Prahalad taught them to think outside the box

The India-born global management guru not only helped companies but also MBA students and faculty to think laterally.

Seventeen years ago, the 1993 batch of MBA students at the University of Michigan had concern written all over their faces. Their class was running the risk of becoming the first one to graduate without any courses by Indian management guru Coimbatore Krishnarao (CK) Prahalad.

“He (Prahalad) did not let that happen and, in the Spring of 1993, focused on being in Ann Arbor for seven weeks. He agreed to teach two MBA courses on strategy. The response was overwhelming and multiple sections were opened up with CK teaching from morning to evening. I registered for one course which was excellent and I decided I must somehow attend the other course too.

“CK said it might not be possible since every section was filled to capacity. I persisted and attended the classes even though I had to stand. Finally after a couple of sessions, CK relented and I was able to enroll in the second course as well. Thus, my friendship with CK was born,” recalls Samir Bagri. The persistence paid-off for Bagri who is now founder of Bagri Global.

Similarly, in 2004 during Praveen Suthrum’s first month at the University of Michigan, he and a friend casually walked up to Prahalad’s office to get him to speak to the ‘Emerging Markets Club’. “We thought we’d find a secretary but there was none. We were too nervous to just walk in — heck, he was the most influential figure on campus. After a minute of debate, we simply walked in and introduced ourselves and asked him to speak to our club.

“CK responded saying he was sure the club members would turn up if he came to speak but urged us to do something more action-oriented — write business cases for his book. Back in class, my fellow students laughed skeptically when I told them that we would write cases that would be published as a book by CK Prahalad.

“At the end of my MBA, I remember sitting in the student lounge and leafing through ‘The Fortune at the Bottom of the Pyramid’ and smiling; it was the best graduation gift ever. CK made that happen,” recalls Suthrum who today is the founder and president of NextServices — a healthcare management company with 120 people in Ann Arbor, Michigan and Mumbai, India.

Bagri and Suthrum are not alone when singing paens to Prahalad who passed away on April 16 this year. Hundreds of students whom Prahalad tutored and even those he didn’t, besides his colleagues at Michigan university and admirers from other universities assert that his contribution to management strategy across the globe is unparalleled. “B-schools across the world use his work extensively in classrooms. His book — The Fortune at the Bottom of the Pyramid — is for Indian companies. The whole idea core competence was created by him. His landmark strategy courses would always be a part of the B-school curriculum,” notes Bala Balachander, founder dean Great Lakes Management Institute.

Bhavin Mehta and Rhitik Karande, both students of Jamnalal Bajaj Institute of Management Studies (JBIMS), believe that Prahalad’s managerial philosophies have shown them “the right way to redefine the thinking that is required for the future”. Prahalad’s theories have come up in many discussions at JBIMS. His concept of ‘Inclusive Capitalism’ has been one which has aroused much interest; be it in the field of marketing, finance, or general management.

Prahalad was also known to have regular interaction with B-school students and faculty around the globle. For instance, during a recent three-day visit to the Goa Institute of Management (GIM), Prahalad interacted with the students and faculty. “He took the time to interact with the students and faculty separately. He spoke to the students about the need for innovation and strongly encouraged the students on the importance of thinking out of the box and how it would help young managers survive the world economic downturn,” recounts Peter F X D’Lima, Director of GIM, adding: “Most of his (Prahalad’s) theories are taught in the marketing subjects of the GIM curriculum.”

“Closely following the philosophies of Prahalad, IILM strives to be creative and innovative in its teaching learning processes,” concurs Surabhi Goyal, Associate Professor (Market strategy and Consumer behaviour) at IILM. The institute, says Goya, is also inspired by the knowledge-building methods adopted by Prahalad at Ross Business School “which encourages an academic setting where learning is through discussion and practice rather than power point presentations”. His strategic approach to target the bottom of the pyramid continues to be the underlying philosophy of modules taught at IILM namely Strategic management, Market planning strategy, Rural marketing and Entrepreneurial planning and innovation.

P K Gupta, Chancellor of Sharda University adds that at the management school of the university, “very often, we refer to various works on corporate strategy authored by Prahlad — prominent among them are ‘The Core Competences of corporations (Harvard Business Review, May-June, 1990), The Future of competition, (with Venkat Ramaswamy), 2004”. Besides the students having completed academic assignments on the “iconic case studies of Prahalad — that is Aravind Eye Hospital and Bank of Madura”, as part of our ongoing campus activity, Sharda University will be organising a lecture on the topic ‘Management theories of Prahalad and its relevance in Indian context’.

Prahalad’s former students point out that the mentoring went beyond B-school education. For instance, when Suthrum was starting his own company in late 2004, he consulted Prahalad over dinner. “If you are calling the company NextServices then it better be doing that. Build for the future regardless of whether you have resources or not now,” Prahalad told him. “We did exactly that”.

Bagri had a similar experience. “Last year 2009, I decided once again to go down the entrepreneurial path, setting up my own consulting firm in India. Once again, it was time to seek out CK for his advice. I found him speaking at a conference in Delhi. We continued our conversation over breakfast the following week in Kolkata. CK listened to my entrepreneurial ideas, gave me advice and reminded me to just do it!,” says Bagri adding with disappointment: “Little did I know that would be the last time I would see CK. He was truly one of a kind.”

Had the makings of a great teacher

Samir K Barua

Director, Indian Institute of Management, Ahmedabad

C K Prahalad graduated from IIM Ahmedabad in 1966. He was in the first batch of the two-year Post Graduate Programme in Management. He was a gold medallist. After working for six years, he joined IIM-A as a faculty member in 1972. The institute sponsored Prahalad for DBA at Harvard Business School. He rejoined the institute in 1975 after completing his DBA. He left for the US in 1977. Even as a rookie academic, CK Prahalad displayed the makings of a great teacher. He was brilliant in his presentations and communication – making complex ideas simple in the classroom and challenging the students to think differently from the established view. His work and the ideas he proposed reflect the confluence of the orient and occident.

In the last several years, the gift of his oratory skills would be on display almost every year when he would come back to Ahmedabad and deliver a public lecture at the famous Louis Kahn plaza at IIMA. The plaza would be packed with an appreciative audience on such occasions. Prahalad left India when the country was going through a phase of narcissism. Multinational companies (MNCs) were being forced out of the country. He passed away in an era when MNCs are flocking back to India. He was a staunch believer that India would have a significant place as a major economy in the world of tomorrow. His interactions with the captains of industry and government of India were based on this firm belief.

