Reinventing Education - Sudhakar Ram

India’s size and variety are an ideal platform to try new models of education that would help us take the lead in the 21st century. Let’s dare to move ahead as the future of our children and country is at stake, says Sudhakar Ram.

It is, in fact, nothing short of a miracle that

the modern methods of instruction have not entirely strangled the holy curiosity of inquiry.

ALBERT EINSTEIN

NOBODY can argue that the world has changed dramatically in recent years, and continues to change with amazing speed. Yet, we have not changed the basic approach to educating our children for the past 200 years.

Think about the changes our children will face before they retire from the working world in 60 years. Will our current approach to education be adequate to equip these children to face the emerging world? Can we continue with our assembly-line approach to teaching our children, rather than acknowledging and nurturing the unique gifts and talents that each one of them represents? Should education be restricted, primarily, to the first 20 years of our lives? Or should the focus shift to life-long learning?
Alvin Toffler, in ‘The Third Wave’, describes mass education as being built on the Industrial Age factory model to teach basic reading, writing and arithmetic, a bit of history and other subjects — the overt curriculum. Beneath it was the covert curriculum that was far more basic. It consisted of three courses — punctuality, obedience and repetitive work — the basic training requirements to produce reliable, productive factory workers. Will the 21st century world require just these capabilities?
Howard Gardner’s Project Zero at Harvard discovered that up to age four, almost all children are at genius level, in terms of the multiple frames of intelligence — spatial, kinesthetic, musical, interpersonal, mathematical, intrapersonal, and linguistic. But by age 20, the genius level proportion of the tested population dropped to 2%. We are educating the intelligence out of our children. Instead, we need to nurture and develop the multiple frames of intelligence within our schools and colleges. We need to fuel imagination, which Einstein said is more important than knowledge.
The current system of education — both at the school and university level — assumes that a finite amount of ‘knowledge’ is available. The emphasis is on cramming as much of this knowledge as possible into the available years of education. But this paradigm does not work for the 21st century; the quantum of knowledge has become so vast that it would take several lifetimes even to master a single discipline. What we need is children learning how to learn and provide facilities for life-long, just-in-time learning.
In our era of super-specialiSation, we’re developing groups of people who understand their own fields extremely well, but tend to be challenged when it comes to communicating and integrating with groups in other disciplines. Everyday people tend to think we don’t have the ability — or even the right — to understand, let alone challenge, the specialists. In this quest for ‘know-how’ we are losing the ‘know-what’ — the meaning and purpose of life, the context for applying all this knowledge. Our rapid depletion of Earth’s resources may well be due to an emphasis on technology or know-how, rather than wisdom — deciding whether it is the right thing for us as humanity.
The challenges in India are even more acute. Of the 200+ million children of school going age, 35% drop out after primary school and another 50% after upper primary. Of the 20 million youth of graduating age, only around three million actually make it through college, and less than 500,000 are deemed employable. We have an urgent need to rethink education on many fronts.
FIRST, we need to nurture love for learning in primary schools. There are well-researched systems — like the Montessori Method — that are completely child-centred and make the learning process joyful and effective. Newer methods of teaching can combine video-based learning with teacher-facilitated games that develop the child’s natural talents. Primary schools should equip children with basic life skills — reading, writing, arithmetic, environmental science, health and hygiene and social/inter-personal skills.
Second, the focus of upper primary schools should be (a) to teach kids how to learn and (b) to support them discover their natural aptitude. It is critical to offer a good grounding in the scientific approach to learning. Learning should go beyond knowing facts and figures. Children need to be shown how to be selfaware, and to examine their own lives: their life stages, life purpose.
Third, high school curricula should focus more on building concrete skills and capabilities in multiple disciplines, rather than stressing exam results. For example, a team could take on the design, construction and installation of solar-based power systems in their own schools — addressing the technical, financial and social aspects of the project — under expert guidance. Another team could focus on reducing child abuse in their local area. In the process, teams would understand the theoretical constructs and develop the critical thinking skills needed.
Fourth, universities of the future should offer life-long learning modules that allow people to acquire knowledge just when they need it. Given the need for organisations to continually learn and evolve, we need to change work patterns to combine learning and working — for instance, by having a four-day work week with another day or two a week devoted to learning and experimenting with new ideas. University professors should be encouraged to pursue research in multiple disciplines and to act as facilitators in their students’ learning process. Practitioners from industry should be encouraged to act as guides and mentors to students taking on specific courses.
Education is a pressing problem across the globe. However, the challenges in India are so great that it presents us with the greatest opportunity to innovate. Our size and variety are an ideal platform to try many new models of education that would help us take the lead in the 21st century. It is up to us as parents and educators to make this shift happen. Let’s have the courage to move ahead — the future of our children and our country is at stake.
Long live the earth.

(The author is CMD of Mastek)

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Why Telangana Makes Sense

The creation of Telangana might trigger cries to make more new states. The best way to decide on such demands is to set up a group, like the states’ reorganisation panel, and have it thrash things out with everyone, says Abheek Barman

THE din and violence surrounding the government’s announcement that it’ll finally push to carve out the state of Telangana from Andhra Pradesh, has claimed a major victim: reason. Most arguments against carving out Telangana are emotive, charged with hysteria, coloured with political posturing.

The only remotely sensible argument against creating Telangana is that it could set off an avalanche of competing demands for more new states. But even that argument, as we shall see, holds little water and can be dealt with reasonably.

Let’s not kid ourselves. Over the last 60-odd years, successive governments have tinkered with state boundaries and carved out new states from older ones. The last three — Chhatisgarh, Jharkhand and Uttarkhand — were created less than 10 years ago, in November 2000. India today has 28 states, compared to 14 shortly after it became a republic. So let’s stop behaving as if this is an unprecedented calamity that we’re suddenly faced with.

Folks who argue in favour of Telangana say that the region is backward, something that’s hard to refute. Districts like Nalgonda, Medak and Warangal are among the poorest in India. Glittering Hyderabad is located in Telangana, surrounded by these districts. Drive out from the city and it’ll take you less than an hour to reach some of India’s most backward areas.
Yet, this is also the place where a lot of India’s mineral wealth is concentrated. Miners like the Reddy brothers from the neighbouring state of Karnataka have huge operations in Telangana. One of their mining companies is now being investigated for — this is hard to believe — changing the border between Karnataka and Andhra Pradesh to benefit their mining interests.
Lots of resources, yet very few benefits coming to people on the ground: that’s what proponents of Telangana argue. As a new state, they say, the government of Telangana will have the political and administrative drive to do better for voters. Instead of trying to refute this argument logically, people in coastal Andhra and Rayalaseema, both wealthier than Telangana, are on a rampage. Burning state buses is no answer to an economic argument; it only leaves you with fewer buses.

For many years, Jawaharlal Nehru refused to pay heed to any claim for statehood based on linguistic or ethnic factors. His sole criterion was economic: would a new state be better off after independence? Would it be able to support itself better than before? Though Nehru’s blindness to language or ethnicity was, well, a handicap the economic arguments he so loved are very important. And most arguments for Telangana’s statehood are economic.

But are the assumptions of folks who want Telangana state realistic? Do people who live in newly carved out states do better than before? Nine years after the creation of Chhattisgarh, Jharkhand and Uttarakhand, there’s some reason to believe that, indeed, they do.

Among all the newly created states, Uttarkhand is probably an anomaly; it wanted to peel off from Uttar Pradesh because it felt that its parent was more backward than it was. So, it’s probably no surprise to know that by 2006-07, the average person in the hill state made Rs 27,800, nearly double the Rs 14,663 made by the average UP-wallah.

MOST of the stories coming out of Jharkhand are about Naxalism and the fabulous wealth allegedly salted away by former chief minister Madhu Koda. Yet some of Koda’s prosperity seems to haXve rubbed off on Jharkhand, where the average person’s income two years ago was Rs 20,177 again, nearly double the average Bihari’s Rs 10,570.

It’s the same story in Chhattisgarh, where the average income was nearly Rs 29,000, much more than the average Madhya Pradesh income of Rs 18,051 two years ago. People in smaller, newer states are better off than counterparts in their parent states.

Another argument against splitting existing states is that the new ones are slow to mobilise their own funds from taxes or cesses and depend heavily on central handouts. Ergo, to control New Delhi’s finances, it’s better to go slow on new states.

Sure, a state like Chhattisgarh might take time to get its taxation systems in place and need central handouts. But even a state like Haryana, carved out of Punjab in 1966, needs funds from New Delhi. Bengal, which has been partitioned several times, and therefore got smaller, is hardly self sufficient.

Indeed many ‘established’ states like Bengal and Bihar are still so slow to collect local revenues that matching funds from New Delhi often go unused. All states, big or small, old or new have similar powers to collect revenues. Their ability to do so doesn’t depend on when they were created or their size, but by the efficiency of their administration and the buoyancy of their economies.

The creation of Telangana might trigger cries to make more new states like Vidarbha and Gorkhaland, or split Uttar Pradesh into three. The best way to figure out what’s feasible, which demand merits attention and which doesn’t, is to set up a group, like the States’ Reorganisation Commission and have it thrash things out with everyone, and then take a call.

