A man of substance

Meet Sadashiv Chandrakanth Khodke. His life was turned upside down, exactly one year ago, when the despicable scum called terrorists attacked Mumbai. I heard his tale on a BBC podcast and it touched me – and it’s the subject of this Sunday’s non business post.

Sadashiv was a waiter in a restaurant, holding a steady job. His misfortune was that he was in VT station at exactly the wrong time. He was injured in the shooting and his life turned in an instant. He was taken to a hospital and operated upon to remove shrapnel lodged in his chest. The operation was successful, but he had to spend a long time in hospital and then in recuperation.

It is usual to blame the government for apathy when it comes to disaster victims. I actually think this is often a completely erroneous accusation. The government does do a lot – many a time its just that the scale of the tragedy is simply too big. In Sadashiv’s case, they did all they could. They didn’t charge him for the treatment. Even when he was in the hospital, the Railways and the Maharashtra Government came and gave him Rs 50,000 each in compensation. No red tape, no running around.

But then what happened is the real tragedy. One of his relatives, from whom he had borrowed money earlier, came to the hospital, while he was still there and took away the money that was due to him from the compensation amount. Consider for a moment, how crassly insensitive this was. Here was a man in a hospital bed recovering from being shot by a terrorist and what does his so called relative do ? Take away some of his money.

This is unfortunately not atypical behaviour. I have heard of appalling acts of callousness, motivated by money, even in the face of disasters. It makes you sometimes wonder whether humanity is a rare quality in human beings .

Sadashiv’s misery did not end there. He was in hospital for a month and was fit to go back to work only after six months. When he went back to his restaurant, he was told he had no job. In his absence, the restaurant owner had taken somebody else. Tough luck !

While I can understand the business logic of not being able to wait 6 months for somebody to come back, where is the heart of a businessman, however small he may be, who sacks a guy because he couldn’t come to work after being shot by a terrorist. Public opinion often criticizes the rich and successful businessmen. I submit that insensitivity is not the monopoly of big business. There are inhuman human beings across every spectrum of life.

Sadashiv is now running his own tea stall on the pavement somewhere in Mumbai. He has lost his home – so sleeps on the footpath like thousands of Mumbaikars. He is in debt. He is not able to send much money to his family back in the village.

But listen about Sadashiv on this brief BBC podcast. There doesn’t seem to be much bitterness. He lays his faith in God. He does not complain about his ill fortune. He says God saved him and is thankful for this blessing. He is working hard to earn a living. Its tough to make ends meet running a tea stall on the pavement. But he is giving it his best shot. He serves with a smile.

Sadashiv Chandrakanth Khodke – you are truly a human being to be admired. To my mind, you are the Businessman of the Year. If I ever get to find you on the streets of Mumbai, it shall be my privilege to be your customer and have a cup of tea from you. The fates dealt you a cruel blow on that day a year ago. I pray that they also deal you a kind hand in the future.

The world's most outrageous CEOs

The media loves to makes lists – the richest people in the world, the biggest companies in the world and so on. Forbes has compiled a rather unusual list – the 10 most outrageous CEOs of 2009.

Bernie Madoff would have been a slam dunk for the winner – but his place in the sun was last year – so he’s disqualified.

This year’s list is full of people who have been charged or indicted of fraud. Robert Moran sentenced for tax fraud at No 10, David Rubin indicted for fraud at No 9, Allen Stanford accused of misappropriation at No 8, Danny Pang accused of running a Ponzi Scheme at No 7, Thomas Peters on trial for fraud at No 5, Ramalinga Raju, in jail at No 4 and Raj Rajaratnam charged with insider trading at No 3.

Sandwiched between them are Ed Libby of AIG at No 5, for the retention bonuses he decided to pay the executives of the financial products divisions who brought ruin to the company in the first place and John Thain of Merill Lynch at No 3 who pushed through bonuses before the takeover by Bank of America.

But standing at the pinnacle is Lloyd Blankfein of Goldman Sachs – by any standards a superb CEO of a brilliant company. He should be at the top of the most outstanding business leaders in the world. And yet here he is at the top of Forbes’ “outrageous gallery” sharing the stage with some of the worst corporate fraudsters. His famous joke to the Sunday Times that bankers like himself were doing God’s work, must have propelled him to the winner's post.

Just goes to show that however brilliant you may be, however successful your company may be, you will be tried at the altar of public opinion. All the millions cannot buy you respect. Character and grace are still priceless. They cannot be achieved by just business success.

