Saturday, March 30, 2013
Friday, April 6, 2012
The Hidden Key to Productivity
Every company worries in some way about how to make people more productive. To do this, most companies normally focus on two things: training – building knowledge and skills, and technology. No doubt this does yield returns. However, there is something else, perhaps even more powerful, that is largely ignored.
Productivity is how much you produce or create within a given period of time. Therefore, it has an implicit rate component to it. This means how productive we are depends on how fast and how effectively we act. Our knowledge and skills certainly play into how effectively we act and technology can speed it all up. The other hidden component, however, is how fast and effectively information travels through an organisation every day. Information about who else is doing what, information on resources in the company and the larger ecosystem, information on happenings in the market and about customers – the general buzz and chatter. If you don’t know about something, you can’t incorporate it into your planning or decision-making. You can’t act on it. This is true not just for companies but for societal productivity and progress in general. Still, the value of how information flows through the company seems sort of intangible. Just how valuable might it be to employee productivity? How do you put a number on it?
Productivity is how much you produce or create within a given period of time. Therefore, it has an implicit rate component to it. This means how productive we are depends on how fast and how effectively we act. Our knowledge and skills certainly play into how effectively we act and technology can speed it all up. The other hidden component, however, is how fast and effectively information travels through an organisation every day. Information about who else is doing what, information on resources in the company and the larger ecosystem, information on happenings in the market and about customers – the general buzz and chatter. If you don’t know about something, you can’t incorporate it into your planning or decision-making. You can’t act on it. This is true not just for companies but for societal productivity and progress in general. Still, the value of how information flows through the company seems sort of intangible. Just how valuable might it be to employee productivity? How do you put a number on it?
Wednesday, February 8, 2012
Microfinance: Time to move towards financial inclusion
As printed in the Economic Times
The numbers that describe India's economy are mindboggling. Just one-tenth of the population participates in the formal economy. Of these, only about 35 million pay taxes. That's less than 3%.
No wonder then that our economy produced a GDP of only $1.42 trillion at last count, about the same as that of the city of Tokyo which has a population of 35 million. There are simply too few producing value and wealth in India and so there is not enough to go around.
The financial inclusion agenda so far has been largely focused on redistribution of wealth while what is required is inclusion in the creation of wealth. Financial inclusion so far has meant debt distribution and nofrills bank accounts.
Microfinance has been one major channel of debt distribution to the poor. While the original assumption was that these loans were for investment in micro enterprise, the Malegam committee report in 2010 indicates that 75% of the loans went towards consumption. Contrast this with the distribution of bank debt in India where less than 20% were consumer loans.
The numbers that describe India's economy are mindboggling. Just one-tenth of the population participates in the formal economy. Of these, only about 35 million pay taxes. That's less than 3%.
No wonder then that our economy produced a GDP of only $1.42 trillion at last count, about the same as that of the city of Tokyo which has a population of 35 million. There are simply too few producing value and wealth in India and so there is not enough to go around.
The financial inclusion agenda so far has been largely focused on redistribution of wealth while what is required is inclusion in the creation of wealth. Financial inclusion so far has meant debt distribution and nofrills bank accounts.
Microfinance has been one major channel of debt distribution to the poor. While the original assumption was that these loans were for investment in micro enterprise, the Malegam committee report in 2010 indicates that 75% of the loans went towards consumption. Contrast this with the distribution of bank debt in India where less than 20% were consumer loans.
Wednesday, December 28, 2011
Scrap the MBA
Part of the Big Ideas Series for The Smart CEO
What we need are Masters in Enterprise Building (MEBs)
Ask MBA (Masters in Business Administration) students what they want to do after they graduate and the answer is usually a variant of ‘Get a good job’. A good job, they will explain to you, is a job with a good salary, good personal growth opportunities, good work environment and good facilities. Large multi-national corporations will top that list. At the recent IIM-A Confluence, Satish Pradhan, executive vice-president, Tata Group likened business school placements to the Pushkar Mela. wherecandidates, like camels, are dressed up, paraded and sold to the highest bidder. . A student countered that they were ‘trained’ to find jobs.
What’s wrong with that, you might ask. For a country, where less than 10 per cent is employed in the formal economy and where the college capacity extends to less than 7 per cent of the potential college age population, access to a higher degree like an MBA is competitive and coveted. It is natural then that people see this as a rite of passage to personal financial success.