Finally, the Congress party which dominates this government, needs to be internally consistent in what it stands for. As long ago as 2001, the Congress Working Committee accepted the report of one of its study teams and decided that it was in favour of creating two new states: Telangana and Vidarbha. Then, the BJPled NDA government was in power and it mattered little what the Congress thought. But in 2004 after its election victory, the common minimum programme adopted by the first UPA coalition also agreed to work towards statehood for Telangana. In the hurly burly of coalition politics, it soon forgot this promise and lost an ally, the Telangana Rashtriya Samiti (TRS) two years later.

Today, instead of dithering, the government should signal clearly that it will work to create Telangana. And set up a group to examine the demands for other new states. Remember, the United Sates, with about one third our population, has 50 states, a number that’s only grown over time.

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Dragon Builds Rail-Web around India - Raghu Dayal

Maoist China believed power flowed from the barrel of the gun; today it believes power comes from farms and factories sustained by assured supply lines of energy, minerals and materials, supported, in turn, by adequate logistics and connectivity. It seems to demonstrate that industrial power is at the heart of economic power, and economic power at the heart of strategic power.

China has imparted to railways a unique dimension of diplomacy and statecraft. Since 1985, China has channelled large investments into the expansion and revitalisation of its railways to also serve as the new Euro-Asian continental bridge akin to the fabled silk road as much as a lifeline of its economic and military might. Asia to Africa to Latin America.

All around India, China shares land borders with five Saarc countries, looks over the Chicken’s Neck at a sixth, and has a long border with Myanmar. From Kunming in its Yunnan province, a network of road, rail and river links fork out to Sittwe in western Myanmar and Thilawa near Yangon on the Bay of Bengal.

China would have completed extensive rail links to Myanmar after it builds 232-km Lashio-Muse/Ruili rail line in that country. A Myanmar-Bangladesh rail link will help connect Kunming to Chittagong as well. China is contemplating, among various rail-related projects in Bangladesh, construction of the second Padma bridge and a 130-km rail line from Chittagong to Gundum on Myanmar-Bangladesh border.

China’s formidable presence in terms of rail and road projects in India’s north is uniquely typified by world’s highest 1,142-km Golmud-Lhasa rail line. There seems no stopping it to extend it first to Nyalam on the China-Nepal border, and finally to Kathmandu.

A feasibility study is already completed for a new 252-km line from Lhasa to Xigaze. A further 400-km rail link from Xigaze to Nyalam is listed in its rail network programme. Nyalam to Kathmandu will then involve just about 120 km of additional link to be built. The prospect of going by train from Rameshwaram to Beijing via Kathmandu and Lhasa does not appear all that far-fetched any more!

Likewise, on India’s eastern flank, Chinese rail and road connectivity speedily knits the south-east Asian land mass. The 5,380-km Singapore-Kunming rail line project pursued by Asean covers the route from Kunming through Laos to Cambodian port of Sihanoukville on the Gulf of Thailand that is being actively supported by China.

It is already connected by rail to Vietnam through the 195-km dual-gauge (1,435 mm/1,000 mm) line between Hanoi and Dong Dang. China’s comprehensive renovation of the Kunming-Hekou link and construction of 141-km Yuxi-Mengzi line support an early connection of the pan-Asian rail network.

It is busy not only speeding up construction of its own network between Kunming and Singapore but also helping close the gaps across the Asean railways, viz, between Thailand and Myanmar, Thailand and Cambodia, Thailand and Laos, Laos and China, etc.

With the remaining gaps in the network, when bridged, traffic originating in Singapore or Indonesia would be able to join the main Chinese south-north trunk line that runs from Shenzhen to Erenhot on the border with Mongolia, or its east-west trunk line that runs from the port of Lianyungang on the coast of China to Druzba on the border with Kazakhstan.

Similar developments on India’s western flank have for long been ominous. China-built Gwadar port in Balochistan on Pakistan’s southwest coast close to the Straits of Hormuz will be the entry point for energy supplies to China, bypassing the Malacca Straits.

Gwadar is proposed to be linked through Khunjerab Pass in the Karakoram to Kashgar (Kashi) which is connected to Xigaze, due to be rail-linked to Lhasa. There are reports of Gwadar being linked by an 800-km standard-gauge (1,435 mm) rail line in Pakistan via Dalbandin along Koh-I-Taftan (on Iranian border)-Spezand-Quetta-Chaman (on Afghan border) and extended to Kashi in China. When completed, it will isolate the broad gauge (1,676 mm) rail network in India while providing a through 1,435-mm network all across China.

China’s frenetic development of infrastructure in central Asian republics (CARs) signifies its long-term strategic and economic stakes in the region. Constituting a virtual bridge between China and Europe, Kazakhstan is keen on developing both a trans-Asian rail route via Iran as well as the Euro-Asian rail route, both enabling Beijing to provide connectivity between Asia-Pacific and Europe.

The former comprises a 10,500-km through rail link along Beijing-Almaty-Tashkent-Ashkabad-Tehran-Istanbul, and the latter between Hong Kong-Beijing-Almaty-Saratov-Kiev-Warsaw-Berlin-Brussels-London (13,000 km). The different rail gauges in China (1,435 mm) and CARs (1,520 mm) compel swapping of wagons and coach bodies at a trans-shipment yard China has built at Alataw.

The Maersk railway subsidiary, European Rail Shuttle, in conjunction with Trans Siberian Express Service and Tie Yang Transportation in China, offers regular block train services from China to the Czech Republic via Mongolia, Russia and Poland.

Another instance of China’s engagement in building rail lines in resource-rich CARs is its links to Kyrgyzstan and Uzbekistan. Following the rail track between Tedzen (Turkmenistan) and Mashhad (Iran) at Sarakhs, a through rail link would be available from China through CARs to Europe via Turkey. Yet another transit route being considered is through Afghanistan and Pakistan along Ashkabad-Torghundi-Herat-Kandahar-Chaman-Quetta.

It is difficult not to infer that these mighty overtures from India’s northerly neighbour also aim at strategic encirclement and containment of India, creating a ring of anti-Indian influences. Asserting its ascent through ‘hard power’, for example, China has indulged in ongoing Yunnanisation of northern Myanmar.

Be it the road and rail links along and inside Pakistan, Myanmar or Vietnam, again, China is busy developing extensive multimodal connectivity all along the borders and inside the neighbouring countries for facilitating trade flows, energy supplies as well as large-scale movement of arms and armada, subserving its strategic global ambitions. This is real politik.

Against this, a complacent, smug and ‘argumentative’ India remains wrapped in its own bliss of ignorance and masterly inactivity, unable to take forward with good grace even fractional connectivity projects in Myanmar, Nepal and Bhutan. There is tide in the affairs of nations as well as men and India is in danger of having missed it. Small openings of opportunity seized in time can help mend fences and build confidence in our smaller neighbours.

http://economictimes.indiatimes.com/Opinion/Comments-Analysis/Dragon-builds-rail-web-around-India/articleshow/5320813.cms

Peter Drucker Lives On - T T Ram Mohan

Peter Drucker, the acclaimed management thinker, was widely remembered on his centennial last month. Harvard Business Review ran a feature titled, What would Peter do? The reference was to the present economic crisis in which managers and businesses have come under a cloud.

Well, first Drucker would have rubbished any characterisation of him as a ‘guru’, he famously said that newspapers used the word only because the word ‘charlatan’ was too big to fit the headline. Drucker did write some books of the ‘how to’ variety. But he was not the sort to prescribe ‘six easy steps to brand-building’ or ‘eight rules for go-getting CEOs’.

Drucker was a business philosopher who sought to establish broad principles for successfully managing businesses over the long run. His focus would have been on what managers might do to prevent situations that give business a bad name. One of the articles in HBR mentions some of the things he would have done in today’s situation.

He would have exhorted top managers to work together to rein in excesses in executive pay. He would have reminded businesses that in order to retain the loyalty of knowledge workers, businesses must create a larger purpose that such workers could relate to. He would have re-emphasised the need for businesses to work closely with civil society and non-profit organisations.

Some of Drucker’s ideas have been so widely embraced that they have become commonplace. The purpose of a company is to create a customer. Every company must define clearly the nature of its business. Discarding the old is as important as focusing on the new. Knowledge-based organisations need fewer levels than the traditional industrial firm. Managers routinely practise these tenets without even knowing where they came from.

Is there anything in Drucker’s work that remains relevant and is not fully reflected in managerial practice? I combed through Drucker’s writings and found at least three areas where his ideas could make a difference: the role of a CEO; the functioning of corporate boards; and the larger responsibilities of management.

Most people think the CEO is one man’s job. No doubt, many CEOs find it convenient to have it that way, the imperial CEO lording it over all he or she surveys. Yet, as Drucker correctly points out (and this was in 1955!), the CEO’s job involves three distinctive functions: planning for the future, responding to every day problems, being the organisation’s face to the outside world.

It is impossible, Drucker asserts, for any individual to successfully handle more than any two of these three functions. Hxence, the CEO’s role cannot be discharged by one person, it can be done only by a team. And the team should comprise at least three members. How many businesses can claim to do this?

