What India can learn from China - 4. Higher Education

Education, as we all know, is a fundamental driver of a society’s development. Both China and India, with massive populations, roughly spend the same % of GDP on education. But China’s economy is three times larger than India’s – so per capita China spends a lot more on education than India.

China is developing institutions of higher learning with a vengeance. And therein lies a lesson for India to learn.

In the good old days, IIM Ahmedabad was considered the best business school “east of the Suez” and one of the best in the world. The Asian Institute of management at Manila was the only real competitor and this was often derisively dismissed . And for years and years IIM A stayed still. Today, in the Financial Times listing of the top 100 business schools in the world, IIM A does not even feature. The eighth rated school in world is the Ceibs in Shanghai. In the Academic Ranking of Word Universities (across all disciplines), there is not a single Indian or Chinese university in the top 200. But in the top 300, there are 8 Chinese universities; there is still no Indian one – not even the IITs, who come much further down.

China’s institutions of higher learning are galloping ahead. In business, CEIBS & Jiao Tong in Shanghai, Guanghua and Tsinghua in Beijing, Nanjing university , Zhongshan in Guangzhou and a clutch of b-schools in Hong Kong are all world class now. A similar situation prevails in other fields of education.

India had a huge head start. Jawaharlal Nehru, the first prime minister of India had the vision to start world leading institutes of higher education in the 50s and 60s. The IITs, IIMs and IISc, were all started long ago – they, especially the IITs, have been the driver of the talent boom in India. But since then India has stayed still. The Indian School of Business is the only world class institution opened recently. Only recently have more IIMs and IITs been opened. Instead of exploding such institutions, India has been trying to being reservation (affirmative action for non Indian readers) into these institutions.

Even where expansion has taken place, India has confused meritocracy with misplaced perceptions of geographical “equity”. New IIMs are in Kozhikode, Lucknow and Indore – with all due respect to these towns, these are not the best of locations for a world class institute to develop.

China is rapidly growing its institutions of higher learning. It is openly wooing American universities to help set them up. There is a lot more of visiting foreign faculty who come to teach in China ; India instead exports its best teachers – the corridors of every American university are filled with professors of Indian origin.

India often mistakes the quality of its graduate output, for the quality of the educational institution. No doubt, some of the best minds in the world, pass out of Indian educational institutions. But whether it is because of the institutes , or despite them, is a question to be pondered upon.

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Five things China can learn from India - 3. Innovation

Innovation is not the greatest of strengths in China. China is disciplined, but that is a strength as well as a weakness. Innovation, and even entrepreneurship, is not on the same page as in India. That’s a difficult lesson for China to learn.

In the last post, I argued that Chinese are disciplined in their work. I said “In the BPO business that I was involved in, you could rely on the team in China not to deviate from the standard process”. That’s also a weakness.

The average Chinese employee is uncomfortable in an unstructured situation. “Tell us what to do and we’ll do it well” is a mindset that’s common. “You’re the boss, why are you asking us ?” is another phrase , which is often unsaid, but meant many times. Hierarchy counts for a lot here. When I ask colleagues to challenge the process, innovate, rationalize, argue, and fight, there’s fidgeting and discomfort. It doesn’t come naturally to them.

Indians, by nature, are an argumentative lot. Challenge comes naturally to them. Its difficult to keep a process straight – somebody is always tinkering with it, trying to change it, trying to tweak it. When I ask a bunch of colleagues to challenge the process, innovate, etc, they take to it with gusto. They would rather innovate, than do a set process properly ! The cauldron of India is chaotic, but it does promote innovation.

Without constant innovation and improvement, there’s only obsolescence down the road. Its not a sustainable model to let somebody else do the innovation and copy it effectively. To be able to compete effectively in the world, you have to be an innovative culture. The current set of competitive advantages that China has , will erode over time. New advantages will come only from innovation; not from conformity.

Its not difficult to see why this is so in China. Chinese , are by nature actually entrepreneurial. But in an organisational setting they lose that instinct. They have chosen a political and social system that is tilted much too much towards discipline and conformity. Dissent is not encouraged. Outside influences are moderated – witness the blocking of Wikipedia, Blogspot , YouTube, Wordpress, et al. Media and reporting is sterile. People are encouraged to look up to an authority for answers. This is not fertile ground for an innovative culture. China has chosen a certain to road, which has lots of advantages, but equally has some disadvantages.

As I observed before, this is a difficult lesson for China to learn. But learn it must, in due course. Sometimes the chaos and indiscipline in India can be an advantage.

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Five things India can learn from China - 3. Work Ethic

The word “follow up” is rarely used in China – at least by me. I would like to dreamily believe that there is no word for follow up in Mandarin (not true of course). The Chinese work hard, but with a difference – and therein lies a lesson for India to learn.

In the office, once the job is well understood and within the capability of the individual to perform, you can leave him alone. He needs little supervision. The job is done precisely as it needs to be done. No short cuts, no scrimping on the edges. Nobody needs to look over his shoulder. No lounging around over coffee, no extended lunch break, no going missing. In the BPO business that I was involved in, you could rely on the team in China not to deviate from the standard process. And you didn’t need to check on it.

At home, the maid does not bunk. If she’s not able to come , she tells a day before. If she’s to start work by 9.00, she comes at 8.55. If we call a plumber or an electrician, he comes at the appointed time. And finishes his job before he goes. You rarely have to phone twice.

Now this is not , of course, unique to China. In many countries in the west, you see a similar phenomenon – people are very professional. The difference in China is that people achieve this AND work incredibly hard. The hours that the average worker puts in China will be way above what it is in the west.

In India, too, many people work very hard. But “follow up” is ubiquitous. Nothing will be achieved without follow up, even in a white collar setting. More than 50% of my professional life has been spent “chasing”. Standing on somebody’s head and getting it done. I am willing to bet that there are far more “supervisors” in India than in China.