What we need are Masters in Enterprise Building (MEBs)
Ask MBA (Masters in Business Administration) students what they want to do after they graduate and the answer is usually a variant of ‘Get a good job’. A good job, they will explain to you, is a job with a good salary, good personal growth opportunities, good work environment and good facilities. Large multi-national corporations will top that list. At the recent IIM-A Confluence, Satish Pradhan, executive vice-president, Tata Group likened business school placements to the Pushkar Mela. wherecandidates, like camels, are dressed up, paraded and sold to the highest bidder. . A student countered that they were ‘trained’ to find jobs.
What’s wrong with that, you might ask. For a country, where less than 10 per cent is employed in the formal economy and where the college capacity extends to less than 7 per cent of the potential college age population, access to a higher degree like an MBA is competitive and coveted. It is natural then that people see this as a rite of passage to personal financial success.
Cityscape
As posted on YourStory.in
There is a certain romanticism that we all carry about rural living. For many of us it represents the simple life, a place where you go when you need to slow down and not do much. And it is precisely that. The world’s relentless march forward occurs in the cities. Almost three quarters of the world’s productive output, its GDP, comes from its cities. There are simple reasons for this. When we cluster closer together into large agglomerations it brings us close to resources and information. City living is more expensive because we are willing to pay more for the choice and opportunity that this results in. For the entrepreneur, it allows you to access the resources you need quickly and efficiently from legal to administrative to people and gives you rapid access to a larger market. For the job seeker, thriving entrepreneurship means more jobs, more choice of jobs and therefore an implicit safety net that if one job doesn’t work out there are other jobs to be found. For the consumer it means more products available just outside your doorstep. There is immense value in all this.
There is a certain romanticism that we all carry about rural living. For many of us it represents the simple life, a place where you go when you need to slow down and not do much. And it is precisely that. The world’s relentless march forward occurs in the cities. Almost three quarters of the world’s productive output, its GDP, comes from its cities. There are simple reasons for this. When we cluster closer together into large agglomerations it brings us close to resources and information. City living is more expensive because we are willing to pay more for the choice and opportunity that this results in. For the entrepreneur, it allows you to access the resources you need quickly and efficiently from legal to administrative to people and gives you rapid access to a larger market. For the job seeker, thriving entrepreneurship means more jobs, more choice of jobs and therefore an implicit safety net that if one job doesn’t work out there are other jobs to be found. For the consumer it means more products available just outside your doorstep. There is immense value in all this.
Happy Nation
As posted on YourStory.in
Many CEOs and HR folk will tell you that happy people make for more productive employees. In fact there are even studies that demonstrate that when you are happy you are more productive. Therefore, the reasoning goes, it is important for companies to make employees happy so that they will be productive. Some even go so far as to say employees first, customers second. An article in the recent issue of Outlook on happiness made me wonder if they haven’t got it all backwards.
Many CEOs and HR folk will tell you that happy people make for more productive employees. In fact there are even studies that demonstrate that when you are happy you are more productive. Therefore, the reasoning goes, it is important for companies to make employees happy so that they will be productive. Some even go so far as to say employees first, customers second. An article in the recent issue of Outlook on happiness made me wonder if they haven’t got it all backwards.
Monday, November 7, 2011
One World, One (Giant) Language
As posted on yourstory.in
Take a risk. Use your imagination. Transform your world.
Try to say this in any Indian language. I challenge you. You will fall short. Short on comparable, easily accessible vocabulary, short on that easy feel of flow and short on memories of when you last heard something like it said. English is the language of progress and possibility. English is the language of technology. English is the language of change.
To be progressive, therefore, one of the most powerful things we can do in this country is make English mandatory curriculum in every school, and then in the next generation just switch to English as the sole medium of instruction. One world. One language.
OK, I hear the critics. Some of our languages are so beautiful. So much of our culture will be lost. Then quick, start translating. English is one of the fastest growing languages in human history. According to the Global Language Monitor, the number of English speakers has grown from 250 million in 1960 to some 1.53 billion today. In China alone there are apparently now 250 million English speakers. In India, 100 million.
Take a risk. Use your imagination. Transform your world.
Try to say this in any Indian language. I challenge you. You will fall short. Short on comparable, easily accessible vocabulary, short on that easy feel of flow and short on memories of when you last heard something like it said. English is the language of progress and possibility. English is the language of technology. English is the language of change.
