Trends from the Gujarat Elections – Development is still core issue

The recent Gujarat elections results have been interpreted in different ways. The BJP has claimed a victory, saying that it has won Gujarat for the sixth time in a row beating anti-incumbency trends and it’s a vote for the development politics that has been ushered in by the Modi government. The Congress claims a victory indicating that the margin of victory is only 19 seats and the BJP has got its lowest tally in Gujarat at 99 seats. The Congress has also been claiming that it the party has been revitalized by the energetic campaign by Rahul Gandhi and reflected in the election results. Whatever the analysis and trumpets blown by the parties, the Gujarat elections has thrown some interesting trends which have far reaching implications on the national politics.

The first major trend is the shift towards Hindutva politics and not playing the minority card. The BJP`s stronghold has been the Hindu vote which was latched onto by the Congress this time. Rahul Gandhi`s temple visits and playing to the Hindu vote base was a clear-cut realization that the days of the KHAM vote base are past and banking on the minority vote is not smart politics anymore. The root to the issue lies in the UP elections wherein the BJP, without any Muslim candidates, won even in the Muslim dominated seats by the inducing the Muslim women to vote for them with their policies for the upliftment for the Muslim women. Hence the days of parties playing the minority card, without any concerns for their development, are probably numbered. It might also lead to a realignment of community based politics where parties will need to have a developmental agenda to win this vote base.

The BJP was supposed to lose the trader dominated seats like Surat because of the angst due to demonetization and GST. Alas, the BJP managed to win all the seats even in Surat probably due to the timely action on the GST relief in the run-up to the elections. Even all the anti GST campaigning by the opposition parties proved to be of little effect in shaking up the strong trader vote base of the BJP. Even though demonetization and GST implementation would have led to short-term pain to the trading community, this vote base is almost still intact with the BJP and alludes to the point that the business community still reposes faith in the developmental agenda of BJP. If the business community is still voting for the BJP it indicates the faith in BJP`s vision, to take Indian business and trade forward, in the global arena.

The critical area where the BJP lost vote was in the Saurashtra area, especially with the farmers. The ostensible reason was that the government didn’t respond to the farmer demands for loan waivers, etc. similar to the waivers in UP and Maharashtra. Probably true! Even in Maharashtra, the loan waiver came with reluctance with the government insisting on farmers raising their productivity levels so as not to fall into the debt trap again. In the past, governments have splurged money on the loan waivers stressing their finances as well as make the PSU banks having to waive off huge amount of loans at taxpayers expense. Even though the BJP will prefer to address this issue of farmers, hopefully without much populism, the trend shows that elections can still be won without buckling under populist pressure.

Despite sloganeering by the opposition parties, the Gujarat elections reflects the shift in the Indian politics of development agenda moving to be the core issue of Indian politics and elections. We will certainly see quite a bit of populist politics thanks to the challenges of a democracy and we might and certainly see the BJP making some populist moves in 2018 before the next general elections. However, the core issue still remains “Development” which if taken as the criteria makes BJP the clear victor from the Gujarat elections. Next – Karnataka elections!

Lessons from Gopi `s success story

Pullela Gopichand (Gopi), the famed badminton coach, has established India`s credentials as a major world badminton power-house. His stable has produced world beaters who have taken the game by storm- P.V. Sindhu, Saina Nehwal, Srikanth Cidambi- to name a few. Thanks to the accomplishments attained by these players, the popularity of badminton has risen so fast in India, that in the days to come it can give a good fight to cricket as well.

Gopi `s successful venture is nothing short of a successful start-up like an Uber, Snap chat or a Tencent. His academy`s achievements in building up so many champion players in the past few years proves that his model is not a flash in the pan but has been scaled up to a successful business model – something which every firm looks for in all new avenues of investment. 

What are the lessons that can be learnt from Gopi`s triumphs? There will be a number of lessons but a few can be seen clearly, as below, by many sports loving- management professionals:

A successful anchor helps increase the probability of success

Gopi was a star player having won the All England championship during his playing days and hence had the star power to attract and convince people about his ideas. Successful people, apart from the experience also know how to man oeuvre the maze at a higher level, to achieve the desired results.

