aren’t we Indians, and all of South East Asia, Africa and Latin America.

(The Middle East is in the oil economy, so they’re out – never mind most Arab countries and almost all Arab people have nothing to do with oil.

By the way, what is ‘China’? Another brand like Ford, Coca-cola and Microsoft? Or a country with many different brands?)

Our professors are unfailingly fair to non-European students. Sometimes they try to preach, but back off when told ‘Doctor, heal thyself.’

However, they don’t realise how blatantly racist they can be in the way they think: “Those who are not in the West, don’t count!  You’re ok, but your country… it exists only as a source of raw material and labour (products), and as markets for commodity and semi-commodity products. Leave the thinking to us.”

This view may be very real, but it isn’t one we want to stay real for ever. So resentment builds up. It is in both sides’ interest that it doesn’t burst. 

Saturday, 17 October, 2009

If Coke is the most powerful brand…

The sage of Indian advertising, and my former senior, Mr Anand Halve, is very good at putting things in perspective.

The question he asks about Coke is an excellent example of this quality. “If Coca-Cola is the world’s most powerful brand,” he asks, “why can’t it command even a single paisa’s premium over Pepsi?”

Strange, no finance guru asks this obvious (only in hindsight) question. Or do they consider water, and not Pepsi, to be Coke’s competitor?


Professors want our assignments to be double-spaced. Why?

Double spacing probably made some sense in olden days when assignments were submitted in hard copy and professors could to write their comments between the lines.

Nowadays, all assignments are submitted electronically, which means the professors can make markings in the softcopy and save trees.  And don’t they find double-spaced writing very unusual and, therefore, difficult to read.

The price of milk

Apparently Aldi, the German deep discounter, maintains P&L accounts for each product. Which leads to this tale: Tetra packs of milk sold much better than bottled milk in Aldi stores, but didn’t yield good margins because they leaked and the stores had to spend a good deal cleaning the mess.

So, they stopped stocking tetra packs.

This is supposed to illustrate the store’s commitment to price.

I’m afraid it doesn’t. Because product-wise P&L accounts is a prehistoric concept in these days of data analysis; what Aldi should look at is ‘basket-wise’ P&L accounts.

I suspect those tetra packs went into baskets of single people or childless couples who also bought a good deal pre-cooked and semi-cooked food. And also have more disposable income than other shoppers. Taking them off the shelves, ruins these customers’ baskets, and invites them to shop elsewhere, perhaps for ever – that is, when they are no longer single or when they have children.

Thank heavens we have elections

A professor was comparing India’s reluctance to allow foreign direct investment in retail beyond a certain limit with China’s enthusiasm for FDI. “We have elections, sir, and they don’t,” I said. He smiled and that was the end of it.

Except that I fear he thought I was among the many Indians who think democracy is holding India back. I don’t.

Votes are poor people’s currency. They are the only way they can outbid the monetarily rich and economically powerful. Those who blame politicians for doing this and that economic blunder for political reasons fail to see this simple thing.

For instance, unrestricted FDI in retail may lead to huge mega-marts, jobs and much needed efficiency in supply chains. But if they harm local groceries, they’d endanger millions of jobs, not only in retail but in tiny manufacturing units, who can never fulfil supermarkets’ orders.

Also, there is no guarantee that organised retailers will treat the farmer any better than the middlemen do. 

Also, I don’t see how organised retail can do anything for the vast majority of Indian consumers who are too poor to buy the SKUs that big stores must stock.

Even the so-called middle class cannot shop as much in a trip as its counterparts in the West do. Besides, prices of staples will be much lower than in the West (for instance, a litre of milk costs more than a euro here [in France]; it costs, at most, one-third that in India).  

Yet Western investors will have high expectations from India’s middle class, not realising that the phrase means a much ill-off population. In no time, we’ll have a royal mess. 

If votes prevent the politician from robbing Peter to pay Paul, and keeps Western investors from taking miscalculated risks, thank god we have votes.

Monday, 12 October, 2009

The human robot

The assembly line worker is characterised as a human robot everywhere, from literature to management texts. Chaplin’s Modern Times is possibly the best example of this view.

