World Economic Forum – India derailed.

Such is the faith of people in India that problems, challenges, opportunities, and any successes are often attributed to a divine force – the almighty. I remember a raging argument with my mother when I was a child, in which she basically justified her in-action by citing the same – “if it’s meant to be…”, which I’ve always seen as a cop-out as she avoided taking responsibility for an action.

Well, the reason I mention this is that having participated in the World Economic Forum’s India Summit in Mumbai earlier this week, India’s political & business leadership reminded me of the raging argument between my mother and me. Just that in this case, India’s much celebrated captains of industry became my mum for two days.

The problem is that everyone now recognises that the challenges India faces are possibly too big to overcome. The shine has truly come off. The penny’s dropped and they don’t know what to do. So they’re happy just to bumble on and see what happens (if it’s meant to be…)

Such was the elation of the mid 2000’s, that she was pleased to have been invited to the G20, and other international platforms, it seems that they’ve forgotten that if they desire global recognition, they need to offer solutions that fix problems.

Take, for example, the construction industry which itself will see an investment of a trillion dollars over the next ten years, but where are the skilled tradesman? In a similar fashion, take any profession and you arrive at the same problem.

India’s much talked of demographic dividend stands to turn into the exact opposite if practical solutions are not found. It’s far too easy to say that the private sector needs to play a role by harnessing the opportunity. India’s government needs to follow through by creating a favourable policy environment, else… the risks to her growth are simply too significant to consider.

I’m quite a positive guy, but this Summit knocked the stuffing out of me.

Corruption, a bloated bureaucracy, a ego, all stand in the path of progress. That’s what the India Summit confirmed in my mind.

Is the UK a corrupt nation?

That corruption in India is an issue is not news to anyone. Just look at the news headlines being generated by Anna Hazare’s attempt to reshape the Lokpal Bill. You see scores of everyday people piling in behind this, BUT…

What I’m dismayed about is the manner in which big business has keep out of the fray. In a country that accords celebrity status to the likes of the Ambani’s and other businessmen / promoter families, why is there such a deafening silence?

I’ve often canvassed opinion on the issue of corruption in India, and the overwhelming opinion of businessmen is that paying people off is justified as long as it progresses their matter! It’s the cost of doing business in India.

Aggrieved that I’m accusing their country of being a shady place, they quickly retort by asking rhetorically whether our business practices are cleaner and cite examples such as BAe systems case dropped by the Labour government in the national interest. Or more recently, the hacking scandal that’s engulfed the media industry. They also cite the parliamentary expenses scandal as another example in which the UK is as corrupt a society as India.

So, what’s your view?

KV Kamath – India’s Banker becomes Chairman of Infosys

Earlier today, it was announced that KV Kamath would become Chairman of Infosys – a major Indian and international IT services company that’s based in Bangalore.

In my book titled ‘India’s Inc – How India’s Top 10 Entrepreneurs Are Winning Globally’, I interviewed and included Kamath – although he wasn’t an entrepreneur per se – simply because he’d taken a boring, old world, finance institution and made it globally competitive – displaying all the traits that successful entrepreneurs display while building their businesses. In the book, I called him ‘India’s banker’ as ICICI had truly become a force in India. Their retail operations were slick, their corporate and investment bank delivered exceptional returns etc. The thing that truly marked him out, though, was his fascination with technology. He could have easily been the Chief Technology Officer for ICICI, such was his grasp of the potential technology held to provide a well deserved boost to his company.

For this reason, it came as no surprise that KVK, on retirement as CEO of ICICI, was asked to serve in Infy’s Board. So in many respects, this announcement also doesn’t come as a major surprise to the markets.

Interestingly, Narayana Murthy, founder and soon to retire Chairman of Infosys, also features in my book. Murthy’s known for many things but what stuck out was his commitment to retiring from Infosys as per the governance of the company. In many cases, such words are seen as niceties as it’s widely expected that their next generation will take over, so for this reason its important to mention and celebrate an entrepreneur who’s kept to his word on this – not that anyone has ever doubted it.

