Skill Development & India: Challenges !

Would you like to become someone who is looked down upon in society? Say an ambulance chaser? Just imagine that you have a choice to become a doctor or a fashion designer, and the society you live in accords more respect to a doctor, would you prefer the later route? Besides livelihood people work hard to earn respect of society around them. Can you say I bought a Ferrari by selling contraband? People are identified by their profession and skills so skills are important part of what a person is? Isn’t it?

Government of India has realized that no economic development is possible without inculcating critical skills in people of India. Economic growth based on capital has limitations as compared to skills the capital as resource is less impact on sustainable growth. CK Prahalad & Gary Hemel introduced the concept of Core Competencies into Management literature. Michael Porter, another strategy stalwart, advised many governments to persuade them to build a Competitive Advantage for their economy and companies.  Presence of large number people having knowledge of English language available at low cost provided  competitive advantage to India in the BPO sector for couple of decades. China took few years to scale up their assembly & manufacturing on the basis of manual skills present in the Chinese people. Indian people on the other hand don’t seem to have manual skills needed for achieving success in manufacturing space.

Ustad Ahmad Lahouri a Persian is the architect behind India’s iconic Taj Mahal built during Moghul period. Silks in India come from Karnataka as people have traditional skills in silk rearing & weaving Punjab has grey yarn spinning industry as cotton is grown in large quantities here.  Religious men from Hinduism & Islam claim to predict your future on the basis of their knowledge of astrology etc.  But skills in India have been associated with caste classification of society as per the Hindu belief system. And perhaps the caste system is the culprit for vanishing of skills among the people. Another view is that since the British ruled India for couple of centuries wanted to prepare clerical slaves for the Empire, so they manipulated the education system to produce educated people with just average communication skills rather than preparing masses for vocations as the British wanted to flood the made in UK goods into India.

Well past is past! Presently most Indians prefer to work on white collar jobs rather work with their hands. It’s rare to find a great carpenter or blacksmith in India. Why? Because when a carpenter’s child gets a clerical job then he would not be called a carpenter but a clerk. A clerk or babu is considered a more respectable profession in India as per caste system. Therefore thousands of engineers graduating from technical universities can score exceptionally high marks in written exams but hardly anyone can use hands to fix a machine.  Unless the government addresses the social stigma attached to skilled people not many would be prepared to learn the skills required by India for nation building. India can create national level competitions every month in various critical skills and honor the winners with large sum of money. Higher income can diminish the hurt involved in learning new skills in caste ridden medieval society of India. 

India Welcomes Walmart Tesco Carrefour : FDI in Multi-brand Retail

Finally on September 20, 2012 Government of India allowed Foreign Direct Investment in multi-brand retail in India. It’s possible now for global retail majors like Wal-Mart, Tesco & Carrefour to enter the market which has 300-400 millions strong middle class. Without going into political economy aspect of the move let’s look at the management & marketing side of the multi-brand retail in India. Retail & aviation has many similarities in India particularly. Retail majors need to learn lessons from India’s aviation industry as both cater to same customer base.

Lessons: Largest of the domestic corporate giants have burnt their fingers in organized retail in India during more than decade long period. Top three of them have reported losses. Retail in India is a fragmented unorganized business evolved alongside the social structure of communities. India has more cultural diversity than entire Europe as language, food habits, customs, religions & even Gods change every 50 kilometers in India. Hindustan Lever Limited had attempted to monopolize ice cream market in India two decades ago by buying out major brands but they could not fight with local satraps.

Basics: India has population of the size of China living on 1/3 of the area. Publicity managers of brand India have projected that what makes India attractive is presence of 300-400 million middle class consumers. Let me flag this figure right here from marketing perspective. Since Indian society is highly fragmented & culturally diverse therefore it’s a challenge to find various ‘consumers profiles’ embedded in this large population of consumers.

India buys few cars just [1/6 ] as compared to China. This figure is very significant as majority of Indian people prefer buy a house before car unlike in rest of the world.  India has no problem with congestion as all metro cities are teeming with people hence retail experience to India may not be same as routinely described in classical retail plans. On the issue of buying on credit or cash Indian consumers are no different than others but majority of Indians don’t have credit cards.