Yet, have we ever wondered, even less inquired, what the poor assembly line worker thinks of his job. In the developed world, the line enables many otherwise unemployable people to lead decent lives (by the standards of poor countries). In poor countries, it’s the only defence against starvation.

The workers’ feelings towards his assembly line may be quite different from what the novelist and the management guru insist they are.

Also, has someone researched innovation on the shop floor, especially in Japan.

Lastly, take the jute mills of Howrah. During the Second World War, mill owners amassed fortunes from machines that had, theoretically, long given up the ghost. How did they do it? With brain-dead labourers? I suspect not. 

Our most valuable asset

Managers are deservedly despised as hypocrites for effecting mass sackings in downturns, after having repeatedly described their ‘human resources’ as their companies’ most valuable assets.

Now, describing people as ‘resources’ and ‘assets’ gives away the manager’s moral imbecility. However, there is no contradiction between their words and deeds here.

Risks are proportionate to returns. While people can do great things (for which managers take credit) when they have work, they are capable of greater mischief when the tools are down. Hence, managers are perfectly consist when they get rid of ideal hands and minds.

Saturday, 3 October, 2009

I don’t know

Is there a management course that accepts “I don’t know” as a good answer?

Not “I don’t know because I was asleep in class” but “I don’t know because the data supplied is inadequate to even attempt an opinion.”

Why must managers always decide? Why can’t they, sometimes, defer? Why is decision good and postponement a sin?

Because your competitors will be upon you? If you decide wrong, will speed make any difference at all?

You can’t wait till every datum comes in, can you? Of course you can’t. None but the psychologically ill do that.

All I’m suggesting is that someone who insists that we can’t decide has at least as much chance of being right as someone insisting that we must.

XYZ is not a factor

Once, the famous cartoonist RK Laxman was asked what makes a good cartoonist. He mentioned several factors, like being good at drawing, having a sense of humour, having an excellent grasp of politics. I don’t remember the list.

What I do remember was that he emphasised, over and over, that you needed all these at once. Having, say, three of them, and not having the fourth, was no good.

Whenever I hear or read someone saying that this or that (character, charisma, curiosity) is (or isn’t) a factor for success in something (leadership, innovation), I remember Laxman’s interview.

Hey, factors don’t act alone, except in books where the author has decided the conclusion before he begun his investigation. Which is why he spent his entire time factoring out effects (“Everything else being equal, charisma is not a factor.”) and none in searching for interactions between between factors (“In the vast majority of cases, an effective leader had both character and charisma”).

Wouldn’t over-complicating lead to analysis paralysis?

But who’s talking about making things uselessly complex. I’m all for simplifying. Science and technology doesn’t move an inch without making simplifying approximations, and it has come a long way. That’s equally true for the arts subjects. Simplification (approximation, generalisation, etc) is indispensible for understanding and discussing anything.

However, it’s equally important to be conscious that one is simplifying, that whatever one has is, at best, an extremely crude copy of reality, and that the real world is not obliged to resemble it.

So you have to make room for things you don’t know or deliberately left out, that is, for Chance.

Singur is political…

But it’s fine not to pay income tax.

It’s ok to say, “All politicians are thieves, and if they want my money to use for the general good, they are lying. I want to do my bit (give back), but I’ll do it by spending on things I want and need, with the certainty that doing so will lead to good tickling down, etc. I decide how every penny I own and earn should be used.”

“But Singur is political. If a farmer says, ‘I want my land to stay mine, and I don’t care if any company or government thinks it will help society, including me and my progeny, if it becomes a factory plot instead,’ he’s short-sighted, selfish and silly.”

“It’s perfectly fine to reason that a factory must come up near a big city primarily because no executive will work in a place without good schools nearby. It’s fascist to suggest that executives should be made to shift wherever they need to be for the long-term good of society (never mind if their own children grow up illiterate and unemployable). But farmers shouldn’t have that choice.

If one must suffer for the good of all, so be it.” 

The point isn’t whether Singur was political – and I just don’t see what’s so horrible in anything being political; it’s that if we are so hell-bent on never putting ourselves in the other person’s shoes, we shouldn’t expect any solution.

Tiger Woods and Obama

Tiger Woods is half-Thai. Obama, like most American African-Americans, is half-white. Wonder why they must be seen as blacks all the time?