Recently, I’ve also read some of the media coverage around succession at Infosys in particular, which despite being interesting to ponder, is in fact a sign of things to come. Mr Murthy and his band of founders will retire soon. Whilst they claim that Infosys will thrive without them, Kamath’s appointment is a litmus test on their faith in the company that they’ve built.

It’ll be worth keeping an eye on Infosys, that’s for sure.

Indian Budget 2011 – what’s going on?

It’s that time of year, again!

Finance Minister, Pranab Mukherjee met with Congress insiders to begin unveiling his thinking on this year’s Budget, which is expected later this month. His headaches include inflation, a current account deficit, high import duties, and importantly how best to increase government revenues.

So, before the big day, I’m asking all of you what to expect in this year’s Budget?

People keep on talking about India’s demographic dividend; will the septuagenarian Finance Minister understand what’s required to ensure that the future is prosperous for this massively important population bracket. A budget for the young, perhaps?

Will he use the opportunity to guarantee market reforms that enable foreign firms get a larger piece of the action? Will India Inc exert its influence to ensure home company advantage?

What policies is he going to put in place that will help India break the 10% GDP growth rate, that India desires? Education, Employability, Innovation, and Entrepreneurship are critical drivers to achieve this. What’s he thinking on these?

If you have any idea on the above, or on the forthcoming budget, leave your comments below.

Twitter journalism in India

Turn on your TV, open a broadsheet newspaper, tune in to a radio station, and you’ll inevitably find journalists passing stories off as originals when in fact they’re not. Much of India’s journalism, in my view, doesn’t stack up. it just isn’t good enough. Maybe its because of the massive explosion in the Indian media sector – where every journalist and organisation has to work even harder for stories that they in fact start passing off trivial stuff as being news-worthy.

All you have to look at is the huge dependence of Indian journos on Twitter. Over the past week since I’ve been on vacation in India, all the newspapers have written stories for their main sections based on 140 characters tweeted by x or y Indian celeb! I’m not saying that India is the only place it happens, as I also read stories in the UK that are sourced from Twitter, but I see a much larger number of these tweets written up as bigger articles in India.

Editors ought to realize that they risk strangling the goose that laid the golden egg if they don’t improve the standards of journalism. Twitter, and social media tools are valuable sources of information, but ultimately a call needs to be made as to whether a story on x celeb stating they’re no longer entertaining their followers on Twitter, or they’re endorsing a new skin whitening cream really needs to take up 300 words in the main section of a “quality” newspaper.

I’m a big fan of the Indian media sector. They’ve entertained, explained, exposed, and generally done a fab job over the years, but my recently concluded visit has stirred me enough to write this blog-post.

There’s nothing wrong with gossip and tittle-tattle, I enjoy it as much as the next person, but they do a great disservice by passing of such trivia as genuine news.

Obama teaches Britain how to organise a visit to India

Wow. What a visit this is working out to be for Obama. Fresh from his defeat in the mid-term polls, Obama arrived in India on his first visit and on day one announced 20 business deals worth over $10bn, which will create approx 53,000 new jobs in the US.

Contrast that with David Cameron’s first visit a couple of months ago. Anyone remember that?

My Tory friends criticised me for saying openly on the BBC that Cameron ought to follow through from his visit to the US, where he declared that Britain was the junior partner in the special relationship. In India, he might as well continue taking that line when he was going to be there a few weeks later.

As far as I am concerned, when a quarter of the world’s workforce is going to reside in India in the next 15 years, or when a country can claim to have more middle class consumers that the entire population of the US, it’s time has come. The fact that India & China will reclaim their place in global commerce is not a secret. It’s something that we need to get a grip with. In this respect, they’re going to dictate the terms, be the senior partners of any relationship.

Whilst my original point wasn’t meant to be political, I ask those who felt I was speaking an untruth or heaping shame on Cameron to reflect on the substance of Obama’s visit and then really tell me that our Prime Minister & Britain isn’t the junior partner.

