Failure Of Indian Leadership Model

In the famous Hollywood flick, Gladiator Maximus famously said “Win the Crowd, and you shall be more powerful than the King”. Leaders don’t need official position of authority if people in and around you look up to you for ‘clues in crisis ‘you are a leader. A lot of trees might get cut for the paper work if we try and make a list of qualities an ideal leader must possess, here are few which I believe are of utmost importance. If a human brain looses self control, the same beautiful mind can be its biggest enemy and self destruction is eminent. So a good leader should be able to control his emotions and passions. You might not appreciate me using the word passion, as many entrepreneurs are passionate (almost all), and passion is the oxygen for excellence in entrepreneurship, but what is important is having a control. The emotional attachment towards success should be very less, this is because being a leader on will see failures, and I don’t know a successful man who has not seen them. If a leader is high on self efficacy he can get his team of the slump faster. A leader CEO/Manger can create value on long term basis only if he is passionate about his job but not too emotionally attached to what he has done or he is capable of doing (ego). Let us take case of Satyam Computers it failed because Mr Raju was attached to what he had achieved and feared that all that could be acquired if he showcases the real stuff, thus compelling him to cook the books from inside, let’s not forget he hardly gained personally from it. Emotional attachment stops one from taking decisions for larger good.
Leaders are neither born nor manufactured, they emerge. A good leader should be less individualistic in nature and more of a team-man. As truly said by lord Krishna ‘Hey Arjuna, keep on doing your duty, without expectation of fruits and victory shall be yours’*
Leadership (Management) Style’s across USA, Japan and India…
I used these two countries as its chalk and cheese when it comes to USA and India in terms of how companies are run, that does not mean it’s not all Smoke & Mirrors when it comes to running the Show in USA.
One clear difference I make out is in nature (the mindset), in USA people are very individualistic and the first generation entrepreneurs don’t focus much on legacy, they actually might not mind to hand over to professional Managers to run the show. If we talk about the Indian Large Business houses few names come to my mind are ITC, L&T, Gujrat Ambuja Cement, ACC the Murguppa Group and many more but we can actually count them, but in USA things are different.
I am not saying that Professional Managers create better value for shareholders or not, neither do we have enough empirical evidence, we have seen fiascos like Enron and World Com in the past due to larger than life ambitions of these CEO’s these companies met their destiny.
Talking about styles of managers/leaders major difference between styles of USA and Japan is the relationship between suppliers/vendors and companies are totally different. If we see the case of Auto Industry crippling with lack of fuel of liquidity currently, companies like GM and Ford try to create competition amongst the suppliers to get the best deal.
In Japan likes of Toyota and Honda go for cross holdings in the suppliers companies and make them part of the family and believe in long term relationship, also supporting them to develop new technologies and help them achieve operational efficiencies. And we all know what success companies like Toyota have scripted in world’s largest car market.

*Essence of Bhagvat Gita , but not the exact words.

Leaders

 Motivations of a leader:

 A leader does not need a management degree or any other kind of a degree to be a leader.There is ample evidence pointing in this direction. People tend to cater to the notion that leaders are born or created. As usual the truth is usually a mixture of the two.

 

 The first and most important thing about a leader is that such an individual is self driven. By self driven I  mean that the person is necessarily not motivated by external agencies. 

 

 Human actions in general are driven by needs , starting from the need of food to going upto the need for love and entertainment. While it is obviously untrue that a leader is not motivated by his own needs but  it is true that for anyone to be a leader he/she has to be atleast partly motivated by the needs of others.

 So we have spiritual leaders catering to spiritual needs of the masses , business leaders catering to economic (the need for activity) needs , military leaders catering to their military needs and political leaders for diplomatic needs etc..... Clearly an ideal leader has to read the mind of the masses and must possess an innate sensitivity to make this happen.

 

 The leader among men is driven then by the selfless wish to either alleviate the suffering of the masses or to bestow something of value upon them. Outstanding examples of  leaders of the first kind are Gandhi,William Penn,George Washington.Examples of leaders who bestow something upon the masses are Bill William Gates ,Dhirubhai Ambani, J R D Tata . These men have faught long hard battles to get something for many others even when they already had for themselves much more than they would ever need. Most of these are selfless people. 

