Yearly Archives: 2018

12Nov/18

Book Review – A Better India, A Better World

The author of this book N.R.Narayana Murthy (NRM) needs no introduction to Indian readers. The principal founder of the well–known IT major Infosys, NRM is one among the most respected corporate leaders of India. This book is a collection of NRM’s talks given to various institutions in India and abroad in a variety of topics like education, leadership, nation-building, poverty, development, management. Bill Gates describes the book as “A timely message about the importance of values and leadership in business.”

In the first talk delivered to students of the Stern School of Business, New York University, on Learning form Experience NRM provides a glimpse of the success story of Infosys from a small Indian IT vendor to a multibillion dollar, global, software power-house. He talks about the crucial decision he took which made Infosys what it is at present. When an offer was made to sell Infosys for $1 million and all other partners of the company were favourable to it, NRM stood against it and convinced them not to sell, a classic example to show what effective leadership can do and an important quality of leadership – the ability or willingness to renounce a short-term gain for long–term goals. In this speech, talking about learning form experience, NRM makes the following interesting observations

“As I think across a wide variety of settings in my life, I am struck by the incredible role played by the interplay of chance events with intentional choices. While the turning points themselves are indeed often fortuitous, how we respond to them is anything but so. It is this very quality of how we respond systematically to chance events that is crucial.”

This brings us to the question is there something like “chance” or “fortuitous event”? Indian seers and sages with a deeper spiritual vision perceived that what appears to be chance, fortune or fate are the outer results of unseen and invisible causes. They saw two major factors behind all events. First, at the highest level, it is the Divine Power and Wisdom which governs the world. Second, at a lower level, Law of Karma which determines the consequences of our actions. The environment in which we are placed, events we encounter and the experiences we go through in our present birth are the results of our past actions and what NRM says, the nature or quality of our responses to the “chance” or “fortuitous” events is one of the factors which will determine our future destiny.

Coming back from the philosophical digression to the book under review, the main theme which recur constantly in NRM’s speeches and repeatedly emphasized as the key factors for building a better India and a better world are values, excellence, leadership, entrepreneurship, innovation implementation, giving back to the society. This book as a whole provides useful perspectives on a wide range of issues which can be of great help to people from all walks of life and in all stages in their career or life – from the student in the B-school and the young man or woman in the beginning of their career, to the senior professional, manager, administrator or politician.

M.S.Srinivasan

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Effort and the Output: An Uncommon Approach

Our modern culture, especially the corporate culture, is heavily result-oriented, with an excessive focus on outcomes, such as profits and productivity. However, here is an attitude or an approach from a corporate group, which is uncommon but needs to be explored and experimented in management and education. This article examines this view in the light of a deeper perspective.

Appreciation of Effort

Timothy Rerlick, senior director of professional development at CME Group, states that in his company the main emphasis is not on ‘output’ but on ‘effort’. “Instead of focusing on output,” says Rerlick “which can be seen as a result of talent (and emblematic of a fixed mind-set), we think about effort. Instead of celebrating employee achievement we say ‘Thank you for the effort.’” The management of the CME Group regards the approach based on talent, achievement and output as ‘fixed mind-set’ and the other approach based on effort as the more progressive ‘growth mind-set’. There is an element of spirituality in this approach. The divine teacher in the Indian scripture Bhagavad Gita says to his disciple Arjuna: “You have the right only to work and not for the result.” The effort belongs to the domain of work, but the output belongs to the realm of results.

But nothing is said about how ‘effort’ is included in the performance management or motivation system of the company. Most organizations assess performance not by effort but by outputs, for example, productivity. If this company lays a greater emphasis on effort, how is it incorporated in the performance review of employees? If a low-performer makes a sincere and persistent effort to improve, which is a growth mind set, is she as much appreciated or recognized as the high-performer?

This principle applies equally to assessing student performance in education? Let us now examine briefly the factors which shape effort and output and the ways they can be incorporated in management and education.

Effort, Performance and Character

Effort has a quantitative as well as a qualitative dimension. The quantity of effort depends on physical strength, vital energy and willpower and its quality depends on dedication, selflessness, concentration and the aspiration for progress, excellence and perfection or in other words character of the person.

The output depends on effort but also on knowledge, talent and skill. Someone may be crude, selfish and corrupt in his character but he may have great vital energy and well-developed faculties of action with some talent or skill in a line of activity. Such a person will be tremendously productive. In the traditional corporate world he will be admired as a star performer or a great executive or professional. His weakness and defects in character are ignored.