I still remember the early winter morning in 1976 when I ran into Prahalad and Gayatri (his wife) taking a morning walk on the campus. He was trying to photograph a kite that was sitting atop a tree, surveying the world beneath. The kite took off and soared up and away as did Prahalad to take his place in the sun.

CK had foresight

M S Krishnan

Professor of Business IT,

Ross School of Business

I first saw CK in 1997 at a public presentation he was delivering in Ann Arbor on the emerging economies, primarily India and China.

Although I was sitting in one of the last rows of a big auditorium at the Michigan Business School with 400 people in it, I still remember his last slide in that presentation. It was a picture of a family of five in India travelling in a two-wheeler with the mother holding a baby in her hand balancing herself in the rear seat.

CK concluded by saying that “You don’t need market research and a team of analysts to find out whether there is a big market for affordable cars in these countries.” He added, “But you cannot design products for those markets sitting here in Detroit. You need to be there to deeply understand the requirements and need for affordability.”

That was 13 years back. The world celebrated the Tata Nano innovation last year. All the major global auto firms now have the small car category as an integral part of their competitive strategy. That is CK for you.

Learnings for ISB

Reuben Abraham

Executive Director,

Indian School of Business

CK Prahalad and Stuart Hart published ‘The Fortune at the Bottom of the Pyramid (BOP)’, which provided a construct with which one could argue that the opening up of markets to the poor was a good idea, as with mobile phones.

Prahalad made a powerful case for the use of market-based solutions, rather than development aid, as a means to ending poverty. He also argued in favour of technology and innovation to reinvent cost structures, a pre-requisite for doing business at the BOP.

Critics, however, said Prahalad’s thesis was too focused on consumption rather than production; was too focused on MNCs rather than SMEs which are the engines of job creation in an economy; and there were definition issues with both poverty and BOP and how to measure them.

In 2006, the ISB set up the Base of the Pyramid Learning Lab with Stuart Hart’s group at Cornell University. We later expanded our mandate from being BOP-focused to being more holistic and set up the Centre for Emerging Markets Solutions. I think Prahalad would have approved the idea.

http://www.business-standard.com/india/news/prahalad-taught-them-to-think-outsidebox/392978/

Poorly Made in China: A Reality Check

Despite being hailed as ‘the world’s workshop’, China’s reputation of being a reliable and responsible manufacturer is far from world-class. In his new book ‘Poorly Made in China’, intermediary and author Paul Midler exposes the pitfalls of manufacturing in China, debunking several myths in the process.

The first -- that China exists for the United States alone to make things for Wal-Mart -- is a fallacy, says Midler. The reality is that Wal-Mart’s business in China, in terms of outsourcing, is less than one per cent of total Chinese exports.

“It was a statistic that was widely published in 2008, that procurement for Wal-Mart out of China was steady at $9 billion. And steady does not necessarily imply something good there. It may have remained steady over the course of three years, but meanwhile Chinese exports were climbing 20 per cent during this period,” he told INSEAD Knowledge. “That the largest of the largest is less than one per cent is telling. The United States doesn’t take more than a fifth of China exports.”

This ties in with the next preconceived notion of a one-size-fit-all approach to economies worldwide. “There are some people who believe that all economies are the same, that every place in the world is more or less the same. Supply, demand -- whatever their basis -- they believe that it's all the same. But actually there are quite a lot of differences among us and some of those differences are cultural. Every place is different. Even a place like the United States, you cannot say is uniform. You have Manhattan, you have Alabama, there are many different places.”

China, he adds, does not operate on the same economic principles as other countries. “What can you say about an economy where relationships get worse over time (and about) factories that are more successful are harder to work with than factories that are struggling? And what does that say about the Google case in China, and how China is becoming more and more successful; and the more successful it becomes, the more teeth it starts to show ... You have (this) exacerbation of the boom-bust cycle in China because people, when they are becoming more successful, are behaving in riskier and riskier ways and taking more and more liberties.”

He elaborates: “Some of the factories that are engaged in the quality games are not the poor ones, (it’s) the ones that are actually doing better. It’s the poor factories in China that don’t dare play games with quality that actually deliver a higher quality product.”

Ironically it is the ones who that have made their money, are bored with their success, have already gotten over the excitement of snagging their big customers, that are trying to show how clever they can be -- by taking shortcuts where possible.

Yet China continues to receive production orders from all over the world. Why?

“Some of that has to do with the things they’re good at, like finding the margin down the road and quoting lower in the beginning,” says Midler. “One of the singular ways in which they do business -- and, really, to their credit -- has been the way in which they’re able to take a chance on the long term with regards to a production relationship. Maybe in the beginning they have no profit, but down the road they’ll find their way.” And that level of confidence is something that I don’t know if manufacturers in other economies have seen.”

One of the methods used by Chinese manufacturers, he says, is the ‘arbitrage opportunity’. So while profit may not be generated from producing for first-market importers in the US, Canada and Western Europe, a manufacturer’s bottom line could, instead, derive solely from second-market customers in Latin America and the Middle East.

“A manufacturer accepts an order for 500,000 pieces from a first-market importer that produces a unique design. Rather than merely fill the order, the supplier keeps the machine running and its people working until it produces a total of 700,000 pieces. The original customer gets his order for half million pieces, and then the factory sells the surplus of 200,000 pieces at a considerable markup.”

Another tactic is ‘quality fade’ where manufacturers sometimes secure an order and then, over time, they lower the quality standard of the product in order to find their margin. “This is sometimes done to the detriment of the product itself and that’s when we’ve seen things go awry,” he says.

Midler thinks the quality issue can’t be addressed in a top-down fashion, but rather it’s those on the factory floor who can turn around the situation. “I think it needs to be handled from the bottom up, not from the top down. And I think a lot of the approach right now has been having high-level meetings. The United States’ watchdogs and the China watchdogs get together and they have dialogue and a lot of it is empty talk.”