 

 Their have been many politicians and many wealthy businessmen but history remembers a few as truly remarkable leaders. They left their mark on society not because they wanted to but because they cared about something which they knew was much bigger than themselves.

 Birth of a Leader:

 A leader is always born , not necessarily of  the womb ,but mostly of circumstance. Leaders are not made. No one can be 'made' a leader. Someone may be 'made' a financial analyst . Someone may be taught 'history' and given hands on 'business experience'. Someone may be trained to be a 'manager' of a business but no one can be trained to be a 'Leader'.

 

 Leaders are born of circumstance . If Gandhi was living at Mumbai  in 2001 and did not travel much he would not have much of a motivation to free a nation .He would probably have done something to alleviate poverty. Similarly George Washington living in the America of today might have been a good businessman. 

 The more dire the circumstance the greater the potential for a great leader to emerge. Examples that verify this are ample throughout history.

 Life of a leader.

 Not many agree but for a mind that is not in control of itself , power is its own mortal enemy.

Hence in general a leader among men must possess a fair amount of self discipline. This is not to say that he/she should be an ascetic. A good leader must be able to control his/her passions

and emotions.  Anyone who gets too emotional or is too attached to the outcome of certain actions will end up losing his/her mind and eventually leadership appeal. Thus the worldly life of a leader is a hard one. A spiritual awakening goes a long way in becoming more effective as a person and a leader. 

 

 The spiritually enlightened thus will be the most influential leaders. Remember that millions of people follow Christ and Buddha to this day.They  have been bigger leaders than any of their contemporaries . On the other hand there have been many Generals and business people and freedom fighters through the ages. How many from before 1600 A.D. do you know?

 This clearly says something about qualities of an ideal leader. In the current business world(Dwapara Yuga) he/she should be able to chanellize (control) his/her passion(emotion)

towards achieving success for a large number of (his/her) people by the measure of monetary benefit (employee benefit).

 

 Consequently a good corporate leader (CEO/manager)  can adequately assign monetary benefits to his/her shareholders and employees alike while satisfying customers fully as well,while him/herself being passionately unattached to what he/she does at a personal level

 

Conclusion:

Leaders emerge . Leaders are niether born nor made . A good leader should be passionate about what he does for others (his aim) while being detached to (not thinking about) the possible outcomes of his effort other than his aim.       

  

 

Job-Loss Due to Outsourcing, Overhyped!

Everyone loves to talk about globalization it’s a favorite topic anywhere you go from coffee shops to business schools. Workers complain about how their jobs are shipped to lower-wage countries.CXO’s are always excited about new overseas markets. Activists & NPO’s of various types are concerned with environmental damage or suffering that it may cause or does cause in third world countries. This raises most important question: Is Globalization the most defining trend of this decade for the West?


If we try 7 see local news & event's tend to occupy more mindspace in our everyday life than a Global. If we go on asking people, most people have a view's on whether their Mayor is doing a good job, is the serial killer caught by the County Police or realty prices in a particular area. Very few people have a view on the United Nations Secretary-General's job performance, or know his name even for that matter.

Call-centers in India are maligned, as the developed-country jobs being shipped overseas. But the number of jobs at stake is small relative to the overall work force. And their importance is also overstated.

We must ask this to ourselves how many parents in the U.S. dream that their kids will grow up to work in a call center? Hardly any!

Sometimes we tend to miss the bigger picture...Americans are worried about their job being sent to China? A cheap worker working in a shady sweatshop in China isn't necessarily their biggest threat. It's more likely that an average American worker will be replaced by better technology or cut by management trying to use one less worker & time.