Why is this so ? One of the most heartening things about China, is that many people consider work “sacred”. They take pride in working hard – not grumble and do it because of having to earn a living. How many times have I thanked somebody for doing something and she has responded back surprised saying “Why are you thanking me ; It was my job” ! In China, until recently tipping was an unheard of phenomenon. Even now, its not very common, although foreigners have come to pollute this atmosphere. The worker feels he is doing his job, for which he is receiving a salary. So the tip is completely unwarranted ! When I was new and I offered a tip, very often the guy looked pained and returned whatever I gave him.

In India, amongst many people, work has lost its sacredness. Its considered OK to scrimp. Its OK to cut corners. Its OK to look for “easy money”. Its OK not to do it, until chased. Its OK to demand an entitlement, before doing the job. The Vishwakarma Puja has become a ritual and lost its true greatness. I know this is an unfair generalisation; many Indians are not like this. And not every Chinese is the opposite either. But there are far more Indians in this mould than Chinese.

So, my call to India, is to “reinstall work is worship”. Its an irony of sorts, that an Indian has to learn “worship” from a Chinese !

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What China can learn from India - 2. Go Global

Chinese are reluctantly going global. Indians are enthusiastically going around the world. And therein lies a lesson China can learn from India.

This is another counter intuitive lesson than I am proposing. After all Chinese have gone everywhere in the world. There’s a Chinatown in virtually every city. And yet, I say Chinese are reluctant globetrotters. In the past, Chinese migrated and travelled enthusiastically. I think they lost that globalizing spirit during the Cultural Revolution and haven’t still regained it. Today, they’d rather stay at home.

Indians on the other hand are going everywhere. Even the junior most Indian employee will jump at the chance if he is sent to any country in the world to work. Walk into any company anywhere and you are likely to see at least a few Indian nationals working there. This is a huge advantage for India. Many Indian professionals today have some experience of working in a different country. They have learnt what it takes to work globally. They assimilate, more easily, global working practices. They learn how to win globally.

In a class of MBA students, here in China, I asked, how many would like to go for a job or for higher studies in the US. Not a hand went up. If I asked the same question in an Indian business school, not a hand would stay down. There are many more Indians living and working in China than Chinese in India. In the companies that I have worked for, there have been 50 times more Indian expats working in various countries in the world than Chinese expats. In my own company now there are quite a few Indians, like myself, working in China. There’s not a single Chinese working in India.

Why is this so ? Command over English is only a minor reason – today’s Chinese professionals have a comfortable working knowledge of English. There is a deeper reason. Chinese professionals are less comfortable to go and work in a different culture. They are more comfortable working back home, and this is accentuated by a high demand for qualified people in China. The willingness to take a dare and experiment working in a completely different place is simply not as high. Hence my assertion – Chinese are reluctant globetrotters.

In the long run, this will prove to be a competitive disadvantage for China. You cannot lead the world economically, staying at home. The world will come to you, only up to a point. While the world wants to learn from China, Chinese have more to learn from the world.

China – the world is yours to conquer. But you have to go there first.

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What India can learn from China - 2. To get rich is glorious

In the spring of 1992, Deng Xiaoping visited Shenzhen and uttered 9 words that changed China. “To get rich is glorious, Poverty is not socialism”, he said. The rest is history.

Remember, where China was at the end of the Cultural Revolution and the Mao era. For Deng to say that is the most visionary thing that has happened in the world in the 20th century. Some 300 million people were yanked from abject poverty to a good standard of living in a very short period. Whatever may be his other faults, for this achievement alone, he is one of the greatest leaders of that century.

In China, business and economic activity is considered glorious. There is little backlash against industry. Agriculture and industry do not confront as much as in India. The migrant labour that has enabled China’s manufacturing miracle all came from agriculture, willingly. Businessmen are not generally seen in China as rogues . The mindset of the people in China is massively in favour of economic advancement. It is not glorious to be poor.

In India, poverty is glorified. Political leaders fall over themselves to be pro poor and anti rich. Even as a society, Indians tend to be apologetic about being rich and glorious about being poor. This is extremely hypocritical; as a nation Indians are as money minded as the rest of the world, but somehow its not OK to be so overtly. Consequently industry is seen with suspicion. Much of the economic policy is therefore warped.

In China, the poor are given opportunities to get rich. In India, the poor are subsidised to remain poor. In China, policies are pro industry. In India, policies are allegedly pro poor. In China, they create wealth before they think of redistribution. In India, they think of redistribution before they create wealth. That’s partly why China runs a surplus budget and India a deficit one. The average Indian feels happy when a rich man is pulled down. The average Chinese is happy when he joins in being a rich man.

So India, adopt a new mantra. I suggest all Indians recite this every day – To get rich is glorious; poverty is not socialism.


PS : There is some doubt as to whether Deng Xiaoping actually said those words. The Chinese text (Deng did not speak English) is not widely known. But whether he actually said it or not, that’s what people believe and that’s what the government has acted on.

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Five things China can learn from India - 1.Cost competitiveness

This might come as a surprise, but China is not as cost competitive anymore. China has a cost problem it does not recognise.

I am alternating posts between what India can learn from China and what China can learn from India. This is the first of what China can learn.

China’s great strength is that it can produce at low cost and on scale. There are other countries which are cheaper eg Vietnam. But none could match the scale and deliver the cost advantages. That was so in the past. Not true anymore. India is cheaper and can match the scale.

What has happened in China is that costs have risen and risen in the eastern seaboard where much of the economic activity has happened. And the currency, the RMB has strengthened. The twin impact has been that China no longer enjoys the massive cost advantage it had.

Like for like, India is cheaper than China. Cost of living in a top city in India vs a top city in China. Cost of labour in a small town in India vs a small town in China and so on. India is 20% cheaper. Subsidies distort the picture on both sides, but if you strip them away, this is the truth. One of my biggest surprises when I came to China was that everything was more expensive than India. Daily necessities like milk, bread, vegetables, fruits. Utilities like power, water. Cost of transport. Everything. Even toys are more expensive in China than in India.