The US though has been trying to make some headway on quality control via its Food and Drug Administration offices in China, which they opened in 2008 as part of its strategy to improve safeguards for US imports. “I think it’s the first time ever a major economy has ever had to take a domestic agency of that kind and set it up overseas ... It’s a sign of how bad everything is, that we’ve actually had to do that.”

Midler says it’s “very disturbing” that, even after two people were executed in an earlier melamine scandal back in 2008, more new cases are still surfacing. “Cadmium in toys has now come up. And you’d think we’d learn the lessons already from the lead case (when Mattel had to recall millions of toys made in China), and here we are revisiting the same old issues.”

One of the reasons for this stalemate, he feels, is because there just aren’t enough whistle blowers in China, as the Chinese view whistleblowers with disdain because they are seen as acting out of self interest.

“With regard to the quality scandals that we've seen, in almost every case, we didn't find out about the product failure until it reached the end market and there was a bad result. But in many of those cases, there were workers in production facilities that knew what was going on and that they didn't say anything. You can't fault them because there's really nowhere to go. If you were working somewhere and you knew about the melamine scandal and you saw what was being done, who would you report it to?”

Convincing those at the upper echelons of any wrongdoing is even harder. “You can’t convince somebody that his methods are wrong, when his business is growing 100 per cent or more, (and) your business is growing only 10 to 20 per cent a year ... People who are doing well (are) emboldened by their business style and thinking.”

With no real safeguards in place, it seems then that the only recourse for now for those wanting to trade with the Chinese is caution. Midler offers this advice: “You want to temper expectations. I think a lot of people who were big boosters on China, convinced many who didn't know better to rush in to China without weighing in certain risk factors. You definitely want to make sure that, for certain things, you're budgeting enough on the compliance issue. If you're in manufacturing, you want to make sure that you have a budget for doing things like quality control.

‘Poorly Made in China: An insider’s account of the tactics behind China’s production game’ is published by Wiley.

First published: March 12, 2010

http://knowledge.insead.edu/contents/manufacturing-china-midler-100312.cfm

The Lafarge Dilemma

Lafarge has a cement plant with one leg in India and the other in Bangladesh. The plant also finds itself on both sides of law.

The Indian landscape is testing territory for mining companies. While they are tempted by the immense richness of the soil, they are also put off by its uncountable hurdles — forests, native settlements and lack of infrastructure. It looked like things were getting better when French cement major Lafarge’s limestone mining project in Meghalaya started off in 2006 “almost smoothly,” given its complex nature.

A 17 km-long conveyor belt takes the limestone across the border to Lafarge’s cement plant in Bangladesh, part of the Indian government’s promise to develop its neighbour’s cement sector. But Meghalaya comes under the Sixth Schedule of the Constitution due to which its land laws are vulnerable to various interpretations.

In 2007, the Union Ministry of Environment and Forests asked the company to stop its operations on grounds that the mining was being done on forest land and not “non-forest land” as certified by the state administration. Though Lafarge got an interim relief from the Supreme Court, earlier this year it was forced to close the mines after a new directive. Lafarge’s fresh application for forest clearance is now being considered by the Apex Court.

So how did a non-forest land suddenly become a forest when officers from the centre checked? While Lafarge officials declined to comment on the story, local activists smell a “conspiracy to alienate native Khasi tribals,” as alleged by B.M. Roy Dolloi, legal advisor of Shella Action Committee, or SAC, named after the village where part of the mining land is located and which has filed a PIL (Public Interest Litigation) in Meghalaya High Court.

If the ban on mining is not lifted, Lafarge’s Bangladesh plant may close down “within weeks.” The SAC alleges that the transfer of land to Lafarge is illegal. “The land sale was done in secrecy. How was a tribal land given to a non-tribal entity? It is completely illegal,” says Dolloi. He adds that under the Meghalaya Land Transfer Act, even the state doesn’t have the right to transfer a tribal land to a non-tribal person or entity. He cites the Samata judgment in Andhra Pradesh where the state government had to return tribal areas that were transferred to mining companies.

Sources close to Lafarge say that the landmark judgment doesn’t apply in Meghalaya as it has its own land tenure system under the Sixth Schedule, which empowers tribal councils and the chieftains in transfer of land. Lafarge claims it has got clearance from the local tribal body. “It is a case where too many regulatory laws are involved,” says Neerav Merchant, Associate Partner at law firm Majmudar & Co. “It remains to be seen where the final word rests,” he adds.

Questions have also been raised on how Lafarge was allowed to mortgage the “Indian” land to raise money for its Bangladesh project. And similar to the issue of iron ore exports, there are also murmurs to restrict the across-the-border movement of limestone to conserve “national resource.” Fortunately for Lafarge the state and the central administrations support the company, which claims it has followed the law. Lafarge will hope the legal webs would be cleared before its Bangladesh plant runs out of limestone.

Find this article in Forbes India Magazine of 30 April, 2010

http://business.in.com/article/boardroom/the-lafarge-dilemma/12642/1

'China will be the world's largest economy'

"In the next five years both India and China will continue to grow very fast. Both will struggle to gain influence in global decision-making that is commensurate with the size of their economies," says Arthur Kroeber.

In an e-mail interview with rediff.com, the Beijing-based managing director of GaveKal Dragonomics, an economic research firm, and editor of the China Economic Quarterly, explains why China will be a power to reckon with and what all India can do to attain greater growth.

China is likely to become the world's largest economy in a few years. Your opinion, please.

This year China will become the world's second biggest national economy, ahead of Japan, with a total GDP of over $5 trillion. It still ranks well behind the United States, whose economy is about $14 trillion, and the combined European Union economy, which is about the same size as the US.

If we assume that China's economy continues to grow at 12 per cent a year in nominal US dollar terms (8 per cent average real growth plus 4 per cent combination of inflation and currency appreciation), and the US grows at 5 per cent nominal (3 per cent real plus 2 per cent inflation), then China's economy will surpass the United States in 2025 to become the world's biggest economy, with a GDP of around $31 trillion.

It might happen a bit earlier or a bit later, but it is likely that by 2030 at the latest China's will be the world's largest national economy.

An aerial view of Shanghai's new financial district skyline along the Huang Pu river at night.

What, according to you, are the secrets of China's phenomenal economic prowess? Where had India gone wrong?

I am not so sure that India has 'gone wrong'. China's growth mainly derives from the following factors:

Very favorable demographics since the mid-1970s. Note that after 2020 China's demographics will become very unfavorable while India's continue to improve.