To be progressive, therefore, one of the most powerful things we can do in this country is make English mandatory curriculum in every school, and then in the next generation just switch to English as the sole medium of instruction. One world. One language.
OK, I hear the critics. Some of our languages are so beautiful. So much of our culture will be lost. Then quick, start translating. English is one of the fastest growing languages in human history. According to the Global Language Monitor, the number of English speakers has grown from 250 million in 1960 to some 1.53 billion today. In China alone there are apparently now 250 million English speakers. In India, 100 million.
Cigarettes and Swans
As posted on yourstory.in
In my last post, I mused about who actually knows what something is worth? Beyond survival, ‘value’ is simply collective perception, a construct of our collective mind. So what do we mean when we talk of ‘value’? What is our mind ‘valuing’ and for what purpose? For an entrepreneur this is a fundamentally important question. On a very simple level you could claim to be creating value so long as someone sees it as valuable enough to pay money for it. However, there are people willing to pay money for all sorts of destructive things like drugs and cigarettes and exorbitant amounts of money for completely worthless things like crystal swans. Of course that is my value judgement I’m imposing on it. I have friends that would argue me down that the drugs help their creative process and the cigarette smoking calms them and helps them be more productive. And as for silly looking crystal swans – some people derive happiness from having them perched on a shelf in their house. However, on the other hand, if you ask a large room full of people to name products that are of fundamental value to society, they will disproportionately name a few – two wheelers, mobile phones and internet access are ones that come up frequently.
In my last post, I mused about who actually knows what something is worth? Beyond survival, ‘value’ is simply collective perception, a construct of our collective mind. So what do we mean when we talk of ‘value’? What is our mind ‘valuing’ and for what purpose? For an entrepreneur this is a fundamentally important question. On a very simple level you could claim to be creating value so long as someone sees it as valuable enough to pay money for it. However, there are people willing to pay money for all sorts of destructive things like drugs and cigarettes and exorbitant amounts of money for completely worthless things like crystal swans. Of course that is my value judgement I’m imposing on it. I have friends that would argue me down that the drugs help their creative process and the cigarette smoking calms them and helps them be more productive. And as for silly looking crystal swans – some people derive happiness from having them perched on a shelf in their house. However, on the other hand, if you ask a large room full of people to name products that are of fundamental value to society, they will disproportionately name a few – two wheelers, mobile phones and internet access are ones that come up frequently.
Monday, October 10, 2011
What is it worth?
In 1989 as a 17 year old college student I had a childish view of what it took to get by in the world. Foolishly, I thought that $150 (7,500 Rs.) was sufficient to spend a month in Greece (it was my own hard earned money and seemed a lot to me at the time). $150, I found out, is not a lot of money. It worked out to about $5 a day. In purchasing power parity terms it was somewhere below $2 a day in an India. What followed was hardly a sightseeing tour but an exercise in subsistence living. For $1 there were hostels that would let you roll out your sleeping bag on their roof. If it rained they would accommodate you in the corridors by the bathrooms. In Athens I could not afford the entrance fee to the Acropolis but discovered that if you climb the hill from behind the Plaka you can scale the wall and see it for free. On my budget bus travel was wildly expensive but if I spent long enough it was somewhat easy to hitch a relatively trustworthy ride. I had to save most of the money for food. On most days I used to buy a loaf of bread, a piece of cheese and a tomato and stretch it out for the day.
For me it was a game, an experiment, but half the world lives in this kind of subsistence paradigm. In rural India, according to the NSSO studies, people use 50 to 70% of their income to buy food, to fuel the survival of the body. My statistics were virtually identical. Aggregated over time about 60% of my daily expenditure was for food. 30% for shelter. The remaining 10% for transport and for one 30 second phone call to my parents from a post office in Thessaloniki (Of course I’m fine, see you in a few weeks. Where am I? What does it matter? OK.. OK..don’t shout, I’m in Thessaloniki). A good part of my day was spent comparing the size and price of loaves of bread and pieces of cheese. Excuse me, please can I have that one instead? (It looks just a tiny bit bigger). At the end of the day I was always a bit hungry so I had an acute sense for the caloric value I needed to derive from the money. Under these constrained circumstances my value judgements were very self-centred and tangible. ‘Value’ was almost entirely a calorie conversion.
When we operate in surplus of subsistence, however, there is a fundamental transition in our valuation paradigms.