On the other hand, another person may be honest, kind, compassionate, refined, sensitive, cultured, humble, willing to work hard and improve, at a higher level of inner development, but if he has some weakness or defects in his vital being or faculties of action, he may not be very productive or efficient in his work. Such a person cannot thrive in the corporate world. If he is working in a hardcore traditional business organization, he may be fired for incompetence or even if he is retained he cannot rise up in the corporate ladder and will remain at lower levels as an unimportant and insignificant person in the organization.

This principle applies equally to education. The academic performance of a student depends on a combination of three factors: intelligence, interest and effort. When the student is interested in a subject, effort comes naturally and when it is illumined by a good intelligence it leads to academic excellence. When the intelligence is lacking, but the interest is there, the spontaneous effort it generates can awaken the intelligence by pouring vital energy into it and lead to good academic performance. If both interest and intelligence are lacking, then the academic performance is likely to be poor. But intelligent and interest can be developed by a persistent and patient effort and concentration, which develops willpower and character. A student who is willing to make this effort and does it with persistence, patience and hard work has strength of character, though he may be poor in academic performance. And he is likely to be much more successful in life than someone who has a brilliant academic career but lacking in this quality of character.

Towards a Higher Culture

We have to evolve a new culture of management and education which takes into consideration all the factors which we have discussed so far. In management, we have to think beyond performance and productivity. If the corporate world has to progress further in its higher and future evolution, people with character and compassion and with a greater intellectual, ethical, aesthetic and spiritual sensitivity and culture have to ascend to leadership position at all levels from the board of directors to the lowest supervisory positions. For this to happen, we have to build a new corporate culture and environment, where these qualities are valued, recognized, appreciated, rewarded and cultivated at every stage of human development, beginning with recruitment and selection and later in the domains of assessment, motivation and reward, training and development. Similarly, in education we have to think beyond enhancing the academic performance of the student to the integral development of the learner which means, all the potentialities, power and faculties of his body, mind, heart and soul. This requires a more holistic assessment of the educational progress or achievement of the student with a greater emphasis on self-knowledge, self-mastery, progressive leaning and constant improvement rather than on book knowledge and gradations based on academic performance.

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11Oct/18

Book Review- Poor Economics

Poverty is a subject of great interest to economists and there is a voluminous literature on this subject discussing the problem and remedy in great detail. The authors of this book under review Abhijit Banerjee and Esther Duflo are two senior and award winning economists from the famed Massachusetts Institute of Technology, MIT. The book is a winner of the FT/ Goldman Sach Business Book of the year Award 2011. Amarthya Sen, the Noble Laureate in economics describes the book as “Marvelously Insightful”

In this book authors study in minute details the problems of the poor who live on the less than 1$ a day. “Poor economics is a book about the very rich economics that emerges from understanding the economic lives of the poor” says Banerjee and Duflo. “it is about the kinds of theories that, help us make sense of both what the poor are able to achieve and for what reason they need a push. Each chapter in this book describes a search to discover what these striking points are and how they can be overcome.”

A true solution to the problem of poverty has to tackle the malady simultaneously at two levels: first, in the long-term, a progressive attempt towards eventual elimination of poverty. Second, in the short term, simple remedies which can help the poor in their present problems and in an incremental betterment of their lives. Banerjee and Duflo deal with both but with a greater emphasis on the second; in the following passages they describe the two aspects forcefully and elegantly:

“Given that economic growth requires manpower and brainpower, it seems plausible, however, that whenever that spark occurs, it is more likely to catch fire if women and men are properly educated, well fed, and healthy, and if citizens feel secure and confident enough to invest in their children, and to let them leave home to get the new jobs in the city.

It is also probably true that until that happens; something needs to be done to make that wait for the spark more bearable. If misery and frustration are allowed to have their way, and anger and violence take over it is not clear that the spark will ever arrive. A social policy that that keeps people from striking out because they feel that they have nothing to lose, may be a crucial step toward preserving the country’s date with that elusive takeoff”

Among the many strategies and remedies for resolving the problem of poverty, Banerjee and Duflo stress mainly on the following:

  • A system of education which provides the basic skills to earn a decent living with a close monitoring assessment and improvement of the process of education and its results to ensure the desired outcomes are actually realized.
  • Providing basic and affordable nutrition which lays down a strong foundation of health in people.
  • Simple, low-cost and effective innovations like microcredit which can break the vicious circle of poverty and kick- start a reverse cycle of progressive improvement in the living conditions of the poor; iodized salt which can improve their health: electronic money- transfer through mobile which can enhance their financial capabilities.