Entry Strategy: What business model Walmart would use in India is the billion dollar questions. Will they go for company owned company operate [COCO] route to begin with or take the franchise route? I believe later route may be more suitable as it would cut cost of entry & provide for safe landing for this controversial roll out. If Walmart recruits 25 major franchises in the beginning it would provide substantial leverage in domestic market to navigate the social reaction in the first phase.

POS & billing: In my opinion POS strategy would be the waterloo for Retail in India. Walmart, Tesco & Carrefour would be wise to invent a new POS strategy as no other country resembles in India in buying behavior. I would recommend that CXOs of retail giants should invest lots of their time at airport lounges & Metro railway in Delhi & Kolkata to grasp the behavior of Indians and ignore Mckinesy consumer reports. It’s impossible to succeed in retail without strategizing this final moment of truth in retail trade.

India is really a more diverse country than it appears on paper. Retail industry may have to take Indian Railway route & organize the operations that could handle the diversity of buyer needs in India. Historically Indian may have lived under centuries of foreign domination but they have succeeded at maintaining their lifestyle & culture and this must serve as guiding principle to any executives involved in this service sector. 

India's Private Shame !

The rise of China has significantly trounced the Thatcherism on public vs private sector. The experts failed to notice the dangers of universalizing an essentially Western phenomenon. It has been argued & agreed that each economy has some unique features that differentiate it from the others. Moreover an economy also has certain competencies prevalent due to several natural & man made reasons.  Apologists for poor performance of India vis-à-vis China point to two main factors that are cultural & administrative factors in nature. Indian ultra-nationalist economists never tire of stating that China has been able to pull of spectacular economic performance majorly due to one race- one language and a political system that doesn’t allow room for dissent. Both arguments examined closely would prove nothing but mythology.

Blind faith in virtues of privatization & efficiency myth of Indian corporation must be examined in the light of realities of two decades of its operation in India. The representative symbol of economic growth in India in last two decades is the current Prime Minister Dr. Manmohan Singh who brought in a set of economic reforms in early 90s that gave India freedom from Hindu rate of growth of two to three percent. India has posted a six plus GDP number ever since he came on the scene. His economic policies were continued by governments across political spectrum in India.

Where is the evidence to prove the hypothesis of private sector‘s superior performance in comparison to the public sector? China may have greater number of private enterprises now than ever before but the public sector enterprises continue to contribute a lion’s share to the state output.  In India too, despite domination of service sector by private companies, baring telecom, virtually in all other arena public sector organizations continue to command higher trust than the private sector companies. India remains a difficult place to do business but on the corruption front private sector companies have been found to be worse off than public sector.

Organized retail in India faces no public sector competition and FDI restrictions have kept the global competition at bay, but still is has failed to take off. How could one exonerate India’s corporate giants for failing in retail sector?  Once FDI is allowed into retail India shall see the rise of global retail corporations & reap benefits in terms of expansion of economy.

To upgrade human resources of India government allowed private capital into high education sector to boost the infrastructure. The story here too is no different. None of the higher education enterprise set up in private sector has been able to offer any competition to the autonomous public sector institutes. A management institute was launched in Hyderabad with much fanfare to augment talent creation in business management education but it has failed to offer any competition to even newly set up IIMs? The scenario in related field of health & pharma is not different. ?  India is globally known for its Information Technology firms too but unfortunately some of them have been called as chop shops due to their lack of going up the technology curve to become true tech corporation.  Story in aviation is no different private sector companies as doing as bad as public sector behemoth. Banking & Insurance services sector too portrays same picture with SBI & LIC leading the pack by miles.

Maruti Suzuki began its journey as government owned company and it remains the number one player in passenger vehicles segment.  All major Oil companies are also in public sector. Reliance despite huge industrial base could not compete with public sector companies. It would not be out of place to mention consumer electronics sector too. The moment global competition came in consumer electronics, all major Indian companies melted away like snow flakes.  Indian corporations except TATA group failed to dominate consumer goods & fmcg space despite having head-start in form of understanding local culture critical for success in distribution led businesses. Some Indian companies have made their mark in industrial goods & telecom sector that shows the private capital in same light as it’s seen globally.