Leave a comment on my blog. Let’s have an open discussion.

Where’s our Trade Minister Mr Cameron?

I agree with Iain Dale (click here)on the huge ommission by Cameron on appointing a city heavyweight to the vacant International Trade Ministers’ portfolio. Surely, this isn’t the right signal to send when you’re trying to develop a commerce based foreign policy. UKTI, whilst being ably steered by Andrew Cahn, could do with a vocal champion who undertakes the role with as much gusto as Lord Digby Jones, combined with the phenomenal practical experience that Mervyn Davies brought to the role.

In any case, if you’re interested, I’ve done or am doing the following media on Dave’s visit to the motherland:

BBC Radio 5 Live with John Piennar
Hindustan Times
BBC Radio Wales Breakfast Show
Indian Express
BBC Radio 5 Live with Gaby Logan
BBC Asian Network
Reuters
BBC World Service News
Al Jazeera English
BBC Radio 5 Wake Up To Money
BBC Breakfast Business News with Simon Jack
BBC Breakfast News with Sian Williams & Bill Turnbull
BBC News 24

Any new insights you can provide are welcome.

Thanks.

Indian IT should say it loud: “we’re Indian and we’re proud”

Threats from western economies like the US and the UK to enact legislation that protect their jobs are falling on deaf ears. The moment has passed and we’re too far down the road, so to do a u-turn would require a mammoth effort and defy logic – simply put, they’re hooked.

At least that’s the sentiment expressed by some of the IT titans that I interviewed for my newly published book that looks at the global achievements of India’s top 10 entrepreneurs. Of the top 10, N. R. Narayana Murthy, Chairman of Infosys Technologies; S. Ramadorai, Vice Chairman of TCS; and Shiv Nadar, Chairman of HCL Technologies speak frankly about where they’ve come from and what the future holds for their respective firms.

What I found spectacular was the manner in which each of them came to the fore. Shiv Nadar’s journey began in 1976 on a rooftop terrace, where he and his colleagues started HCL selling calculators – all at a time when India had a total of 250 computers! HCL began in the hardware space and later realised the need to move into software – ironic as India’s fame is based on the talent of its software engineers. His first breakthrough came courtesy of IBM, who were kicked out of India, leaving a void that Nadar’s HCL neatly capitalised on.

I describe Nadar as an opportunist, as he’s mastered the art of spotting trends to capitalise. In my view, his acquisition of a call centre in Belfast when the trade unions were kicking off demanding ‘British jobs for British people’ not only left critics dumbfounded but showed the vision which he had. Today, near-shoring is as popular as off-shoring, thanks to a trend popularised by Nadar.

Ramadorai’s strength lies in the simple fact that he knows how to scale up an organisation. Yes, he may be one of Ratan Tata’s trusted lieutenants, but his is a story about how Indian companies promote entrepreneurial thinking. Just cast your minds back to 1995, when TCS employed only 5000 people to today, where headcount stands at 120,000. Likewise with the sea change that Ram brought in, he also brought in a massive increase of revenues, which today sees them go toe to toe against the biggest and best in the industry and walk away with lucrative contracts, such as in the public sector which has long been dominated by a cosy club of vendors. Ramadorai disrupted the order of things, which he deserves credit for.

No book on Indian entrepreneurship would be complete without mention of Narayana Murthy of Infosys, who borrowed $250 from his wife to finance his equity in Infosys, Bangalore’s biggest and most known brand. Murthy explained that during their early days, they realised that it was tough to beat the blue-chip vendors of the West, on their terms in their territories, so he brought the competition to India, where he could compete in hiring the best talent by beating the Western majors in building the best work environments known to the industry at a cost that he could afford.

That he’s known as being the most ethical isn’t necessarily relevant for this article, but his behaviour at a time when the sector came under massive pressure following the Satyam scandal is worthy to note and is a pointer that Indian business leaders care about how they’re perceived globally.

