Is Microsoft ready for the next surge?

A guest post from my dear blogger friend Adesh. Adesh writes an excellent blog and is a passionate advocate of customer service. Seeing my blog dry up because I'm traveling and not online, he very kindly offered this guest post - a gesture that has truly touched me. Adesh - I really owe you one. Here is his post.

There was a statement few days’ back which I got my attention today. Prominent person who has done extremely well in his field made it. However, the statement showed that they are trying to change things and trying to make sure his organization do not lose race to others in this cutthroat competitive world.

Statement came from Microsoft Chairman Bill Gates.

“It is a competitive business; it’s always been. There’s nothing really new about that. You can list our past competitors and those made for a lot of good news articles that Microsoft was on its last legs. We would not want to deny anyone the opportunity of denying those articles. Again and again and again.”

This statement does bring some kind of air of arrogance with it but at the same time makes it clear that Microsoft knows it cannot takes things lightly as competition is catching up with them fast.

Microsoft is struggling as its competitors are trying to change the rules of game and Microsoft has to play this new game according to rules established by its competitors.

Apple came out with blockbuster products like iPod and iPhone, which in turn also made people lapping up their Macs. Microsoft tried to counter them by launching Zune but it turned out to be a dud. Now Microsoft is trying hard to counter the attack posed by resurgent Apple. They are coming up with advertisements, which show that Apple laptops are costly than PC. But will this work; we have to wait to know the results.

Apple is not the only one who is threatening the dominance of Microsoft. Their other nemesis is Google. This Internet giant is putting its money on Internet based applications and challenging Microsoft’s business model, which is to have software and applications installed on PC. Only time will tell how robust Google’s new business model is but it surely has caught Microsoft off guard as it has agreed to give its Microsoft Office product free online.

With Yahoo! Search in Microsoft’s pocket, intentions of Microsoft are clear that it is ready for long haul. Good thing is that Bill Gates is not taking competition easy. Hopefully we will continue to see more innovation from company, which gave us Operating system and Office suite.

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Does anybody buy duty free anymore ?

Liquor, yes. Cigarettes, yes (those smokers still left). Perfumes, yes (to placate the lady). But who buys all the rest of the insanely priced goods that masquerade as duty free items in airports ?

In the good old days, flying was the prerogative of the rich, Shops at airports were built to cater to that lot who can afford all those outrageous prices. Hence the shops that sold designer clothes. Designer bags. Brand names that are unpronounceable by ordinary mortals. Prices starting from $500 plus.

Today's air traveller is a completely different animal. She's toting a backpack. It looks like airport shops haven't noticed. They are still peddling stuff that nobody buys. Changi airport doesn't need a Gucci showroom. It needs a Mustafa.

I am sitting at Suvarnabhumi airport typing this post. I can't see a single guy buying anything from those fancy shops that are all over this airport. Not clear how they are in business.

I am however in bliss. No proxies to navigate through my beloved Net Nanny. Can actually post direct on Blogger. Can even spellcheck. Can read posts without having to wait for a zillion minutes for the proxy to pipe me silly ads. Oh for the simple joys of life ....

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The Chinese magic in services ?

China, economically “conquered the world” by offering products at unbelievable prices. This led to the export boom that changed the face of the world over the last twenty years.

Manufacturers from every other country have scratched their head in bewilderment as to how the Chinese could sell at such prices. Many predicted that this was dumping and would soon collapse. It hasn’t for two decades. The prices continue to confound many.

Thus far, it was in products. In goods that you could touch and feel. Conventional wisdom was that China had no chance in services.

Think again. Bank of China, the world’s third largest bank is now offering mortgages in the UK that have undercut all the other lenders. The likes of HSBC and Barclays are left scratching their heads, much in the same way as their manufacturing brethren have been for the last so many years.

Maybe its just a flash in the pan. But experience says watch out for the Chinese. They have perfected the business model of huge scale and low margins. The financial sector has relatively fat margins. A disruptive player with a completely different business model and with utter disregard for “established norms of business” can change the industry in a few years.

