The woes of Air India

Reading that Praful Patel, Indian Minister for Civil Aviation, is visiting Manmohan Singh with a range of ideas that could turnaround India’s state airline, I am reminded of my few unique experiences on Air India which, no matter what Mr Patel proposes, will undoubtedly remain etched in my memory.

Having experienced great luxury travel with the likes of Jet and Virgin, especially of the sumptuous Virgin lounge in Heathrow, it remains a constant surprise that Air India’s lounge is just so, so shabby. To the point that the furniture has ciggy holes in it and everything looks greasy – including the samosas! Let’s not even mention the unbearable stained carpets, the over-weight and heavy handed flight attendants, or the sub-standard on-flight entertainment.

I agree with Praful Patel on the count that the issues with Air India are deeply systemic and go to the core. If they can’t get customer service right, then why expect a higher demand on their flights?

Not so long ago, a friend of mine – during a conversation of the excellent service I had received with Jet, quipped amusingly that she always flew business class in Air India to Mumbai, for the simple reason that “who else would let you put your kids down to sleep on the floor in front of your seat”.!!!!

What a great USP.

India Inc: …

I’ve got a small dilemma that I need your help in resolving. You may be aware that for the last two years or so, I’ve been writing a book on the emergence of Indian companies in international markets, and have profiled ten Indian CEOs / entrepreneurs / promoters such as Narayana Murthy, Baba Kalyani, Subhash Chandra, Malvinder Singh, Kishore Lulla etc. who have lead the charge to globalise their firms.

Well, I’ve now finished writing the book and can now focus on the presentational aspects of the project, of which, the most important being (at least for today) the title of the book. My original choice was: ‘India Inc: How India’s Top Ten Business Leaders are Winning Globally’. However, as a result of the economic downturn, is this title appropriate, given that the world has been turned on it’s head as a result of the banking crisis and subsequent global recession?

It would seem a little to extravagant to use the original title in the environment we’re currently in.

For this reason, I’m searching for something appropriate as a subtitle to ‘India Inc: xyz…’. Or is ‘India Inc.’ substantial enough?

Your ideas are welcome.

David Cameron meets Indian CEOs

I’d organised a meeting yesterday between David Cameron, Leader of the Opposition, and a client of ours called ‘The India Group’, which is an alliance of the European based CEOs of large Indian private sector firms. Not only did we meet someone who’s described as our next Prime Minister, he also made sure that William Hague, Shadow Foreign Minister, and Ken Clarke, Shadow Business Minister, both of whom are considered ‘heavyweights’ in the Conservative Party, and should retain their high profile portfolios if they form the next government, attended this meeting.

Cameron was relaxed despite having to respond to the Prime Minister’s Iraq Inquiry statement later in the day. He appeared knowledgable and personable and had, what seemed obvious to me, been briefed appropriately in advance on the key issues that may arise.

So, it’s no surprise that business immigration featured highly with the IT companies leading the charge on labour mobility within the UK in the context of TUPE legislation. He spoke about Ken Clarke leading a review on Whitehall red tape that will help form their policies in advance of the next general election.

On trade promotion in India, Cameron suggested that some of the Regional Development Agencies across England would be put on notice. He recognised that trade promotion in India may also need looking at and the India Group recommended that just as Indian SMEs seemed to be embracing opportunities in the UK, the Government really needed to push British SMEs to do more with India. Banks like ICICI had tried linking up with counterparts in the UK to provide trade finance for their clients interested in India, with not much success, which seems a shame given the scale of the opportunity.

Hague spoke about a better relationship on foreign policy, which all India watcher’s will agree about, especially as Miliband’s visit to India was seen as an unmitigated disaster. Hague spoke of their support for India and Japan for permanent seats on the UN Security Council, which we know China has a different view on.