For me it was a game, an experiment, but half the world lives in this kind of subsistence paradigm. In rural India, according to the NSSO studies, people use 50 to 70% of their income to buy food, to fuel the survival of the body. My statistics were virtually identical. Aggregated over time about 60% of my daily expenditure was for food. 30% for shelter. The remaining 10% for transport and for one 30 second phone call to my parents from a post office in Thessaloniki (Of course I’m fine, see you in a few weeks. Where am I? What does it matter? OK.. OK..don’t shout, I’m in Thessaloniki). A good part of my day was spent comparing the size and price of loaves of bread and pieces of cheese. Excuse me, please can I have that one instead? (It looks just a tiny bit bigger). At the end of the day I was always a bit hungry so I had an acute sense for the caloric value I needed to derive from the money. Under these constrained circumstances my value judgements were very self-centred and tangible. ‘Value’ was almost entirely a calorie conversion.
When we operate in surplus of subsistence, however, there is a fundamental transition in our valuation paradigms.
Monday, September 26, 2011
Relationships Not Productivity?
As posted on yourstory.in
Some weeks ago I received a rather acerbic email from a reader lambasting me for my relentless focus on productivity. Life is not just about productivity, he said. It is about relationships. Have I thought about this? Maybe people don’t want to be working day in and day out in factories or offices. People derive happiness from relationships not money and being poor doesn’t mean being unhappy. Our country will suffer because of people like me who come with western ideas to spoil the fabric of our society. And as I have come to realize, this particular reader’s opinion is a fairly common one.
Last week I was going through the Kerala backwaters in a small boat with my kids and I almost could see his point. Life expectancy in Kerala is 78 compared to the 55-65 range in the rest of the country. Literacy is 100%. The villages we passed were clean and beautiful. What is it you would want to change about this scene? Is there some burning need for ‘progress’ here?
Some weeks ago I received a rather acerbic email from a reader lambasting me for my relentless focus on productivity. Life is not just about productivity, he said. It is about relationships. Have I thought about this? Maybe people don’t want to be working day in and day out in factories or offices. People derive happiness from relationships not money and being poor doesn’t mean being unhappy. Our country will suffer because of people like me who come with western ideas to spoil the fabric of our society. And as I have come to realize, this particular reader’s opinion is a fairly common one.
Last week I was going through the Kerala backwaters in a small boat with my kids and I almost could see his point. Life expectancy in Kerala is 78 compared to the 55-65 range in the rest of the country. Literacy is 100%. The villages we passed were clean and beautiful. What is it you would want to change about this scene? Is there some burning need for ‘progress’ here?
Monday, September 12, 2011
The Glitter of Gold
A couple weeks ago my newly married maid came asking me for a loan to pay the rental deposit on her flat. I knew she had saved up much more than the amount she needed so I asked her what she had done with the money. She told me she had bought gold jewellery with it.
With all of it? I asked her. Why did you do that when you knew full well you had this expense coming up?
I had to she said, without gold they won’t let you get married.
Who is ‘they’? I inquired.
Everyone, she told me. All my relatives in my village
At the time I told her she was foolish. Now I’m not so sure.
With all of it? I asked her. Why did you do that when you knew full well you had this expense coming up?
I had to she said, without gold they won’t let you get married.
Who is ‘they’? I inquired.
Everyone, she told me. All my relatives in my village
At the time I told her she was foolish. Now I’m not so sure.
Monday, August 29, 2011
What do you know about village life?
As posted on yourstory.in
A couple weeks ago we surveyed readers like you to see what your perceptions were of rural India with regards to mobility and connectivity. We also wanted to get a sense for how different your own behaviour and access is from the villagers. We asked you to guess different parameters about infrastructure and behaviours in the region of Vadipatti (i.e. Vadipatti Taluk excluding the town) which is in central Tamil Nadu. Whoah! you guys were way off. Most of you guessed that the villagers had less access, mobility and connectivity compared to you but you just didn’t realize HOW MUCH less. Here are the results:
Who answered the surveys
125 people answered this survey online. 75% were from the major Indian cities. Of this half were from Chennai which is the closest major city to Vadipatti Taluk and the rest spread out across Bangalore, Delhi and Mumbai. 10% were from Western Europe and the United States and 5% were from small towns in India. In Vadipatti we surveyed 1000 people across 125 villages of which 540 were entrepreneurs running a business.