This might sound counter intuitive because even now India is flooded with cheap Chinese imports. I predict that soon, this will dry up. Costs have crept up and China has not waged war on costs – this is a little bit like boiling a frog slowly. With economic prosperity has come some complacency in China. Costs are not attacked in business with the same intensity as in India. Indian business attacks costs like a maniac – without that they wouldn’t survive. China can survive for now, because there is simply no other option for production on such scale in the world. But margins are being squeezed. When a competing nation with the same capacity for scale comes, China will lose, if it doesn’t wage war on costs. This is one reason why its not succeeding in services.

Why is India not taking advantage of this cost competitiveness. It is, but on a smaller scale. Infrastructure is the bottleneck, as my earlier post observed. The American importer would rather pay 2 cents more to be sure that he would get delivery on the committed date.

The best time to cut costs is when the going is good. China , beware. Now is the time to learn cost competitiveness from India.

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Five things India can learn from China - 1. Infrastructure

China’s wonderful infrastructure is an obvious lesson for India to learn. This is a no brainer , but it is so much of a competitive advantage for China, that even though its glaringly obvious, I am covering it as one of the things India must learn from China.

China is an infrastructural marvel. Everything is being built on a scale that will stagger the imagination. Cities, Railways, Airports, Roads, Ports, Power, Water supply – name it and China is building 20 years ahead. That’s the difference with even Europe or North America. China is building for the coming decades. The West is trying to catch up with last year’s requirement. India is trying to catch up with the last century.

Business is “physically” easy to do in China. Factories don’t have to build power plants – there is no market for generator sets here. In offices, the term UPS is unheard of. If you want to ship your container 17 days from now, you can – there is rarely port congestion and delay. In cities, public transport is superb. In Guangzhou, where I live – the metro must surely be one of the best in the world ; even Singapore’s seems dowdy by comparison ! You don’t need to bus your employees to work and they rarely spend more than a hour on the road. I can go on and on – you can get the drift.

In India, everything is physically difficult. Cities have become unlivable. Transport in cities is a nightmare. The less said about power, the better. Exporters can rarely meet shipping commitments. Our airports, even the newly built Bangalore and Hyderabad ones would be ashamed to stand in the company of the second tier cities in China – leave alone Beijing or Shanghai. End result is that this is all a huge “tax" on businesses in India.

It is a myth to say that China can do this because its not a democracy and that this is a cross India has to bear for its political system. I don’t believe it for one moment. Chinese leaders have understood how important building infrastructure is for their country. Indian leaders haven’t. Full stop. In China too, there are protests over land and displacement of people. But the government acts. They act decisively and firmly. They do not allow a minority with a grievance to block everything. Think about this – China is a large and diverse country. There is no way the government can consistently get away with high handedness, unless the majority of the population truly believes that what is being done is for the general good. That’s why they succeed here. They have demonstrated that building infrastructure leads to benefits for a lot of people and inconvenience to some. The benefits therefore win.

When there is a will, it can be done in India too. The Delhi metro is one such example. The telecom infrastructure is another. The best thing India can learn from China is that investment in infrastructure pays. India must stop justifying its woeful infrastructure in the name of democracy.

India’s siren call has to be “Build baby build” (with apologies to Sarah Palin). China has shown that if you build, prosperity will come.

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China and India

It had to happen. An Indian living in China, cannot but compare these two great countries. So I am going to post for the next 10 days “Five things India can learn from China” and “Five things China can learn from India”. Purely in a business context.

It has to come with lots of statutory warnings. While I know India very well, I can hardly claim to know China. I’ve worked only in one city Guangzhou – China is as diverse as India and you just can’t generalize from a single place. And in any case all generalisations are suspect. I haven’t travelled well enough in China to even reasonably understand this fascinating country. But still, this blog is a personal perspective and I could be as much right as wrong ! So I’m plunging on.

I don’t mean to rub either my Chinese friends or my Indian friends, the wrong way. Take it for what it is – my perspective and view. And feel free to disagree !

I start tomorrow with the first of what India can learn from China.

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The Railway Minister

Only in politics, and especially in India, are competence and performance irrelevant words.

I am reacting to the sacking of Laloo Prasad Yadav as the Railway Minister of India . He was, without doubt, one of the most competent ministers of the last five years. He was probably the best Railway Minister India has ever had.

Indian Railways is one of the most complex business organisations to run. It is the largest commercial employer in the world. Its scale is incredible. It carries a staggering number of people each day. Its historically been beset with problems with various Railway Ministers treating it as a gravy train (pun intended). It has suffered from chronic underinvestment. It has suffered from gross overmanning where its not needed and scarcity of talent where it is desperately wanted. It was making a significant loss.

Into this organisation , five years ago, stepped in Laloo. The rest is history. He seemed buffoon like and expectations were low. Instead he astounded the world by turning Indian Railways into a star. The story is too well known to be repeated. Sure he didn’t do it alone ; many thousands of railwaymen did it together. But, to the leader should justifiably go the credit. He became a much sought after speaker in universities to share the amazing success story.

And the reward for this success ? He’s been sacked. Yeah OK – it wasn’t because of his performance but because he walked away from the Congress alliance before the elections. But still, shouldn’t performance count ? To hell with political affiliations. The best man in the country to run the Railways is undoubtedly Laloo. Period. When will India have the courage to place merit and efficiency above all other considerations ?

Put the best man in the job. And see what happens to the country.

In, now, walks Mamata Banerjee. I can hear groans. But there were similar groans when Laloo took office five years ago. He taught us not to judge by outward appearances or first impressions. Maybe Mamata can surprise too.

But somehow, I find that difficult to believe. Time will tell. Meanwhile three cheers to Laloo Prasad Yadav.