The main effects of favorable demographics are:

The creation of a very large labour force, and

The accumulation of high national savings.

Effective mechanisms for mobilising national saving for investments in basic industry and essential infrastructure.

Pragmatic, investment-friendly economic policies. These include the decentralisation of much economic decision making to local governments, and the creation of incentives for local governments to compete for investment and economic growth.

Has China's rapid economic rise changed social welfare? Have the benefits touched the majority of its population?

Social welfare has improved dramatically in China. The vast majority of Chinese citizens have a much higher standard of living than 5, 10 or 20 years ago.

Inequality has increased, but that is mainly because of structural reasons: people get wealthier by moving into the cities, but the cities can only absorb so many people each year (approximately 12-15 million).

Those that are left behind on the farm see their incomes grow much more slowly than city dwellers. But eventually they will be urbanized and their incomes will catch up.

In India almost 37 per cent people live below the poverty line: what can New Delhi do more to make growth more inclusive and widespread?

Deregulate labour markets and dismantle barriers to investment. Also improve and make universal basic education (6-9 years) to enable more people to participate in the modern economy.

What do you think are India's economic strengths and weaknesses?

Strengths are good capital markets, a strong entrepreneurial business culture, and increasingly favorable demographics which mean that the labour force and the national saving rate will rise for another couple of decades.

With more resources available, India will be able to invest at a much higher rate and sustain an economic growth rate of 8-10 per cent a year for two or three decades.

Weaknesses are poor institutions, inflexible labour market, insufficient basic education, and unreasonable restrictions on certain kinds of investment activities, especially in labour-intensive industries that can provide the basis for long-term growth in an economy with a large labour force and low wages.

What role will the Chinese financial markets play in shaping global sentiments? Do you think Indian financial markets have the strength to play a global role?

China's financial markets are essentially closed to foreign participation, so they have no direct impact on global markets. But they have a sentiment impact because China's economy is so huge.

India's financial markets will play a similar role when India's economy is sufficiently large, in 10-15 years.

China is gobbling up major American brands. Will it be able to maintain this momentum?

Actually, China has gobbled up no American brands. The only exception is the IBM personal computer business which was bought by Lenovo. But the broader IBM brand remains untouched.

Chinese firms' big long term focus is on the fast growing domestic market. To the limited extent that they acquire foreign brands and technology, the aim is to strengthen their market position at home.

But for the most part Chinese firms do not have the financial or management expertise to integrate large-scale acquisitions of sophisticated foreign firms.

In the recent global turmoil, China's banks have remained largely unscathed. What are the reasons?

Because China's financial system is largely closed, the currency is non-convertible for capital transactions, and capital flows are heavily regulated.

21st century belongs to Asia. How true do you think is this statement?

It's a vague statement with no clear meaning. What we can say is that Asia's share of total global economic output will rise substantially, led by China and India.

China and India's combined GDP is approximately $6.5 trillion or about 11 per cent of the global economy of $60 trillion; however the two countries' share of global population is around 40 per cent.

So the combined share of global GDP will certainly rise, although it will probably not reach the population share. However the economic power of the US and Europe will remain very important, as those regions are still by far the most important sources of technological innovation.

What are the privileges and problems of China's socialist market economy? How would you compare them to the problems of the Indian economy?

The main strengths of China's system are the effectiveness of mobilising saving for productive investment in industry and infrastructure, and the ability of the government to identify, analyse and respond to a wide array of economic and social problems.

Some of these strengths derive from the economic reforms of the past 30 years but others -- especially bureaucratic capacity -- rest on 1,500 years of continuous bureaucratic governance, a history that is unique to China.

The weaknesses are an underdeveloped and inefficient financial system, and a political system that discourages innovation and insufficiently represents a diversity of interests.

On India's strengths and weaknesses, see above. India can benefit from a study of China in learning how to mobilize savings and improve the investment environment. However its political system responds to an entirely different social reality and it is unfair to compare the two systems.

Should China devalue its currency? Do you think a common Asian currency might evolve?

China's currency will probably appreciate against the US dollar at an average rate of 3-5 per cent a year over the next decade, based on China's faster economic growth rate.

A common Asian currency is impossible without some federal Asian political structure, which is inconceivable at present.

As US dollar is being devalued it is said that China, since it holds about $1 trillion US Treasury bonds, can actually hold Washington hostage in economic negotiations. How true is the statement?

The reverse is the case. If China sells its Treasury bonds, it must buy something else. There is no other asset class that can possibly absorb such a large amount of money. So long as it continues running big trade surpluses and accumulating foreign assets, China has no choice but to buy US treasury bonds. Therefore, it has no real leverage.

In the global economic arena, where do you see India and China in the next 5 years?

Both will continue to grow very fast. Both will struggle to gain influence in global decision making that is commensurate with the size of their economies.

Gaining that influence is a long and complex process that does not simply depend on sheer economic size, but the sophistication of governance institutions and the willingness to look beyond domestic concerns. On both of these latter counts both India and China are still quite under-developed.

http://business.rediff.com/slide-show/2010/apr/22/slide-show-1-china-will-be-the-worlds-largest-economy.htm#contentTop

Sweetest language tag for Bengali?

The Bengali New Year couldn’t have started on a sweeter note. If a message circulating on social networking sites like Twitter and Facebook is to be believed, Bengali has been voted the sweetest language in the world.

Conducted by UNESCO, the vote ranks Spanish and Dutch as the second and third sweetest tongues respectively. Even though Twitter and Facebook users have started celebrating, there was yet no official confirmation from UNESCO which conducted the online voting a couple of months back.

Messages and postings like “Joy Bangla”, “Proud to be a Bengali” and “Banglar Joy” have flooded social networking sites. Celebratory messages are being exchanged, though some felt it could be premature. Rahul Ray, who came across the news on Twitter four days ago, was ecstatic. “If so many people are talking about it, this has to be true. There can’t be any doubt that Bengali is a sweet language. Now, it has been accepted that it is indeed the sweetest,” said Ray.