Malcolm Gladwell in his book “Outliers” says that success comes not only by sheer work and effort but also by successful associations and influences. A good example is that of Mahendra Singh Phogat- father of the famed Phogat wrester sisters- who created a transformation by taking up women`s wrestling in his village in traditional Haryana because he himself was a national level wrestler.

In corporates too, for a complete transformation and change, a proven and accomplished leader increases the chances of success. Nandan Nilekani could successfully build up the Aadhar network in India given his background as one of the founder CEOs of the famous Indian IT firm - Infosys. Lee Iacocca could turn around the car company -Chrysler, as he was a well-known personality from Ford Motors.

Basic ground rules are same for all

Gopi `s academy had a strict rule that all trainees should eat meat to build strength and endurance. No waivers for anybody! Similarly, Mahendra Phogat had the same rules of training for his daughters as well as for other trainees. No emotions and no special favors!

Create your own path 

Gopi tried for government aid to launch his academy but didn’t get much support. He thus decided to start off with his own funding and in fact mortgaged his own house to fund his project. To create a transformation, you have to create your own path as well-trodden paths cannot necessarily lead you to a victory in a totally new venture. 

Don’t count on one blockbuster product

Saina Nehwal needed special attention and decided to move to train with another coach. Rather than regret, Gopi stuck to his vision of expanding his academy and created other stars such as Sindhu and Srikanth to name a few. He ensured that his academy moved on and not rue the loss of a star product. Successful firms hence need to have strong plan B and Plan C`s, in case plan A fails.

World is flat, business model matters

Gopi setup his academy in Hyderabad - a Tier-2 Indian city- and not in any of the metro cities. He however could sell his value proposition to his trainees and succeeded in attracting players to Hyderabad where he could build up his academy at probably at a lower cost.  Secondly, Hyderabad has most of the facilities of a metro city and hence the players could concentrate on their training without any distractions of a metro city like high commuting time and higher living expenses.

In any corporate firm, location is always taken as one of the major factors in setting up a new business. The success of Gopi`s venture proves that as long as the business model and ecosystem is good enough and companies have free access to their markets and suppliers, the business model should work and be free from location constraints.

Pullela Gopichand`s success should be an encouraging sight for many successful sportspersons to take up coaching across the country and create a successful pool of world beaters. India needs an effective ecosystem to create numerous global sports players and Gopi has shown the way with his vision and dedication. It’s time for others – corporates, players, people - to learn and move ahead to make India a global sports force to reckon with. 

The Infy saga – Issues with “Active Promoter Management in Indian firms”

The recent saga that unfolded at Infosys saw something which was unprecedented in Indian corporate history. A professional CEO, the first non –promoter CEO with an unblemished track history was forced to resign, not by the Board which reposed full faith in him, but due to pressure and attacks by a promoter who was not even on the board. The buck didn’t stop there!! Within a few days, the board consisting of some distinguished persons from the corporate world were forced out! In short external powerful forces overruled the board and the executive management.

Similarly, at Tatas a year back, the CEO, who was a family confidante with a great track record was booted out due to pressure again by the promoters. In this case, strangely, the board which took the decision to sack the CEO had never before raised any issues with the CEO before on his performance!

Hail “Active Promoter Management”!

The Indian corporate world is dotted with family owned firms which are growing globally and wants to professionalize its working. However despite the claims of the promoters, especially of listed firms of having a hands off approach, the truth is different. Promoters either through their proxies run the firms or exert influence through other means as seen in Infy. However, research shows that family driven firms globally generate more value on a long term basis as compared to many professionally run firms due to their commitment to the business. Hence on a positive note, it can be argued that the promoters’ involvement is beneficial to the firm to some extent. In many global firms like Ford, Walmart, etc. the promoter families have big stakes but the businesses are left to the professionals and the board. Thus, there is a thin line of difference between active interference and outside support.