Examining detailed data on changes in the U.S. the authors Bruce C. Greenwald and Judd Kahn have shown that job losses due to higher productivity greatly outnumber those lost to globalization, meaning here shifting production from Country A to Country B and then shipping the product back. Think of the large number of secretaries and office workers eliminated by the desktop computer..
Globalization and trade have helped countries that have made the tough local decisions to liberalize markets and unleash the powerful incentives of capitalism.
If this sounds counterintuitive, it helps to remember that "globalization" is just today's catchword for a phenomenon we've seen before. Messrs. Greenwald and Kahn compare our age of expanding global trade to the early 20th century and find a similar picture. Trade as a share of global output rose until 1920 due to advances in shipping, which helped build global markets for commodities like grains and coal.
This expansion of trade proved only partial and cyclical, however. Commodities became cheaper and thus a smaller part of spending. Households began spending more on manufactured goods, such as washing machines and automobiles that at the time were harder to globalize because they depended on local sales networks and tastes. That caused global trade's importance to shrink.
This time it will be services, which are harder to transport across borders. The desire for services will drive demand for managers, teachers, builders and nurses. These are exactly the high-skilled professions that are hardest to replace with technology or offshore workers.

PS: This article is inspired by a blog on Outsourcing by Mr Carew who covers M&A for the Wall Street Journal Hongkong, i have tried to add some Indian Flavor to it

Optimisation Vs Perfection

There is always a trade-off associated between achieving 2 associated things. So is it in case of achieving Optimisation and Perfection at the same time.

Let us look at it from the managers perspective.

Managers need to make decisions day in and day out. Some decisions are very critical and some are not so. The criticality depends upon the impact of the outcome of the decision. So it the decision has a high bearing impact on the organisation it is a critical decision. Otherwise it is not a critical decision.

So needless to say that we have to trade-off in favour of perfection against optimisation (in terms of efficiency and productivity - after taking into account the time taken to arrive at the decision) for highly critical decision making. Hence for day to day decisions (low impact decisions) we should strive to be more optimum rather perfecting it.

This is nothing but a logical conclusion of the Pareto's 80-20 rule. The principle if applied to the decision making criteria would spell out that 20% of the decisions have upto 80% of the impact on the results (which means that they are critical) while the remaining 80% of the decisions have upto 20% of the impact on the results. So it is common sense to spend more time on the critical decisions vis-a-vis on other decisions.

As a manager spends more and more time in taking a decision, in all likelyhood he is moving towards perfecting the decision. We we speak about optimising in this context it means that a lot of decisions have to be taken in a lot of operating constraints. One constraint might be time. In the time context, combining the above two concepts managers would most likely spend only a limited amount of time on non-critical activities so that they can get the best but once the time at hand is exhausted they would simply move on to do other tasks as those activities even if left non-perfected would not have a much impact. The opposite holds true for the critical activities. It is not the constraint which determines the effort to be put in but the sheer magnitude of impact of the decision which determines the effort and subsequently the deadline (constraint).

But in most settings managers have to take a whole lot of decisions and most of them are of low impact and very few are of high impact. Hence managers in my opinion need to follow more of optimisation rather than perfection.

PS:
This content is taken from a co-blogger Anil Daga, Anil is a pass-out of the Prestigious Great Lakes Chennai, prior to which had a Career in Citigroup (IB division).

In Business We Think Big & Suceed Big

"Being different is what has made our country great. We have the freedom to think, believe and achieve whatever we set our minds to do. For that reason, we should set our sights on the big dreams we have for our careers.
With “golden parachutes” failing to open for much of corporate America these days, entrepreneurship remains a growing trend. It’s important that we keep finding ways to explore our ideas to the fullest and not dismiss them just because they may seem too grandiose.
Right now, the timing could be right for your brilliant idea and be just what your community, city, state or even nation needs. Google became a billion dollar business in just 6 years with just a very simplistic idea. Why not yours?
This is powerful confirmation; more millionaires were created immediately after the Great Depression in 1929 than in any other era in our nation’s history. If indeed history repeats itself, then we could be headed for another boom-time right around the corner. Keep your eyes open and your attitudes positive so you can recognize the next big opportunity that comes your way." - Donald Trump

PS: These are words of the Great management Guru Donald Trump. Their is no original contribution by the blogger in this post, its a privilege to have lessons in excellence given by Donald through this post.