The results
Excluding the town of Vadipatti there are 10 petrol bunks in Vadipatti Taluk which is 1 per 20 to 25 square km. Most of you underestimated the number of petrol bunks. Your median guestimate was 3 petrol bunks and average was 7. A large number of you guessed that your city had 100 Petrol Pumps (Median value). Your average guestimate was 340. For Chennai for instance, which is 164 sq km your median guess is that there is 1 per 1.6 sq km which is around 15 times the density. This means a villager in Vadipatti Taluk has to travel about 15 times as far as you do to get petrol.
A couple weeks ago we surveyed readers like you to see what your perceptions were of rural India with regards to mobility and connectivity. We also wanted to get a sense for how different your own behaviour and access is from the villagers. We asked you to guess different parameters about infrastructure and behaviours in the region of Vadipatti (i.e. Vadipatti Taluk excluding the town) which is in central Tamil Nadu. Whoah! you guys were way off. Most of you guessed that the villagers had less access, mobility and connectivity compared to you but you just didn’t realize HOW MUCH less. Here are the results:
Who answered the surveys
125 people answered this survey online. 75% were from the major Indian cities. Of this half were from Chennai which is the closest major city to Vadipatti Taluk and the rest spread out across Bangalore, Delhi and Mumbai. 10% were from Western Europe and the United States and 5% were from small towns in India. In Vadipatti we surveyed 1000 people across 125 villages of which 540 were entrepreneurs running a business.
The results
Excluding the town of Vadipatti there are 10 petrol bunks in Vadipatti Taluk which is 1 per 20 to 25 square km. Most of you underestimated the number of petrol bunks. Your median guestimate was 3 petrol bunks and average was 7. A large number of you guessed that your city had 100 Petrol Pumps (Median value). Your average guestimate was 340. For Chennai for instance, which is 164 sq km your median guess is that there is 1 per 1.6 sq km which is around 15 times the density. This means a villager in Vadipatti Taluk has to travel about 15 times as far as you do to get petrol.
Tuesday, August 16, 2011
From Subsistence to Suprasistence
As posted on yourstory.in
Over half the world simply subsists – caught in a cycle of supporting ones immediate survival. More than half of India is a subsistence economy. The word subsistence is a derivative of the word ‘exist’ which comes from the Latin word existere meaning ‘to emerge’ or ‘to be’. But what does it really mean to subsist? Typically it is thought of in terms of poverty – some amount of money that people earn - but to me it is not equivalent – I think it is better defined in terms of an energy use cycle.
Here’s what I mean. In rural India, according to the NSSO studies, people use 50% to 70% of their income to buy food which means the majority of expenditure goes towards fueling the survival of the body. Compare this to the United States where it is around 20%. Similarly, an NCAER survey in the late 1970s showed that around 90% of fuel consumption in rural areas in India is used for cooking. I assume it’s improved now but venture to guess that it’s probably still in the range of 70% or more. In the United States only 15% of household energy consumption is for the kitchen. Furthermore, fuel consumption in rural India is still largely biomass – firewood ranks highest followed by dung and crop residue. An NIC report (I’m not sure which year) estimated that 89 million households spend 31 billion hours annually in biofuel gathering. That’s a lot of time. The subsistence cycle is thus to eat to sustain the body, use the energy to gather fuel and tend to the fields and livestock and then use the energy from these efforts to once again fuel the body. Petroleum, electricity and LPG together are minimally used not because of availability but because they must be paid for with money rather than time. And in this is an implicit judgement of human worth – that its value is little more than the kCalories expended per unit time to gather fuel or transform food on the cooking stove.
Over half the world simply subsists – caught in a cycle of supporting ones immediate survival. More than half of India is a subsistence economy. The word subsistence is a derivative of the word ‘exist’ which comes from the Latin word existere meaning ‘to emerge’ or ‘to be’. But what does it really mean to subsist? Typically it is thought of in terms of poverty – some amount of money that people earn - but to me it is not equivalent – I think it is better defined in terms of an energy use cycle.