In the case of Infy, the leading promoter, who chose the CEO and quit the board on the CEO`s arrival, attacked the board and CEO publicly. Similarly, in Tatas the promoter, started interfering with the CEO`s actions and questioning them.  These activities go against the ethos of professional management and is probably due to the deep emotional attachment of the promoters to the firms. Indians are an emotional lot and just as there are deep family attachments to all actions, the emotional attachment of the promoters to the firms which they have built up is natural. In the famous case of Apple, Steve Jobs who started the company was sacked by the board when they found him interfering too much.

This leads to the question whether Indian corporate world will see a completely professional management in the days to come. If highly respected firms like Tatas and Infy cannot do it, who can? However, equity markets, especially global markets, demand good governance and professional management and hence Indian firms cannot walk away from this fact. Secondly, expanding business demands and an ever changing global business scenario needs different skill sets which can be brought in by good governance and by inducting professionals only.

Hence the incidents at Infy and Tatas have thrown some interesting conclusions. Firstly, corporate governance in Indian firms will be largely dictated by the promoters who hold significant stakes in the company. This might change with more global participation and diversification by Indian corporates.  

Secondly, expat global professional CEO`s will be wary of working, on a long term, in Indian firms given the governance scenario. At Tatas, a decision on flat organizational structure taken by the expat CEO was overturned by the corporate management. Hence we can see a number of home grown CEO`s taking the mantle as well as open lots of avenues for global Indian professionals who have wide global exposure. These people will be best suited to handle to Indian business scenarios as well as the promoter expectations.

“Shareholder activism” which is very normal in western markets is still nascent in India. “Active promoter management” cannot be a full substitute to shareholder activism and probably not healthy for Indian businesses in the long run.

To conclude, global investors who are attracted to India due to its growth story will however have to factor in the effects of governance issues, both good and bad, due to “Active Promoter Management” in India.    

Artificial Intelligence challenge – future “SMART “work force

Abstract

The Artificial Intelligence (AI) challenge will change the workforce practices in the future. Humans need to meet the challenges of AI and automation. This post looks into the skill sets challenges that the futuristic human worker will face to work and compete.

Main Body

A World Bank report published in 2015 indicated that a sizeable number of jobs would cease to exist with the advent of Artificial Intelligence (AI). Former world chess champion Gary Kasparov, who famously played against the IBM machine Deep Blue in the 90`s, has claimed, in a recent Ted talk event on “Artificial Intelligence’, that human behaviour and work practices need to adapt so that with, machines becoming more and more intelligent, humans and machines can co-exist rather than compete. An October`15 HBR article “How smart and connected products are transforming companies” by Michael Porter and James Heppelmann states, that in the future networked and data-driven world, most of the manufacturing firms will have to change from the traditional organizational structures to a revised structures wherein IT and data would be the fabric. Data flow, supported by IT tools, from both external and internal sources would drive analytics which in turn would give deeper business and customer insights. An another interesting trend that will be seen is “Uberization of workforce” where workers will be chosen from a pool for specific activities matching their skill sets, on a project to project basis, like we take an uber cab ride.

AI presents a huge challenge to the workforce and firms in terms of skill sets, training, and education and importantly a different set of soft skills and work practices. This leads to the important question – what are the skill sets required for both white and blue collared workers in the new age wherein humans will have to co –exist with machines? Workers will need to compete and co-exist not only with their colleagues but also with machines which probably is at a remote location in some other part of the world but also work in different organization structures as pointed out by Porter and Heppelmann.

We will see a workplace where, as a division of work between machines and humans, machines will take away a bulk part of the operational work due to their higher speed and efficiency and hence pressure will be on the human workforce will be add more value through innovation, lateral thinking and adding a more humane touch. The human workforce will also need a different team working skills to co-exist in an ecosystem of machines and humans.

These challenges lead to the regular question – how are the education systems of today preparing the workforce to address the challenges of the workplace of tomorrow especially at the schools level. The Finnish government has redesigned their schooling education system where, rather than studying subjects, the school children work together as a group and discuss relevant topics. This helps not only in understanding the topics but also build team skills, co-learning and sharing activities.

Thus the future workspace will see a combination of humans and machines in which the human workers using their co-machine workers as a platform to innovate and reduce time to produce results with better speed and efficiency. Traditional organizational structures will be broken down and new and flexible structures will be in place. The future workspace is a challenging place where different skill sets will be required and human workers need to be more “SMARTER” than today to face the machines challenge. Interesting world indeed!! 