For more humbler mortals like me, who may not reach such lofty heights there is still a lesson to be learnt. For every act I do, however humble a job, it would be prudent to ask the question - if what I did was splashed on the front page of the newspapers, will I be lauded; or will I be crucified ?

Rupert Murdoch vs Google

In the blue corner is Rupert Murdoch, the media tycoon – Chairman of Newscorp, owner of The Times and the Sun in the UK and New York Times in the US, and the TV Channels Sky, Star and Fox News. In the red corner is Google – the titan of the on line world. The bout has begun.

In question is the issue of on line news – who owns it, who pays whom for it, etc etc. Now we are perfectly willing to pay a few rupees, or cents or yuan for a newspaper, but are absolutely not prepared to pay a penny for the same newspaper on line. Confess it – you haven’t read the newspaper today. Instead you browsed on line. I did too – at least my excuse is that the single English newspaper, where I live, is not worth reading! What’s yours ?

Murdoch says Google and such other news aggregators are freely linking to news content that his newspapers create and then get advertising revenue for it and to rub salt into the wounds, charge the papers for sending readers to it. They have news pages which attract readers by aggregating content, but they don’t pay the content creators for it. Kleptomaniacs, thunders Murdoch.

Google says the old man just doesn’t get it (of course not in those words). They say the on line world is a new world, traditional newspapers are dinosaurs, their business models are broken and that the on line world is comprised of “free” information and that’s the way it will be.

Now Murdoch has a point. Credible content that newspapers create cost money. They have to have reporters in every corner of the world, they have to edit pieces, etc etc. Contrast that against the writings in this blog, which costs nothing to create, but is usually unadulterated twaddle. So Murdoch says, his news is intellectual property and cannot be stolen by content aggregators.

He is therefore going to Microsoft , trying to negotiate an exclusive arrangement with Bing and simply exclude Google.

The problem is that newspapers are declining all over the world. In a few years, newspapers may go the way of Readers Digest – a quaint oddity for the geriatrics. Newspapers went online but have made it free – only the FT and the Wall Street Journal have managed to charge for it. So their revenues are in serious decline.

Its easy to brand Murdoch as an old foggy and that he doesn’t understand the online world. I don’t think that’s true – he’s a shrewd businessman who understands it all too well and is picking up a real fight . After all remember they said the same thing, at the peak of the dot com boom, about an old geezer called Warren Buffet.

The day when India was on top of the world

One of the greatest of days in Indian sport , to me THE greatest day in Indian sport, was the day in March , long ago, when India lifted the hockey World Cup in Kuala Lumpur. India beat Pakistan in the final to win the World Cup for the first, and alas thus far the only, time.

The greatest day was actually not the final win. By the day of the final, it seemed pre ordained that India would win. The day came on the semi finals, just a day earlier. India played Malaysia on their home soil It was on a rain sodden pitch early in the morning (those days they played hockey on natural turf). It was a classic, which will remain in the memory of every Indian sports fan who was around then. There was no TV , of course, so glued to the transistor radio, listening to Melville D’Mello and Jasdev Singh, we followed the match.

The Indian team was an all star team captained by the immortal Ajitpal Singh. I can still get the full team more or less right – Leslie Fernandez in goal, Surjit Singh and Michael Kindo the starting full backs, Virender Singh, Ajitpal Singh and Mohinder Singh the half backs and the forward line of Phillips, Ashok Kumar, Shivaji Pawar, Govinda and Harcharan Singh.

Malaysia were playing way out of their skin, in front of a partisan capacity crowd. They led 2-1 well into the second half. India was virtually camping in front of the Malaysian goal. But the equaliser eluded them. They forced penalty corner after penalty corner. Surjit Singh, who was usually brilliant in taking the corners, just could not score that day. His hits were being frantically saved, somehow. The commentators were besides themselves as corner after corner was taken. Govinda ne push kiya, Ajitpal ne roka aur Surjit ne hit kiya (in 1000 decibels) … lekin …. The goal would just not come.

I vividly recall the feeling of absolute gloom. Two years ago in the finals against the Netherlands, exactly the same thing had happened. India was sitting in front of the Dutch goal, but could not score the winner and ultimately lost in the tie breaker (heart breaker). Was it going to happen all over again ? Surely the fates wouldn’t be so unkind.