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The stock market is an ass

For the last three days, I have been watching the Indian stock market with utter amazement. On Friday, the BSE Sensex closed at 12173 . On Tuesday, it closed at 14302. A full 17% increase in two days. You would have made a killing if you bought on Friday and sold on Tuesday.

Nothing has changed in India except that the Congress won an unexpectedly comfortable victory in the general elections. On “sentiment” , paper wealth of Rs 350,000 crores (US$ 75 bn) has been created in two days. This is pure nonsense.

Unfortunately, the stock market gets a disproportionate share of public interest. And where the media and public watch, politicians follow. So economic policy starts to be dictated by the mayhem in the stock market. The stock market is NOT the, or even the most important, barometer of the economy. Its just one of the many markets that exist.

In the long run, the stock market as close to a perfect market as humans have ever invented. But the operational word is “long term”. In the short term its an ass.

90% of trading in a stock market is speculation. Maybe even more. These are punters trying to make a quick buck every day. You know that utter madness has crept in when you see Madras maamis in 9 yards sarees staring at a screen and day trading.

Politicians and businessmen should ignore the stock market and concentrate on real performance. Forget having the ticker on all the time in your office. Watch your sales. Watch your profits. Or if you are in the government, watch growth, public debt, investments. Ignore the clamour when the stock market falls (notice that there is no clamour when it rises insanely).

It’s a free world. Let the punters lose their shirts, or their sarees. Real people – investors, businessmen, government – just watch it once a year. The other 364 days, focus on performance. You may be pleasantly surprised that, that on the 365th day, when you notice the index , it has hit the roof.

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Women in Indian business

Nasscom in conjunction with Mercer Consulting has published a report on Gender Inclusivity in India. According to press reports on this study, India has more working women than any other country in the world. 30% -35% of the overall 400 million workforce is women.

Nasscom sites (www.nasscom.org) has a link to the report. Click (http://economictimes.indiatimes.com/articleshowpics/4524928.cms) for a press report on the study. There are some blithe conclusions that the IT and BPO industry are responsible for the high proportion of women in the workforce in some way.

I haven’t read the original report (I am not paying $60 for this), but I am reacting to the press reports.

Balderdash. Indian corporate world is a male chauvinist pig. Period.

I’ve worked in a number of places. Nowhere have I seen a more women unfriendly business environment than in India, although things are changing

* Any employee is considered worth his salt only if he slogs like a maniac. Its often said that the office begins only after closing time. Men are stupid enough to be willing to slog meaninglessly. Women have more sense and balance. So they aren’t “good workers”

* Career breaks are considered sacrilege in India. You are expected to commence work when you are out of the cradle and toil ceaselessly at the office till your grave beckons. When the child comes, women are forced to step off – and its difficult to get in again

* Working part time or from home is considered “not working”. How is a woman with a child then expected to work, especially since our precious husband believes that lifting a finger to raise a child is beneath his manhood.

* You are expected to be mobile across the country, and increasingly the world. So, if a husband gets moved to another place, guess what happens to the wife ?

* The working environment is many corporates is all aggro. Testosterone flows like water. Either a woman has to inject testosterone into herself or else sit in the background.

Sure this is a one sided rant and I am exaggerating to make a point. But I could not believe the report of this study. I simply cannot believe that India is anywhere near being a women friendly workplace – it cannot be the largest employer of women by a long stretch even including agricultural labour, construction workers etc.

And the IT/BPO industry is no saint. Yes, its better than other sectors, but its nowhere near world class in employing women. I was in a BPO in India. Try as we might, the proportion of women did not cross 30%. I then was in a BPO in China. The proportion of men did not cross 30%.

By the way, the press report is telling in a way. The words are about India. The photos are all Chinese !

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Communicating with fellow bloggers

Well, my "tunnel" is dark, and I really can't see very well, so I'm using this post to communicate with my fellow bloggers as there is simply no other way.

I can post on my blog, but can't add pictures. No control over formatting and I can't edit. Can't comment. But I can post, which is something.

I can read all your blogs, for the moment. When you don't have access to a blog, is when you realise how important and beautiful they are - so my fellow bloggers, if I haven't said nice things lately, I am saying them now - you are wonderful.

I can't leave a comment on anybody's blog, except Preeti's. Why Preeti alone , I have no clue , but that's how it is. So here are some generalised comments

Aparna - You must be banned from blogging. Look at your last two posts - on Appa and the guest post from Chotu. Big lumps in the throat - if you write one more like this, I won't have a throat at all. Worth all this nonsensical tunnelling just to reach your blog. Very very nice.

Rads - Are you also in China and blocked ? No posts ?? Ha Ha !

Blogueur - Lovely new look to your blog and loved your last post on neighbours. My own neighbours are all Chinese and I still am hopeless in learning the language. So we smile a lot - they are very sweet and its amazing how much communicating you can do with smiles.

Adesh - Thanks for all the help. You are the best Bloggers' friend in the blogosphere. That's an award to you ! I want to add "outrageously priced tickets to every sporting contest ; especially if Xie Xingfang is playing" to your list in the share of wallet post.

Mark, Hang, Jonna - My fellow bloggers in the Middle Kingdom. What else can I say except to add some tears of frustration, shakes of the fist and general ranting. Great to see you have all found your own tunnels.

Dada - Thanks for all your kind words of encouragement. No they can't "chop suey" me. I am too thin and they want something more beefy.

Preeti - Yes Ma'am. Thou ordered and we hear and obey. Will leave the comment on your site. Can you tell me the secret of how you alone seem to have charmed the pants off the stern faced censors here ? Whisper in my ear please....

I'll keep reading all your blogs, even if I can't comment.

"Normal" business posting from tomorrow (hopefully).

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Sneaking in !

You can't keep a determined blogger out. I stumbled on a way to "beat the system". Don't know how long it will work, but I'll enjoy it as long as it does. Its a little painful, but hey what the heck - its a lot better than getting completely blacked out. Posts may not look perfect, things might be out of synch (thanks to the sneaking I am doing), but at least its something.