Drucker is emphatic as to the need for effective boards. “It is an organ of review, of appraisal, of appeal”. The last function, appeal, that Drucker mentions is striking if only because it is defunct today. Drucker says of this particular function of the board, “Somebody has to discharge the final judicial function in respect to organisation problems, has to be the ‘Supreme Court’”. We all know the drab reality that obtains today. Most boards do not even want to take cognisance of appeals from managers, that would be ‘interfering in operational matters’.

Drucker argues that it is in the interest of the top management team to attract outstanding individuals to the board and to make the board effective. An effective board is crucial to the success of top management. Yet, most CEOs tend to regard boards as decorative as best and a nuisance at worst.

Lastly, the responsibilities of management. One is self-evident and has been placed on the altar, making profits. Drucker is not dismissive of profits. Indeed, he sees it as the first responsibility of business. But, management has other responsibilities towards the enterprise as well: making sure of tomorrow’s management; not claiming special allegiance from its employees over and above the contractual obligations; allowing the freest mobility from the bottom to the top; developing a capital expenditure policy that counteracts the business cycle.

Beyond these, management has a larger responsibility towards society. This is not what passes these days for ‘corporate social responsibility’. It is much loftier than that. Drucker inverts the free market slogan, “What is good for the enterprise is good for the country”. He contends that management must strive to make whatever is good for the country become good for the enterprise. Business must make this rule “the lodestar of its conduct”.

There is so much wisdom in Drucker’s writings. Yet, it is possible to go through an MBA programme without even heard of Drucker. It is possible to be a professor in a business school without having read Drucker. That is, perhaps, why so many managers are like the blind men in the parable who feel out an elephant’s parts without knowing the elephant.

http://economictimes.indiatimes.com/T-T-Ram-Mohan/Peter-Drucker-lives-on/articleshow/5320817.cms

Employee Engagement: A Leadership Priority - R Gopalkrishnan

ALEADERSHIP priority is emerging — how to improve employee engagement within companies: There have been disquieting developments in recent times. All over the world, good employee policies exist in the manuals. However, the management capability to engage with the workforce and to implement the policies humanely is under pressure.
In his book The Idea of Justice, Prof Amartya Sen refers to the two Indian philosophical concepts of Niti and Nyaya. Niti relates to the policies, principles and institutions of justice while the Nyaya refers to the actual delivery of justice. The former is committed to better justice, while the latter is deeply concerned with the prevention of injustice.
Prevention of injustice is very different from pursuit of perfect justice. They are two sides of the same coin, but their value perception is different. So far as the Indian legislative framework is concerned, laws pertaining to worker relations have for long needed to be updated. Labour reforms have been widely discussed, but the subject remains on the pending agenda.
However, at the firm level, managers can act on remedying the nyaya perceived by the employees in the employee-employer relation; its practice can be modernised by forward-looking managements. This requires special effort by company leaders.
Evidence of pressure: Consider the evidence that employees do suffer from a feeling of unfair treatment, resulting in desperation and depression among employees of both developed and emerging markets.
Well-known French companies such as France Telecom, Renault, Peugeot and EDF have experienced increasing suicides among workers in the last two years. The cynic may observe that the French suicide rate is generally high compared to Britain, Germany and the US. That is true. However, even in the US, the rate of suicides has increased by 28% in the last two years.
Employees feel that they are expected to offer loyalty to their employer, but they do not receive an equal commitment from the employer to protect their jobs. Managers are so focused on corporate survival that they seem to have a limited bandwidth to attend to the employees’ feeling of injustice. Employees everywhere say that they are ‘in distress’ or that they are ‘stressed out’.
Surveys in the US over the last few years show that indices like ‘loyalty’ and ‘trust’ have collapsed from the 80% levels to 30% levels. More than half the respondents feel a sense of stagnation and disinterest in their work. The recession has increased uncertainty simultaneously with a perceived ‘onslaught’ by managers to increase workforce productivity.
All in all, in the developed countries, permanent workers are unhappy and are disenchanted with both their work and their employers’ attitude. Temporary workers too have their own grievances. In South Korea, industrial action by temporaries has been experienced at Ssangyong and Donghee. In Japan, the president of Rengo has stated his disapproval of “temporaries being treated the same as robots”.
In India too, we have witnessed hyper cases of industrial action recently. After many decades of relative labour tranquillity, company executives have been killed at Grazino in the north and Pricol in the south. Strikes have occurred at Gurgaon-Manesar, Chennai and Coimbatore.
Employees in the emerging markets are deeply concerned about inflation, food and security. Prices of essential commodities have already increased sharply. Food experts predict
that the rise in food prices is only the beginning of a serious, new threat. Richard Henry, chief economist at IFC’s agribusiness department, believes that “last year’s food crisis was a fairly small one — and was cut short by the global financial crisis — the next one is bound to be more prolonged”. In emerging countries, such forecasts cause very deep concerns.
Universally, employees are a worried lot. All of these are alarming trends and need to be taken seriously. Solutions must be found and implemented at the firm level. Within the firm, it must be focused upon at the departmental level and at the level of the individual relationship. Employees feel engaged or disengaged at the transactional level within departments.
A firm-level approach: Managers must consider a four-pronged approach:

• First, the subject of employee engagement needs to be driven down the company by the CEO. I think there is a general lack of awareness of the problem down the line. It is also mixed up with the general economic downturn. Poor employee engagement, it must be clearly understood, is a precursor to some other problem which is brewing. That is why there needs to be top-level engagement. If enough employees feel disengaged, the consequences will certainly be disruptive. Operating managers have to act. It cannot be left to the HR department.

• Second, there must be the action to measure and track employee engagement. Techniques are available and excellent companies already track their employee engagement scores. However, the extent to which such companies act on the results is unclear. Further, I suspect that very few companies measure employee engagement and prefer to get a qualitative feel; so their agenda to respond is also too general. The general approach
may have worked in the past, but will not be good enough for the future.

• Third, operating managers need a refresher training on empathy and listening skills. Unions have been quiet for over two decades now with the passing of labour leaders like Datta Samant and Kuchelar. A whole new generation of managers has taken leadership roles without any direct experience of dealing with employee discontent. Listening skills are difficult to develop especially when a manager’s career thus far has not required him to do much of it. There need to be powerful conversations at the operating level, where employees feel they have been listened to even if all their suggestions have not been accepted.

• Fourth, and last, the top leadership of the company must institutionalise ways to connect directly with the lower levels of employees. Many Tata companies practice a monthly dialogue or a two-way webcast. Many formal and informal models of listening downwards have been practised. These need to be brushed up and implemented earnestly.
(The author is executive director at Tata Sons)

http://economictimes.indiatimes.com/Opinion/Comments-Analysis/Employee-engagement-A-leadership-priority/articleshow/5308990.cms

BY GEORGE!

Fighting blind spots in leadership and development with a variegated HR toolbox makes George Hallenbeck a change agent de force.



As head of intellectual property (IP) and development at Korn/Ferry International, George Hallenbeck has a talent for tuning and fine-tuning talent. With expertise in developing IP and products around the human factor, the 40-year-old Minneapolis-based consultant often has a crack at his six-string and idolises The Edge of U2. If that’s what it takes for Hallenbeck to tune up, CD finds him in fine fettle in the innards of Korn/Ferry’s Gurgaon office—strumming out classics on talent management and the limitations of the 360-degree feedback.

Excerpts:
How can we upgrade our talent management infrastructure and capabilities to build a truly talent-centric organisation?
There’re potentially a lot of things to do. Typically, when organisations try to put a talent infrastructure in place, they just try to put in place the ‘Best Practices’ piece. At one level, they have to figure out the critical capabilities organisations focus on. Depending on that, they need to translate them into leadership skills. Many of the companies are not capable of doing that.

How do we take our executives through a learning journey to accelerate their entry into senior roles?
The individual must have a number of unique and diverse experiences. That’s where the learning agility piece comes in. It is all about getting the right experience at the right time.

How can we ensure the best fit in every role whenever we take an executive selection decision?
First, you have to start out by asking about the key things that determine success in a role. Get feedback from not only the hiring manager for that role but also from high-performers in that role. If you’re not hiring at the right capabilities, you may get a lot of talented people but they may not fit into their roles within the company. So the talent needs to be channelled well. Lastly, through assessment and interviewing, we can determine the best fit.

How can we assess, align, orient and engage our talent to navigate through organisational changes?
All of that comes down to dealing with ambiguity and uncertainty. Our research proves that it is not a skill people normally excel at. It takes time to become capable at that. And there are very few who can turn ambiguity to their advantage.

What are the limitations of 360-degree feedback?
One of the things that I feel for the 360-degree feedback is that it shouldn’t be a tool for all purposes. In our experience, we found that it specifically functions in the context of helping people to develop. Primarily, what 360 provides is better awareness of how you are perceived by others. And awareness is the fundamental step to growth. When we try to adopt 360 for other purposes, particularly, performance management, it breaks down. We applied 360 for studies we’ve done in development and then when we applied them to performance, we found all the ratings went up. So a 360 will tell you what, it doesn’t tell you why. It may tell you that you have to improve your ability to motivate people but it won’t tell you why. That’s where the self-exploration of the inside-out process coupled with a good coach help ask the right questions to create the story behind the results.