8 minutes to go. India made a substitution. They replaced Michael Kindo with Aslam Sher Khan. They continued to besiege the Malaysian goal. Got two more penalty corners. Surjit hit them hard and straight. And yet the goal would not come. 3 minutes to go. By then I had lost all hope and was in tears, with the transistor still glued to the ear. Melville D’Mello was commentating. Yet another penalty corner. This time Ajitpal signaled Aslam Sher Khan to step up. Surjit was having no luck today. Govinda went to the goal line to push. Ajitpal to stop and Aslam to hit. The push came, Ajitpal stopped it dead on top of the circle. Up stepped Aslam. Cracked it true and hard. GGOOOOAAALLLLL. Even the normally suave Melville D’Mello went berserk. India had equalized.

From then on it all seemed pre ordained. India duly got the winner in extra time. And in the finals against Pakistan the next day, it seemed inevitable that India would win. Even the Gods had decided that it was India’s turn this time. Ajitpal was majestic. Fittingly, Ashok Kumar, son of Dhyan Chand, the greatest hockey player of all time, got the winner.

India was on top of the world.

Flights of fancy

Of all the markets in the markets in the world, one of the most nonsensically regulated is the air travel market. Countries are still clinging on to the antiquated notion that somehow national interests are involved in the aviation sector and “national airlines”, however dinosaur like they may be, must be propped up.

This post is prompted by the news that Germany has asked Emirates to raise its business class fares for flights out of Germany. Emirates, faced with big fines, has been forced to raise its rates by some 20%.

Airlines flying in and out of Germany are policed by the unfortunately named Federal Office for Goods Transport. This august body has written to Emirates saying it was “not allowed to engage in price leadership" on routes out of Germany to non-EU countries. Apparently it was acting under a law used in cases where "public transport interests are being permanently damaged". Apparently European carriers can indulge in “price leadership”. Only non EU airlines should not. Have you heard of the R word ?

Can you believe that such words are being mouthed in the 21st century . Its easy to see behind the fig leaf. Lufthansa has simply arm twisted the authorities to prevent Emirates from undercutting it.

The most closed of markets in the world is the airline market. Who can fly where is governed by complex inter government agreements. Slots at airports are jingoistically protected. All sorts of tariffs are levied. Sick airlines are state supported. It’s a complete mess.

The EU is frankly one of the most blatant of cartels that exists. The EU has no business lecturing anybody on free trade. It is supposed to be the largest economy on earth, larger than the US. But then its not a nation – its just a cartel. And look at what it has done today. Supposedly democratic, it has taken a leaf straight out of Stalin’s notebook. Behind closed doors, some 20 odd people, in classic skulduggery, have chosen Herman van Rompuy as its President. Herman who ??

In the middle of it all is the poor consumer. Although you could argue that by definition an airline customer is not poor. But that’s no excuse for governments to conspire to screw him. Free the airline market around the world. And hey presto – fares will fall AND customer experience will improve. Heard of free trade and competition Mr van Rompuy?

Romance is in the air

This seems to be the season for whispering sweet nothings. K and C are engaged in a very public courtship as I blogged here – its progressing at such a snail’s pace that its probably more exciting to watch grass grow. K has threatened to abduct and carry away C, and C is saying “bah” as women are wont to do !

But there’s another rumour doing the rounds. Yesterday curious things happened with Colgate Palmolive’s share price. The speculation is that Reckitt Benckiser (makers of Dettol) and Colgate Palmolive (makers of, well, Colgate) are looking coyly at each other. It appears that Reckitt is sending strong signal that he/she is ready to marry. What is not clear is who the target of its affection is. Is it Colgate, or is it SSL (makers of Scholl and Durex) ?

If its Colgate, then its not clear who is the bride and who is the groom. For they are both roughly equal. It's supposed to be a marriage of equals. But then women’s lib has not yet reached the corporate world where the tradition of the man abducting the woman and running away with her is the usual norm. So who will pop the question and who’ll say Yes, is not clear.

It is also rumoured that Colgate does not really want to marry. But then its perhaps scared of that stodgy, old man (wheeze, wheeze) who’s much bigger, has a bigger fortune and is capable forcibly lifting her up and running away with her. So why not this strapping Reckitt, who at least is of the same age and has similar taste in music – both like P.Diddy rather than Harry Belafonte which the old man likes. You get the drift …

Why is romance in the air ? Consumer goods companies are struggling for growth. They are being ripped apart by retailers who sell their own brands for a lot less than these companies (after all somebody has to pay for all the ads they air). Then come the discounters who are refusing to stock their products at all. Consumers reeling from the recession are penny pinching. All told, general misery. So the hope is that by marrying they can share the costs (like having only one house, like sharing the same bed, …. because businessmen have to invent important sounding words, these are called synergies). And the stodgy companies who stayed in Europe and North America have belatedly realised that they are in the Old World and that the New World is in China, Brazil, India, Indonesia and the like. Since they are scared of venturing into such strange lands on their own, why not marry somebody who’s already there.