According to twitter messages, the formal announcement could come on Rabindranath Tagore’s 150th birth anniversary in May. “There is no doubt that Bengali is a sweet language,” said author Dibyendu Palit.

http://timesofindia.indiatimes.com/india/Sweetest-language-tag-for-Bengali/articleshow/5842055.cms

What Subroto Bagchi says about Dr. C.K. Prahalad

Dr. C.K. Prahlad, we cannot get him back but we can keep him alive by taking his message and personal example to continue unabated towards creating India@75, the way he would have loved to see! Says, Subroto Bagchi, Vice Chairman and Gardener at MindTree Ltd.

“If you were a painter, how should you price your painting?” CK Prahalad would thunder in his trademark, booming, voice to room full of software industry leaders. In the next moment, he was giving them a good bashing for not understanding the essence of what he called value minus pricing. The way the software industry priced its output in the 1990s was akin to a painter charging for the oil and the canvas, and then some more for the labour, all at actual. “Going by that logic, how much do you think should be the price of an MF Hussain painting? You need to respect your own work if you expect the world to take note of it. What you are doing today is cost+ pricing; what you need to shift to, is value minus pricing.” Those were the days of Y2K and he went from company to company, industry associations to media interviews, urging Indian companies to go up the value chain. Looking back, he was asking midgets to behave like giants. But today, many of the very same midgets have transformed themselves into giants!

I met him many times after – his was a crusade like no one else’s: he wanted to see his motherland at par with the developed countries of the world that he straddled with the ease of an eagle. Wherever he went, from boardrooms in the US to think tanks in Europe or in his own country, he would ask people to do two things: to look at why something could not be done very differently and two, raise their expectations from their own selves ten, hundred, and sometimes, a thousand times. I have been personally, deeply, impacted by not just his message but the way he would take groups of disbelieving men and women, whipping them into rising above themselves with credible, compelling argument born out of a fine mind and at the end, making them aspire for the higher ground! He invariably did it with the sharpness of a sword, never let his audience feel wounded, instead he let them feel that the future, a higher, meaningful, impactful version of the future, was their entitlement.

When MindTree was launched in 1999, I met him at a small gathering. I walked up to him to personally tell about the fact that some of us had quit our comfortable corporate jobs and were raising venture capital to build a company. “What took you so long, I was wondering,” he quipped. In front of this giant, good was not good enough.

In the last one year, I have run into him a number of times. First we met at a sustainability think-tank at Nyenrode University in Amsterdam and then more recently, at a CII event in Kolkata where his wife Gayathri was with him. At Nyenrode, he spoke about sustainability with the same ease with which he has been teaching management strategy at class and boardrooms in the same unwavering way as he did two decades ago. At Kolkata, CK was asking a roomful of Bengali corporate bhadraloks as to why the path ahead for revival of Bengal was entrepreneurship and why the time was now. Knowing that only a God could change West Bengal, I was baffled at his messianic zeal. Then it occurred to me, more the disbelievers in some place, greater the need to preach there. Harder the ground, higher the need for the plough! To CK, Kolkata was where he was needed. As I listened to him speak: there was no change in the way he presented his teasers to the audience, there was no change in the way he confronted them, the only thing different now was his view of the next decade or two. CK saw the future like no one did. He was gifted by the Goddess of Learning with the ability to connect the dots, going forward. Most people can do it, only looking backwards.

CK was in Kolkata as part of a larger mission. He had helped CII craft the vision for India at 75! Only the other day, he had presented a document capturing the dreams and desires of people from a cross-section across the length and the breadth of the country to build a nation that would be full of opportunities for every Indian, a nation that would see education, health and infrastructure and concern for the environment

I have personally come to accept life; and in it, accept death. It does not cause me hurt or anguish.

At least, not for people who have given so much more to life than they have taken out of it.

We cannot get him back but we can keep him alive by taking his message and personal example to continue unabated towards creating India@75, the way he would have loved to see!

That said, Mother India, being a Mother, would grieve her loved son forever. For a mother, it is just never time.

Subroto Bagchi is Vice Chairman and Gardener at MindTree Ltd.

http://www.mindtree.com/subrotobagchi/in-memorium/

For my readers I have this much to add:

 

Coimbatore Krishnarao Prahalad (August 8, 1941 – April 16, 2010) was a globally known figure who was consulted by the top management of many of the world's foremost companies. His research specialized in corporate strategy and the role of top management in large, diversified, multinational corporations.

 

At Harvard Business School, Prahalad wrote a doctoral thesis on multinational management in just two and a half years, graduating with a D.B.A. degree in 1975.

 

After graduating from Harvard, Prahalad returned to India. He taught at his alma-mater the Indian Institute of Management Ahmedabad, but soon returned to the United States. He was appointed to position of the Paul and Ruth McCracken Distinguished University Professor of Corporate Strategy at the Stephen M. Ross School of Business in the University of Michigan.

On April 16, 2010, Prahalad died of a previously undiagnosed lung illness in San Diego.

In the earlier days of Prahalad's fame as established management guru, in the beginning of the 90's, he advised Philips' Jan Timmer on the restructuring of this electronic corporation, then on the brink of collapse. With the resulting, succesful, 2-3 year long Operation Centurion he also frequently stood for the Philips management troops.

C. K. Prahalad is the co-author of a number of well known works in corporate strategy including The Core Competence of the Corporation (with Gary Hamel, Harvard Business Review, May–June, 1990). He authored several international bestsellers, including: Competing for the Future (with Gary Hamel), 1994; The Future of Competition (with Venkat Ramaswamy), 2004; and The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits Wharton School Publishing, 2004. His new book with co-author M. S. Krishnan is called The New Age of Innovation.

He was co-founder and became CEO of Praja Inc. ("Praja" from a Sanskrit word "Praja" which means "citizen" or "common people"). The goals of the company ranged from allowing common people to access information without restriction (this theme is related to the "bottom of pyramid" or BOP philosophy) to providing a testbed for various management ideas. The company eventually laid off 1/3rd of its workforce and was sold to TIBCO. At the time of his passing, he was still on the board of TiE, The Indus Entrepreneurs.

Prahalad has been among top ten management thinkers in every major survey for over ten years. Business Week said of him: "a brilliant teacher at the University of Michigan, he may well be the most influential thinker on business strategy today." He was a member of the Blue Ribbon Commission of the United Nations on Private Sector and Development. He was the first recipient of the Lal Bahadur Shastri Award for contributions to Management and Public Administration presented by the President of India in 2000.