Don’t you think underperformance gets a leg up once talent is standardised in the corporate world?
There are several schools of thought on that, the Jack Welch philosophy and so on. You really have to look at every individual—because there may be some very high talent that underperforms. And it’s not a one-size-fits-all for underperformers either. Talent management is not about standardisation but it’s a combination of the right principles to operate by, but never forgetting that you’re dealing with the individual. It’s a balance between the two.

Give us a glimpse of the HR toolbox to execute talent strategies.
The toolbox really is an integrative blend of consulting and tools that we provide to our clients. It’s a series of tools that we build around different talent functions but what makes them unique is that they’re all integrated with each other. We align those with the strategy of the organisation. One of our processes is to then sit down with the senior management and understand their strategy and how that translates into specific leadership competencies. On the basis of that, we put other solutions around selection, development, employee engagement, succession planning, talent identification and deployment. We put all those integrated pieces around the core that’s aligned with strategy. That really takes you to the upper echelons of talent management. It’s relatively few companies that reach that pinnacle that have talent practices that are integrated, and that’s what we’re trying to accomplish.
There’s a history that goes back to about 25 years of research that are woven into our tools. The principles of research came from the Center for Creative Leadership, which is a worldwide research non-profit organisation. One of our co-founders was also a principal talent manager in Pepsi and some other prime organisations. So a lot of science goes into creating those tools, but we’ve also been able to manifest them in a way that both HR and line managers understand. So we’ve had some breakthroughs with these results in what we call the 70-20-10 development. It basically establishes that people learn through their experiences. We develop people and leaders by giving them on-the-job learning experiences, and that’s 70% of our investment. About 20% should go into coaching, and really 10% should be the traditional training piece related to skills training, education etc. Unfortunately, most companies have that flipped. The other piece is learning agility, and we’ve even developed sub-types of identifying learning agility.

In a process-driven environment, do internal successors steal a march over external candidates?
Companies that are very successful over the long term have ways of going about it. Look at the GEs and the companies that really represent the pinnacle of this. But at the same time, you can be completely insecure. You always need to bring in fresh perspective and talent to add. It also depends on who is coming in. They need to adapt to the new situation. If you are coming into an organisation, regardless of whether it’s a highly process-driven organisation, if you’re not adaptable, you don’t succeed.

http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD/2009/12/04&PageLabel=33&EntityId=Ar03300&ViewMode=HTML&GZ=T

Managing the Reputation Risk - Kuntal Sur

RECENT turmoil in global financial markets and subsequent collapse of many banks and financial institutions in western economies has brought focus back on different dimensions of risk management. Among the others, managing reputation of the bank / institution has become a prime risk management area. Reputation is the single most-valuable asset of most businesses today — albeit an intangible one. Financial institutions (FIs) around the globe are grappling to tackle reputation of their institution. Reputation risk is all encompassing as it affects shareholders, customers, investors and employees alike. Worse, the reputation risk has connection to one or almost all other risks that FIs face. Typically, reputation could be damaged by an institution’s failure to properly manage the risks it faces (such as credit, market, strategic, operational or other material risks) as well as some external factors that are beyond its control (eg rumours). Such damage may lead to serious consequences with immediate or long-term implications and in many cases result in costly litigation, or lead to a decline in its customer base, business or revenue.

Reputation, being largely based on people’s perception and expectations, is intangible in nature and thus cannot be easily analysed or quantified. While a good reputation may take many years to build up, it can be tarnished instantly.
FIs should adopt an approach to reputation risk management that fits their own risk profile, level of sophistication, which enables the risks affecting reputation to be consistently and comprehensively identified, controlled, and reported.
Reputation risk management has three main building blocks:

• Comprehensive and effective corporate governance framework, including independent reviews and audits
• Effective reputation risk management process
• Pro-active risk identification, reporting and disclosures.

FIs operating as part of a group will be susceptible to reputation events affecting their parent bank, non-bank holding company, or other members of the group. Such contagion effects on FIs’ reputation may also result from other problematic relationships, such as any close association (whether knowingly or unknowingly) with major customers, counterparties or service providers that are revealed to be engaged in unethical, unlawful or corrupt activities.
A proactive monitoring system is a prerequisite for obtaining early warning of potential risks to reputation. Such monitoring includes, (i) monitoring of media reports and (ii) monitoring of industry, market, political, legislative or social developments which may have implications for the institution.

FIs may devise early warning indicators (eg a sudden increase in customer complaints, breaches of internal controls, operational errors, fraudulent incidents, etc) and any other triggers or thresholds, which can act as alarm bells for top management actions or provide signals to invoke any contingency plans.

One of the effective ways to mange reputation risk is regular communications with stakeholders. This can take many forms, including annual reports, prospectuses, website information, AGMs, press releases, media interviews and issue specific clarifications to regulators. Timely disclosures to stakeholders, including regulators, will better their understanding of the institution’s performance and future prospects.

A good reputation hinges on a business living the values it claims to espouse and delivering consistently on the promise to its stakeholders. Active and systematic management of the risks to reputation can help to ensure that perception is aligned with reality and that stakeholder experience matches expectations.

The author is associate director with KPMG Advisory Services

http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD/2009/12/02&PageLabel=13&EntityId=Ar01301&ViewMode=HTML&GZ=T

India Inc gets cheaper loans from cash-surplus MFs

India Inc has found a new, cheaper way of meeting its funding requirements — borrowing from mutual funds through short-term commercial paper, at rates lower than what any bank can offer.

Flush with cash, mutual funds (MFs) have been deploying their surplus funds in CP issued by top-rated corporates, at rates ranging from 3-5.5%. As a result, top corporates like IOC, HPCL, Tata Motors and L&T Finance have become very active in the CP market. In fact, CP issuances have risen to an all-time high this year.

According to the latest data released by the Reserve Bank of India, outstanding CP issuances by corporates zoomed to a high of Rs 88,161 crore as on September 15, 2009, as compared to Rs 54,181 crore in September last year. This phenomenon has clearly elbowed out banks in terms of their coprorate lending. Most banks confirm that their corporate lending portfolios are yet to see a pick-up.

According to Yogesh Agarwal, CMD, IDBI Bank, “We have made a lot of sanctions for corporate loans, but the withdrawals on these accounts aren’t happening.” Adds MD Mallya, CMD, Bank of Baroda, “Corporate lending is still yet to pick up.” Bank credit growth has slumped to 9.7%, according to the latest figures released by the RBI – almost half of their year-end estimate of 18%.

For corporates, it’s a win-win situation. Not only are they getting short-term cash at rates much lower than what banks can offer them, they also have the option of rolling over these CPs. Corporate paper is usually issued with a tenure of three months. Mutual funds, on the other hand, are enjoying higher rates from corporates, as opposed to what they would have otherwise got by deploying cash in treasury bills or lending it in the CBLO market.

According to J Moses Harding, head of global markets at IndusInd Bank, a number of mutual funds have been actively deploying funds in CPs issued by major corporates. “MFs usually have an appetite of less than 90 days for deploying funds, so a three-month paper suits them fine,” he explains. In fact, AMFI data shows that liquid and money market mutual funds saw inflows of Rs 1,01,441 crore in October. Rajat Monga, CFO, Yes Bank, says, “It’s the higher-rated corporates that are issuing such paper, and the demand for it is apparent when you see the way CP issuances have risen this year.”

http://economictimes.indiatimes.com/Markets/Analysis/Companies-turn-to-MFs-for-raising-cheap-funds/articleshow/5289829.cms

Companies sound off branding plan for distinct connect with consumers - Economic Times

Think about the new Tata DoCoMo commercials or the A R Rahman-composed tone for Bharti Airtel. You could well be humming one or the other. That’s the magic of sound—one of your most powerful memory senses, the sense that most brands in the crowding telecom market are betting on, to find a space in your busy brain.

The name of the game is sonic branding. “Sound is an integral part of brand building for telcos because they deal in the service of sound. For them, not using sound in building their brand would amount to missing an opportunity,” says Santosh Desai, MD and CEO of Future Brands, which manages the brands of the country’s retailer Future Group, and an advertising industry veteran.

Also, signature tune is vital to strike a chord when companies operate across geographies that speak different languages and deal with globe-trotting customers having reduced attentions spans. “India is a country of music lovers and good music helps connect with the audience,” says Shalini Sethi, head of communications at Aircel, a young telco that roped in music composers trio Shankar, Ehsaan and Loy to do its signature tune.

The concept is not new. We have been listening to “Vicks ki goli lo, kich kich...” and “Tandarusti ki raksha...” for ages now. In telecom space itself, Airtel made Rahman sit down and compose an exclusive tone eight years ago. Since then, it has become one of the most downloaded ringtones in the world.

“We have tried out different variations to the core tune ever since it came into being. For instance, Rahman did a version of the tune when we launched in Sri Lanka, using instruments that reflect the country’s culture,” says Shirish Joshi, chief marketing officer of Airtel. Reliance Communications, the second-largest telco, too uses a signature tune from Shankar-Ehsaan-Loy, while Idea Cellular got its made by Tamil composer Ilaiyaraaja back in 2002.