So will Reckitt or Colgate pop the question to each other ? Who can fathom the minds of people who are all dewy eyed (Sri, are you listening ?!). The papers will make interesting reading.

Is the consumer a king or a tyrant ?

“Remove baby before folding the stroller “ is a famous example of the American legal system gone crazy. It remained an object of mirth until it became all too real last week. For, Maclaren, a small privately held maker of baby strollers was faced with a massive crisis on a similar sort of a problem.

Maclaren’s strollers are actually of a reasonably high safety standard. However it appears that when the stroller is being unfolded, if a child sticks a finger into the hinge, its likely to chop off the finger tip. This is not a state secret that normal human beings are unaware of. Any parent, however dumb, is well aware that if a child sticks its finger into a hinge, it will get hurt. However there was no warning on Maclaren strollers that children must be kept away when opening it. And the product is "unsafe". So the company is responsible.

There were 12 instances of such an event happening. The company is now recalling 1 million strollers sold in the US – or atleast providing repair kits to the owners. Now 12 cases in a million is 0.001%. The probability of being struck by lightning is higher. But never mind, the company is a big bad evil monster and so mob lynching is perfectly acceptable.

Reams of newsprint (or should I say, bytes) are being written on this case. Media has used “amputations from strollers”, “child amputation” and the like to lampoon the company. A million words have been written about the company being slow to react, PR disaster, etc etc. I haven’t read one word to say that perhaps this is a overreaction and the consumer is also, just a teeny bit, at fault.

I can understand when there’s a defective or dangerous product – the company must be taken to task. The product must be recalled immediately; period. But this is just a normal stroller – sure its safety can be improved by providing a protective cover over the hinge. But , by itself, the product is not unsafe. Is it then right to force companies to recall millions of products sold over a long period of time ? Today there is no choice for companies. Immediate product recall, whether justified or not, is the only sensible option – else the PR disaster will be so big that the company may probably not survive.

That doesn’t make it right. Where is the notion of sensible consumer responsibility ? One consequence of this is the silly sort of warnings (like coffee is hot) that companies have to print to "inform" consumers. How about differentiating between genuinely defective or unsafe products and ones where usage with common sense is perfectly fine, but careless usage will create a problem. Does a product have to be designed for the average consumer , or the absolute lowest common denominator?

The consumer is the king. I know. But what if he turns into a tyrant ?

The continuing idyll of our yuppie

Our city bred yuppie has settled down into the village, mastered the art of managing without plumbing and has been proposed to. If you’ve missed this story of a couple of weeks ago, click here.

Statutory warning : This is a X rated post. Youngish readers and those with sensitive feelings please leave now !!

Of course the company has not put him here to bask in the adulation of the village belles. He’s supposed to do some work. Like organising a cattle camp.

My good friend Aashish, who comments often in this blog, observed that I seem to have a peculiar fascination for matters bovine – considering the number of times this venerable creature has appeared in what is ostensibly a business blog. I must confess that I hadn’t thought about it, and now that he has said it, am guilty as charged !

Now, in this part of the country, the buffalo is the family’s most prized possession. Therefore the cattle camp is the most important "village development” exercise that he can undertake. What our yuppie hasn’t realized as yet, is that the cattle camp is also the most blatant sex show on earth !!

There are only two objectives in a cattle camp. To castrate the bulls and impregnate the cows. Our yuppie is to participate whole heartedly in the process ; he realises belatedly that his ratings depend on his performance in this orgy, although of a different kind !

The bulls are being led away to one side of the camp. They are lined up one by one to be emasculated. One randy specimen has broken away – he charges vigorously to the cows shepherded on the other side, for the one last fling of his life. He’s promptly caught and brought back, only to be pushed to the head of the assembly line. The logic of this exercise is that bulls, when not motivated to oogle at a shapely cow, will instead work harder. Now, I wonder how come Hitler, Stalin, and the lot, did not consider this angle, when it came to the human race. Although, it must be said that right through history, many kings seems to have grasped this wisdom. Our yuppie’s face is beet red. He has “performed” , at best, an average job. There’s much tongue clicking amongst the wise and the elderly on city bred types who can’t even do a simple job properly.