In 2009, he was awarded Pravasi Bharatiya Sammaan

In 2009 he was conferred Padma Bhushan 'third in the hierarchy of civilian awards' by the Government of India.

In 2009 he was named the world's most influential business thinker on the [Thinkers50.com] list, published by The Times.

This IIT-ian uses theatre to promote jobs, leadership

I read this article on Rediff and just one thing made me write about this person. A desire to do something for us. Something for our country which very few of us care to do. One more things needs special mention. He is doing something for my state, West Bengal, as also for my home town, Malda, a place famous for production of mango and silk, and once ruled by Hindu and Muslim rulers from the beginning of the 7th century till 1757 when the British attacked . That struck the right chord. I have modified the article to suit my readers.

He could have enjoyed a cushy job at the Tata Consultancy Services or could have minted money as a Silicon Valley software professional (he worked for Techna Incorporated in California). But for Kharagpur IITian Amitava Bhattacharya, entrepreneurship was an irresistible dream that he thought of chasing hard.

Out-of-box thinking has always been his way of life and hence instead of launching a software consultancy firm or something similar, he launched Banglanatak.com, a social communication firm that uses theatre and other folk art as the medium of promoting leadership and a culture for employment and growth.

A Chau performer

How does Banglanatak.com work?

The company is guided by the sole ambition of reaching the unreachables, said Amitava. The team is involved in a thorough day-to-day-research to assess the need of the rural communities across India and sends out proposals to the central and state government and social welfare organisations. It starts working on the projects as soon as the approvals and assistance arrive.

Banglanatak believes that community education and participation are the keys to sustainable development.

It has innovated unique theatre-based models for empowering backward and marginal sections of India with knowledge, skills and resources so that they can counter their vulnerabilities to diseases and crimes like trafficking.

The company has worked with diverse linguistic, cultural, religious and demographic groups across 21 states of India. Its strategy is to physically reach out to the people in rural areas and urban slums where conventional approaches fail because of illiteracy, poverty, absence of electricity and lack of infrastructure.

The company uses interactive theatre, forum theatre etc to promote community participation and involvement. It trains grassroots-level service providers and community-based resource groups in workshops.

The company has so far built about 3,200 theatre group networks across India through which it sends out social messages to further a social cause.

For instance, to build HIV/AIDS or reproductive child health awareness in any Indian state, the company gets in touch with the regional theatre groups or folk artistes of that state and trains them to put forth the relevant messages.

                  

Some Bengali folk art designs

How it helps rural artistes make a living out of their art

Banglanatak has worked in tandem with the Eastern Zonal Cultural Centre to revive Bengal's performing folk art forms like Chau, Domni and Jhumur as means of sustainable livelihood.

Under these programmes, 1,200 Chau artistes of West Bengal's Purulia district have formed 74 self-help groups, 134 Domni artistes of Malda have formed 10 self-help groups whereas 31 SHGs have been formed with 468 Jhumur artistes of Bankura district.

For instance, Banglanatak dot com has been a facilitator for skill development workshops for the Chau artistes, it has tutored the Domni artistes to use their art form as a means for livelihood and also as a tool for community education.

Under Banglanatak's guidance, the Jhumur naachnis, traditionally treated as outcasts by villagers, have been empowered and encouraged to seek their rights.

They have also been taught to earn their breads through their performances.

Jhumur performers

Objectives of the organisation

Preserving performing arts, folk traditions and rituals

Facilitating inter-regional exchange, collaboration and partnerships

Raising awareness about the role of theatre and other cultural media in social inclusion and economic empowerment

Its main activities:

Fostering pro-poor growth

Protecting rights of women, children and indigenous workers

Promoting culture for employment and growth

Safeguarding intangible cultural heritage

Banglanatak dot com team

Initial years had been tough

Neither the TCS job nor the Silicon Valley stint as a software consultant could satisfy Amitava's zeal to achieve something new. He often dreamt of doing something with theatre, a medium that he harboured a deep passion for.

He was itching all over to do something on his own, to create and launch a new concept back home in India.

What's the point in working in a foreign country when my own is a treasure trove of opportunities, he asked himself.

In the late 1990s, Amitava quit the Silicon Valley job and launched Banglanatak.com in his hometown of Kolkata in 2000.

Helped by friends (all of whom are project managers now) -- Sayantani Roychowdhury, Ananya Bhattacharya, Ranjan Sen, Nilay Basu and Madhura Dutta -- founder director Amitava Bhattacharya embarked on a unique journey across India.

His first task was to travel widely, interact with the people, and communicate with folk artistes and theatre groups and analyse the social needs of the rural communities of India.

Amitava and his friends polished off their personal savings to set up their 'dream venture' with an initial investment of Rs 30-35 lakh (Rs 3-3.5 million).

As expected, for 11 long months, the company did not get any order. The first assignment (worth Rs 100,000) came from Malda Zilla Parishad, which sought Banglanatak's assistance for an educational enrolment programme through local folk dance Gambhira as the medium.

Bnaglanatak dot com brochures

Present status of the company

The company now has 65 employees, 10 of whom have done their masters in theatre and four are members of National School of Drama.

The company also boasts of having three Commonwealth scholars among its employees.

According to Amitava, the company pays its staff competitive salary and gives them complete freedom of operation.

Working here is fun, which is why almost 90 per cent of the staff have been here since its inception, claimed the founder director.

A Chau performance

Putting forth social messages is a rewarding task

Though the salaries that the Banglanatak.com staff get do not match corporate standards, they stick on because of the tremendous satisfaction that their jobs offer, said Amitava.

For them, each new project is a new experience, an eye opener. "It gives us a great pleasure in making a rural woman understand that abortion is legal or that HIV is not spread through touch or through sharing the same roof," he said.

"We were shocked to discover that Aurangabad records 24-25 per cent abortion deaths; for Bihar, it is 13-19 per cent; whereas for Lohardanga in Jharkhand, it is 19 per cent," said Amitava.

Recently, Banglanatak launched an alternative livelihood initiative for bidi workers in Purulia.

During that project, the company explored if Chau dance, a popular form of entertainment in the state, can be a profession.

The experiment, said Amitava, met with a huge success so much so that a Chau dancer who earned Rs 400 a month in 2004 could now make anything between Rs 1,900 to Rs 15,000 per month.