India is no UK or USA. Private companies in India are run differently than global standards & practice. India has failed to romp up quality & create large capacities in private sector.  Private sector companies have failed to create & nurture talent as they are led by families in unprofessional manner. There are many factors responsible for dismal performance of Indian private sector companies that has led to enormous pains to fighting poverty in India. The Government has rolled out red carpet to private sector for close to two decades now but its performance has disappointed everyone. It’s ridiculous to give better report card to private sector over public sector in India.  Government need to accelerate state capitalism to kick start the economy.  

My inquisition into search for finding factors that show private sector in poor light than public sector has thrown up various reasons that need verification & further research.  But most prominent factor is the quality of management in private sector, the governance. Families run private sector companies assisted by small group of top executives from bureaucracy generally fail to recognize, nurture & reward the talent. Recruitment in private sector are done in arbitrary manner and religion & caste play a major part in profiling a candidate.  Private sector in the name of merit has been rejecting the state’s affirmative action initiatives for long which has led to low quality of human resource pool that is out of sync with reality of India. Failure happens due to absence of talent and private sector companies in India are no exception either. India is faced with horrendous poverty that need faster economic growth and the private sector must prepare for the responsibility. 

GOI Bans Social Media

Just half an hour ago Social Media has been banned in India. You can't access Twitter, Linkedin, Facebook but TED is still on. Today is a historical day in India when judiciary has shown the gumption to convict a Minister Dr Mayaben Kodnani for her role in massacre of 85 Muslim children & women in Naroda Patiya in Gujarat, India in 2002.Today is also a day of the SC upholds sentence of Ajmal Kasab a Pakistani terrorist involved in 26/9 attack in Mumbai. Text messages had already been under ban for the past week.

I am not sure how to react to GOI ban on social media. The govt must have its reasons for doing so as NE  India has been embroiled in communal clashes for almost a week. Indians are used to all kinds of restrictions and shortages. We take it as part of life and squeeze our-self in the continuously shrinking space for living due to over population.

Social media allows ordinary people to have a voice on issues that matter to them. It is damn empowering tool that scares the shit out of people who want to regulate information. Social media may limit an individual's  social interaction in the real space but it offers enormous opportunity for connecting virtually with global audience. So if you are the only one in your group who enjoys poetry you could go online and share your experience with the connoisseurs.

Congress Vs BJP: Political Marketing 2002-14

If you tell a big enough lie, and tell it frequently enough, it will be believed-Adolf Hitler

India’s oldest strongest & most suitable political party is upset. Congress is upset by calumnious propaganda tirade let loose by the principal opposition party BJP. The party takes solace in its domestic & global achievements and expected a pat on the back from citizens as well as opposition parties in India.  

Congress wants BJP to be accepting & approve good work done by Cong & criticize wherever they go wrong.  It is upset over BJP’s frontal attack on the party & its leaders. On its part BJP, a Hindutva supremacist RSS backed organization, is completely consistent in behaving as per its DNA.  Did it walk any differently on the ramp in 2009? Perfect Competition is a Utopian economic concept that envisages that one must continuously keep working to have equilibrium state for level playing field. We live in real the world.

Congress has a convincing case against BJP but it has to do more as it’s not a two horse race. A secular Congress has been secure in the thought that since rightwing BJP is a Hindutva supremacist party therefore a diverse India has no choice but to vote for it. This deduction looks very attractive but is it enough? Now let us examine the fundamental premise of this logical conclusion.  

A Hindutva BJP has no chance of winning against modern secular Congress unless it discredits Congress on some serious secular all encompassing factor.  Well the BJP/RSS strategists got to work in their usual manner, which is to go back into past to discover something that they thought made a lot of sense to Hindutva ideology and then try recreate, rejuvenate & bring back that into present. Essentially dig up something from past to throw at people to embrace it for a better future.

Congress in its present avatar cannot be accused of being tough & undemocratic with state governments-Modi despite serious charges get to keep his job- therefore corruption seemed to be the other original idea for BJP. You would recall in 2004 & 2009 BJP failed to convince citizens that it has ‘strong’ & ‘nationalist’ leaders that can lead India in twenty first century. So the opposition party had no choice but to paint the incumbent party as corrupt.  