The scene at the cows end is even more interesting. Humans have decided that its much better to impregnate cows artificially than allow matters to progress naturally; a curious logic considering the number of able bodied bulls at the other end of the field. On one hand you castrate eager bulls who are all too ready to do the job for free. On the other hand, you procure the elixir of life from an unknown stud, of mythical qualities, transport it in liquid nitrogen (global warming and all that), at the cost of an arm and a leg. Whoever said that there was native common sense in the villages ?

The process begins with determining which of the cows are “ready”. I shall pass lightly over this process in order not to offend readers’ sensibilities – suffice to say that the process involves shoving a whole arm up you know what, an act our yuppie is flatly refusing to do; job rating or no rating. The cow’s owner is looking on anxiously. If the verdict is a no, he has come in vain. If the verdict is a yes, he seems to experience the state of heightened euphoria, which is more usually associated with the performer in matters amatory.

The “no” cows have melted away. The “yes” cows are then helped along in their ostensible purpose in life – to bear calves and produce copious quantities of milk. Would our yuppie, at least participate in this – having baulked at the previous step in the process which has resulted in extreme hilarity amongst the onlookers. Knowing that his job is on the line, and with a face akin to an overripe tomato, our yuppie fetches the straws from the liquid nitrogen container and assists in the creation of life !

Evalauation time. The young man is given a C. He has avoided getting fired from his job. In the process , he has brought much merriment to the village folk and has added to the repertoire of folk tales in the village. Fair deal. But he is rather quiet these days.

When good politics was better than good economics

Yesterday was 9/11, written in the British way. It is as momentous a day as its American equivalent is tragic. For it was on this day, 20 years ago, that the Berlin wall collapsed. And Europe would never be the same again.

A trillion words are being written about the event and the celebration and the hoopla surrounding it. This blog is loath to add to that total, and in any case is not a political forum. Instead we will touch upon one of the most interesting aspects of the reunification at that time, the currency unification.

The word German reunification is actually a politically correct, but not factual, term – in reality it was an acquisition of East Germany by West Germany. When German reunification happened, the black market rate between the mighty Deutsche Mark and the Ostmark (East German Mark) was 1 to 5. The Ostmark would be abolished and instead the Deutshe Mark would be the currency of the new Germany. But then, at what rate do you convert the existing Ostmarks of East Germans ?

Economists fell over each other to proclaim that the exchange should happen at the fair value, which was the black market rate. They warned of huge inflation if it was converted at a rate better than the true rate. They also warned that if East German wages were reset in Deutsche Mark at anything other than the fair rate, East German industries, with their low productivity, would be outpriced, go out of business and result in high unemployment. Dire consequences were predicted by the economists.

The politicians however cared two hoots for the economists. Germany was in euphoria. It was one country, once again. The cold war was over. It was a momentous time. They grasped in a second that for the reunification to succeed, there must not be social upheaval in the East. They fixed the exchange rate as 1 Deutsche Mark to 1 Ostmark for upto 4000 marks and 1 to 2 thereafter.

Economists were outraged. Doomsday scenarios were predicted for Germany. East Germans were , as you would expect, mighty pleased. They embraced reunification wholeheartedly. West Germans were in fact giving a massive subsidy to East Germans. While there may have been some grumpiness at this, there wasn’t fierce resistance from them.

No doomsday scenario emerged. Inflation didn’t rocket up. Sure there was some pain and perhaps some prolonged impact on the German economy, but pick up it did. This was the best way to have handled the reunification – any other alternative might have been far worse. For once political logic triumphed over economic logic.

Look at Germany today. It is the engine of Europe, much as the British or the French might like to think otherwise. We go gaga over China, but even last year, the world’s largest exporter was Germany, not China. Despite all the chronicling of Germany’s economic woes, almost every country would give an arm and a leg to trade places with Germany.

But back to 1989. On that fateful day thousands of East Germans joyously crossed into the West. Amongst them was a 35 year old lady. Her name – Angela Merkel. Today she is the Chancellor of Germany. It probably wouldn’t have been possible, but for the fact that the politicians were right and the economists wrong.

Work Wife Balance

This weekend's irreverent post is a guest post in le embrouille blogueur's blog. I am flirting with deep danger by continuing to needle the fair ladies, but then, this Sunday is that sort of a Sunday. Ladies - this is all just for some idle fun ; don't take anything seriously ! Click here to read this post.

The taxman and Windows 7

If you are in India and wanted to buy a Windows 7 box, you could not do it legally. Never mind that Windows 7 was released globally about 2 weeks ago. Never mind that much of Windows 7 development happened in India. Why ? Because the babus (pedantic officer) at Customs wanted to tax the stuff twice !!