They don’t come cheap. These companies have invested crores on their audio identifiers. While the companies refused to share any numbers, music industry insiders reckon that AR Rahman commands more than Rs 4 crore for a signature tune and Shankar-Ehsaan-Loy charges up to Rs 75 lakh.

But the return on investment is not measurable. “Although good colours, pictures and sounds associated with brands do get them noticed, it’s a complicated science and the return on investment (ROI) is difficult to measure in absolute terms,” says Harminder Sahani, MD of Delhi-based management consultancy Wazir Advisors.

Yet, companies see sonic branding as a crucial aspect in their brand-building strategy. “Our signature tune has helped in creating a brand recognition for us. The ear is a sensory organ and a way for people to experience our brand, so branding through sound has been important for us,” says Prasad Narsimhan, CMO of Virgin Mobile.

It’s particularly important for international brands such as Vodafone and Docomo as audio identifiers help them overcome language barriers and create familiarity. DoCoMo’s jingle, for example, repeats the brand name several times. “The idea is to establish a distinct connect with the consumers through music and create strong consumer recall for DoCoMo,” says Lloyd Mathias, CMO of Tata Teleservices.

Well, in a high-tension wireless sector, it’s important to make the right noises, if not a song and dance.

http://economictimes.indiatimes.com/News/News-By-Company/Corporate-Trends/Companies-sound-off-branding-plan-for-distinct-connect-with-consumers/articleshow/5289571.cms

Adding Skills to NREGA benefits - A Kumar & V Raghunathan

Can the National Rural Employment Guarantee Act (NREGA) be the answer to the country’s skill-starved construction industry? Yes. NREGA is among the largest social welfare schemes implemented anywhere in the world. The Act provides for at least 100 days of wage employment to at least one adult member of a rural household who is ready to do unskilled manual work.

In the current financial year alone, it has reached out to 35.8 million households in selected districts, creating nearly 1.59 billion person-days of work in this financial year. NREGA envisages that physical work leading to community assets like irrigation canals, all-weather roads, water tanks, etc, will be created through this labour in the vicinity of villages.

As with any government scheme, proponents hail it as one of the most direct and effective poverty alleviation programmes, while detractors believe a lot of money is going into wrong and undeserving hands. There have been two or three significant and recurring criticisms about NREGA. One of them is that the assets created by the scheme are of dubious quality. Another criticism is that funds are being given out as dole to the not-so-deserving. Neither criticism may be entirely unwarranted, as it is difficult to check the exact status of people or quality of assets being created in such a massive programme.

At another level, the country’s infrastructure sector is booming but the construction industry is in dire need of skilled workforce. The paucity is not only delaying projects but also impacting the quality of workmanship. There is hardly a channel of supply of skilled and certified masons, bar-benders, carpenters, etc, on the scale required, so that a person serving as an unskilled labour till the other day at one site may declare himself a mason at another site, the next day.

An Assocham study shows that the number of vocationally-trained workers in India is just 5.3% compared to 95.8% in South Korea, 80.4% in Japan, 78.1% in Canada and 75.3% in Germany; that nearly 93% of workers (or 353 million people) in India’s unorganised sector do not get employment-related training; that around 80% of the new entrants to the workforce every year have no opportunity for skill training; that against 12.8 million new entrants to the workforce annually, the existing training facilities can train only about 3.1 million, thus releasing nearly 10 million untrained workers to an already-big pool! Grim numbers. Surely, we do not have much reason to celebrate our largest youth population in the world if much of it is unskilled?

This leaves us with two seemingly-unrelated phenomena. But a little reflection shows how the two problems taken together automatically lead to a solution — for both. It is evident that NREGA can mitigate a lot of criticism directed at it if it can actually create value for the individual beneficiary as well as the nation. To do so, perhaps NREGA is best implemented in a PPP model where construction companies are invited to take up projects in defined geographic areas, employing NREGA-registered labour for the project under implementation. In fact, the real benefit of this idea underlies in its potential for long-term skill-building, as described below.

The project being implemented under the PPP model must create an on-the-job training module aimed at upgrading the skills of people working at the sites. It could be about 80% hands-on training while 20% could be on concepts, quality and other technical aspects delivered in pedagogy suitable for the target group. A select few who come up to the standards benchmarked by the firm for a particular skilled category could be given certificates for the relevant skill. The industry will benefit not only in terms of fulfilling its social responsibility and upgrading the labour force but also in creating a certified cadre of skilled professionals for themselves and the country. With the government aiming to spend nearly $500 billion in the next five years on infrastructure, it is time to move beyond creating jobs for a huge unskilled workforce?

This has the potential to turn NREGA into an earn-while-you-learn engine that will propel the skilling of our workforce, and not just end up as a dole-out programme. This would also be in line with the goals of National Skill Development Mission that plans to add 10 million workers to the non-agricultural sector through skill training. The combined budget of various ministries towards this objective alone is in excess of Rs 10,000-15,000 crore.

The major mode of training suggested in the mission document is also through the PPP mode, which includes adopting existing ITIs, running short-term courses ready for employment which is more hands-on, running skill development centres at the rural doorstep, etc.

Thus, marrying the two major plan initiatives will kill two birds with one stone: make NREGA more effective and provide a steady supply of skilled workforce. The idea may call for some path-breaking coordination at the national level, but that could be handled by the Planning Commission.

(Avanish Kumar and V Raghunathan are with GMR Varalskhsmi Foundation. Views are personal.)

http://economictimes.indiatimes.com/Opinion/Adding-skills-to-NREGA-benefits/articleshow/5277427.cms

Hans Rosling: Asia's rise -- How and When ?

Hans Rosling was a young guest student in India when he first realized that Asia had all the capacities to reclaim its place as the world's dominant economic force. At TEDIndia, he graphs global economic growth since 1858 and predicts the exact date that India and China will outstrip the US.

http://economictimes.indiatimes.com/tv/Hans-Rosling-Asias-rise--how-and-when/videoshow_ted/5261107.cms

Indo-US ties: Important, not Urgent - Swaminathan S Anklesaria Aiyar

While the US needs Pakistan to target the Taliban and China to protect the dollar and sustain recovery in the short term,it sees India as a long-term ally against Islamic terror and an ambitious China, says Swaminathan S Anklesaria Aiyar.

After reading the McChrystal Report on the Afghanistan issue and watching President Obama’s visit to China, dismayed observers complain that the US views Pakistan and China as more important partners than India. The truth is more complex. There is certainly a strong urgency to US relations with Pakistan and China right now. By contrast, ties with India are important, but not urgent. This raises short-term worries, yet bodes well for the future.

US casualties in Afghanistan are rising, and the Taliban looks stronger than ever. The US urgently needs Pakistani help in Afghanistan. It is getting a mixture of help and sabotage. Pakistan is cracking down on the Pakistani Taliban, and this diminishes the urgent threat from the Afghan Taliban too. However, the US knows that Pakistan would like to have the Taliban back in Afghanistan eventually, which is why it gives the Afghan Taliban leadership protection to stay in Quetta.

The US lives with this manifest duplicity since it urgently needs at least partial cooperation from Pakistan. Yet, Pakistan’s unreliability as a long-term ally is well understood in Washington. The latest Pew Global Attitudes report shows that only 22% of Pakistanis think the US takes their interests into account when making foreign policy decisions, essentially unchanged from 21% since 2007. Fully 64% of the Pakistani public regards the US as an enemy, while only 9% views it as a partner. So, while the US-Pakistan partnership has an urgent short-term basis, its longer-term prospects are poor, and both sides know it.

A recent report of General McChrystal, US military commander in Afghanistan, has one section that has raised concerns in India. This states that “increasing Indian influence in Afghanistan is likely to exacerbate regional tensions and encourage Pakistani counter-measures”. The statement is obviously true: after all, Pakistan created the Afghan Taliban to reduce Indian influence and increase its own in that country. Indian observers worry that the US will placate Pakistan by trying to reduce India’s role in Afghanistan.

However, whatever McChrystal may say, there is really no chance of the US forcing India to quit its Afghan presence. The US cannot stay in Afghanistan forever, and when it leaves, India will be a more reliable anti-terror partner than Pakistan can ever be. The latest Pew report shows that 76% of Indians have a favourable image of the US, up from 66% in 2008. Indeed, fewer Israelis (71%) have a favourable view of the US than Indians.

Commercial, educational and personal ties between India and the US are strong, and many Indians migrate to the US. Both Indians and Americans see Islamic terror as an existentialist threat. So, economic, social and security considerations provide a solid basis for long-term Indo-US partnership, even if it lacks the urgency of some other partnerships.

Fareed Zakaria, editor of Newsweek, has succinctly highlighted India’s long-term value to the US. “South Asia is a tar-pit filled with failed and dysfunctional states, save for one long-established democracy of 1.2 billion people that is the second-fastest growing major economy in the world, a check on China’s rising ambitions and a natural ally of the US. The prize is the relationship with India. The booby prize is governing Afghanistan.”