The future of IT may rest on the shoulders of such giants, and for this reason it’s vital to not only know who they are but also know where they come from so we can get a better insight to where they’re headed.

Whilst in client meetings they may position themselves as being global companies, but there is no getting away from their Indian identity, something that should be embraced as opposed to hidden away. Rather than apeing Western business models, I’m certain they’re able to show an alternative way of delivering high-end solutions to a global client pool and by watching Murthy, Nadar, and Ramadorai, we may find the answers to some fundamental questions about the IT industry.

TATA Corus Job Losses – is this the Indian way?

In my book I comment on how in the run up to their acquisition of Corus, the TATA’s faced an absolute grilling from several quarters regarding their ambitions for the steelmaker, which today has announced job lay-offs for 1,700 staff in Teeside. Naturally, the unions were worried about the intentions of a firm that they’d probably never heard of. Sensing their discomfort, the firm put in place a programme of briefings in which their iconic CEO – Ratan Tata actually went and met with groups of people, including Parliamentarians, from the regions that Corus employed people.

At one such briefing, he made the point, which was well taken, that Indian firms don’t have it in their DNA to be vultures or become asset strippers. He looked them in the eye and said that not only were they buying Corus for sound strategic reasons but that he assured them that Corus would create more jobs, as he intended to take the firm forward. Sadly, not even he had predicted the global downturn and the circumstances behind this decision need to be presented so that no one jumps to any other conclusion than that the TATA’s tried everything to minimise losses, such as:

  • My sources tell me that the decision has been pending for over 8 months, and that the number of losses is smaller than what could’ve been the case.
  • The long term strategic partners, who pulled out, will be taken to court for failing to stick to their original commitments.
  • And finally, that there’s been an ongoing dialogue about the situation with all stakeholders for some time, so this comes as no surprise.

My reason for writing this blog is not to defend TATA, but to highlight that I wrote my book as a result of realising that the western markets need to know more about Indian firms who are increasingly making acquisitions in Europe & America, as a result of their improved understanding of thes histories and cultures of such people and firms, I hope they’ll be better armed to combat the negative headlines that often lead the news agenda as a result of my book India Inc. How India’s Top Ten Entrepreneurs are Winning Globally.

Is Noel Tata down & out of the running?

Not so long ago, the view from Bombay House – especially amongst those who’d been with the TATA group for any length of time – was that the company needed a Tata at the helm after Ratan Tata retires, they’d almost suggest that this is what makes their company so special, and it was such talk that inflated Noel Tata’s hopes of one day succeeding his mega successful relative.

For this reason, I wouldn’t be surprised if Noel was miffed at reading Ratan Tata’s interview in the WSJ today, in which the iconic CEO makes it clear that the company has initiated a global search for the hot seat, and further to this, he’d prefer someone in his 40s – which effectively disqualifies his half-brother from the race.

Ratan Tata makes some great points, such as 65% of its revenues are booked outside India, making them truly a global winner, and that increasingly, their employee base is diverse and international – take for example, the UK where they employ almost 50,000 people – which in turn suggests that the firm requires a top calibre professional CEO with tons of commercial experience who can build on Ratan Tata’s success.

With the TATA’s the key thing to remember is that they, ultimately, always do what’s right. Handing such a treasure to someone just because they happened to be related simply won’t wash in today’s age. That’s why I used to be surprised when old hands at Bombay House use to suggest that Noel had a chance at being No1.

But, as all TATA commentators will tell you, Noel’s strength is simply that he has an influence in what happens through his father in law’s shareholding in the firm. Pallonji Shapoorji Mistry, after all, is no ordinary man – he owns a 18% stake in the juggernaut that generates a revenue over $70bn. So, for this reason, and as much as I’d like a meritocracy to drive this decision, it may be the case that Noel is down today, but you’re warned not to count him out.

You can read the full article here: http://www.livemint.com/2009/11/18142605/Tata-scouts-the-globe-for-succ.html?pg=1