This is an example of the nonsensical complexity that abounds in India’s taxation law and the missionary zeal with which the babu wants to implement them – methinks the ultimate frustrated guy is the Indian babu and his only source of pleasure in life is from creating and implementing mind boggling complexity.

Take the Windows 7 situation. The product is the standard software box with a CD and a manual in it. Because it’s a box, it’s a physical product. Therefore customs duty on the “product” is to be levied. Then the box contains a CD which gives you a license to use the software. Giving the license to use is a “service”. So they want to again charge service tax on the same box. Tax the same stuff twice - once as a product and once as a servie. Only the warped mind of an Indian babu can come up with such logic. Boxed software sales in India have fallen by 40% as the boxes gather dust in the customs warehouse. Furious lobbying, intricate clarifications from the mandarins in Delhi, millions of manhours of intense activity and the boxes seem to be ready to leave the shipyard now.

Examples abound of such inanity. Many years ago, I knew of a case of a producer of jams. In one budget, the government decided that jams should be exempt from excise duty as an incentive to fruit farmers. The producer of jams heaved a sigh of relief. But the next day, the babus descended on the poor guy. They said that while manufacturing jam, he starts by dissolving sugar in water , the act of which was the “production” of sugar syrup. He doesn’t have to pay excise duty on jams, but would he please pay excise duty on sugar syrup. The producer protested that he wasn’t producing sugar syrup – he was just executing a step in the manufacture of jams. NO. The babus , with great glee, were “enforcing the law”. The producer asked that instead of dissolving sugar in water, if he first mixed the fruit pulp and then added sugar in the mix, would that be OK? Yes; that was absolutely fine to the babu. No “sugar syrup” was being “manufactured” and that was fine !!!

Needless complexity and zealotry in arcane interpretations bedevil our taxation system. One one hand it leads to misery for a guy who wants to follow the law. On the other hand, it provides myriad opportunities for corruption. We should simply exterminate the tax babu. Bring a common rate of taxation on everything. Make the damn thing simple . And then enforce it ruthlessly. If the system was simple, the rate of tax was reasonable, and the penalties for evasion harsh, most people will quietly pay their taxes. I am quite prepared for a special fund to be created out of my taxes to create an opulent bordello where we can banish the tax babus for them to get their kicks, and leave us poor folk in peace.

FAIL OFTEN. FAIL EARLY. FAIL CHEAP.

Rapidly evolving technologies and market adjustments have thrust media into states of nearly perpetual alteration that require agile and swift responses to gain benefits and defend the firm from outside forces.

Managers who have been used to stable environments and well conceived plans are often reticent to move to seize opportunities with quick and decisive action based on incomplete information and knowledge. The turbulent contemporary environment, however, require leaders to rapidly evaluate the potential of new communication opportunities and to take risks in a highly uncertain setting.

This is disturbing to managers who are used to employing well developed and elegant strategies that require significant investment and commitment. Declining to test opportunities until a clear roadmap is produced, however, takes away flexibility and the ability to rapidly change with contemporary developments.

While preserving the core activities of media businesses, managers need to simultaneously look for emerging opportunities that can be pursued, communities that can been served, and experiences that can be delivered. It is important to get in quick and inexpensively, to build on small successes, and to abandon initiatives if success proves elusive.

It is better to fail often, fail early, and fail cheap than to avoid risky moves, lose potentially rewarding opportunities, and forgo learning from innovative initiatives.

In the current tumultuous environment, failure has become a form of research and development. Try things; drop those that don't take you somewhere interesting; document what you learn from each unsuccessful initiative; move on to something new. What you learn from unsuccessful efforts is usually more important that what you from success.

The only real failure in the rapidly changing world of media is doing nothing and hoping things will get better on their own,

The right royal mess at GM Europe

Politicians should, in general, not meddle in business. A great illustration of this danger is the mess brewing in General Motors Europe.

Facts of the case are as follows. When GM was entering bankruptcy last year, the fate of GM Europe was in serious doubt. In any case GM Europe had too much of manufacturing capacity in Germany, the UK , Spain and Belgium. Even under normal circumstances a big restructuring was inevitable. Now there was serious threat of complete closure.