If I go again missing for a while, it just means I have been caught and I have to find another way. But for the moment, I'm back.

Hooooorrrrraaaay !

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Blocked out

I woke up today to discover that Blogger has been blocked in China. I can’t read blogspot blogs or post in my own blog. Yuk !

This is how things are in China. Suddenly whole sites get blocked by “The Great Firewall of China”. Currently YouTube is blocked, WordPress is blocked and now Blogspot.

I won’t be able to post on my blog, until I find a way out – either shift my blog altogether or find a proxy. I hope to be back in action in a week to 10 days.

Unfortunately I can’t read your blogs too. This gets me even madder. So pardon my absence for a few days – I’ll come back for sure to your blogs.

I’m requesting my good friend Adesh to post this in my blog for me from India. Many thanks Adesh.

Sorry. Will be back in a while.

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Are you smarter than a 5th grader?

There’s a US TV reality show called “Are you smarter than a 5th grader ?” In this game, adult contestants make a fool of themselves trying to answer questions from 1st to 5th grade in schools. They mostly fail and prove publicly that they are not smarter than a 5th grader.

I am concluding my current posts on education, with a non business post on something that’s intrigued me.

Two questions come to mind. First an obvious one and the second, perhaps a not so obvious one. Firstly the obvious one - Why does an adult willingly subject himself to shame by being proved on TV to be less smarter than a 5th grader ?

But the question that is more intriguing for me is – Why are 5th graders being taught stuff that honest adult Americans don’t know and  have no use for in real life .

I am amazed at the sort of stuff taught in schools. I think the educational system has completely missed the revolution in our lives that the internet has caused and is still sticking with an outdated concept of education.

In the good old days, information could never be easily found. It had to therefore be learnt and memorized. Hence learning of factual information was the most important objective of education. A student who knew his facts was much better off than one who didn’t. Therefore cram as much of information as possible into a student’s head.

Today, factual information is easily accessible. You don’t need to know it; you only need to know how to find it. One word is all you need to know. Google. Therefore the objective of education must shift to teaching morals, values, how to access information, how to use information and how to make judgments and decisions and how to communicate. For example learning languages is much more important now than it was years ago. In today’s world it’s a huge advantage if you are fluent in the three most important languages in the world – English, Spanish and Mandarin.

Sure a fair degree of factual information is required to be learnt (and crammed), but a lot less than what is currently done.

My daughter is a third grader. Here are some of the stuff she is learning

• The difference between a farthingale and a bumroll worn in the early Tudor period (3rd grade history)
• Explain scientifically why a chapatti puffs up (1st grade science)
• Where is Bubastis (3rd grade geography).
• What is a punctuation pyramid (3rd grade English)
• Explain the difference between trapezium and rhombus (kingergarten maths believe it or not)

If you scored 0 out of 5, welcome to the club !

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What ails XXX ?

The day I walked into my business school , all those years ago, I heard this term - "What ails XXX ?- substitute name of business school for XXX. Many years on, I still hear this rhetorical question. From many business schools. Its nice that they do ask this question, but often they stop at that and simply gaze at their own navel.

Imagine an organisation, where you have virtually irrelevant performance targets, no serious performance evaluation, you are unlikely to be sacked, where you bristle against authority and do your own thing, where compensation levels are low, but have little relationship to performance and where demand often exceeds supply, so you don't have to worry about capacity utilisation. That closely approximates a business school - I am being deliberately harsh to make a point. Business schools rarely practice what they preach. That's probably why they hate to take anybody from the industry inside.

Business schools must be run like a corporate - with all its faults, a corporate is still the best form of an organisation we have invented. Hire the best talent. Pay market rates but linked to performance. Sack professors if they are inefficient (what a revolutionary thought). Set sensible performance targets (not number of unreadable papers that are published). Tailor the product to what industry needs; not what you would like to give . Have some form of an organisation structure and accountability - not anarchy in the name of academic freedom.

The CEO of a business school must be from industry, not academia. As I posted before, professors have to go back to industry once in 10 years - not doing consulting, but doing an actual job, where if you fail, you get sacked. At least 10% of professors must NOT have a Phd - ie they must not be career academic types.

If I were to say any of these things in the hallowed portals of a business school, I would get pelted with rotten eggs. But that's the beauty of a blog - I can only be figuratively pelted; not literally.

So in answer to What ails XXX ?, I say Nothing. Just practice what you preach.

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Teaching - A "noble" profession nobody wants to get into

A society can often be judged by the professions it eulogises. What are the professions that are aspirational ? What do people want to be ?

Its a sad fact of our times that in no nation would the teacher figure at the top of the list. Very few people really want to be teachers anymore. If the best minds are not working at the schools, colleges and universities, how is a knowledge society like ours going to be sustained.

This is true of business education as well, With all respect to my academic friends, the best minds in the business world are not at the business schools.

Why ?

The obvious answer is that there is little money in academic life. It is a well known fact that an outstanding professor with a lifetime of experience would earn less than a green horn passing out of business school on his first day at the job. So why would anybody, other than those laudable souls who do it out of passion, ever aspire to an academic career.

But its not only money. Business schools often do not practice what they preach. The working environment in the business school is not great. Its a culture that breeds "satisfactory under performance". The best minds are not challenged to work there. More of this tomorrow.

Business schools also suffer from the extreme stratification that happens in say the sports field. The stars are feted like gods. In business schools the top 5% are world renowned - they get the plum consultancies, sit on Boards of companies, get invited to speak everywhere and are treated like rock stars. The balance 95% see nothing. This is not so stark in the business world. 50% may be toilers, but the other 50% can reach places.

But, at the end, its the value society places on the teaching profession. In many ways their position is similar to the nursing profession. If you ask somebody to rank the most "noble" of professions , teaching and nursing would come at the top and a businessman would appear close to the bottom. And yet, do we want to become teachers and nurses. No.

