In defence of business

The word business is nowadays accompanied by a metaphorical holding of the nose. Post the financial crisis, businessmen would probably rank just above bankers and below more traditional last placers like real estate agents, in the list of reputable professions. Readers of this blog would know that the author is a staunch defender of business and advocates the view that the profession is unfairly maligned. An earlier post had touched on this subject.

It was gratifying to read The Economist’s Schumpeter column, The Silence of Mammon, which argues that business people should stand up for themselves. The article recounts the two arguments it says proponents have put forth in defence of business – that many firms are devoted to good works and that businessmen have done more than any other institution to advance prosperity. It opines that these are not enough and puts forth three more arguments to counter the critics of business who have dominated the discussion on corporate morality – that business is a remarkable exercise in cooperation, that business is an exercise in creativity and that business helps maintain political pluralism. All excellent arguments, in an eminently readable article.

I wade into this debate with unbridled enthusiasm. I have little sympathy for those who taint businesses as immoral with a broad brush. At the cost of oversimplifying a complex matter, I set out a central theme in defence of business and industry.

I come from a poor country, India, and now live in another one, China . I have seen how degrading poverty is to humanity. And it is China that I want to present in defence of business. In 1981, 84% of China’s population of a billion plus was below the poverty line of $1.25 a day. In 2005, in the same China, the percentage of population below the same poverty line had decline to just 16% (source : World Bank working paper 5090). Yes SIXTEEN per cent. That equals to 700 million people who have climbed above the poverty line. We all know how this was done.

Show me any other way of pulling 700 million people out of poverty and I’ll abandon all defence of business.

No Christmas Business, But...

Hello Show Attenders,

Following a spectacular Holiday Spectacular show with THREE guests (Louis Katz, Amy Dresner and Chris Thayer), The Business will be dark for the Christmas holiday week. However, we will be back for a big New Years Eve Eve show on Wed Dec 30th 2009. No secrets revealed yet, but plans are in the works for some knockout guests.





...and as Jan crests on the horizon, The Business is proud to ba a part of SF Sketchfest 2010 on both Thur Jan 21st and Friday Jan 22nd. Still at the Dark Room, but joined by new guests and other great sketch groups. Check www.sfsketchfest.com for more details. These will be the only Business shows until February, so come by and get your Biz Fix.

THANKS FOR ALL THE SUPPORT IN 2009!

Sincerely,
The Businessmen

The low point

This week has been the low point in my infancy in the blogging world. A combination of traveling, ridiculous working hours and the difficulty of actually getting access to the internet when traveling overseas without paying up a complete fortune, has made this a barren week. No posts at all and unforgivable delays in responding to comments. Sorry.

There are, of course, periods in business life, which are like this. Low points. Much more serious than a blogging setback. When nothing seems to be going right. When self doubts creep in. When your boss rubs it in, instead of being supportive. Hence a post which might help in a small way, if you face such a situation.

Firstly , everybody goes through this, many times in a career. Even Jack Welch. Steve Jobs was once sacked from Apple ! The more successful guys have perhaps gone through it more often. So, if its of any comfort, we are in elite company.

Secondly, its only a job. This is often the most difficult of concepts to digest. ITS ONLY A JOB. Its not our life. The vast majority of us consider that it IS our life. Sure, we must give it our very best, We must give it our heads and perhaps our hearts, but never our soul.

Thirdly, it won’t look so bad tomorrow. It has often amazed me that what looks like a low point today, doesn’t seem all that low tomorrow. Our perspectives often react in an extreme to a given situation. Tomorrow is another day.

Fourthly, the sun will still rise in the east. Nothing is ever THAT important. In a few months, if not a few weeks, it will all be forgotten. Think back to the last time that it didn’t seem to be going so well in the office. Did it matter ? Of course it didn’t.

Fifthly, its not worth getting furious at the boss. He’s going through the same cocktail of emotions too. OK, he’s a bum. But is it worth expending all that energy on a bum ? He’ll go away tomorrow. There’ll be a new bloke to deal with.

If this sounds all cliché ridden, it is. File this away in a far corner of the mind. And on the low days, maybe, just maybe, it might help, just a teeny weeny bit.

I’ll leave you with a song that bears no relation to the post other than that it features the word low. Its wildly evocative of a lovely lovely land. Here it is …….