Criticality of No.2`s in a team

Rahul Dravid, who is presently the coach of the India “A” cricket team (shadow team to the national team) has said that the aim of the ‘A” team is not necessarily to win matches but to ensure a steady supply of players to the Indian national cricket team. In other words, he is focussing on the success of the national team in the larger interests of the Indian cricket and also is more interested in the national glory rather than personal glory. What a noble thought! In his playing days Dravid was an effective vice-captain to Sourav Ganguly when the Indian team started winning matches abroad and in the broader interests of the team kept wickets in one-dayers, opened the innings as and when required and thus was a genuine team man. However, he is remembered as the second best batsman of his era after Tendulkar and second behind Sourav Ganguly in the Indian captains ranking lists. He was thus a genuine no.2 who was very critical to the Indian cricket team.

As it is said “Behind every successful man there is a woman (the No.2)” there are always a silent and hidden no.2`s, behind the scenes personnel, behind every leader`s success whether be it the corporate world, politics, sports, etc. The Indian Prime Minister Narendra Modi has an able No.2 in his party chief Amit Shah who has been the architect of many of his electoral successes. While Modi focuses on reaching out to the world and people, Shah focusses on the nuances of the organization to ensure full organizational support to Modi`s vision. In the Indian corporate world JRD Tata, who was one of the main architects of expanding the horizons of the Tata group, had able and strong leaders like Russi Mody and Ajit Kerkar to take forward the Tata group`s business interests.

Successful teams need to have different personalities and skill sets which need to be aligned. A team normally has six different types of personalities, as stated by Kate McFarlin viz. driver, adventurer, energizer, cheerleader, stabilizer and perfectionist. Successful leaders normally play some of the first 4 roles. A good no.2 normally plays the role of a stabilizer who tries to sew together all the different personalities in a team and is able to handle the different interests and egos in a team.

Thus can a good No.2 be called a “silent follower” who sacrifices his or her own interests in the larger interests of the team? Certainly not. Good no.2 in today`s context is a “Team Player” according to Mitch Simon, who feels that “followers” are outdated and hence leaders should empower their No.2 to play the role of effectively showing a mirror to them and have the courage to question the leader`s thoughts and take decisions. A good leader also needs to empower and encourage their sub ordinates to express their views freely and also play the leader`s role in their absence. Mahatma Gandhi built an able set of leaders for the Indian freedom struggle like Jawaharlal Nehru, Sardar Patel, etc. who could implement his thoughts and take it to the people.

The typical traits of a good No.2 would be thorough, meticulous, hardworking, ability to connect with people, non –egoistic and generally conformist. One of the questions that can be asked is whether, good no.2`s, leaders or managers? I would say, good leaders but excellent managers.

What would be psychological built of a good No.2? Maslow`s famous “5 stage hierarchy of needs” defines the different needs of a person as physiological, safety, belongingness and love, esteem and self-actualization as the different needs of a person. The difference between great leaders and good no.2 is in the domain of “esteem” as per Maslow`s hierarchy. While great leaders tend to become larger than life images, the No.2`s remain content with the respect and sense of achievement that they have. Rahul Dravid and VVS Laxman remained content as technically sound batsmen in the Indian team but didn’t have a cult status like Tendulkar and Ganguly.

In the corporate world too, we see lots of great leaders but their able deputies are rarely in limelight. Thus good companies focus on building and nurturing good teams rather than leaving to the whims and fancies of a superstar. Steve Jobs was a visionary who changed the consumer electronics products industry with Apple. However, Jobs needed the support of an able manager like Tim Cook and a bevy of engineers who could build products in accordance with his ideas. Thus management of companies needs to have effective processes to identify, nurture and recognize the efforts of the good no.2`s. A team cannot be full of leaders but needs team players playing various roles.

It is said,” It doesn`t matter who gets the credit as long as the team succeeds”. Well, good no.2 certainly fit into this saying. We need great leaders around globally but very importantly we need great No.2 `s too to implement and play effective roles in societies, teams, etc.