Yes, it does boil down to money. We must pay our teachers 5 or 10 times more. Some of the best minds in the world must get into academics. Its an investment societies have to make.

With apologies to the Duke of Wellington, "The battles of business are won on the corridors of Harvard". Little wonder that the business world is where it is today !

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Commercial Break

Taking a commercial break from the sequence of posting on Business Education, to write on the Sudirman Cup going on in Guangzhou currently. I am a sports nut, and for those who are unfamiliar with badminton as a sport, the Sudirman Cup is the World Team Championship. China wins this all the time, but Indonesia, Denmark or Korea can give them a fight. India used to be in the top league not so long ago, but its now in Group III, aiming to get promoted to Group II.

I've been going to see the matches live. Badminton live is something different altogether - TV is nothing like the real thing. China is simply awesome. My only grouse against them is that they have benched the beautiful Xie Xingfang and are playing Wang Yihuan in the women's singles. Xie Xingfang is a local Guangzhou girl - Beijing Games silver medalist no less. How could they do this ?

(China's first couple of Badminton - Lin Dan and Xie Xingfang)

India will win Group III easily. Indian badminton is actually on a high now. In Saina Nehwal, we have a world class player - she'll trouble even the Chinese. Among the men, Chetan Anand has been in good form rising to No 12 in the world. Rupesh Kumar, partnering Sanave Thomas has been outstanding in the doubles. Diju and Jwala Gutta are solid in the mixed doubles. India will comfortably win Group III and will go to Group II in the next edition. I'm going and cheering.

(Saina Nehwal)

(Chetan Anand)

Talking of cheering, its an eerie feeling. The stadium is three quarter empty unless China plays. I am the only Indian around. Even our Indian players couldn't believe it when they saw a lone Indian cheering. There's something special about cheering for your country a thousand miles away from home. Its a very nice feeling, especially as India is winning nicely !

Tomorrow is a big day. Indonesia take on China. The very thought of that match is making me salivate. At the level they play at, they transcend sport and it becomes poetry. Sitting in the crowd with the Chinese spectators yelling their head off , I'm going to support Indonesia. Indonesia is the spiritual home of badminton. That is, unless the Chinese decide to field Xie Xingfang.

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Academicians vs Managers

Management is one of the most applied of all sciences. Its not a theoretical science. You would therefore expect that in this field there is the closest of cooperation between academicians and practitioners. Nothing could be farther from the truth. The two mutually loath each other although outwardly its all bonhomie

Managers think academicians are outdated, theoretical and of no use in the "real" world. They think what is taught at business schools is of little relevance to corporate life , even though they may have been from a business school themselves.

Academicians see practitioners as non cooperative, contributing little to the profession and certainly irrelevant to the academic world, except for allowing professors to write cases. They see them as something of an intellectual vacuum.

Interaction between the two is therefore largely restricted. Top notch professors sit on company Boards and do consulting, but the vast majority of academicians have retreated into their academic world and interact little with the business world. Similarly a few business leaders and some committed souls visit universities and give guest lectures, or cooperate in an academic endeavour, but the vast majority of managers would react with horror at the thought of spending a week in close proximity to a professor.

End result is that both lose.

The academic research that is done is often trivia and many publications are unreadable. Pick any PhD thesis and the average manager would probably not even understand the title. Does "Perceived Organizational Support and Organizational Commitment: The Mediational Influence of Psychological Well-Being " excite you to get up at 4 AM in the morning and read; this is an actual PhD title for example.

Managers have virtually gone obsolete and have forgotten management theory (read my last post). So you get Boards that don't understand credit default swaps leading the whole world down the tube.

In my view, no Professor should be allowed to continue in his role, if every 10 years, he hasn't worked one year in business. Actual work. Not consulting. Where he feels the responsibility in the pit of his stomach and the shit hits the ceiling every alternate day. And no manager must be allowed to keep his business degree if he hasn't gone back to university every 10 years and requalified.

The world of management is ill served by this tiff between academicians and practitioners. Just to prove this point, both sides, if they read it, will tell me that this piece is utter rubbish.

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The Obsolete Manager

How obsolete are we ? If I were to judge myself, pretty obsolete.

This week I am posting on Education, as the theme. Starting with an outrageous statement - the manager is obsolete the minute he steps out of business school (or whatever school) and then it is a long road to utter obsolescence until he retires.

Management science is a pretty dynamic science. The body of knowledge is expanding at a terrific pace and we rarely keep up with it. Company training programmes are meant to missed, citing "extremely busy" as an excuse. How many times have we gone back to university to relearn or do a refresher programme - none , unless your company has sponsored you for one of the Advanced Management Programs (note to my company - are you listening ? Harvard would be nice !)

Take for example the field of finance and accounting. A few years ago, in my company, we played a game - Who wants to be a Millionaire (or Kaun Banega Crorepati to my Indian friends) on basic IFRS principles. We played this amongst the top accountants in the company from many countries. Not one guy won any money. Everybody flunked. We were that ignorant.

Try this in your company. Walk up to your CFO . Do it for a dare. Ask him to price a plain vanilla option, on anything - say your home currency against the US$. Watch him wriggle and squirm.

Experience is a great teacher ; no doubt. But mere experience is not enough. "Back to school", say every 10 years, is a great way of getting abreast and relearning everything we have forgotten.

And reading. Reading a lot. Airport business books don't count. Real stuff. How many of us managers, have read an issue of the Harvard Business Review during the last one year ?

So my recipe to guard against obsolescence (which I haven't thus far practiced, except for the last one), is

- Go and do a formal course in a B-school every 7 or 8 years

- Read the leading business journals of the world (Financial Times and Wall Street Journal don't count)

- Lecture occasionally at Universities.

- Write a business blog ! In order to write sensibly, you have to read something, right ?

I speculated on what grades I would get if I went back to Business School and wrote the exam now. Here's my candid assessment

Business Strategy - A

Quantitative Methods - F

Finance - F

Accounting - C

Marketing - C

Operations Management - F

Economics - F

Pathetic.