Its time to leave the village

You may have followed the travails of our city bred yuppie here and here. He survived the attentions of the peacock. He managed to escape being hitched. He got over the close association with bovine sex life. He even learnt to ignore the ever present gun. But , at last,  the time came for him to leave the village and go back to the city – back to normal business, back to the life he was used to.

The parting was really tough. There wasn’t a dry eye on the day of his departure. The hosts openly wept. They, and he, knew that they would never see each other again. For two months they had shared the same roof. Eaten the same food. They came from different worlds and yet had started to appreciate the other. It was now time to go their separate ways. But for both, their lives would never be the same again. He got his bags together. Said goodbye to the teary family gathered on the porch. There was mutual assurance that they would write to each other – on inland letters as was the norm then. But they both knew this would not happen. It was over.

On the long train ride back to the city, the yuppie reflected on the two months that he had spent. The good, the bad and the ugly. The good first. People make incredibly warm bonds in the unlikeliest of circumstances. The hosts had much of the simplicity that defines life in India. They shared whatever they had with their guest. They reached out openly to him. They were curious about the different life he came from, but they did not disparage it. They related to him with their hearts, not their heads.

But the ugly side of village life also needs telling. The appalling caste system is, alas, well and thriving in rural India. Untouchability in its starkest form is evident everywhere. Crime is omnipresent ; there is little of the rule of law – the gun is the king. The treatment of women is often barbaric. There is abject poverty. Poverty is demeaning to the soul. If ever there is anything that dehumanizes people, its poverty. Under the excuse of poverty, anything goes. It is so obvious that helping lift people out of poverty must be the number one priority for any state – in this there can be no better shining example than China.

As the train chugged on, the yuppie continued to ruminate. As in all things in life, there are two sides to everything. Some people glorify village life. Others disparage it. Each sees it through the lens he has fashioned. From behind his own lens, the yuppie concluded that his truth is that there is some good and a lot bad. But it was an experience indeed. Something he was not likely to forget in a hurry. For, after all, experience is the elixir of life.

The train chugged into the city station. He sighed deeply, and stepped forward into the world that was his, and the one he knew allright.

Is small scale more desirable than large scale ?

Why is the Government of India so fixated about small scale ? For some reason, the thinking seems to be that small scale is ethically more acceptable than large scale. This is nonsense – both economically and morally.

I am reacting to the news that the government is considering stipulating that public sector enterprises would be required to source 20% of their purchases from micro, small and medium enterprises. Never mind that such public enterprises have to compete on the open market against enterprises with no such restrictions. Never mind that public enterprises, funded with taxpayers money are supposed to be economic engines – not means of implementing a warped sense of social justice.

Small enterprises need no special support. Just as in every other facet of industry, there are the good and bad among them. The good don’t need any handouts. The bad deserve to die. In some areas, scale is an advantage and small scale, by definition is suboptimal. As a consumer, I have no desire to accept suboptimal costs. In some other areas smallness can be an advantage. Good , then compete on your strengths and may the best man win.

Small scale industry is not a saint. They violate laws too. Often laws relating to safety and labour are least observed in small industry. They do not deserve to be glorified.

The problem is that there is a ministry of micro, small and medium enterprises in the central government. If there is a ministry, there must be netas and babus. They have to find something to do to justify their existence. They therefore create such horrible policy. Without a doubt, detailed rules will be laid down as to what materials have to be sourced from them. PSUs will lobby saying some materials have to be excluded because they are not manufactured by the small scale industry. Small industry will lobby saying that some items have to be exclusively sourced from them. Before you know it, a 1000 page compendium will be published. Case law will be created. The babus can be in bliss.

Reminds me of an incident which P Chidambaram, the current Home Minister of India used to speak about. When he first took over the Commerce Ministry, long ago, he discovered the existence of an organization called the Controller of Imports and Exports. While he could understand why imports were thought to be controlled in the license permit era, he was completely at a loss as to why there was a Controller of Exports. When he asked the worthy official why this was so, he was treated to a lengthy presentation of why that function was absolutely important. The gobsmacked Chidambaram realized that the only way he could make things happen was to simply abolish the whole function.

I suggest that the Ministry of micro, small and medium enterprises be likewise abolished.

A great organisation

The house of the Tatas has been synonymous with values which are unique in the annals of business history. This post is about why they more than deserve their illustrious reputation.