The Chinese banks have a lot of advantages. They have access in their home market to massive retail savings at low costs. They know how to run businesses on low margins and achieve massive scale. Sure, they have lots of disadvantages too – you just need to visit a bank in China to experience it first hand ! But they are shrewd, learn fast, can adapt brilliantly and are not afraid to take on the world.

It will great to watch how they progress. As a consumer, you can only cheer loudly . The Chinese made many products affordable which otherwise you and I could not have bought. If they make the same thing happen in the services world – hurray !

In case you haven’t noticed, the top three banks in the world in terms of market capitalisation are Chinese.

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A moment in time for the grey haired generation

If you are a golfer, or a fan, or even a casual sports enthusiast, you could not, but have been riveted at the happenings in the British Open last weekend. Tom Watson, one of the all time greats in the game, and now 59, rolled back the years to force a playoff with Stuart Cink, and heartbreakingly lost. For a moving writeup on the most dramatic of British Opens, click here.

This has great relevance in business too, as its getting to be a young man’s world even there. Tom Peters has made one of his best ever posts on the relevance of Watson’s doings to the baby boomers – being a good American, Tom has related it to the greying generation in the US, but it has relevance to every 40+ in business.

Its a lovely post from the great man, and I offer it here, with no comment.

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Killer Roads

There’s an interesting story doing the rounds in China. A 74 year old man got so frustrated with drivers violating traffic rules that he stationed himself at a junction and started throwing bricks at cars that jumped the red lights. This story has led to an outpouring of support on the Internet – huge numbers of Chinese have supported what the man did.

I had posted before on road safety here. On this Saturday morning, when Typhoon Molave is raging outside and the wind is howling and rattling windows, the mood is one of how vulnerable man is. Hence this post again on taking road safety seriously.

India and China, lead the world on road deaths. The second most dangerous place in the world is the Indian road. The third most dangerous place in the world is the Chinese road. There are more deaths on the road than in the Iraq war. Than in Afghanistan. Than in Darfur. Than because of swine flu.

Why is it that perfectly reasonable people become monsters when they hit the road ? Refuse to wear seat belts. Refuse to wear a helmet . Drive like a maniac. I know that the male species often considers behaviour on the road as an expression of their manhood, but consider that if you are “Bobbitted”, there is not much use you can make of your machoism.

So a small call for sanity when you drive to work on Monday morning. Drive safely. You owe it to your near and loved ones.

And I am totally in support of the old man . He’s a hero.

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Pets only airline

Did you say that the airline industry is in doldrums ? Well, here’s a start up in the airline industry. A pets only airline. Where else, but in the US of A.

Pet Airways will only carry “pawsengers”. No humans please. Services include a boarding lounge, pre boarding walks, full service on board including meals, loo breaks and the full attention of a cabin crew.

Flights are sold out for the next two months.

Visit www.petairways.com if you are a pet and wish to travel

Airlines of the world, please note. Your industry is in fine fettle.

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Open the Internet at the office, or shut it out ?

What should be the “internet policy” in companies ? Not so easy a question to answer.

Companies have one of the following approaches

- Complete ban (would be very unusual these days)
- No internet on your desktop, but internet kiosks available
- Internet access for limited hours at the desktop
- Wide internet access, but personal stuff like e mail, blogging, youtube blocked)
- Complete free for all

What is “right” to do ?

Only one thing would be universally agreed – no porn. After that everything is fuzzy.

Arguments against a very open access are many. Firstly it costs hell of a lot. If you have 10000 employees in your office, the cost of providing internet access to everybody will be a fortune. Why should companies foot the bill for you doing your personal stuff in the office. At least some employees will goof off having fun online rather than doing what they are supposed to be doing. More serious is that companies face big law suits and possibly massive liabilities if some employee does crazy stuff online via the company’s network. Monitoring internet traffic raises all sorts of privacy issues. And if you dispassionately think about it, the number of people who really need unrestricted access to the internet to do their daily jobs is rather small.