The Conservative team were interested in the pace of market reforms the new Congress lead coalition would take, to which the India Group agreed that the Insurance sector would probably be the first to have FDI levels increased. What was interesting was that the CEO’s, all, were united in conveying that despite the shortcomings in some industry sectors, India was open for business. It just so happens that the two big sectors that the UK has particular competence in – financial services and retail – are the one’s that have yet to be liberalised. Fair point.

Closer to the hearts of some of those was the issue of personal taxation and non-dom, to which Cameron was quick off the blocks to suggest that had the government adopted the plans they’d suggested, those around the table would have the certainty they desired.

I’ll conclude with sharing how they started as it’s an important point. Cameron emphasised that both – the Labour Party & the Conservatives (a) didn’t really differ on issues concerning India – whether this was trade or foreign policy and (b) that both parties shared the view that Britain was a better place as an open globalised economy, one which market protectionism and restrictive practices were unwelcome.

The future of family owned businesses in India

The dominance of family owned businesses in India is well known. However, has what Malvinder Singh done with Ranbaxy shown us what’s to come in years ahead?

For those not watching, Malvinder Singh was the Chairman & CEO of Ranbaxy, India’s largest pharmaceuticals company, who decided that he’s had enough and stepped down.

Ranbaxy was bought by Malvinder’s grandfather, who saw the opportunity in the generics market of India for low cost drugs. Malvinder’s father took charge and grew the business to spectacular levels and took it to a global platform. Malvinder was initiated into the business when his father was diagnosed with cancer. He took on various minor roles in a short span and then emerged as the CEO.

During his apprenticeship, the role of leading Ranbaxy was instituted in a professional CEO – one who wasn’t a member of the family – and at that time, the general public saw this as a positive move and various commentators suggested that the future had arrived. Little did they realise that Malvinder would take charge and sweep aside the same professional management that they had put in place. In fact, Malvinder went that step further and argued that just because his family owned a majority stake didn’t mean he wasn’t “professional” or “qualified” to lead the firm.

Yes, he also brought success to the firm and vindicated his convinction of leading the firm to new heights – most notably, with the sale of his family stake to a Japanese firm for approx $5bn. He may have retained his position as CEO of the firm, but I suspect that after various issues related to the US drugs regulator and also their huge losses, he would’ve had no choice but to walk.

In one way, this seems to complete the story. With the sale of their stake, Malvinder hung in there and still talked of Ranbaxy as an Indian firm. With his exit, Ranbaxy can move on.

So, has Malvinder shown us the future of family owned businesses? Please post your comments.

Jaguar / Land Rover & Tata

I’m writing this post in the context of hearing on the news that Lord Mandelson has placed a call, this morning, to  Bombay House, the Tata HQ in India.

I was speaking with a senior government figure, who’s involved in this matter, two evenings ago at a Whitehall pub in which he began enquiring as to what the Tatas would do if the UK Government refused to lend them the £1bn bailout they’ve requested for Jaguar / Land Rover.

To say that the Tatas have no other options would be misleading, as it wasn’t so long ago that the media reported that they had deep pockets and more importantly the intent on making the new venture a success. Let’s also not forget that within the Tata Group, there are a couple of companies which can only be described as ‘cash cows’, such as TCS, the IT firm from which they can divert resources to the benefit of Jaguar / Land Rover.

However, what I found interesting was his take on the cultural differences between the parent and child. He suggested that the Tata’s weren’t used to a culture where their plans would be stress tested and scrutinised as, in their opinion, their track record, trust, and their brand should prove to be enough of a guarantee for the UK taxpayer.

I disagree with the suggestion that the Tatas are naive and culturally backward. The Tata’s have been in the UK for more than a century and employ almost 50,000 people here in some of the most intensive and unloved sectors of the economy. As a result of their experiences here, they would understand the nervousness of the Government and therefore not take it as an affront to their heritage if certain questions were asked. After all, they understand that government money, ultimately is raised through taxation – our money.

With that comes responsibility. The Tata’s understand that, all too well.