In this venture, Banglanatak got the necessary assistance from the Eastern Zonal Cultural Centre.

Empowered by Banglanatak's training, 700 Chau and Baul artistes earned as much as Rs 21 lakh (Rs 2.1 million) through their performances in and around Kolkata during Durga Puja last year.

This year, Banglanatak won a major project from European Union and with that bought health insurance for 10,858 rural people of West Bengal, including 3,200 folk artistes and their family members.

As part of the EU-Banglanatak exchange programme, four Baul artistes took part in a cultural programme in London this March, whereas six Jhumur and Chau folk dancers are also scheduled to take part in a festival in China in May.

A cultural programme organised by Banglanatak dot com

Who are its clients:

In the last 10 years, the company has been able to build a widespread clients' base.

It includes ministries of social welfare, petroleum, rural development, Eastern Zonal Cultural Centre, Panchayati Raj, West Bengal departments of health and family welfare, primary education, labour, consumer affairs, Sundarban Biosphere Reserve, Sundarban Development Authority, Kolkata Police, West Bengal Police, etc.

The company has also worked with the state governments of Rajasthan, Jharkhand, Bihar and corporates like NALCO, Oil and Natural Gas Corporation of India.

It has worked with international bodies like Unifem, Undoc, UNFPA, Unicef and social welfare organisations like Population Services International, Catholic Relief Services, Care, HIV Alliance, Abt Associates, PA Consulting, Heart Care Foundation, etc.

Awards and accolades

The hard work put in by the Banglanatak bore fruit over the years and award and accolades started pouring in.

In 2006, it won Civil Society Award for outstanding contribution in HIV/AIDS Communication from UNAIDS and National AIDS Control Organisation

In 2007, it won UNFPA-LAADLI Media Award 2007 for gender sensitivity for best community theatre project in Eastern India.

In 2008, London School of Economics conferred on Bhattacharya fellowship on leadership and excellence.

In 2009, the company won UNESCO recommendation for Accreditation to provide Advisory Services to the Intangible Cultural Heritage Committee.

I am very impressed with what I have read about Bangkanatak dot com from their web site. This space is not enough for me to write about what they have done over the last decade and continue to do so earnestly. Interested readers may see everything on http://www.banglanatak.com/  for the latest on what's happening with this amazing team of people who make me proud to be an Indian. Thanks Amitava for doing so much for us. I am particlualrly happy you have started out with Malda and continue to inspire us. Keep up your good work.

http://business.rediff.com/slide-show/2010/apr/22/slide-show-1-tech-this-iit-ian-uses-theatre-to-promote-jobs-leadership.htm#contentTop

Infosys employees vent anger on HR issues in blogs

Employee activism is on the rise at Infosys, India's second-largest information technology services firm, which employs close to 114,000 in India and across the world.

The company's effort to tame the disgruntled employees, who were earlier venting their anger in public forums and some social networking sites like Facebook, Twitter and YouTube, by giving them a blogging platform on its intranet, seems to have back-fired.

So much so, the company's HR Head, Nandita Gurjar claims to be getting thousands of negative reactions to her blog postings in the company's intranet 'Sparsh'.

This has forced her to set up a team of six to moderate the blogs and 'My voice', the dedicated website the company has developed to seek the opinion of employees on important policy matters. Infosys is understood to have changed some of its HR policy decisions, coming under severe attacks by the employees in these blogs and 'My voice'.

"We realise that they should not take names and make personal attacks. But sometimes, from their perspective, they are in so much pain that they need your attention and which is why they make personal attacks. You can't react to it . . . because I don't think they are talking personally about you, as long as they are talking about a position. It's part of the game," said Gurjar.

The employees started showing angst in various social networking platforms and websites when Infosys won the Business Today award for being the 'Best Employer'.

Many of them questioned this and wanted to know under what criteria the company was adjudged best employer whereas "you are asking us to work for 9.15 hours a day".

This anger aggravated when the company launched its new changed management system christened 'iRace', to remap the technology skills of the employees. This initiative, which aimed at "improving the technology depth" of the software professionals, reportedly had affected over 4,000 employees, who felt it was blocking their career growth.

When found that many employees are venting their anger in social networking and blogging sites, the company invited them to convey their reactions in the official blogging site.

In a one particular blog posted by Gurjar, a record number of 1,100 employees participated. "We actually believe that our employees are writing outside. So, we posted comments in the blog, suggesting the employees raise issues relating to HR and other matters inside the company. If they raise this outside, everybody else will start commenting on it and people make fun of them. And remember, as long as they wear our badge, they are the brand ambassadors of the company," said Gurjar.

Ever since iRace was introduced in the company, Gurjar writes blogs and changes topics every Friday. The employees are free to participate and give their comments. Every day, the blog is getting around 30,000 hits.

"Now we have made things open and transparent with official blogs. Here the difference is they put an email id, even when they write junk," she adds.

She says other than blogs, she receives about 200-300 mails from employees every day, where employees write on any HR related issues, starting from bus services to HR policies.

"I will any day respect somebody who comes out with his email id and say I hate this (any policy decision). And they write to me directly, I don't even need a blog," she says.

To a query whether the company thinks employee activism has suddenly gone up, she says it was always there. But, this is being seen more, as the new generation of employees have moved to Facebook and Twitter

"When they say let's talk, the whole world talks. You can't stop them from talking because it's all about network. In the whole IT industry, if one person says anything, it just spreads like wildfire."

Other than the blogging site, there is the dedicated website, 'My voice', where every employee who has an opinion on any policy matter can give an opinion. The website is getting about 4,000 hits every day. Owing to the overwhelming participation, Infosys has now developed a software which brings the summary of the employees' comments, to which Gurjar replies religiously.

"They (employees) are saying we are going to participate in every decision which impacts us. We have opened the window for them to air their opinions and views on these platforms," she ends.

 

 

Campus selection rules made more stringent

Meanwhile, Infosys has made its campus selection process more stringent this year by increasing the cut-off marks and visiting a fewer engineering colleges.

Nandita Gurjar said the company visited just 300 engineering colleges against the usual 1,000, and gave more than 18,000 offer letters. "We have actually increased our tests, percentage cut-offs, which helped us in picking the top students across colleges," she said.