Arguments for open access are equally many. Today’s workforce is inextricably linked to the internet. Blocking that is a prehistoric practice. And so what if an employee does some personal stuff during office time. Doesn’t he do office stuff in his personal time ? – take calls, answer emails fro home and so on. In today’s life, work and personal times are closely intertwined – the days of a 9 to 5 job are over. Liability on account of employee action exists even today – if he uses the phone to sexually harass somebody outside, its no different from using the internet.

So what is “right”. Obviously no easy answer.

My suggestion is triggered by a very interesting report from a 15 year old Morgan Stanley intern, on online habits of teenagers. It’s a cracking read – he claims, for example, that no teenager he knows uses Twitter for real. But one thing he said triggers my suggestion – he said teenagers don’t want to pay for anything.

So my suggested internet policy is – give the option to the employee if he wants unrestricted internet access or not. If he wants access, charge him 50% of the cost an ISP charges. And only ban porn or anything else illegal in law.

Everything else is upto him ! Including reading this blog !!

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Bye Bye Bengal, Hello France

The capital of militant and inflexible labour is France. The title that Bengal held in the 70s and 80s seems to have been taken over by France.

These are bad times everywhere in the world. France is not immune to the ill winds. Factory closures and job losses, are alas, everywhere. French workers have reacted to it, by contributing to a new word in the English language – "bossnapping”. Holding bosses hostage until their demands are met. What in India, is called ghereao.

Now there is a report of the workers at a failed auto supplier threatening to blow up the factory unless the supplier’s customers – Peugeot and Renault – pay € 30,000 to each worker. This is a rather unique demand. They aren’t asking their own employer, for they know that their employer does not have the money. They are asking their employer’s customers !

Losing jobs is one of the most demeaning things that can happen to anyone. The anger is understandable. But the reaction will harm France for a generation to come. That’s what happened to Bengal. Bengal has become associated with “difficult labour” because of what happened in the 70s and 80s. Its no longer true of course – the Bengali worker of today is as hardworking, committed, and non militant as any other , if not more. In the service industry today, Calcutta is a very attractive destination – wage levels are a tad lower, commitment is high and attrition rates are amongst the lowest. And yet the image of “difficult labour” has stayed, however unfair it may be. And it won’t go away that easily for a generation or more. Bengal, the pride of India, now lags behind economically.

This is the problem for France. However huge a country it may be, it cannot stand in isolation. It needs the rest of the world to come, invest, create jobs, etc etc. But that won’t happen if the French worker is considered synonymous with laziness and militancy. This is absolutely untrue. But the image is becoming one of that. And images, unfortunately, matter.

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Can it be business as usual ?

Goldman Sachs, is reporting its quarterly results tomorrow (Tuesday). There is rampant speculation that they will report “blowout profits” – something in excess of $2 bn in the quarter. Remember, not so long ago, they received money from the government to stay afloat and they repaid it back recently. They were also a beneficiary of the bailout of AIG – they had significant dues from AIG which would have all been a write off, but for the government bailout of AIG and them paying their creditors like Goldman Sachs.

Along with the speculation on results, there is the inevitable speculation on bonuses. Analysts are falling over themselves in predicting the size of the Goldman bonus pool.

There is no doubt that Goldman Sachs made all this money by taking significant risks and managing them better. Everybody else on Wall Street envies them. Many hate them for their success.

In some ways Goldman Sachs are in no man’s land. If they report poor results, the markets will kill them (remember their shares have risen by 68% this year). If they report fantastic results, surely the government, the public and everybody else is going to wonder, how is it possible to make huge profits just months after virtual meltdown.

To me, this is a signal that “business as usual” has reappeared far too soon. After what all has happened, it just cannot be allowed to be so. Where Goldman Sachs goes, surely others will follow. There will be increasing clamour for everybody to lay their hands off and to let them carry on as before.

If Goldman Sachs does indeed report the expected “blowout results” its an urgent wake up call for governments around the world to focus on how this industry will be run – what regulation, what structures, what they will be allowed to do and what they will not be allowed to do.

One thing is certain. The world cannot afford to let them carry on “business as usual”.