BJP cleverly orchestrated campaigns led by organization outside sangh privar to accuse the Congress. Anna, Kejriwal & Ramdev were mounted to launch attacks at the incumbent party to achieve their political objective. BJP plan is simple. Create a bigger specter of corruption to camouflage the demon of racial cultural supremacy so that masses begin to see it as foremost present danger from among various other general threats. It looks fairly simple game plan.

BJP thinks that since Congress led UPA is the incumbent coalition therefore corruption issue could not boomerang on them. Well incumbency in politics also referred to as ‘Winner’s curse’ has been investigated in depth & many papers are available on this premise in political marketing literature. As political marketing student let me say that ‘corruption’ as an election issue in India has limited appeal.

India is land of perennial elections. Elections are so frequent in India that you wonder why not outsource the work to some private corporation to lower the cost. There are large companies conducting test & research activities with six sigma accuracy, they certainly would be able to plan & execute election at much lower cost in these crunch times for governments all across the globe. If the government gets out of business of conducting elections it would bring more transparency & neutrality to the exercise.

Marketing concepts & tools are often used by political players to establish & grow their relationship with citizen voters.  Political players in India are no stranger to use of it. Let me flag some critical marketing issues related to current tug of war in India. BJP has succeeded in getting far higher SOV (share of voice) at present what is has to do now is to achieve similar SOH (share of heart) & SOM (Share of Mind). What the incumbent Congress need to do now?

Congress surely has greater SOH & SOM amongst all segments of India. It needs to recover the lost ground in SOV. But let me caution that it has been established beyond doubt that incumbent party would be better off without winning the race for higher SOV. Congress party should not get carried away by media’s need for 24x7 sensational entertainment and continuously work towards having greater acceptance among elderly & youth segments in India.

India has seen Anna & Ramdev events put up by BJP strategy team and is looking forward to a Congress show of strength outside Parliament to enable the masses to determine the winner.  Congress needs a new social media strategy to counter the opposition media war. A winning strategy should be clearly differentiated one so as to counter the challenger & present your brand equity rather than engage with opponent on their turf & conditions. Congress has to augment its current media strategy.

Decline in Higher Education in India: MBA B.TECH

The Goal: Education has always been associated with higher achievement in life. Aesthetics, Health, Wealth, and Kingdoms could be created & experienced by an educated mind.  Ancient India gave highest regards to teachers by addressing them as Guru.  A Guru is one who dispels darkness by enlightening human mind.

Innovation vs. Tradition: Couple of decades ago India allowed private capital into setting up of higher education Institutes & Universities.  AICTE & other regulatory bodies were created to oversee the quality of education so that suitably trained human resources are made available for nation building activities. The initial focus of this move went into creation of capacity in Engineering, Medical & Management field. This led to proliferation of large number of Education Enterprises across length & width of India. Since Indian society do not encourage independent  original thinking therefore everything new can only be allowed if there is enough evidence of its existence somewhere else on the planet.

Wrong biz model: India is a land of happy number two unlike some other cultures that encourage & reward original thinking & innovation. So to justify the case for privatization of higher education, the success of privately managed US universities were cited.  Our bureaucracy did not bother to study the financial model for independently funded higher education institutes.  It’s criminal to allow such institutes to meet their finances entirely from students’ contribution.  Did the Babus in government borrow the model from infamous tuition shops in India? Receipts from tuition fee do not make more than 20-30 percent of the revenue of such higher education institutes in the world. They have other fund raising routes & the head of institution spends most of his time on raising funds leaving academics to the faculty.

Private vs. Public: A society needs to invest in education for sake of its future. No reasonable country leaves the task of educating its citizens to parents alone. That’s why Indian govt too provides free compulsory school education to all citizens.  Why the same government does not rationalize the financing of higher-ed institutions in India? This has led to deterioration in quality of education and entry of questionable people as promoters in this critical sector. For instance if you look at the profile of such institutes you shall find that most promoters themselves have had no education at all and they do not understand the value of core purpose of education which is to enlighten a mind. So many of such institutes have names from our ancient past that shows how much freedom such institutes would allow to students & faculty to prepare for a better future.   