Here’s what I mean. In rural India, according to the NSSO studies, people use 50% to 70% of their income to buy food which means the majority of expenditure goes towards fueling the survival of the body. Compare this to the United States where it is around 20%. Similarly, an NCAER survey in the late 1970s showed that around 90% of fuel consumption in rural areas in India is used for cooking. I assume it’s improved now but venture to guess that it’s probably still in the range of 70% or more. In the United States only 15% of household energy consumption is for the kitchen. Furthermore, fuel consumption in rural India is still largely biomass – firewood ranks highest followed by dung and crop residue. An NIC report (I’m not sure which year) estimated that 89 million households spend 31 billion hours annually in biofuel gathering. That’s a lot of time. The subsistence cycle is thus to eat to sustain the body, use the energy to gather fuel and tend to the fields and livestock and then use the energy from these efforts to once again fuel the body. Petroleum, electricity and LPG together are minimally used not because of availability but because they must be paid for with money rather than time. And in this is an implicit judgement of human worth – that its value is little more than the kCalories expended per unit time to gather fuel or transform food on the cooking stove.
Monday, August 8, 2011
What do you know about rural India?
****This survey is now closed******
We have some interesting results that will be officially announced in a ten days or so and not on the 15th as previously promised.
******************************************************
Think you know what rural India is really like? We are doing a short quiz to understand your perception of rural India and to get some information about your ecosystem that we will use as comparison. The survey will take you about 2 minutes and we will post the results next week along with what the real numbers look like.
Take the quiz!*
Please do take 2 minutes to participate!
*For folks outside of India - 'Petrol Bunk' is India speak for 'Gas Station'.
We have some interesting results that will be officially announced in a ten days or so and not on the 15th as previously promised.
******************************************************
Think you know what rural India is really like? We are doing a short quiz to understand your perception of rural India and to get some information about your ecosystem that we will use as comparison. The survey will take you about 2 minutes and we will post the results next week along with what the real numbers look like.
Take the quiz!*
Please do take 2 minutes to participate!
*For folks outside of India - 'Petrol Bunk' is India speak for 'Gas Station'.
Monday, August 1, 2011
A Different Species
There is this strange sense of duality that India seems to bring upon you. On one hand there is this feeling of being on the cusp of something extraordinary. The giddy experience of watching something once so far removed from the developed world morph so rapidly and palpably into a modern society. The sense of possibility, the sense that something big is about to happen is now regular dinner party conversation.
The journey of one generation to the next has been so fast that parents often have little context for the lives of their children. Particularly for the lives of the children who have been abroad and returned speaking, dressing and acting differently. This new India is English speaking, moves easily from one city to another, sometimes one country to another. It is hyperconnected and watches all the same TV shows as the rest of the English speaking world, hears the same news, and eats burgers and chicken nuggets almost as often as dhal and rice. This is more significant than you might think. “You know”, a friend tells me at dinner last week, “when I was young when we met kids who had grown up abroad we never knew what to talk about. We used to feel so awkward – they watched shows you never heard of, ate things you never heard of and talked about things you never heard of and had an accent you could never understand”. “But now it’s so different”, she says “recently my kids met some kids that had grown up in Singapore and the US and they got on immediately playing games with the same characters and constructs”. There is the feeling that we are increasingly becoming one world. Another friend who runs a global business and has lived in London, New York and Moscow has decided to now base out of India because its “here that its happening now and you want your children to understand it”. It’s easy to go to the US or Europe and get into the system in a few years, but to understand India is much harder, he contends.
The journey of one generation to the next has been so fast that parents often have little context for the lives of their children. Particularly for the lives of the children who have been abroad and returned speaking, dressing and acting differently. This new India is English speaking, moves easily from one city to another, sometimes one country to another. It is hyperconnected and watches all the same TV shows as the rest of the English speaking world, hears the same news, and eats burgers and chicken nuggets almost as often as dhal and rice. This is more significant than you might think. “You know”, a friend tells me at dinner last week, “when I was young when we met kids who had grown up abroad we never knew what to talk about. We used to feel so awkward – they watched shows you never heard of, ate things you never heard of and talked about things you never heard of and had an accent you could never understand”. “But now it’s so different”, she says “recently my kids met some kids that had grown up in Singapore and the US and they got on immediately playing games with the same characters and constructs”. There is the feeling that we are increasingly becoming one world. Another friend who runs a global business and has lived in London, New York and Moscow has decided to now base out of India because its “here that its happening now and you want your children to understand it”. It’s easy to go to the US or Europe and get into the system in a few years, but to understand India is much harder, he contends.