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Spreading the Cheer

Wow , what a beginning to the day. I was declared as a Blogger Friend by Rads. And then by Aparna.

I am touched ladies.

Here's my list of Blogger friends. They are super bloggers themselves, but above all, they're friends , whom I didn't know before, may have never met, got to know mainly through blogging and who are the epitome of kindness.


In no particular order

Hang - my Chinese blogger friend who writes a nice English blog and is hugely open minded.

Preeti - she doles out the "bubblegums" and "candies" in bagfuls, that I am now addicted to, along with a few hundred others

Reva - the best sense of humour in blogosphere

Jonna - the Swede who writes a superb blog on China from Suzhou

Mark - the Yank, ditto, ditto from Xian

Richard - the most revered laowai blogger from Beijing

Stephanie - Ok Kanmuri, as she prefers, who writes the best researched posts that bring Japan to life even if you haven't been there

le embrouille blogueur - that's a joke ; he's most "un embrouille"; writes beautifully, and has the kindest comments

Adesh - whom everybody will declare as a friend, the most supportive blogger, very well read, passionate about what he writes, and does so much for fellow bloggers

Sandip - the first blogger I knew, who's been blogging for years and continues to thrill, although he's getting lazy.

Chris - the Canadian, who reinforced that even today, in business, there can be a heart.

And then of course

Aparna - the most "touching" of bloggers , who can bring a lump in the throat with a few words

Rads - the most polite and caring of bloggers, who has a nice comment even in your most boring of posts, while her posts are uniformly first rate.

Thanks Aparna and Rads, once again, for your kindness.

And to all ye blogger friends - Yo Ho Ho and a bottle of rum

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Hail the Coder

Its the coder who has pulled India by its bootstraps and plonked it firmly on the world map. I know, she'll violently object to being called a coder - there are more politically correct, but boring terms available. With due apologies, let me sing an ode to the Indian coder.

The coder ranks right up there, as one of the hardest working classes in the world. She works her socks off. Day and night. Especially night ; which other person, who has a graduate degree would willingly work in the middle of the night, for years on end, because timezones dictate it that way. And she will do what it takes to get a job done or to meet a deadline, which others wouldn't even try.

She wasn't born into a privileged family. Her parents probably sacrificed a lot to get her educated. She studied hard and by her own efforts got a degree. And then post graduation. She let go of much of the fun in life to achieve this. She may be called a geek, but she can be proud of it.

At work, she has often travelled crazily. Never seen the inside of a plane before, and she's suddenly pitchforked into a 30 hour flight to the middle of nowhere in some country in the world. She copes with all the strangeness with grit and determination. Works even harder there. Sees snow for the first time and learns how to survive in minus 20 deg C. Endures abominable food (for she's a vegetarian), but does not complain. And delivers admirably. There is no other group, anywhere in the world, who's willing to travel like this for a job - literally to any country in the world, anywhere. And subsist on a measly daily allowance.

And slowly, but surely, she's proved herself as the best in the world. India's IT entrepreneurs have been rightly feted. But it is the humble coder who made all this possible.

The world, over the last 20 years has been transformed by IT. Many people, in many parts of the world had a lot to do with this, of course. But one of the most important components of this revolution, if not THE most important component, has been, and will be, the Indian coder.

Above all, I admire the coder for raising my stature as an Indian, in the world. How many times, have I been told by complete strangers in all sorts of countries that "I must be intelligent because I am an Indian". There is a new respect in the eyes of others when I meet them, that wasn't there 15 years ago. It was the coder who made this happen - not the political leaders, not the media, not Bollywood, not the businessman; but the coder.

Hail the Indian coder.

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Hail the 21st century heroes

In all of history, there have been periods when groups of people have changed the world. Sometimes the soldier, sometimes the priest, sometimes the king, sometimes the philosopher, sometimes the writer.

In my view, two heroes have changed the world at the dawn of the 21st century. Unheralded they are, but they have changed the world nevertheless. China's migrant worker and India's coder. Today it's a salute to China's migrant worker.

There are lots of them. Some 200 million or so. They have built the skyscrapers, the roads, the airports and all the wonderful infrastructure that you see in China today. They make all those products that you and I, anywhere in the world, have been able to afford. They mine the coal that supplies all the power to the factories that churn out the goods that we all buy. They are the ones, who have made China, what it is today.

They come from the interior of China. They come to the eastern coast where much of the economic activity happens. They leave behind their farms and their families. They come alone to the strange big city. They live in packed dormitories near their work place. Theirs is a tough life. They live alone. They work hard. They send the money to their families back home.

They work really hard. Work long hours. And they're all not men. In fact many factories prefer women. So the women too have come from a far off land. Its often usual that the husband and wife are both migrant workers living in cities thousands of kilometres apart. The child (China has a one child policy) is left back home in the village, often with the grandparents.

Once a year, at Chinese new year time, comes their moment. They all head home. All 200 million of them. Its the greatest annual migration of humans ever. It happens every year . For a week, they get back to their families. To their child. To their parents. To their spouse. The week passes by very quickly. And its time for the reverse migration to start another year of toil.

These are the real heroes of China. China's boom is largely because of them. Much of the world's economic prosperity is owed to them.

Hail China's migrant worker.

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Change rules to win

I am delighted to present a guest post by Adesh Sidhu. Adesh runs his excellent blog Not being Sarkari. He is a "Customer Advocate, Apple fan, Desi and an avid reader". He writes passionately on customer service - his blog carries many excellent posts. Thanks Adesh for your post that follows

Big boys make rules. Big boys want to rule the world by the rules they have created. They have created rules, which are convenient to them, and these rules serve as entry barriers to new players.

For so long music industry worked on royalty and record labels were operating by the rules, which they have created. From music creation to marketing of music to enforcement of copyright, record labels handle everything. Singers and musicians were depended on record labels for their success. Record labels were the big boys and rules they created were suited to them. Customers had to pay whatever price record labels decided. If record has only one good song, customers also had to pay for 7 below par tracks.