As for China, Obama’s recent visit suggested a change of attitude in China’s favour. He did not condemn human rights violations in anything like the terms used by his predecessors. Given that China is now the global locomotive of growth, helping pull the US economy out of recession, Obama was subdued in criticising China’s mercantilist policies and refusal to revalue the yuan. China is now a major creditor of the US, and debtors cannot be too harsh on their creditors.

The Chinese managed to insert a phrase into the Obama-Hu statement saying the two would work for stability in the “south Asia region”. Indian observers took this to mean that the US had officially blessed Chinese interference in Indo-Pak affairs, and expressed strong displeasure. The US said the reference was to Af-Pak rather than Kashmir. Yet, it seems clear that China has scored over India on this occasion.

However, this sort of diplomatic point-scoring has little long-term relevance. China has long been an important ally of Pakistan, aiding its nuclear bomb and building the Karakoram highway and Gwadar port. So, protesting about Chinese ‘interference’ in south Asia is somewhat comic: it has long been a major player, not a mere interferer. The positive recent development is that China also fears Islamic terrorism, and that complicates its traditional pro-Pakistani stance.

The US today rightly views engagement with China as urgent. China has been growing much faster than India for decades, and is streets ahead of India in every economic respect. It is a very important trade partner of the US, and the largest foreign holder of US gilts. Economic circumstances have thrown the two countries together to form what some call Chimerica.

Yet, China’s rising economic strength is getting reflected in rising military strength and assertiveness, and this worries the US. China has potentially dangerous differences with long-standing US allies in east Asia, including Japan, Taiwan and South Korea. Globalization of China’s economy has the positive effect of making military adventures more disruptive and costly economically. Yet, the greater economic strength globalization gives China translates into military heft.

In this context, India has become important to the US as a potential regional counterweight to China. Everybody hopes that China will limit its military ambitions, but nobody can be sure. And so, the US sees India as a long-term strategic partner with a common interest in containing Chinese expansionism. This is one reason why President Bush pushed so hard for the nuclear deal with India: he saw it underwriting a strategic partnership going well beyond mere nuclear supplies.

This underscores the main thesis of this column: that Indo-US ties have less urgency for the Obama administration than ties with Pakistan or China, but have more long-term importance. This carries some short-term disadvantages, but also major long-term advantages.

http://economictimes.indiatimes.com/Opinion/Comments-Analysis/Indo-US-ties-Important-not-urgent/articleshow/5265786.cms

The Responsibility of Asia's rise - Janmejaya Sinha

For at least a decade now, the world has been preparing for the emergence of Asia. Many have dubbed the 21 century as Asia’s and many countries in the continent are working to make this true. On a review of some basic economic statistics, the shift in world economic power over the next 10 years will be stark. By 2013, the EU, Asia and the US will be equal-sized economic blocks contributing roughly 25% of global GDP. In contrast, in 2000, EU formed 32%, the US 28% and Asia 20% of global GDP. By 2020, China, Japan and India will be with the US and Germany at the top five economies of the world. Together, the three Asian countries will form 27% of global GDP. What is even more significant will be the accompanying shift in consumption patterns.

Today, 5% of the world’s consumers — or, the US population — provide $10 trillion of global consumption. All of Asia, with about 45% of the world’s population, adds up to only $7 trillion. But by 2020, Asia will consume $21 trillion of global produce, 140% of the US at that time, which will be consuming $15 trillion.

Thus, over the next 10 years, Asia will consume $15 trillion more than it does today, much more than three times the $5 trillion that the US will add over the same period. This will be a dramatic shift in global consumption patterns that can be ignored by companies at their own peril. The population dynamic will, if anything, only make this impulse stronger: Asia’s average age will rise from 29 to 32 in the next 10 years while it will go from 40 to 43 in Europe and 37 to 38 in the US.

There have always been strong companies in Asia, even today, if you sort through billion-dollar-revenue companies globally and correct them for double holding of some groups, you find about 12,500 companies of which 3,500 are from Asia. This share is bound to rise in the next 10 years. In fact, as Boston Consulting Group’s research on the top 100 companies from rapidly-developing economies (RDE) has shown, more than 70% of these companies are emerging from Asia. Given the rapid growth of Asian economies, this is not surprising.

As illustration, India had about 25 billion-dollar companies in 2000 and today, the figure has grown almost seven times to about 160. This growth is accompanied by an increase in its importance on vital issues for the planet’s survival. Today, while carbon emissions per head are really low in Asia, it is still the largest contributor to carbon emissions with the fastest growth rate. The demand for safe water by populations emerging out of extreme poverty and deprivation in many countries has not been met and will be the most critical shortage it will need to tackle in the years ahead.

Yet, Asia as a continent or a region is large, diverse, spatially spread, and at different levels of maturity. The idea of Asia has been slow to develop for itself despite the attempts of some regional groupings such as Asean and Saarc. The relations between many countries are soiled by bitter histories and the maturity that wealth brings in such discourse is largely lacking. On balance, the debates between countries with similar histories in Europe is much more mature and balanced. There is much jingoism and a poor appreciation of common purpose for the planet and, in fact, for the region itself. Asia, for good reason, till now has seen itself at the fringe of the global economy and has been focused quite substantially on selling to the American consumer and competing with one another to do so.

If you look at trade patterns, over time the share of inter-Asian trade has risen from 31% in 1990 to 45% in 2008. This is a very large number already and will grow even further in the coming years. The popular psyche still suffers from a colonial hang up and within the region itself, each country has a need for respect which suggests a fundamental immaturity or a lack of real self-confidence in its dealing with each other. This could work in the old world order as all of Asia fought each other to capture the American consumer, in the era that is coming upon us, where the consumer will be Asia itself — will the old ways work?

Asian economies and political leaders have to get ready to bear the heavy responsibility of global leadership. This is a big challenge because there is such great poverty, old enmities, disputed borders and a history of great economic competition. To begin with, there is a need for enhanced regional collaboration based on enlightened self-interest and a recognition of the medium-term imperatives. This is important for Asia’s own development. If you dig deeper into EU and the US as a block, one is a unified country and the other is a fairly well-integrated community with a common currency and free factor flows within the region.

I believe there is a need for a new idea of Asia: one that is less jingoistic, with a better understanding of common purpose and with some statesmanship from the bigger countries. China, Japan and India will need to show a leadership that will have to at least acknowledge that their power might be frightening to their neighbours. A new paradigm will need to be evolved in how they deal with each other. A common vocabulary developed to discuss issues on which there is a large agreement and a rhetoric that is less threatening and more cooperative on issues on which there is less agreement. This is going to be a long journey given the national trade-offs between liberty and economic progress that have been made in different countries and which are now institutionalised.

Japan and India have democratic systems that have often caused gridlock and slow agreement on economic policy. China with growing affluence will need to find ways to open its political system over time. Business leaders and the population at large have the most to gain from the emerging Asia. They need to coax the political leadership and the media into a less strident vocabulary for discussion. Asia needs it and, in fact, so does the world. Asia has to rise to the leadership challenge that its destiny provides it in the 21 century.

(The author is chairman (Asia Pacific) of The Boston Consulting Group. Views are personal.)

http://economictimes.indiatimes.com/Opinion/Comments-Analysis/The-responsibility-of-Asias-rise/articleshow/5245196.cms

Bananas and the Berlin Wall - Vikram Doctor

If you were in India 20 years ago you probably saw the fall of the Berlin Wall like I did — with Prannoy Roy on The World This Week. And like me you may have also been struck by one thing — all those bananas.

I remember the programme ending with shots of ecstatic East Germans kids holding perhaps the first bananas they had seen in their lives. I can’t have been the only one in India wondering rather bemusedly how our humble kelascould cause such happiness.

There was more to the fall of the Wall than bananas, of course, the fruit — and food in general — played a fairly large role. For those stuck behind the Wall few reminders of the harshness of their lives were as constant as the continual queuing for food, and the miserable monotony of what was there.

Meanwhile, they couldn’t help but learn from radio and TV broadcasts from across the wall, or the rare presents that came their way from West German friends, how far their neighbours were progressing.

Especially with bananas. As an article by John Rodden in Commonweal points out, the fruit became a fetish for West Germans in their Wirtschaftwunder (economic miracle) years of the ‘50s and ‘60s. The tropical fruit became a symbol of the new, working Germany , with mothers feeding their kids banana rich meals, and the country even winning a major concession on bananas with the nascent European Union. Other EU countries like France and Spain have territories like Guadeloupe, Martinique and the Canary Islands which grew bananas, so could import them as a legitimate ‘EU’ fruit.

These countries have always wanted heavy tariffs slapped on non-EU bananas, but Germany, with no convenient colonies, has always indignantly objected. The signing of the Treaty of Rome, which formed the original European Community, was delayed over a banana brawl, with West Germany signing only after winning a concession on this. When Konrad Adenauer, the first West German Chancellor returned home, he brandished a banana in the Bundestag as a sign of his success. Bananas for West Germany were not just a desired food, but a sign of their commitment to making Europe work on their terms.

So it’s not surprising then that when the Wall fell, bananas were a sign of victory. Rodden says that a popular bumper sticker of the time had two bananas forming a D for a united Deutschland. On a more practical note, I guess that bananas were among the few things that impoverished East Germans could afford on the other side. They did get a 100 marks welcome present, but as they soon discovered, consumer freedom went with higher consumer prices, and there wasn’t much they could afford.