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California is not the Golden State

Amazing things have been happening in California, economically speaking. You have to rub your eyes in disbelief at what is happening in supposedly the region with the most brilliant people in the world.

I had posted about the mess that California as a state is in here. Usually after a lot of brinksmanship, California does pass a budget before the fiscal year begins and life somehow carries on. Unfortunately this year, even the brinksmanship failed. The budget is not passed and technically the government should have shut down. But to keep things going somehow, California just issued its own currency.

These are called IOUs. They are being issued to all and sundry in California, including people receiving tax credits. Now Californians, and other Americans being as smart as they are, saw an opportunity to trade in these IOUs. The SEC quickly stepped in and declared that non registered traders would be in contravention of federal law. Banks in the state have compounded the mess by refusing to accept these IOUs – they will be arm twisted in due course to accept them – after all what would people left holding these IOUs otherwise do ?

We are seeing the birth of a new currency. Now where California goes, other states will surely follow. Can you imagine what a danger a currency is in the hands of California’s politicians. What a mess.

What California needs is an “economic dictator”. Who will ruthlessly make the hard decisions and get some sanity back into its public finances.

Margaret Thatcher for Governor of California !!

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The future of flying

Ryan Air is contemplating introducing “standing” on flights. Wow. Apparently they now also charge you to go to the loo mid flight. So what is the future of flying ? Here are some suggestions

- They should all do an indepth study of the Bombay trains as the best example of maximizing passengers per cu ft of available space. They can transform flying by replicating the Bombay train model.

- They can have two classes of standing on flights. In first class you are squashed against your neighbour, but can stand straight. In second class you are squashed but your body has to be bent at least in three places to accommodate more people. There will also be a material difference in body odour – a fact that can be advertised.

- Travelling on the roof of the plane will also be allowed (half ticket). It’s much safer anyway than the roof of the train. However the plane will have a fly a little lower to avoid those at the top, who are “catching the breeze”, from being frozen to death.

- Planes will no longer descend at airports. Instead they’ll sort of go slow over the target area and passengers can jump off. If you are incredulous reading this, go to at Churchgate station in Bombay at about 6.00 PM in the evening.

- Boarding process can be entirely dispensed with – Kreegah Bundolo and charge. Boarding will be completed in 1 minute flat. If you are again incredulous, go to Churchgate station…etc etc. Turnaround times for planes will come down to 2 minutes.

- You can dispense will all cleaners. Cleaning ? What’s that ?

- Baggage handling will become much easier. People will stop carrying baggage once they experience one flight.

Here are also some suggestions of how airlines can enhance revenue

- Ryanair’s idea of charging to go to the loo is brilliant. I also suggest that they measure the time you spend in the loo and accordingly have a graded scale of charges

- Airlines can stop pressurizing the plane and then charge for oxygen masks

- They can weigh the passengers at the time of check in and have fares based on weight

- Why not dispense with cushions on seats altogether and simply have wooden planks

- Why not allow people to sit inside the luggage racks as well ? This is fairly common in other modes of travel

- Charge passengers for the privilege of being security frisked (premium charge to be frisked by a pretty girl)

More suggestions welcome.

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IT Industry - Stop begging for favours

One of the provisions of the Indian budget presented a couple of days back is to extend the income tax holiday to IT companies This is an annual ritual. The STPI scheme under which this tax holiday is enjoyed was supposed to expire sometime ago. Every year the industry clamours for its continuance. And the government accedes.

The Indian IT industry does not pay the full income tax in India. This is a completely wonky situation. They operate in many countries in the world, most notably in the US. The tax laws are such that they pay taxes in every country they operate in. The only country in the world where they don’t pay is India.

Businessmen have no shame when they clamour for sops from the government. Moral and ethical rationale have no place in this argument, it appears. The same businessmen bemoan the fact that the fiscal deficit is huge. Why will it not be huge when everybody wants tax sops.

Corporate income tax is the largest source of revenue for the government. And one of the most profitable of industries in India does not pay income tax. Now why do we moan about no tax on agricultural income. Why do we shout on the unsustainable fertilizer subsidy. There is no greater moral vacuum than the IT industry getting tax exemptions. The usual arguments are presented – its an export industry, it creates employment, it needs “support” against foreign competition, blah blah blah. I am not even going to dignify this with demonstrating the utter illogic of these as justification for sops.