Another unique feature of the book is that ideas and theories are supported by authentic empirical data and research. For example, the authors cite the following research surveys to illustrate the substantial impact of nutrition on education and poverty.

“In Tanzania children were born to mothers who received sufficient amount of iodine during pregnancy completed between one third and one half year more schooling compared to their younger and older siblings who were in utero when the Mother was not getting these capsules. Although half a year of education might seem a small gain, it is a substantial increase, given that most of these children will complete only four or five years of schooling. In fact, based on their estimates, the study concludes that if every mother were to take iodine capsules, there would be 7.5 increase in the total educational attainment of children in central and Sothern Africa. This in turn could affect the child’s productivity throughout his or her outer life”

This book as a whole is an important contribution toward understanding the problems of the poorest people in the world. However, as a part of the long–term remedy to poverty, the authors could have discussed in some detail the impact of inequality on poverty. The problem of inequality is now recognized by all economists. It figures prominently in the reports of UN and institutions like World Bank. The facts and figure point out that a small percentage of the richest people mop up most of the resources, income and fruits of development in the world. This shows a serious lacuna in the distribution and sharing of wealth a better distribution and a much more equitable sharing of wealth … and the instruments of wealth like technology… from the rich to the poor can have a substantial and lasting impact on poverty. What is the cause of this unjust and unfair inequality in the world and what can be the lasting solution to type problem? What tis the role of moral and psychological factors like exploitation greed and selfishness in fostering and perpetuating this inequality? Can a higher system of education with an emphasis on the moral and spiritual development of the individual, which can awaken and implant the impulse to share and give on a large scale in the young minds lead to lasting impact on inequality and poverty? Such questions may be beyond the scope of the present book under review. But they have to be discussed and debated by everyone who is interested in finding a lasting solution to the problem of poverty.

M.S.Srinivasasn

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11Oct/18

From a Low–Cost Commodity to a Premium Brand

Branding is an esoteric subject in marketing and management with many experts, consultants and gurus doing brisk business in helping companies to build and manage their brands. What is the secret of successful brandling? The success story of a Brazilian company which was able to transform its product from a local poor- man’s commodity into a fashionable and premium brand may throw some valuable insights. This article examines the branding journey of this Brazilian company in the light of integral management and its implication for Indian companies.

The Case

Apargathas is a Brazilian company set up by two immigrants, Juan Echegaray and Robert Frazer, for manufacturing footwear. Initially the company’s low-cost footwear became a big hit. Called as Havaiana’s slippers, it became a dominant footwear product in the Brazil, achieving a mastering market leadership with 90% market share and selling 100 million pairs of slippers. Havainas became a household commodity sold to customers in every socio-economic category.

But with rapid economic progress in Brazil and the socio-economic condition of people improving fast, sales of Havaiana chapels dropped to 35 percent. Two major factors caused this slump in the market. The more affluent sections of the society perceived Havaiana chapels as a poor man’s footwear worn by lower income groups like maids and construction workers. And the competitors moved in to seize the opportunity with more fashionable and premium products.

The management of Apargathas responded to the challenge with a total revamping of its strategy. The first part of the strategy is to offer a variety of new styles, packaging and displays, with an attractive spectrum of colours and prices, supported by an ad-blitz. These ad campaigns promoted the product as the right foot wear for shopping, leisure, travelling and for resorts and holidays. The second part of the strategy is to stress on the Brazilian cultural traits, which according to the company’s perspectives “youthful, relaxed, and stylish.”

The strategy clicked. In just six years, Apargatas managed to reverse the decline in sales. From 65 million pairs in 1993, sales raised up to 105 million pairs in 1999. Its net sales rose to approximately $ 1.27 billion with a net income of $ 152 million touching the highest in its history. The company expanded its operation beyond its national boundaries to other South American countries like Argentina with a similar strategy. The proximity and cultural affinities of these markets to Brazil, combined with the knowledge of the regional market helped the company to capture a large market-share in Argentina. In 2008, the company launched its Havianas brand in New York and Paris retaining its Brazilian identity and spirit. And the US and European customers responded positively to the campaign and the sales picked-up. The company has opened its first retail shop in California. Haviana slippers were marketed as a high – end premium brand with 150 styles with praise ranging from $ 16 to $ 200. The company has recently revealed plans to launch their products in India and Pakistan.