Fruit at least was one thing they could buy, and that’s probably why so many bananas were bought in those first days. East Germans were soon eating double the amount of bananas than West Germans – whose consumption was already the highest in the EU. But bananas would also feature as the realities of reunification sunk in. West Germans patronisingly called East Germans ‘Bananen’ , while Easterners accused the Westerners of practicing patronising banana politics – one former Communist leader accused West German parties of handing out free bananas to lure voters in the 1990 elections.

In time many Easterners soured on reunification, leading to what’s called Ostalgie – nostalgia for the old East (Ost) Germany. This is wonderfully shown in the film Goodbye Lenin, where the young hero struggles to find the old East German products – Spreewald pickles, Globus peas, MokkaFix coffee – for which his sick, East Germany obsessed mother yearns. The EU was another sticking point, as the banana battles continued, with the banana producing countries insisting on trying to impose tariffs on non-EU bananas – something that would hit the banana obsessed East Germans the most.

If bananas were particular to Germany, food in general had a vital role in the end of the Cold War. For Westerners the superstocked supermarket was the most tangible symbol of their success over the Soviets. A common trope of those times was of Russians breaking down at their first sight of Western retailing.

In Moscow on the Hudson Robin Williams’ Russian character defects in Bloomingdale’s . One of the key confrontations was Nixon and Khrushchev’s ‘kitchen debate’ in 1959 where they debated the success of their countries models in a mock-up of an American kitchen at an exhibition in Moscow. Original plans were for it to have been a full scale replica of a supermarket.

This is something Indians can relate to. Middle-class Indians may not have suffered the worst shortages of the Soviet Union, but in the ‘70s and ‘80s we certainly felt the lack – and the lure – of the Western consumer paradise.

A friend recalls how his family would gather around when an uncle from abroad came home and opened his bags; as much as the actual presents, he says, “it was just the smell of the West that seemed so special.” When my father came back from one trip abroad, I remember being entranced by some cheese in a tube – what an unimaginably cool product!


The other day I found cheese in a tube in one of the new ‘gourmet’ stores here. I cringed at having ever found this processed food product cool.

That these shops are trying to pass off supermarket products as ‘gourmet’ is perhaps a sign we still haven’t got over our Western hang-ups . These days I tend to avoid supermarkets, too aware of the costs, environmental, social, cultural, of their standardising power.

If our local bananas are harder to find now, its because of the way supermarkets insist on promoting just the standard Cavendish that are grown across the world –a fruit designed for the retail trade, but not consumers. The risks of this banana monoculture are now being seen, as diseases wipe out Cavendish, yet the loss of banana diversity has made developing new varieties hard.

And yet supermarkets (and the cheap bananas of mass production ) helped end the Cold War. For ardent communists this is confirmation of their evil, but for those who aren’t , like me, it’s a reminder that life is complicated. The promise of abundance that supermarkets represent was a hugely potent force, and if it was used to a constructive purpose then, perhaps it could be again.

Much as I like the kirana shops, the local hawkers, the municipal fish market I now shop from, I realise that not everyone has the time or interest to do as I do. If only the power of supermarkets could be used to promote the local foods and diversity I get from the other shops, it could lead to many more people buying them. That would be another revolution worth having.

http://blogs.economictimes.indiatimes.com/onmyplate/entry/bananas-and-the-berlin-wall

Affordable innovation in healthcare - Kiran Mazumdar Shaw

Perhaps the most poignant present-day paradox is that even as medical knowledge advances and global wealth grows, health inequity between the rich and the poor is widening. It is easy to get overwhelmed when faced with numbing statistics and depressing reports on global access to healthcare — from numbers that indicate escalating infant mortality, to lists of preventable diseases that remain unaddressed, and reports on ineffectual healthcare systems.

Clearly, it is time to create a new paradigm to address the escalating crisis in global healthcare, to ensure that those who need access to healthcare get it, at all times and in all places. Affordability is the key to accessibility. In the economic reality of a developing country, cheaper drugs and low-priced healthcare infrastructure models can work wonders. We need only a look at the hope that cheaper generics have brought to Africa’s AIDS victims to realise the amazing transformative potential of affordability.

However, affordability is not simple to implement — it requires creative, out-of-the-box thinking. Thus, to deliver affordability, we require innovation — innovation in discovering drugs, developing therapeutics and delivering healthcare. It is only by creating innovation in technology, strategies, practices and policies that we can take on global healthcare challenges.

As an entrepreneur in a developing country, I have pursued a business strategy that has adopted innovation and affordability as the mantra from the beginning. In the quest for affordable innovation, our company has deliberately steered clear of the inherent inequities of business models followed by wealthy countries wherein a new drug is initially accessible only to a small affluent section of the society. Cheaper generic versions become available to a larger patient base after patents expire, thus eventually delivering affordability but having denied access to those who are in need for many years.

Over the years, our company has adopted an effective strategy for innovation that involves forming symbiotic partnerships with companies around the world to create value. I started my biotech business with an Irish partner, a genesis that has engrained in me the importance of leveraging partnerships to share risks, costs and skill sets to augment and expedite development. Since then, I have consciously built research and marketing partnerships to lower costs and gain global market access. Our collaborations have always ensured a complementary relationship where each partner helps the other fill gaps to accelerate the pace of development.

Our collaborative innovation model is also driven by an underlying ethos of developing and delivering affordable drugs for patients the world over, and we have tended to forge partnerships with companies that embrace this philosophy. After all, what good is innovation if it cannot reach those who need it?

Take, for example, our partnership with the Centre for Molecular Immunology (CIM) in Cuba to develop and commercialise a monoclonal antibody for the treatment of head and neck cancers in India. India has an annual incidence of nearly a million such tumours linked to tobacco consumption, largely afflicting poorer sections of the population. The affordable profile of this product has allowed thousands to benefit from a therapy that would otherwise have been out of reach. A second monoclonal antibody is being developed as an affordable alternative to address auto-immune diseases such as rheumatoid arthritis, psoriasis and multiple sclerosis and is already showing immense promise. Cuba is an embargo-hit country with high value innovation capacity. Our partnership with CIM has been truly symbiotic and has had profound impact on each partner.

We have also developed unique collaborations with several highly innovative US biotech companies with unique platform technologies that did not have the capabilities to take their innovations to the market. For example, we have applied a proprietary technology developed by a small biotech company in North Carolina’s Research Triangle Park to develop the world’s first oral insulin in a tablet form. Because we are conducting most of the development work in India, we believe this product will have affordability built in.

Today, the global drug industry is struggling to bring new drugs to the market. The regulatory environment has become increasingly difficult, and insurers and governments are challenged with rising healthcare costs. Affordability is now recognised as a critical factor to build sustainable models for healthcare in the context of ageing populations and the need for universal coverage. For example, new drugs for Malaria, Tuberculosis, AIDS and other neglected diseases will have to be developed in developing countries if they are to reach the patients that need them. Affordable innovation is the only way forward, and India has a unique opportunity to deliver it to global markets by building excellence across the innovation chain from discovery to product and clinical development.

As a traditionally risk-averse nation, India has rarely been at the forefront of innovation. Trailblazing innovation was always something someone else did; India imitated and became very good at it. Even in the biotech sector, most companies operate in the low-risk services and generic diagnostics, vaccines and therapeutics space. It is time for biotechnology companies, especially in India and other developing countries, to re-orient their efforts to aggressively harness innovation through partnerships and collaborations to attain the dream of ensuring healthcare for all.

(The author is CMD of the Biocon Group)

http://economictimes.indiatimes.com/Comments-Analysis/Affordable-innovation-in-healthcare/articleshow/5233899.cms

Cross-border capital flows and the ascendancy of India - CEO of Delloite

Over the past three decades — leading up to the recent global economic downturn — the trend was clear. The world’s capital markets were undergoing tremendous expansion, diversification and integration. Between 1980 and 2007, the volume of global capital flows increased dramatically. Meanwhile, according to various reports, the world’s financial assets — a combination of bank deposits, private and public debt, and equity — almost quadrupled in relation to global GDP.

This surge in global capital has been fuelled, in part, by worldwide financial market liberalisation coupled with the rapid-fire economic growth and burgeoning global influence of India and other emerging economies. Because the free flow of capital is the life-blood of sustainable economic growth and expanding prosperity, the world community at large — especially the G20 nations — needs to continue to facilitate and safeguard the flow of capital across borders. And India has a pivotal role to play in this regard.

Recent statistics from the World Federation of Exchanges reveal a dramatic shift in global markets. Between 2002 and 2007, the number of listed companies on the Nasdaq stock market and New York Stock Exchange (NYSE) dropped by 16% and 3% respectively, while the Asian markets increased significantly, with India growing 47%, South Korea 157% and Singapore 62%.

A similar eastward swing has occurred with regard to market capitalisation of the world’s stock exchanges. Between 2003 and 2008, the Nasdaq and NYSE decreased by 16% and 19% respectively, while the Asian markets enjoyed significant increases. India surged 132%, Shanghai 296%, and Hong Kong 86%.