In waded the politicians. No less than the redoubtable Angela Merkel, Chancellor of Germany. She was coming up for an election. In Germany, auto workers are next only to God. No way was she allowing job losses amongst auto workers in Germany. So she forced an auction, put together a curious alliance of a Canadian spare parts manufacturer (Magna) and a Russian bank (Sberbank) to buy GM Europe. She then offered them $6.6 bn (yes 6.6 billion) and they had to commit no closures and job losses in Germany. Unsaid, but obvious, was – I don’t care what happens in Britain and Belgium – you can go and shut those. She forced a reluctant GM to agree to this ; at that time GM was weaving drunkenly on the ropes and in no position to even talk back to Merkel.

Now Britain, Belgium & Spain would not take this lying down. But they didn’t have the money to do anything about it. But a case is on in the European Union’s competition commission against the German plan. Merkel is no fool – she knows how to twist the Commission and get what she wants. So there the situation lay.

In waded the US of A. The US government has been overseeing the restructuring of GM. One of their demands has been for GM to produce greener and smaller cars. Now GM was doing a fair bit of development of such cars in Europe. If GM Europe went away, all that would be lost.

GM was also not too keen to sell GM Europe to Magna. They saw them, and especially the Russian connection, as competition and did not want all that technology to go to them for them to compete with GM in Russia where Chevrolet is doing pretty well. And how could they be a global company with no business in Europe ?

GM has got over its hangover now having come out of Chapter 11. It is now not mortally terrified of Merkel. So it said a couple of days back, that it was pulling out of the deal that she had forced on them.

There’s complete chaos. The Germans are absolutely furious (holy cow – plant closures in Germany and those b$%# Americans are backing out). The British are delighted (less job losses in the UK). The Russians are livid (not really sure why). The Americans are smug. GM is bracing for a huge fight. With all the politicians mucking about, what chance does GM Europe have ?

The "Ants" of China

China places an enormous value on education – both the society and the government are, rightly, obsessed with it. As a nation it has done a fantastic job of educating huge chunks of its population and providing them with job opportunities. But it’s a massive task and sometimes education and jobs are not always in tandem. This was brought out to me in vivid detail when I read the book review of Ants (Yizu), a book in Chinese by Lian Si, a post doctoral student in Beijing.

Considering the scale of the task, China has been immensely successful in educating its population. In fact, so successful, that it has become a problem. In 2009, China produced more than 6 million college graduates. That gives it the headache of creating 6 million additional jobs every year. Not factory worker jobs, but skilled jobs befitting university graduates. How on earth do you add 6 million jobs year after year ? Just for appreciating the scale, the entire outsourcing industry in India, an undoubted success story, employs only 2 million people. And China has to find work for 6 million graduates, every year.

Ants is the story of the educated who can either not get a job at all, or get only a low wage job. They find it impossible to live in the inner city in the great metropolises of China – Beijing, Shanghai or Guangzhou. They gravitate towards distant suburbs where the rents are affordable. Lian Si calls these localities “slums of intellectuals” and likens them to ant colonies in a positive sense. Ants are extremely diligent, hard working and smart. And they live in their own colonies

Lian Si lived among these ants as research for his book. He says they are mostly from the rural areas and were the product of China’s thrust into university enrollment. They went to college with a dream, but the real word has taught them a few lessons. In the last couple of years they have run bang into a saturated job market. After graduation, they neither have the money, nor the connections, so important in China. They therefore retreat to communal village living by creating “ant colonies”. They now live eight to a room and commute two hours one way to whatever work they can find. But they never give up and strive for a better future.

Chinese society is undergoing massive change today ; a change of such magnitude and speed that few societies in the world have seen. The ants, suggests Lian Si, will be a generation that will determine the future of China in the next 10 to 20 years.

A similar situation exists in India, of course, but I wrote about China because I stumbled on this book review. I wish I could read it, but alas, I fear I may never get around to learning to read Chinese. Echoing in my mind is a beautiful quote from Lian Si’s “ant friend” that perhaps sums up their attitude to life. “I don’t think I am a loser”, said his friend. “Its just that I haven’t succeeded as yet”.

If something is too good to be true, it is too good to be true

Since the beginning of the year, the prices of all sorts of risky assets – shares, oil, etc have increased by fantastic proportions. Take equity. In virtually any market in the world, you would have made returns of 50% plus, even if you are an idiot. Did somebody say we were in the midst of a huge crisis ? Here was massive money to be made, by just being there. Sounds too good to be true ?? As the old saying goes, when something is too good to be true, it usually is.