The government should bite the bullet and treat the IT industry just like any other industry. And the industry should hang its head in shame for continuing to clamour for tax exemptions.

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Borrow like there's no tomorrow

The Indian Union Budget was presented yesterday – normally this is presented on the last day of February, but this year because of the elections and the new government, it is being presented now.

A zillion columns have been, and will be, written on the budget. The stock market reacted yesterday by tanking 6%. Many experts will dissect the budget and depending on where they come from, will either laud it or criticize it.

The budget is full of jargon and incomprehensible to a layman. It also carries tons of detail and is a very tough read. I had argued some months back on the budget being “the Great Indian Rope trick” – Click here and here to read it. And when Pranabda presented the interim budget in February, I argued that even the rope is gone.

In this post I’m focusing on one theme, and to me the dominant theme – the borrowing binge that’s going on.

After rehashing the government presented numbers, the overall situation is somewhat like this. Government will get cash inflows of Rs 7.2 trillion. And it will spend Rs 12.2 trillion. How does it bridge the gap. It simply borrows. Now this is the central government. Every state government does the same thing.

Now which sensible person will earn 7 and spend 12 ? And keep doing something like this year after year. Today a full one third of all revenues goes just towards meeting interest payments. And this number keeps rising year after year.

If this were a company and not the government, it would have gone into liquidation by now. The market would have hammered its share price down to zero. Unfortunately there is no stakeholder to really control the government.

Indian tradition is one of thrift. Of spending and living within your means. Not borrowing like a madman.

How does one drill some sense of responsibility into governments to spend only what they earn ? A futile cause, I'm afraid. Doesn't work in this world. Just turn to the state of California for inspiration on recklessness.

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Even more tag, tag, tag ......

Reflections has tagged me with a picture tag. Now I must say a few words about this famous blogger. Everybody seems to know her. Everybody likes her. Everybody reads her blog. She’s an active commenter – her comments are invariably nice and large hearted. And everybody tags her on everything, simply because she’s so popular. See all the awards various people have given her on her blog.

Now I’m in trouble. A picture tag ? I don’t even own a camera – logic is I’d rather see straight through my eyes than through the view finder. And rather imprint on the heart than on the film. See, how you can justify anything !!

Its Sunday evening and an occasional break from business blogging is OK (another justification for not being able to do a business post on this tag !). And the thoughtful train says “business is not just in my blood; it IS my blood”. Boo Hoo - !!! So, nothing to do with business,



Posted without comment. You can guess who this is and in what setting……..

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More tag, tag, tag ......

A “wicked” girl called The Thoughtful Train tagged me with the ‘Fours tag”. She did it with an “evil laugh of delight” – someday I’ll get even with her ! To his eternal credit, le embrouille blogueuer saved me from this tag – someday I’ll pay him back for it !!

I took the poetic license to change the questions to something remotely connected to business. Here goes.

Four places I have lived in because my company told me to

1. Haldia, West Bengal, India – Of the “ban”, “Cholbe na”, wide open spaces, rosogolla, Rabindra sangeet
2. Village Dalshapur, District Etah, UP, India – Of the karanjas and paranjas, the gun, no power, no plumbing, cow sleeps with you
3. Bangalore, India – From heaven to an awful place. Deve Gowda has made sure this lovely city more resembles Dharavi now
4. Guangzhou China – Of the lovely slim girls, nice people, incomprehensible language, vegetarian nightmare

Four wonderful conference venues I’ve been to

1. Golden Palms, Bangalore India – Simply because we started something game changing there and had lots of fun doing it. Bumped into Sanjay Khan and asked who he was !
2. Bordeaux, France – Was charmed, even though I don’t drink wine. Forget the name of the Chateuax
3. Four Acres, outskirts of London, UK – virtually in London, but nicely “away from it all”.
4. Goa, India – Has to be.