Opportunity in Adversity

Opportunity lies in Adversity:
History has been testimonial to the fact that adverse times have been stepping stone to companies who have seized the moment and made it big. Economic turmoil creates more opportunities for companies to move into position of a leader from a laggard position. A study done by Bain & Company that analyzed the net profit margins and sales growth of more than 2,500 companies clearly indicated that 24% more firms moved from laggards to leaders in the 2001 downturn compared with the subsequent period of economic calm. Also around 20% of those in the top quartile of financial performance (based on Net Profit) in their sectors dropped to the bottom quartile during the period.
Corporate India has navigated through rough weather exceedingly well, and almost through an era where doing business was a crime, and when India had a more socialist outlook. In the year 1998-99 Cement Industry was going through some tough times, and Gujarat Ambuja cement was not immune from the crisis, instead of retreating into a shell, India’s then fifth-largest cement maker by sales acquired an ailing Modi Cement Ltd, taking advantage of the target’s low valuation. It then turned Modi Cement around. Today, Ambuja Cements is India’s second largest cement manufacturer by profits, and one of the country’s most efficient cement producers. Thus indicating the fact if calculated financial risks are taken one can get into leadership position.
Let consider the case of Intel, it was an organization built in a recession ( to the stature we see it at); Advanced Micro Devices Inc, its rival in the chip business, prior to the 2001 recession had made heavy investment in product design and this strategy was paying off, with AMD’s top-line growing three times faster than that of Intel’s. Then the recession hit, catching the entire industry with too much capacity. As AMD’s lack of profitability prevented it from investing in capex, Intel seized the advantage.
It invested in new facilities with state-of-the-art production capability and spent heavily to advertise its P4 processors. In coming years the cost proposition of Intel was much better than AMD, and AMD had to axe 15% of its workforce. The momentum AMD had built quickly vanished and Intel emerged as undisputed king of the Chipset business.
How can Indian companies take advantage of turbulence and a slowing economy, as Intel did? First, they need to realize that conventional approaches often don’t work. Many industry leaders fall from the top during downturns or turbulent times because they assume that a strong market position is an insurance policy against trouble. That approach breeds overconfidence.
The better approach: slow in, fast out — like a good driver heading into a sharp curve. Winners in turbulence tend to brake quickly heading into a downturn by managing costs carefully and consistently. They focus on what the company does best, reinforcing the core business and spending to gain share. That allows them to speed up at the top of the curve, when the economy starts to turn for the better.

PS:
This post is inspired from the research done by Bain & Company. I would personally like to thank Mr Vivek Gambhir and Darrell Rigby, a Bain partner in Boston and the head of Bain’s Global Retail Practice

Indian Textile Indst. to Benifit from Neighbors

Textiles and apparel account for around 13% of India’s exports. As per Assocham, an industry association, the sector employs about 35m people. According to a recent study by India Today, a weekly news magazine, 700,000 jobs have been shed in the sector, both by organized and unorganized players. But that’s not all we might be in for good times ahead, as we might profit from woes of Pakistan and China, as the later is seeing pressures on cost due to appreciation of RMB (Chinese Yuan) and wage increases in China, cost gaps with countries like India, Pakistan & Bangladesh have narrowed. India can be one of the largest beneficiaries.

Indian companies are gaining from lower volumes or stagnating volumes from Pakistan. Given the increased concerns on terrorism in Pakistan, almost no company wants to increase their volumes from Pakistan. Big ticket retailers mentioned of contingency plans to move orders out to other countries, including India, if the internal situation in Pakistan worsens.

India will also see incremental benefit if growth in China slows, cost pressures in China increase and Pakistan remains embroiled in social strife and tension. India is set to gain from the Rupee depreciation, but the fruits won’t come to the surface as many Indian companies have hedged their exposure when rupee was higher and the next couple of quarter’s forex losses are likely to be high. The relief from lower rupee will be visible primarily in FY10.
Having cited all the above mentioned factors there is a flip side, and certain roadblocks to India stamping its authority on global textile market. Cotton prices and raw material prices are up 30%-50%. At Rs47-48/ US$, we can absorb the cost increases. But we are hedged for the next two quarters and so will realize the benefits only after that.
Due to the current financial Tsunami whose effect is now seen on the main street, US retailers are reducing inventories and as a result we expect that Indian companies will see increase in inventories and also further pressure to reduce cycle times. The sourcing companies maintain that given the sharp slowdown in consumer sentiments in USA and Europe, the focus on costs is increasing by the day. All in all opportunities always come with some sort of risk’s , they have to be taken to seize the moment.