The compensation being offered by the company has, however, remained at the 2009-level. Infosys has given an average salary of Rs 3.25 lakh (Rs 3,25,000) this year. The campus recruits will start joining the company after June this year.

Gurjar also said Infosys was the biggest recruiter from B-schools across the country and gave offers to 441 students with a 93 per cent conversion.

Besides, the company has hired 15 IIM (Indian Institute of Management) graduates this year, mostly for its global sales roles.

http://business.rediff.com/slide-show/2010/apr/15/slide-show-1-infosys-employees-vent-anger-on-hr-issues-in-blogs.htm#contentTop

Story of a top Indian Entrepreneur, Sunil Maheshwari

Sunil Maheswari, the chief executive officer and co-founder of Mango Technologies Pvt Ltd, has many accomplishments to his credit. MINT-Wall Street Journal described Mango Technologies as one of the 'Top Ten Startup Companies of 2008'.

In 2007, he won the top innovation award from Nasscom ( The National Association of Software and Services Companies is the premier trade body and the chamber of commerce of the IT-BPO industries in India. Interested readers can check http://www.nasscom.in/) and recently, Business World named him one of the top five entrepreneurs in India. Sunil had managed the team that designed the first 'Designed in India' mobile set and the world's first dual SIM phone.

Mango Technologies is a software solution provider for all low and medium segment mobile phones.

At the 'Jumpstart Your Venture' workshop of the recently concluded TiE-ISB Connect 2009, Sunil Maheswari spoke of starting up a venture. Rediff.com caught up with him after the presentation, and here is his story. (The mission of TiE is to promote entrepreneurship through mentoring, networking & education. Started in 1992 by successful entrepreneurs in Silicon Valley; today the TiE network has over 13,000 members and charter members in 13 countries and 5 continents).

Desire to be an entrepreneur

I had the desire to be an entrepreneur very early; when I was in college itself. I started dreaming about what I should do after my studies. I was influenced by the stories of all the entrepreneurs in India right from the Tatas and the Birlas.

I took the first risk in my career by quitting my job at Reliance Infocom to join a start up company. That was when I saw entrepreneurship up close. I was the second person to join the company. That was where my close encounter with entrepreneurship started. I was doing many things there, including all the nitty-gritties.

We designed a complete mobile handset and that was the first 'Designed in India' handset. It was also the first dual SIM phone. It was a proud moment for us when we could show the phone to the then President Dr APJ Abdul Kalam.

The idea germinates

The year was 2006. It was the right time for an engineer as the market was up and we were getting fancy salaries. It took only one or two months for me to take the decision that I was going to start an enterprise of my own. My family -- my wife -- was very supportive and my friend Lekh Joshi also was supportive. So, we did not face any kind of hurdle.

I come from Rajasthan where there are a lot of entrepreneurs. So we did not look at starting an enterprise as a risk.

We also did some market analysis and found that even if we failed, there would be other opportunities. But we were sure of one thing; we did not want to lose time.

I and Lekh Joshi sat and discussed product ideas, products and what we wanted to do. Probably it was the mango season! We decided to name our product Mango! It did not take us long to reach the name. And the company name came from there.

We also wanted an identity and we thought the word Mango reminded us of something that we consume quite often.

As both I and Lekh worked in the mobile phone domain, we knew that our product also would be in that area.

Starting an enterprise

We started Mango Technologies in Bangalore with less than Rs 10 lakh (Rs 1 million). We were lucky in the sense that we started our operation from our house. A friend who was running a company had some unused area with PCs and we started working from there by giving a small equity to him.

We didn't have any operational expense then as first we operated from my home, and then from my friend's place.

We hired two people. We started building a complete operating system for mobiles. We had a good understanding of the market and some of our potential customers. So we knew where we are going to work and who we are going to target.

The mobile market

By 2006, the mobile market had already started to boom. We saw a healthy demand not only in India but in the other emerging markets also. That's when we decided that emerging markets needed a different kind of software, not just what you get from China, Korea, etc.

The requirement in India is different from the requirements of China, Japan or the United States.

Indians are cost-conscious consumers. In the US, $300 or $400 phones are very common and operators subsidise and give them to consumers, but in India, that is next to impossible.

So we are very cost-conscious but we want the best: best devices, best services, best user experience. We are okay spending money in parts. Even the autowallahs (people who drive a maximum of three passengers on auto rickshaws, a three wheeler) are ready to spend Rs.5 for value-added services like downloading a ringtone but not okay in spending Rs 5,000 for a handset. It is a constraint. So for all device makers, it was a big challenge to make a set suitable for this kind of market.

First customers

We started partnering with Texas Instruments first and then we started working with Qualcomm and they are our number one customer, and they command about 20-25% of the world market in mobiles.

They are the number one mobile semi-conductor company and we are shipping with them. We have many language supports so that they can customise for various countries.

Awards

We won Nasscom's most innovative company award in 2007-08. Mint and Wall Street Journal wrote our company as part of the top ten start up companies of 2008, and recently, we were in the top ten innovators list published by Business World. All these awards really boosted our confidence. It helps attract good talent also.

Journey so far

Nothing is easy in life. With support from our families and the initial set of employees, our journey so far has been not that bad; in fact, it has been quite satisfying.

I believe that any time is the right time and every place is the right place. Even in the worst times, people have started successful companies. I don't think any time is wrong time.

I feel you can create your own niche any time and you need to change your plans as per what you see for future.

We are generating profits and investing them back in the company. Starting with the two of us, we now have 35 full-time employees. We have two offices now; one in Bangalore and another in Jaipur.

The journey is still continuing.

Future plans

We want to become world's number one mobile platform company in this segment which is the bottom 50% segment. We want to be in as many handsets as possible and give better service to our consumers.

Qualcomm takes us to many more customers but in the next step, when our software is available in millions of handsets, we want to directly work with end consumers and the developer community.

You need to create more jobs and more wealth in this country and the only way to grow is through entrepreneurs. If you look at all the successful economies, you will see that wealth is created by first time entrepreneurs. In India, Infosys, Wipro, Reliance are the best examples.

Photographs: Reuters

http://business.rediff.com/slide-show/2009/oct/27/slide-show-1-tech-story-of-a-top-indian-entrepreneur.htm#contentTop