Four interesting cities that I have been to on business

1. Casablanca , Morocco – Wildly evocative. Went searching for Rick’s.
2. Karachi, Pakistan – Oh, how much like India. Same people, same food, same look and feel – why did we go our separate ways ?
3. Greenville, South Carolina – Of all the places in the US. Still can’t understand why I came here, but I did
4. Sindri, Bihar, India – The only place on earth where the sole restaurant closes for lunch

Four places where I starve on travel, because I’m a veggie

1. Lagos, Nigeria – Hopeless, except if you go searching for an Indian restaurant
2. Anywhere in China – Hopeless, full stop
3. Jakarta, Indonesia – Eeks. Run to an Indian restaurant
4. Krakow, Poland – Not so bad as everybody speaks English and you can find something, but they believe grass is for cows

Four business websites that I visit daily

1. FT.com – Love the newspaper, hate the website, because they charge
2. WSJ.com – Same problem
3. economictimes.com - No problem
4. economist.com – Love the website because its free as I buy the magazine

Four places that I would rather keep going to on business

1. Durban, South Africa – a lovely city I am in love with
2. Adelaide, Australia – In my book, the prettiest “business place” in Australia
3. Singapore – Simply for the efficiency of everything
4. Zurich, Switzerland – In summer, gorgeous

Four businessy things I hope to do before time runs out

1. Have a million readers for my blog (Ha ha )
2. Teach a MBA class and a kindergarten class
3. Run a not for profit organisation
4. Run a world championship event in any sport

Four business books I can tolerate

1. Barbarians at the Gate – the story of the takeover of RJR Nabisco in the 80s
2. The History of Unilever - for obvious reasons
3. Dash
4. Dash

Four movies with completely awful scenes on business

1. Jab we Met – Gimmee a break
2. Disclosure – Awful
3. Corporate – Oh God
4. One Tamil serial I was forced to watch one espisode that made me gag and thankfully I’ve forgotten its name

Four people, I have no other choice but to tag

Any volunteers ?

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Tag Tag Tag .......

Le Embrouille Blogueur has been kind enough to give me an award. The award, he gave me with the words “ the man, the machine (firewalled by the Great Wall) ...and the power blogging”. I am honoured. “THE blogueuer”, for he is deserving of this title, is a wonderful blogger friend. He has a unique style of writing, fantastic sense of humour and despite a crazy schedule he keeps, which involves intimate knowledge of various airports, blogs regularly, comments unfailingly and supports enthusiastically.

The award requires me to honour at least 7 friends. This time, I would like to honour seven friends, who aren’t bloggers themselves, but are regular readers of my posts and are good friends in the real world, before I defected to the blogosphere.

Kiwibloke – At heart a Kiwi, but in soul an Indian. Fabulous guy, comments regularly, and can write very well. For the last three years he has travelled so much that he is not a resident in any country in the world. Imagine what a trunk load of experiences he has. I wish he would take up blogging.

Viji – The opposite of kiwibloke. Doesn’t comment at all, but reads all the posts. I know, because she told me so in person. Doesn’t travel. A lady who is much experienced and knows business very well. And she can write very nicely. Could I motivate you to take up blogging ?

Dada – A very dear friend, and been so for a long long time. Western Classical Music expert and the person with the best English I have ever known. He even took up blogging and made one post. And then chickened out. Come back you bum – Blogging ka tempo high hai !

Prince – The quintessential gentleman. No he can’t sing. Yes, he can write , and how. Knows more about business than I ever will know. Comments sometimes. If he took to blogging, The Wall Street Journal, will immediately appropriate him. Come on Prince.

Satish – One of the nicest persons I have known. Warm heart, soft touch, very good looking. He’s not blogging although he’s married to a famous blogger, author, poet, … (too many adjectives to list). Take up blogging please – Preeti maybe a star ; you will be a superstar.

Hansjoerg – A German by nationality, but he is really half Indian and half Chinese in spirit. The person with the largest heart I know. He spends half his life on planes, where he has nothing to do (yeah OK after eating and sleeping) – he can write his posts on the plane. If he wrote, it would be easily the warmest of blogs. At least it would break completely wrong national stereotypes of Germans (that’s to tempt him – tempt tempt).