Sunday, July 17, 2011
Productivity Line
When tackling any sort of problem, it matters immensely how you frame it. The construct and language you use to describe the problem will inevitably direct and guide how you formulate solutions. Let’s take a look at the economic topography of the world – there are places where a great deal of innovative products and services are created that many have access to and other places where much less is created and fewer people have access to the little there is. The medium of exchange for these goods and services being money, the issue of this global inequity among human beings has been constructed in the context of money. It has been framed as an issue of ‘poverty’, the lack of money and therefore the ability to acquire. With this framework lack of money becomes the central issue and we draw ‘poverty lines’ – how much money is reasonable to have and formulate solutions that focus on how to redistribute money and give people ability to acquire.
What if instead we had framed the issue in the context of productivity – in terms of what you give or create and not what you take or acquire? Then instead of looking at the world and wondering why so many people are able to acquire so little, we would ask why so many are able to create so little and why we are so grossly lopsided in terms of productivity. Instead of seeing people as lacking enough money to be above some poverty line we would look at it in terms of people lacking in ability to be above a productivity line. If we saw it this way we would construct our solutions profoundly differently. Rather than focusing on money – which is simply a token of exchange – we would be forced to focus on human capability and the conditions that drive it.
What if instead we had framed the issue in the context of productivity – in terms of what you give or create and not what you take or acquire? Then instead of looking at the world and wondering why so many people are able to acquire so little, we would ask why so many are able to create so little and why we are so grossly lopsided in terms of productivity. Instead of seeing people as lacking enough money to be above some poverty line we would look at it in terms of people lacking in ability to be above a productivity line. If we saw it this way we would construct our solutions profoundly differently. Rather than focusing on money – which is simply a token of exchange – we would be forced to focus on human capability and the conditions that drive it.
Microfinance 2.0
As published in The Smart CEO as part of the 'Big Ideas' series
The last decade has seen a sensational rise and fall of microfinance in India. After the crisis in Andhra Pradesh (AP) that claimed debt related suicides on account of exorbitant interest rates and high pressure collection tactics, the Reserve Bank of India (RBI) has finally put in place regulations based on the recommendations of the Malegam committee. With massive defaults to contend with and the new regulation that places caps on the rates and spreads, the industry is struggling to find its feet again. Many of the less efficient players are out of luck and out of business. Others are tightening their belts and getting more efficient in their operations. But, is microfinance 2.0 just about process efficiency? Or can it be something greater?
The last decade has seen a sensational rise and fall of microfinance in India. After the crisis in Andhra Pradesh (AP) that claimed debt related suicides on account of exorbitant interest rates and high pressure collection tactics, the Reserve Bank of India (RBI) has finally put in place regulations based on the recommendations of the Malegam committee. With massive defaults to contend with and the new regulation that places caps on the rates and spreads, the industry is struggling to find its feet again. Many of the less efficient players are out of luck and out of business. Others are tightening their belts and getting more efficient in their operations. But, is microfinance 2.0 just about process efficiency? Or can it be something greater?
Monday, July 4, 2011
Gross Domestic Poverty
As posted on yourstory.in
For those of us with a memory of India in the 1980s and before there is no doubt at all that this is a country moving forward economically. From my schooldays when there were only two or three sub-standard brands of everything from soft drinks to soap to chocolate to cars, today’s India is remarkably different. It’s not just that there is every major brand available today. There is construction everywhere and sleek glass buildings are slowly but surely replacing old concrete structures. And there is a palpable feeling of change and a growing national pride. Incredible India. Every so often I get caught up in it and then I look at the numbers and I realize how easily we can distort our self-perception.
Here are the facts. India and China are often compared as the Asian giants, both with over a billion people. But China’s economy is three times as big as India’s – a GDP of 5 trillion US dollars compared to India’s meagre 1.4. According to the Global Language Monitor, The Rise of China has been the most frequent news story for over a decade across over 75000 print and electronic media publications. India doesn’t feature among even the top 20. For further perspective, Tokyo, which is the largest city economy in the world, has an economy the same size as India – 1.4 trillion. Tokyo has only 13 million people though, which means that they are pretty hard at work there. About a third of them are either kids or old folk which leaves about 8.5 million people out there getting it done each day, producing an output as large as our entire country.
For those of us with a memory of India in the 1980s and before there is no doubt at all that this is a country moving forward economically. From my schooldays when there were only two or three sub-standard brands of everything from soft drinks to soap to chocolate to cars, today’s India is remarkably different. It’s not just that there is every major brand available today. There is construction everywhere and sleek glass buildings are slowly but surely replacing old concrete structures. And there is a palpable feeling of change and a growing national pride. Incredible India. Every so often I get caught up in it and then I look at the numbers and I realize how easily we can distort our self-perception.