The Commentary

What are the key factors behind the success of Apargatas? The first part of the strategy is not something new but more or less well-known to all marketing processionals. All over the world, in all nations, when a section of the society achieves prosperity and moves from low-income to high-income category, its consumption patterns shrifts from indispensable necessities to affordable luxuries, seeking for variety, colors, style, fashion, and a recognition of its higher economic and social status. And most companies respond to this category of the customer with a more or less similar strategies like that of Arparagathas. The second part of the strategy with its stress on culture is not as common, though it is now increasingly recognized by marketing and branding gurus.

Jan – Benedict E.M. Steencamp, distinguished professor of marketing in Kenan-Fangler Business School University says “brands should be linked to a country’s culture” and attributes the success of Apargatas to this cultural element in their strategy. “There are several positive-cultural meanings that customers around the world associate with Brazil” says Steencamp “vibrant colors, sensuality, youth, joy, fun and a sense of humor. Aparagathas used this identity to gain a global advantage. It was able to transfer these cultural associations to Havianas with a cleverly designed marketing strategy”.

However culture is a complex system with a deep and subtle influence on people. There are many dimensions to a Nation’s culture. There is the outer form of culture made of its customs and traditions. There is a deeper and higher dimension of culture, which comes from the inner mind and soul of a nation and its civilizational roots, made of its basic value-systems. And in between, there is a psychological dimension made of some specific qualities or temperament of the people, shaped by many factors like evolution, environment and infiltration of the nation’s deeper and higher self in to the mind and life of people. An important part of this aspect of culture is self-perception of the people, what a group of people perceive themselves to be and also what other part of the world see in that culture. The Brazilian traits like youthful, relaxed, stylish or joy, fun, sense of humor, belong to this intermediate level of culture, and a part of the self-perception by the people. None of these qualities are entirely unique to Brazilians. America, more recently formed, with its youthful entrepreneurs and its passion for individual liberty, change and innovation is perhaps a much more youthful nation than Brazil. Similarly Italians are perhaps much more relaxed and the French people much more stylish, sensual and fashionable than Brazilians. However from the point of view of marketing, what matters is the self-perception. If the Brazilians think and feel that youthfulness, relaxed etc. as the unique character of their nation and its people and if a marketing strategy makes the right connect between this cultural factor and the promotional campaign, it has a positive impact on customer choice.

Another important factor to note is that qualities like youthfulness, fun, joy; humor has a universal appeal transcending the specific nature of cultures. All of us, young or old and to whatever culture or nation we belong wants to feel or appear youthful, to be happy and enjoy fun and humor. So it is difficult to say precisely what is the main factor which leads to Apargatas’s cult-brand. It is perhaps a combination of factors like time-tested methods with the right cultural connect, which also contains elements with a universal appeal. We have here a balanced and effective formula for marketing success.

However there are nations with a dominant uniqueness and a deep and lasting influence on its people. One of them is India, well-known all over the world as the land of religion, spirituality and yoga. In our modern age, most of the nations have lost touch with the roots of their civilization and culture. Only India is still has a living contact with its ancient spiritual roots. Even now India is producing great spiritual Masters who is giving a new form to the ancient spiritual wisdom. The great and ancient science of yoga is still lived and practiced in the hundreds of small and big Ashrams in India and by many thousands of seekers all over India. The ancient myths, symbols, epics and temples of India still hold a great appeal for Indian masses and some of them well-known all over world. So cultural motifs of India can be a very rich source for branding for Indian companies. As Knox Messy professor of marketing, points out “if there is an emerging market that can put cultural branding in practice, it is India. Its symbols and myths are known around the world.” However when these sacred symbols of India are used with an entirely commercial motive or with a dilution or distortion of their meaning, it is a gross form of exploitation, which may bring adverse results in the long term, because these symbols have a living inner power and misuse of them may have a negative reaction. For the Indian companies and for the Indian nation as a whole, the right strategy for branding it’s to incorporate the spiritual wisdom, vision and values of India and the deeper significance of its symbols in the promotional campaigns with a certain disinterestedness as a service to humanity. It is in fact a great service because the vision of India can lead humanity towards its highest spiritual fulfillment. If a company can do it with a creative force and a certain freedom from commercial motives it acquires a considerable amount of positive karma, which enhances its long term sustainability.

Sources

The case is based on case study in Business Today

M. S. Srinivasan

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