*The Source of data and information for the above article was from a report by CLSA.

Leader......

Our biggest Strength lies in understanding and more importantly accepting our biggest weakness. We as individuals never do that, do we ever? . We all have limitations, limitations are nothing but caps on our abilities. Hey isn’t that negative putting Caps or limitations on yourself, yes true  its bad to put any blockages or hurdles, but trust me your ability can just take you to ¼’th to your destination, the rest is attitude , grit and determination, any of the word that is convenient to you. So what am I trying to say? , I believe you have that grit and street-fighter attitude, its great but at the same time know your limitations. The best success story that comes to my mind is that of Steve Waugh.

Steve & Mark Waugh were one of the very few twins who played together in a team sport. Cricket and especially batting came easily to Mark, he was a naturally gifted fielder, and one of the most attractive & stylish batsman of all times. Watching him you felt cricket is an easy game, on the contrary Steve struggled and fought his way through, he was technically not that superior, and was by no means a natural or gifted cricketer, still his track record is better than brother Mark, he had evident weakness like an ordinary player of short-pitch bowling, strong bottom hand player forced him to be more often than not on back-foot. Still he bailed out Aussies out of loosing situations the maximum number of times, due to sheer grit and will to win.

Steve had this unique ability to get the best out of his team mates, and he built the Australian team, which Ponting  just inherited. History has been testimonial to the fact that most of individuals with common abilities make extraordinary leaders. Daimen  Flemming once said, ” if Steve thinks I can walk on pile of broken Glass, then I can!”, this was the sort of faith players had on Steve. During 1999 World Cup Australia was on verge of elimination from tournament, and then Steve made the famous comments  to his mates“If not You, then Who? If not now, Then When?”… and as they say rest is history.

  And I have my assumptions for this, if you are supremely talented you are too focused on perfecting yourself, and in the process neglect the team. For instance, Tendulkar, Lara both living geniuses’ still didn’t proves their metal as a Captain. Moreover I you are a perfectionist you expect the entire team to do the same or be at the same level, whereas your team might have different styles or competencies which you might overlook.

Same is role of a Manager, his role in today’s environment has become much of a leader than, just another brain doing analysis. There are specialists for the same, there is always an upper limit on what you can achieve, but the realms of achievement for your team are infinite.

 

Its Different ! ! !

We always try to be different, at least try to be apart from crowd.
But why some of us do that, it was true in my case as I dint want to work with any IT major , as I will be sitting in the same old cubicle, I will be lost in the crowd.
Aaaahaana!!, so is it the fear of not being notice makes us this way, where we push ourselves to be different. This is for sure we all love to leave a mark, an impression in whatever we do.
And it takes courage not to follow the sheep herd mentality, yes we all think differently but very few have actually the courage to be different.
And those who try to be different have been successful, at least most of them , to name a few Warren Buffet, Georg Soros, and all most all the entrepreneurs have the ability to think differently and go against the God’s and the odds to convert the perceptions of vision into realm’s of reality.
Now thinking differently stems from two types of personalities, one of them are who have fear of being noticed, the inherent motivator for them is fear. And the other who try to stay away from limelight!
Lets not go too far the famous networking site, and one of my friend Kailash Bajaj ( poster boy of Dara Shaw & Co. and one of the most famous, admired, respected and celebrated (amongst students) student at IBS HYDERABAD ) has the words “less u knw me better is 4 u” on his orkut profile and is flocked by mob in IBS and everywhere he goes.( again he does not do this to garner attention.... he runs awy from lime light and still adulation follows him!)
The reason may the charisma that is created by being different, where people have their profiles overflowing with information and you write few words , it does creates that enigma which is inexplicable.
So being different does it work? Yes if you have the courage to create an identity for you apart from the crowd it can be a real plus.
This article is being inspired by an unknown female on orkut by the name of Bharvi Pandya.