Here are the facts. India and China are often compared as the Asian giants, both with over a billion people. But China’s economy is three times as big as India’s – a GDP of 5 trillion US dollars compared to India’s meagre 1.4. According to the Global Language Monitor, The Rise of China has been the most frequent news story for over a decade across over 75000 print and electronic media publications. India doesn’t feature among even the top 20. For further perspective, Tokyo, which is the largest city economy in the world, has an economy the same size as India – 1.4 trillion. Tokyo has only 13 million people though, which means that they are pretty hard at work there. About a third of them are either kids or old folk which leaves about 8.5 million people out there getting it done each day, producing an output as large as our entire country.
Monday, June 20, 2011
Like a Diamond
As posted on yourstory.in
About 200 years ago it was discovered that diamond, like graphite, was made entirely of carbon. One brilliantly reflective, the other black; one hard, the other soft. How was it possible that two things with properties so contrasted could be made of the same thing? With this discovery came an extraordinary insight: what mattered was not the element itself, for the single carbon atom in isolation had no particular properties. What mattered was the bond structure.
So what does this mean? A chemical bond is simply a probability of how much time electrons from one atom spend hanging around in the space of another. In the case of the diamond the carbon atoms are strongly bonded to each of their four closest neighbours giving it the property of hardness. And so closely engaged are these atoms that when light energy enters it is not welcomed and it bounces around simply leaving the system giving it its reflective sparkle. In contrast, in graphite the carbon atoms are not all tightly bonded but rather some of them associate with one another in more fluid nature giving it softness and the ability to accept or absorb light energy to make it its own.
About 200 years ago it was discovered that diamond, like graphite, was made entirely of carbon. One brilliantly reflective, the other black; one hard, the other soft. How was it possible that two things with properties so contrasted could be made of the same thing? With this discovery came an extraordinary insight: what mattered was not the element itself, for the single carbon atom in isolation had no particular properties. What mattered was the bond structure.
So what does this mean? A chemical bond is simply a probability of how much time electrons from one atom spend hanging around in the space of another. In the case of the diamond the carbon atoms are strongly bonded to each of their four closest neighbours giving it the property of hardness. And so closely engaged are these atoms that when light energy enters it is not welcomed and it bounces around simply leaving the system giving it its reflective sparkle. In contrast, in graphite the carbon atoms are not all tightly bonded but rather some of them associate with one another in more fluid nature giving it softness and the ability to accept or absorb light energy to make it its own.Monday, June 6, 2011
Learning to Organize
Back in 1996 when I was in business school we used to sit around and make fun of our organizational behaviour classes. Soft stuff. Not hard core like finance. Now I know better. Finance is the easy stuff. Organizational behaviour on the other hand is complex and can profoundly change socital outcomes.
So what is organizational behaviour about? If you really think about it, it’s about how human beings come together to share their knowledge and abilities to create, build and get things done. And why should we do this? Because when it is done well, the outcome can be far greater than the sum of the parts.
Paradigms of progress are exemplified by large scale organization. In the United States and most European countries, for instance, somewhere between 5 and 10% of working adults are entrepreneurs. In India it is almost 50%. What that means is that entrepreneurship in the developed world results in larger scale, more people coming together to get it done. Indian entrepreneurs, on the other hand, tend to operate in structures of 1 to 3 people. There are probably a great many reasons for this. Not least that most Indian entrepreneurs operate in micro scale markets – village communities of hardly a few thousand people that don’t provide an opportunity for scale.
So what is organizational behaviour about? If you really think about it, it’s about how human beings come together to share their knowledge and abilities to create, build and get things done. And why should we do this? Because when it is done well, the outcome can be far greater than the sum of the parts.
Paradigms of progress are exemplified by large scale organization. In the United States and most European countries, for instance, somewhere between 5 and 10% of working adults are entrepreneurs. In India it is almost 50%. What that means is that entrepreneurship in the developed world results in larger scale, more people coming together to get it done. Indian entrepreneurs, on the other hand, tend to operate in structures of 1 to 3 people. There are probably a great many reasons for this. Not least that most Indian entrepreneurs operate in micro scale markets – village communities of hardly a few thousand people that don’t provide an opportunity for scale.
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