Business Lessons from India’s Commonwealth Games

The ongoing Commonwealth Games in India have been truly record-breaking – both within the sports arena and without.  As this is a business blog, let me focus on the latter.

Personally, I think the Commonwealth Games have been good for India. 

Good because Indian sport, at the end of the day, has benefited in a myriad of ways.

Good because India has shown what it can do, literally, against all odds. 

Good because the Games have served as a reality check - for India and for the rest of the (business) world - on the complexities of doing business with India. What are these lessons?

1. Execution, execution, execution.  While I have written about this in a previous blog, the reality is that attention to detail and contingency planning is mission critical.
2. Governance is key. Some commentators have remarked that the CWG is a case study in the difference between Indian public sector ineptitude and private sector prowess. The reality is that this generalisation is simplistic.  Fundamentally, governance and accountability processes need to be water-tight.
3. Media and its management matters.  At no time in the history of the Games have they received so much publicity and column-centimetre coverage, in the Commonwealth and beyond, than in 2010. Thanks to the internet and real-time reporting, a common garden snake is able to morph into a King Cobra in a matter of minutes, if not seconds. Understand the dynamics of new-age media.
4. When traditional solutions fail, improvise (jugaad).  The CWG 2010 is probably the first international sporting event that has involved the official deployment of trained animals (‘langurs’) to ward off other stray animals.  Keep an open mind and think of innovative, ‘fit-for-purpose’ solutions.
5. Some things can not be controlled, e.g. Mother Nature.  When it rains, it literally does pour.  Delhi recorded its most intense monsoon season compared to the last 30 years, bringing with it the multitude of accompanying health hazards.  Anticipate, be prepared.
6. A lot can be achieved in 24 hours.  See linked article. Need I say more? 
7. A great test bed.  In an earlier blog, I highlighted the global challenge of managing complexity.  To borrow a phrase from the popular song ‘Empire State of Mind’ – “since I made it here, I can make in anywhere” could well become India’s new business anthem.

If you would like to increase the growth for your organisation by deepening its engagement with India, do write in at ratika.jain@whiteowladvisory.com.

FDI in Indian Retail : One step forward . . .

                                 Image via Wikipedia

As Delhi put its proverbial foot to the accelerator to gear up for the Commonwealth Games over the past week, the Indian economy at large was not delinked from the spirit of sport. Indeed, the Olympic motto of ‘faster, higher, stronger’ is easily apt for the some of the economic indicators and signals that were revealed.

1. The Bombay Sensex reached a 33-month high.
2. India now home to as many as 69 dollar billionaires, compared to 52 last year (Forbes).
3. 127,000 High Net Worth Individuals[1], whose cumulative wealth stands at US$477 billion resident in India (2010 Asia-Pacific Wealth Report, compiled jointly by Cap Gemini and Merrill Lynch Global Wealth Management).
4. India’s growth is likely to outpace China’s (cover story of the latest Economist).

Ostensibly sensing the mood, the Government of India decided to give greater steer to the economy. It announced an easing of the norms for foreign direct investment (FDI) for a few sectors including wholesale cash-and-carry trading.

The Indian retail sector is arguably the most watched and contentious sector on India’s economic horizon. With growth trends and forecasts being what they are (see earlier blog post), this is not surprising. The policy amendment removes the restriction for internal use by the foreign wholesale cash-and-carry segment. It, however, retains the ceiling, mandating that such companies could sell only up to 25 per cent of their turnover to group companies. The move has implications for several retailers such as Bharti-Walmart, Carrefour and Metro Cash and Carry.

This relaxation comes at a time when much debate is underway regarding opening up of the retail sector to foreign investment. Since 2006, FDI up to 51 per cent has been permitted in single-brand retailing in India. 100 per cent FDI has been allowed under the automatic route in the cash and carry wholesale business. A few months ago, the Indian Ministry of Commerce had released a discussion paper on the issue of multi-brand retail, soliciting opinions. While Commerce is in favour of easing norms with some restrictions, the Ministry of Finance is said to be in favour of a more cautious approach.

Some innovative players are not letting these current restrictions be a bottleneck. Instead, they are crafting innovative solutions within the defined goal posts while the patiently nudge the public policy eco-system.

Interestingly, the organised, domestic retail sector is keen to see opening up. Indeed, there are strong and vociferous proponents on both sides of the fence. At what pace the situation evolves and its implications for the economy only time will tell. Perhaps it will be a case of catching the tiger by its (re)tail.

If you would like to increase the growth of your organisation by deepening its engagement with India, do write in at ratika.jain@whiteowladvisory.com .

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[1] Has “investible assets of $1 million or more, excluding primary residence, collectibles, consumables and consumer durables”. 

Is Education India’s next gold rush?