This is from an e mail doing the rounds – these are apparently notes taken by Dilip Ranjekar , CEO of the Azim Premji Foundation. I haven’t requested permission from Dilip, or the persons who forwarded me this mail, to post this, but I am sure none would mind me spreading a story that ought to be told and will bring a lump to your throat. Here it is

Last evening, I had a dinner meeting with HNS in Goa

He narrated the 26th November 2008 terror attack on Taj Mumbai and there were some important points.

Terrorist entry

1. They entered from the Leopold Colaba hotel entrance and also from the northern entrance - spraying indiscriminate bullets on the Taj security personnel and guests in general.

2. Though Taj had a reasonable security - they were surely not equipped to deal with terrorists who were spraying 6 bullets per trigger.

3. The strategy of the terrorists was to throw chunks of RDX in an open area that will explode and burn - creating chaos so that the guests and staff run helter skelter so that the terrorists could kill them. The idea was to create maximum casualties.

4. There were several critical gatherings and functions happening in the hotel on that day - a Bohra wedding, global meet of Unilever CEOs and Board
members and 2 other corporate meetings were being held in the hotel - besides the usual crowd.

5. The firing and chaos began at about 8.30 p.m. and the staff including employees on casual and contract basis displayed exemplary presence of mind, courage and sacrifice to protect the guests who were in various halls and conference rooms.

Stories of Staff Heroics

1. A young lady guest relation executive with the HLL gathering stopped any of the members going out and volunteered 3 times to go out and get things when the situation outside the hall was very explosive and she could have been easily the target of the bullets

2. Thomas George a captain escorted 54 guests from a backdoor staircase and when he was going down last he was shot by the terrorists

3. There were 500 emails from various guests narrating heroics of the staff and thanking them for saving their lives

4. In a subsequent function, Ratan Tata broke down in full public view and sobbed saying - "the company belongs to these people". The wife of Thomas George who laid his life saving others said, she and the kids were proud of the man and that she did not know that for 25 years she lived
with a man who was so courageous and brave

5. The episode happened on 26th November, a significant part of the hotel was burnt down and destroyed - the hotel was re-opened on 21st December and all the employees of the hotel were paraded in front of the guests

6. It was clearly a saga of extra-ordinary heroics by ordinary people for their organisation and in a way for their country. The sense of duty and service was unprecedented

7. The young lady who protected and looked after the HLL guests was a management trainee and we often speak of juniority and seniority in the organisation. She had no instructions from any supervisor to do what she did

* She took just 3 minutes to rescue the entire team through the kitchen
* Cars were organised outside the hotel as per seniority of the members
* In the peak of the crisis, she stepped out and got things for the guests

8. People who exhibited courage included janitors, waiters, directors, artisans and captains - all levels of people

The Tata Gesture

1. All category of employees including those who had completed even 1 day as casuals were treated on duty during the time the hotel was closed

2. Relief and assistance to all those who were injured and killed.

3. The relief and assistance was extended to all those who died at the railway station, surroundings including the "Pav-Bhaji" vendor and the pan shop owners

4. During the time the hotel was closed, the salaries were sent by money order

5. A psychiatric cell was established in collaboration with Tata Institute of Social Sciences to counsel those who needed such help

6. The thoughts and anxieties going on people's mind was constantly tracked and where needed psychological help provided

7. Employee outreach centers were opened where all help, food, water, sanitation, first aid and counseling was provided. 1600 employees were covered by this facility

8. Every employee was assigned to one mentor and it was that person's responsibility to act as a "single window" clearance for any help that the person required

9. Ratan Tata personally visited the families of all the 80 employees who in some manner - either through injury or getting killed - were affected.

10. The dependents of the employees were flown from outside Mumbai to Mumbai and taken care off in terms of ensuring mental assurance and peace. They were all accommodated in Hotel President for 3 weeks

11. Ratan Tata himself asked the families and dependents - as to what they wanted him to do.

12. In a record time of 20 days, a new trust was created by the Tatas for the purpose of relief of employees.

13. What is unique is that even the other people, the railway employees, the police staff, the pedestrians who had nothing to do with Tatas were covered by compensation. Each one of them was provided subsistence allowance of Rs. 10K per month for all these people for 6 months.