Then came the digital downloads. Napster changed the rules of the game. They were small but agile. They did not have resources but they had ideas. They challenged the age-old business model of record labels. Customers lapped this idea of free downloads. Customers had the power to choose good songs over poor songs. Napster was David. They almost changed music industry.

But Goliath did not like it. They objected this, as they were clueless on how to play the game with rules changed. They got Napster banned. Napster started the revolution by giving music digitally and later on iTunes capitalized on this revolution. iTunes model was little different as they were charging from customers for music download and taken steps to reduce piracy. This time record labels decided to partner with iTunes. Record labels knew that if they have to stay in the game, they have to adopt new ways and means of doing music business.

Singers and musicians were dependant on record labels to launch them and promote their music. With the advent of social media, not-so-known but innovative singers and musicians started building communities of their fan clubs. They started releasing their music on Internet and their fans can download the music directly from sites. Record labels are eliminated and singers/musicians are communicating directly with their fans. David won again.

Lot of many times we decide not to compete because we do not have resources. We rarely think of competing with bigger players by changing the rules.


PS: - This article inspired this post.

In case link does not work, use the link in parenthesis. (http://www.newyorker.com/reporting/2009/05/11/090511fa_fact_gladwell?currentPage=all)

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Remembering ABN Amro

Remember ABN Amro. It was one of the largest European banks, operating in some 60 countries. This venerable institution had a history dating back to 1824.

In October of 2007, it was acquired by a consortium of Royal Bank of Scotland (RBS), Fortis and Banco Santander for a staggering price of $ 100 bn. By this time, the financial crisis had already started, although it was in its early stages. Still these three banks went ahead, paid a fortune and carved ABN Amro amongst themselves.

Just one and a half years later, look at the scenario

RBS needed huge bailouts from the British government to exist- its in effect nationalised. Its share price has plunged more than 80%. Its declared huge losses, in no small part due to huge writedowns of the ABN Amro acquisition.

Fortis has fared even worse. Its now completely taken over by the Dutch government. Its effectively dead.

Banco Santander is the only one standing , and perhaps smiling a bit. It took the Italian and Brazilian parts of ABN Amro and immediately on sold the Italian bank, leaving only the Brazilian business it wanted. Smart.

This is a plaintive post moaning about capitalism at its worst. A venerable institution was destroyed. The acquirers have virtually gone bust. The employees haven't benefited one inch from the deal - in fact they've got screwed too with big layoffs, although you could argue that they would been screwed anyway. The customers of ABN Amro haven't seen anything better. The taxpayer has landed up picking the tabs for the disastrous deal.

So who won ? The erstwhile shareholders of ABN Amro . They got a fantastic price. If the deal had not happened, their value would have plummetted in the financial crisis, as with every other bank. So what has in effect happened is a massive transfer of wealth from the shareholders of the RBS, Fortis and Santander to the shareholders of ABN Amro. Correction. actually a transfer of wealth from the tax payer to the shareholders of ABN Amro. Of $ 100 bn.

In the process a lot has been destroyed and zero economic good has been created.

This just can't be right.

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From Michigan to Guangdong

If your sales grew last month by 25% in the largest car market in the world (at the moment) ; if you were No 2 in the market behind a faltering market leader; if you had beaten the Japanese nicely; if your two most famous brands are household names and aspirational in the market; if your other American rivals are nowhere in sight; you should be over the moon - Right?

Wrong - for this company is GM China. And because of the troubles a continent away.

GM has got everything right in China. Its beaten the Japanese. Its beaten the other Americans hollow. Volkswagen is the leader because of historical reasons ; they came into the market very early. They once had a market share of 50% - which is now down to the teens.

Just pause for a moment. Worldwide the car industry is in doldrums with the bottom falling out of sales. And GM China announces that in March their sales grew by 25% over last year. Wow !

So here's a wild thought for GM. Get out of the US and move your headquarters to China. Become a "Chinese" company. In the country which is the largest car market in the world. In the country, which, without doubt, will be the fastest growing car market for some time. And in the country where you have a star subsidiary while the parent is in the geriatric ward.

Sure there are a host of issues. Local competition is heating up. You still can operate in China only through joint ventures. Profit margins are being squeezed. etc etc.

But the view from Guangdong is a lot better than the view from Michigan. Nǐ lái zhōngguó ma ?

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Cutomer Service is all about getting the boring bits right

Today's post is a guest post in Adesh Sidhu's blog - Not being Sarkari.

Adesh is an avid blogger and writes passionately about customer service. He is also an active member of the IndiBlogger forum.

Click here to read my guest post in his blog.

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TPOA

Business jargon is complex as it is. It is made even more unintelligible by meaningless acronyms. Think of how much drivel we spout every day in the office.

Yesterday, my daughter was telling me of the classes she had in her primary school. She said one of her classes was VCOP. For the life of me I could not understand what on earth it was. She didn't either ! I finally discovered that it was "Vocabulary, Connectives, Openers and Punctuation". Oh ! She was having an English class !

This reminded me of my first day at work, all those years ago. I had graduated from business school and was starry eyed and ready to take on the world . I was supposed to be a finance "cat". I walk in , into a leading company and was shown the management accounting template of the company which read like this

I gaped at it open mouthed. Here I was, reasonably intelligent, from a good business school and I couldn't understand a word. It was a most humbling experience.

We do this all the time. Any business document is totally unreadable by a layman. Its full of silly abbreviations.

In one of the companies I worked in, before you clinched a sale, you had to do a DRB, where you outlined the stage in SPADE, attached a CODEC, defended GOP in IFRS and non IFRS terms, got approval for a BAFO and finally signed a SLA ! Ha ha !!

Can we get plain and simple English back into business please.

The Pox on Acronyms - in case you were wondering what the title of this post meant.

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