I read a very interesting article by Nouriel Roubini, the highly respected Professor from New York’s Stern School of Business, in today’s Financial Times. Its somewhat technical, although very readable. I commend even a layman to read this. At the risk of extreme oversimplification, I will paraphrase his argument as follows

- Interest rates are extremely low and will be maintained at very low levels by the US Fed to stimulate the economy
- The dollar is falling. Because it is falling, everybody is short selling the dollar.
- Short selling the dollar essentially means that you can borrow at negative rates of interest, as long as the dollar is falling .
- Invest this in any risky asset – say shares in Hong Kong. Prices of those shares will rise as demand for them increases.
- One month later (or whatever), sell the shares and make a tidy profit. Now these are worth much more in US$ terms as the US$ has fallen. Settle your short sale of the US$ and make a huge profit.
- Repeat step 1 to 5 again.

This is what Prof Roubini is arguing is happening. Of course, this cannot go on for ever. One day the dollar will not fall. Then like a herd on stampede , everybody will sell the risky assets and cover their short positions on the dollar. The bubble will truly burst.

That’s what usually happens to bubbles. When asset prices rise by 70% in 9 months, it is a bubble. The bigger it gets, the worse will be the explosion.

If you want any more evidence that Prof Roubini’s views must be taken seriously, read what he said

“In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions”

The date ? Sep 7, 2006.

Just because somebody was right once, it does not mean that he will be right again. But it would be completely foolish not to listen to him.

Oh, the joys of village life

A couple of generations ago, our great grandparents made the decision to leave their villages and move to the city, largely in search of a better life. In just two or three generations, we have completely lost the understanding of what village life is. One company decided, many decades ago, that city bred yuppies, who it was mostly recruiting as trainees, must spend two months in a village to reacquaint themselves with rural India. This is a story of that “fantastic” experience – it is set in India, but could equally be true of many other countries.

Picture the setting. A truly representative village in a lawless part of India. Modern conveniences have not yet reached the place. No electricity. No plumbing. No nothing. But warm people. The day starts with daybreak and ends with sunset. The most precious possession in life is the buffalo.

Into this setting, in walks our city yuppie. He is ritually welcomed into the house by the lord of the house with the reassurance that he would be completely safe, as the host had two guns proudly displayed in the room. With some trepidation at this reassurance, he walks in.

Our yuppie is given the most important room in the house. This is currently being occupied by the most important possession of the family – the buffalo. The guest is being honoured with bovine company for the two months he would stay there. His olfactory senses would be irreversibly heightened for the rest of his life.

The event of the decade, perhaps of a lifetime, in the village would come the next morning, when its time for the guest to have his bath. Of course, this would be a set in idyllic settings – at the village pump or well. The whole village, especially all the womenfolk, are peeping from vantage viewing sights completely enjoying the spectacle. The sight of the metro male in full flow, accompanied by much giggling, will be the subject of local folklore for the next five decades.

But prior to that, a rather more private, but even more hilarious event has happened. Early in the morning, the host escorts our yuppie to the fields to , ahem, you know what. The host has been told that enjoying the scenery during the act would be something his guest has not been used to and therefore the host must tutor his guest on the ways of village life. The two set out on a walk to the fields carrying a “lotta” each. The fields are neck high with unharvested crop – our yuppie is rather thankful that they provide a good screen . But what he doesn’t know is that the crop also hides a rather generous population of peacocks, who do not take kindly to humans intruding on their patch. Imagine the scene – our yuppie settling down, thinking that this isn’t so bad after all. And then suddenly …. From here comes the picture postcard of the whole experience – a yuppy running for his life, with his trousers down to his ankles, chased by a peacock !!

Enough of such matters. That evening the male VIPs of the village congregate to know the yuppie better. The women are in the shadows listening extremely intently. One of the early questions is, of course, how many wives does our yuppy have. Now , if our hero had been properly tutored, he would have answered that he had three, two of them from important mafia families. But in his naivety, he has admitted that he is only 23 and is therefore wonderfully single; (Sri, please note!). Now that piece of information is met with unbelievable astonishment. They cannot comprehend that a strapping male , such as he, can actually be “available”. An earnest discussion ensures. One concerned elder, sidles upto the yuppie, to ask him in a low voice, as to whether he had , er, a certain problem, for which remedies are advertised in plenty in Page 2 of the Indian newspapers. The yuppie, having turned bright red, assures the elder that he is, ahem, fully in possession of his faculties. The matter is settled. The headman’s daughter is a perfect match. Next Friday is an auspicious day. Would that be OK with the honoured guest ??

This saga may be continued on idle Sundays , in continued proof that the writer has ‘lost it'.