Another noteworthy change has been taking place in the global economy. Many economists believe the recovery will be driven by a new phenomenon: growing consumer spending in emerging markets, with India in the forefront. This shift towards consumer-led growth in emerging countries will transform these areas into important import markets for the world’s manufacturers.

What’s behind this economic power shift towards India and other emerging economies? In a word: capital. A great deal of the eastward tilt stems from the escalating flow of capital across borders in recent years.

Since the introduction of the reform process in the early 1990s, India has witnessed a significant increase in capital inflows — in the form of foreign direct investment, foreign portfolio investment, external commercial borrowing and non-resident Indians’ inward remittances. The size of net capital inflows to India rose from $7.1 billion in 1990-91 to $108 billion in 2007-08. Today, India has one of the highest net capital inflows among the emerging market economies of Asia.

Important reform milestones that have contributed materially to India’s economic growth and its ability to attract capital include the following:

Abolishing the import licensing policy in the early 1990s, which opened the doors to a free trade regime.

Gradual and systemic rationalisation of the country’s tariff and Customs duty structure with the highest rate coming down from 400% to less than 25% on an average.

Convertibility of the country’s current account, allowing greater availability of foreign exchange into and out of the country to meet business requirements.

Gradual deregulation of several sectors, allowing foreign investment capital to flow into India combined with continuous financial sector reforms leading to both financial deepening and widening.

Slow and steady progress in privatising public sector enterprises.

And the general improvement in strengthening intellectual property rights by joining General Agreement on Tariffs and Trade.

Reforms like these encouraged the flow of investment capital into India and helped stimulate the recent era of dramatic economic growth. Indeed, the United Nations Conference on Trade and Development rates India as the most attractive emerging market economy for long-term investors. While there was an overall decline in foreign direct investment (FDI) in India in the depths of the recession last year, Indian FDI flows both in and out of the country have remained buoyant, defying global trends. Inbound FDI increased by over 40% to $3.26 billion in August 2009 alone.

Meanwhile, because capital, like traffic, flows in two directions, Indian firms have pushed forward on the path to more international investments. India’s international merger and acquisition activities have increased markedly over the past 20 years, and the trend is likely to accelerate. Indian firms are making billion-dollar-plus deals in industries as diverse as automotive, steel and tea. Indian outbound deals — valued at $0.7 billion in 2000 — jumped to $4.3 billion in 2005 and then swelled to $35 billion in 2007. Investments have been made in a wide variety of industries, including metals, pharmaceuticals, industrial goods, automotive components, beverages, energy, mobile communications, software and financial services. Indian IT companies have been buying smaller IT outfits in Europe, Latin America and Asia to gain global customers.

Surprisingly enough, the value of outbound deals from India actually recorded a modest increase in 2008, despite the challenging economic realities of the world today. Another sign that India is emerging from the global downturn with greater resilience than many other countries is its GDP growth. For 2008, it was an impressive 6.7%, and the economy is expected to grow by another 6.5% in 2009.

According to the World Bank Governance Indicators, macroeconomic corporate governance has a significant effect on inward FDI flows, suggesting host country governments and authorities should shape policy in this area to maximise such flows. The impact of transparency in corporate governance on FDI and firm performance is well documented.

How do corporate governance and risk management in India stack up against other emerging markets? The New York consulting firm Governance Metrics International (GMI) placed India 19th out of 38 countries on its list. Importantly, India ranks well above average among emerging markets. But more can be done to enhance corporate governance, not only in India but also in many other markets.

The enactment of Clause 49 — which increased the responsibilities of corporate boards, required the appointment of independent directors, consolidated the role of the audit committee and generally made management more accountable — seems to have had a reassuring effect on investors. Also reassuring to investors were the easing of overseas borrowing rules and the establishment of dedicated stock exchanges for small enterprises to enable them to access funds.

Still, more work needs to be done. What we hear from our clients suggests the following:

Continue the process of liberalising the investment norms into sectors that are still closed to foreign direct investment, such as retail and insurance.

Encourage even greater trade openness, which is important to improve absorption of capital inflows in the short run and to develop foreign exchange earning capacity that will enable an appropriate return on invested capital.

Move toward convertibility of the country’s capital account to facilitate smoother flow of foreign capital into and out of the country.

Push ahead with financial sector reforms already under way to enhance India’s role as a major hub for global finance.

Establish land reform policies to enable industrial development.

Reform education to provide access for skill development to broaden the participation in India’s growth.

Seize the strategic advantage — through technological and other innovations — to become a global leader in environmental sustainability.

Build on changes in tax policy, industrial policy and general economic policy by further reducing red tape and bureaucratic hurdles that remain an important concern that discourages foreign investment.

Embrace innovative technologies and strengthen intellectual property protection in India through convergence with international standards.

Building on liberalisation policies dating back to the early 1990s, the country has differentiated itself as a dynamic recipient and source of global capital. India’s prospects are brighter now than ever to be a leading magnet for cross-border capital investments in the years ahead. The power shift is on. Global capital is on the move. India’s time is now.

(The author is CEO of Deloitte Touche Tohmatsu)

http://economictimes.indiatimes.com/Opinion/Comments-Analysis/Cross-border-capital-flows-and-the-ascendancy-of-India/articleshow/5233876.cms

Leh's Power is beneath the ground

What can urban jungle Gurgaon in the national capital territory (NCT) possibly have in common with the pristine Leh? Well, not much, except that NCT’s eyesore and the erstwhile Silk Route town pretty much run on diesel. While Gurgaon is captive to reckless urban planning, Leh faces a unique conundrum. At 9,800 ft, the national power grid can’t reach this township of about 30,000 inhabitants. Worse, in winter, when the demand for power is at its peak, Leh’s mini-hydel plants shut down as water freezes up in the reservoirs.

Today, Leh lives on generators that consume around 50,000 litres of diesel per day, releasing dangerous levels of greenhouse gases into this ecologically-sensitive terrain. The upshot: melting glaciers, thinning snowfalls and freak showers. Indian Army, which has a sizeable deployment in the region that shares borders with Pakistan as well as China, relies on its own fleet of diesel generators.

The answer to Leh’s travails may lie in the bowels of the earth. Scientists say that geothermal plants that tap the heat deep from the earth with minimal emissions of greenhouse gases could be ideal for eco-sensitive regions such as Leh. India was a pioneer in this field with the Geographical Survey of India (GSI) identifying Ladakh’s Puga Valley as an ideal for geothermal plants as back as in 1975.

China broke into the scene in 1981 with its Yangbajain Geothermal Power Station in Tibet across Tawang in Arunachal Pradesh. Circa 2009, India is yet to have its first geothermal plant — despite GSI identifying seven ideal spots across the country — while the Yangbaijan plant lights up half of Lhasa. China plans to increase the capacity of the plant from 25 mw to 60 mw in the near future.

Generation from renewable energy sources today account for 7-9% of India’s 1,65,000 mw installed capacity. However, the efforts are skewed towards solar and wind sources than relatively new ones such as geothermal that could be the model suited for regions such as Leh.

Puga Valley’s clear stream geysers are the offshoot of the collision of the Indian plate with the Eurasian plate. Another tectonic collision has gifted the Philippines with a string of active volcanic spots making it a leader in geothermal power. The Philippines today ranks next only to US in terms of power generated through geothermal sources.

Dr MR Nouni, a director with India’s ministry of renewable and new energy sources (MRNES), says that the geothermal field in the country has

seen only some ‘proprietary’ activity so far. Though power is on the concurrent list that straddles central as well state authorities, such small projects are a prerogative of states, he says. LNJ Bhilwara, a textiles-to-power conglomerate, has shown interest in setting up a 20 mw plant in Puga, but the project is yet to be cleared by the Jammu & Kashmir government.

Dr A Absar, LNJ’s vice-president for geothermal, says the project will incur a capital expenditure of Rs 400 crore, twice that of a coal-based plant, to generate the same amount of energy. “But with geothermal, that’s pretty much your only expense. The technology runs 24x7, is clean, and the same plant could be scaled up to about 50 mw with a little expenditure,” he says.

In a typical geothermal plant, pipes are drilled into earth 1-3 km deep to bring the steam or hot water or both to the surface. The steam is used to propel the turbine to generate power, while the hot water is used to generate steam from chemicals like propane that have low boiling points. The leftover water is drilled back into the same heat source.

Dr Nouni says therein lies the rub in the technology. “You can assess the quality of the source — in other words, its likelihood to generate steam or hot water — only when you drill over a kilometre,” he says. LNJ’s project has hit a wall mainly as the state remains unconvinced how the company will transmit power from Puga to Leh, stretching 175 km.

Similar projects to be based in Gujarat and the Cambay basin are stuck at the drawing board pending a clear government directive. A paper by Dr B Chandrasekharam, professor of earth sciences at IIT-Bombay, estimates that
domestic geothermal provinces have a capacity to produce 10,600 mw.

MRNES has to come clean here. If the technology is not feasible for India, then it owes an explanation as to why private firms are still pursuing this. And if it is suited for Puga and Cambay, then the ministry has to put its power behind the technology.

http://economictimes.indiatimes.com/Opinion/Lehs-power-is-beneath-the-ground/articleshow/5221416.cms