14. A 4 year old granddaughter of a vendor got 4 bullets in her and only one was removed in the Government hospital. She was taken to the Bombay hospital and several lakhs were spent by the Tatas on her to fully treat her

15. New hand carts were provided to several vendors who lost their carts

16. Tata will take responsibility of life education of 46 children of the victims of the terror

17. This was the most trying period in the life of the organisation. Senior managers including Ratan Tata were visiting funeral to funeral over the 3 days that were most horrible

18. The settlement for every deceased member ranged from Rs. 36 to 85 lacs in addition to the following benefits:

* Full last salary for life for the family and dependents

* Complete responsibility of education of children and dependents -anywhere in the world

* Full Medical facility for the whole family and dependents for rest of their life

* All loans and advances were waived off - irrespective of the amount
* Counselor for life for each person

Epilogue

1. How was such passion created among the employees? How and why did they behave the way they did?

2. The organisation is clear that it is not something that someone can take credit for. It is not some training and development that created such behaviour. If someone suggests that - everyone laughs

3. It has to do with the DNA of the organisation, with the way Tata culture exists and above all with the situation that prevailed that time. The organisation has always been telling that customers and guests are #1 priority

4. The hotel business was started by Jamshedji Tata when he was insulted in one of the British hotels and not allowed to stay there.

5. He created several institutions which later became icons of progress, culture and modernity. IISc is one such institute. He was told by the rulers that time that he can acquire land for IISc to the extent he could fence the same. He could afford fencing only 400 acres.

6. When the HR function hesitatingly made a very rich proposal to Ratan - he said - do you think we are doing enough?

7. The whole approach was that the organisation would spend several hundred crore in re-building the property - why not spend equally on the employees who gave their life?


THIS is a great organization, full of great people.

Bhopal happens and nobody is prosecuted

This week marks the twenty fifth anniversary of the worst industrial disaster in history – the leak of the deadly methyl isocyanate from the Union Carbide plant in Bhopal. Thousands of people died and the horrors have been well documented.

This post focuses on one notable aspect of what happened after the disaster. Or rather what didn’t happen. Nobody has yet been prosecuted in a court of law for the accident. That’s right. After 25 years, there has not been a single criminal prosecution.

There is little doubt that safety systems in the plant were poorly designed, bypassed in actual operation and there was criminal negligence on safety. Those of us who have worked in factories know how elaborate safety systems are when handling extremely dangerous chemicals like methyl isocyanate. And yet multiple safety systems seem to have been routinely bypassed. Just glance at the Wikipedia article on the accident that details the number of safety systems that were reported to have been non operational at that time.

The government, NGO’s and all the shouters wanted to prosecute Warren Anderson, the then Chairman of Union Carbide globally. This is a classic manifestation of trying to go after a global name – the more senior the better to show that something is done. Flash of publicity. But is Warren Anderson really the culprit ? – was it he who bypassed multiple safety systems at the Bhopal plant ? Was he the one who designed the systems in the first place ? He should take moral responsibility, but he is not criminally responsible.

The real criminal responsibility lies with the plant management and the actual operators of the plant. The people who took short cuts. The people who gave lip service to the required safety procedures. The people who tried to cut costs by short circuiting what they saw as elaborate non essential procedures. The people who allowed stocks of MIC to build up because the final product was not selling, but didn’t think of the consequences. They are the people who should be prosecuted. If there were serious design deficiencies with the safety systems, then the design guys must also be prosecuted. By not doing so, we have not served the demands of justice. We have implicitly accepted that it is OK to bypass safety systems, even when the consequences are as disastrous as what happened. We have failed to award exemplary punishment to the people really responsible – and thereby deter similar people in other factories from taking shortcuts on safety.

In some ways, we should look at ourselves. We are cavalier about safety in our own homes. Don’t we overload a socket by drawing an extension box and plugging multiple devices to it ? Don’t we ignore earthing and plug a two pin plug where a three pin plug is required ? Don’t we get irritated by the fuse going off repeatedly and short the fuse box ? Do we even have a single fire extinguisher in our house ? This is the same lighthearted approach to safety that caused the Bhopal disaster. Pardon my sermonising like a snooty b%$#@, but this is one topic where I won't stop being a sanctimonious pest.

We would do ourselves a good turn by not taking safety lightly. By asking for a safety audit of our own homes. And then following the safety procedures without fail. Next time we plug a 2 pin plug into a three pin socket .........