    Image via Wikipedia

About twelve years ago, I was sitting in a seminar listening to the Israeli management guru, Dr Eli Goldratt, expound forth on his seminal Theory of Constraints (TOC).  Dr Goldratt shared something very basic but something we often forget - that a chain is as strong as its weakest link.  This thought has stayed with me and it brings me to the theme of this week’s blog – higher education in India. While statistics in the Indian context are astounding, the one’s relating to education are mind-boggling.

• 5: The multiplier by which the budget for education has increased in the 11th Five Year Plan (2007-12), compared to the 10th;
• 14%: Current enrolment rate in higher education; targeted to increase to 30% by 2020;
• 18,000+: Number of universities and colleges in India;
• 600,000: Shortage of doctors;
• 1,000,000: Shortage of nurses;
• 15 million: Annual increase in labour pool by 2015;
• 240-250 million: Estimated skilled workers required over the next 12 years to cater to the incremental skilled workforce demand in 20 high-growth sectors as well as the unorganised sector;  and
• 600 million:  Indians under 25 years of age.

The strain of inadequate educational infrastructure is beginning to take its toll.  A few weeks ago, the World Economic Forum released its Business Competitiveness Report 2010-11.  India had dropped two places to rank 59.  Poorer rankings on education were identified as one of the major speed-breakers.  

Sensing the opportunity, a number of players – new and old - have jumped on to the bandwagon.  Exponential growth in stock prices of educational companies over the past decade bears testimony to the demand-supply dynamics.

Leading international universities have not been impervious to India’s hunger for quality education. Last week, Duke University announced its intent to set up a campus for its business school in India. Like Yale, Brown and Massachusetts Institute of Technology (MIT), it is also in talks with India’s Ministry for Human Resource Development for partnering the upcoming 14 innovation universities. 

As institutions jostle for market share, the resulting frenzy has prompted the Advertising Standards Council of India (ASCI) to introduce a new set of guidelines prohibiting educational institutions and programmes from claiming recognition, authorisation, accreditation, or affiliations without proper evidence.   

To my mind, and borrowing from Dr Goldratt’s TOC, embedded in the education opportunity is one more nugget – that of standards and certification.  Indeed, attention to this could easily apply to India’s preparation for the Commonwealth Games.  After all, success in India is not only about what you do but how.

If you would like to increase the growth for your organisation by deepening its engagement with India, do write in at ratika.jain@whiteowladvisory.com .

Is your company growing as fast as it can?

. . . or only as fast as it needs to?

In a world where ‘double-dip’ is the chasm to avoid, growth has seemingly become the Holy Grail - for continents, countries and corporations.   I say seemingly because, while common sense would dictate that this is a no-brainer, I also know that the problem with common sense is that it isn’t always common.

At a corporate level, how much growth is ‘sufficient’ to satisfy your corporate appetite?  That some companies are doing better than others is apparent.   Why is it that some companies have been able to achieve high growth rates while others haven’t?

Fundamentally, I attribute this to the level of aspiration – something which differentiates the leaders from the pack. Much of this difference is not about what they are doing but how.

When talking to companies around the world on prospects in India, this gets further highlighted.  For those companies who are still contemplating whether they should engage with India or not, hearing of consistent double-digit growth rates seems to sound like a mirage which will disappear if they attempt to grasp it. 

For those who are already in India, many are of the view that they are doing exceptionally well. Compared to their home markets, undoubtedly.  Compared to the local industry, a dipstick survey by White Owl Advisory reveals that international small-and medium-sized companies invariably under-perform the industry average on a host of performance indicators.  

I am currently reading ‘Employees First, Customers Second’ by Vineet Nayar,  CEO of HCL Technologies – one of India’s leading information technology services companies.   Early in the book, Mr Nayar puts in perspective the crossroads the company was at earlier this decade.  He refers to the fact that the company had started slowing down between 2000 and 2005.   This slow pace was 30 percent annual growth.  The journey is what the book details.  For those of you who are thinking this could have been owing to a low base, consolidated revenues at HCL Technologies were US$ 2.6 billion in March 2010. The underlying tenet of Mr Nayar’s book is that if you look after your employees, they will look after your customers who in turn look after the business.

In contrast, the Financial Times ran an article last week on the ever-elusive ‘work-life’ balance dilemma.  They asked some very eminent ‘experts’ whether the Blackberry should be switched off while on vacation.  All but one said yes. The contradicter in the pack was, incidentally, Sir Martin Sorrell, CEO of WPP, the world's largest marketing and communications group, who quipped that ‘clients’ businesses do not stop for holidays’.

HCL Technologies is not unique. A slew of corporates – Indian and multinational - have recorded trail-blazing growth rates in India over the last 15 years.  Given the title of Mr Nayar’s book, I can only assume they managed to give their employees a life as well.