Education & Employment: Student in India struggle to enroll in courses & schools that could ensure them a campus placement since employment scene in India is getting darker by the day. Rise of IT sector in India led to large number of students opting for IT related courses.  Investments in infra sector attracted students to go for civil & mechanical courses. MBA had emerged as all encompassing route to enter corporate sector which changed many lives in a significant manner.  Architecture courses attract many looking forward to join construction design boom. Medical education in private sector has expanded a lot despite many controversies.  Even after more than a decade of opening up of this sector the craze for government & autonomous higher education institutes have not diminished.  B.Tech  & MBA seem to have lost their attraction as reflected in dwindling admissions in private universities & institutes.  

B.Sc or B.Tech? Why the students have begun to opt for traditional of B.com or B.Sc instead of B.Tech or BBA/BCA? Why Industry has refused to offer higher salary to MBA grads in comparison to other courses.  It wouldn’t be inappropriate to mention that they syllabi & teaching methodology of B.Sc courses & B.Tech is exactly same.  Even the hallowed IITs teach Engineering science rather than technology. There is hardly a privately funded institute that is treating B.Tech program as a technology course. So a student has the option to enroll in a B.Sc course rather than wasting time & money on a B.Tech program. Market forces have played out and student enrollment in B.Tech courses have fallen in 2012.

MBA Edge: As the industry left Hindu rate of growth behind and economy began chugging along with an unprecedented 8 plus growth rate millions of jobs in corporate sector were created. The corporate began recruiting MBAs in 1990s on higher salaries in droves. This fuelled mushroom growth of MBA institutes across India. Unfortunately an MBA from an average institute cannot find a job these days so new admissions have become a challenge.

Experience vs. Degree for Faculty: MBA has lost its sheen primarily for the same reason which led to unpopularity of B.Tech program which is lack of suitable faculty.  B.Tech & MBA courses require industry experienced faulty with or without a master degree or PhD.  AICTE dominated by academicians from public funded institutes cannot appreciate difference in approach to teaching of B.Sc  & B.Tech course. MBA is taught by faculty that can handle MA Eco or M.Com courses. So what’s the difference in the two programs?  A B.Tech with 10 years of engineering experience would be an excellent replacement for an Engineering professor with PhD.

No institute can guarantee a job unless economy starts gaining momentum once again. Main purpose of education is to open a mind and develop new skills of an individual. Unless an institute gets down to teaching courses in right manner it would find difficult to survive in mid to long run. And students who could master appropriate skills & attitude would not find it difficult to get a great invitation to put their learning to test. 

True Sales Manager Leads by Example

Sales teams often complain about seniors who repeatedly demand target achievement but do not provide with solutions to their problems.  Teams require leadership that could lead by example but that is easier said than done. By the time a sales pro shifts into corner office there are many changes in the sales universe.  Only solution to such crisis would be to institute regular training to the sales team based on the primary as well secondary feedback.  Following three rules could proper assist you in galvanizing your sales force.

1. Do you have a Sales Bible? Does your company have a written plan for selling?  A senior sales guy had told me once that he had the eye to spot a good sales person from an average one, and therefore success of his job depended upon recruiting a sales professional with healthy resume & pay him on time each month.  According to my friend a great sales guys would find his/her way to achieve target. Companies generally forget to standardize the selling process leaving the teams to their abstract devices. A Sales Management bible is essential to minimize the risk of weak calls to closing ratio.  A comprehensive manual of sales management would reduce the time in induction and preliminary training of new recruits.

2.Can your team asses a prospect? A star sale pro would tell you the difference between various types of prospects and align the sales strategy to suit the situation. Need & immediate want may not be the trigger for customer to reach into his pocket.  A sale pro can walk into an office and analyze the personality type of the buyer. Subsequently the sales wizard could assess the nature of the buyer and pull out matching sales-speak.

3. What’s New you got to offer? Everyone loves a new experience. People seek excitement through consuming new experiences. A marketing professional knows it fully well the value of keeping the offer in the ‘new & fresh’ quadrant. Not man would buy an iconic cult brand of yester years howsoever good that may be. A sales team requires regular infusion of new product, sales style, markets, customers & promotion to keep them engrossed in the process.  Just look into what new your sales team has got in the current cycle and analyze how much it has contributed to expansion.

Gurinder Ahluwalia is a marketing consultant & professor of marketing from Chandigarh, India. You could contact him at ananhadmc@gmail.com or www.anahadmc.com.