Zhang Dan – My Chinese teacher. Lovely girl, whose English is so professional. A post graduate student herself, she amazes me as to how patient a teacher she is, with dullheads like me as a student. Her blog, if she chose to write one, would be a wonderful perspective of a young Chinese. Zhang – Stop “qq ing” and start blogging !

So having done my bit to recruit newbies into the blogosphere, here comes the boring blah blah –

• Link the person who tagged you
• Copy the image above, the rules and the questionnaire in this post
• Post this in one or all of your blogs
• Answer the four questions following these Rules
• Recruit at least seven (7) friends on your Blog Roll by sharing this with them
• Come back to BLoGGiSTa iNFo CoRNeR (PLEASE DO NOT CHANGE THIS LINK) at http://bloggistame.blogspot.com and leave the URL of your Post in order for you/your Blog to be added to the Master List
• Have Fun!

and then the questions and answers

• The person who tagged you: Le embrouille blogueur
• His/her site's title and url : http://dukulsblog.blogspot.com/
• Date when you were tagged : 30th day of June, 2009
• Persons you tagged: see above

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A Titan steps down

On a bright summer’s day in June of 1975, a young man walked into the portals of a great company. He had just finished his Masters and had come to take on his first job, as a Management Trainee. He was a simple young man, hadn’t seen the world, or even the country for that matter. But he had a brilliant mind – this company was known for brilliant people and even in that crowd, he stood out.

He rapidly grew in the organization. After the obligatory stint at a factory, ( and he became a legend there), he moved back to headquarters and started to seriously turn on the gas. One brilliant stint after another followed and it became obvious that he was destined for great things. He went to the parent company in London, came back, went back again and he finally came back to take over as the CFO of this famous company. He was the second Indian to occupy this post in the company’s illustrious history.

For over a decade, he reigned as the CFO of this company. And he became a legend.

He is a leader of men. A whole generation of managers in the organisation were personally developed by him. The number of finance people, who are now dotted all over Indian industry, and who look up to him as their mentor, is legion.

He transformed the finance function. He virtually invented how to wage war on costs in good times, rather than bad times. He foresaw how the internet would transform business and piloted E commerce in the company before the term became fashionable. He was an early leader in creating shared services, again well before his peers. He designed and led control systems for a gigantic company that were ahead of its times. Corporate governance in India has often taken the lead from this company – his handling of the majority shareholder and the minority shareholders has been the example other companies seek to emulate.

I am personally beholden to this man. For after all, he recruited me into the company all those years ago. I still remember the interview, when I didn’t do too well, and yet he decided to take me. Over the two decades that I spent in that company, he was my mentor. He was either my direct manager or my dotted line manager for many a year. When we both had a dream to start something new inside the company, it was he who became the Chairman of the subsidiary we set up. We grew the “baby”, brick by brick and he was the father who ensured that the home was safe and secure . When the baby quickly grew into a lovely girl and wanted to get married, he proudly gave her away – and made sure that we would be well looked after in the in laws place.

Men like him are rare in the world of business. He moves faster than the times and yet his heart is strictly in the old world. A world where loyalty matters, people come first, business aggression is tempered by a soft touch, humility is a virtue and where the joy is in the job superbly done, rather than in the column inches.

For more than three decades, he shone brightly in one company. He didn’t leave, he didn’t change jobs, although he could have walked into any company in the land. When dusk settles down today, something will unalterably change in this company. For, this titan would have stepped down.

Adieu Sundaram. Good luck and Godspeed in the ventures to come.


Sundaram retires today as Vice Chairman of Hindustan Lever, after 34 years of sterling service. Hindustan Lever, to use its old name, is the Indian subsidiary of Unilever.

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Who should pay for Medical Insurance ?

It is human to forget about your health when you are healthy. You are young and fighting fit and who wants to think of sickness and hospitals ? May you be blessed to remain that way always. But just in case …..

Its a feature of our times that, God willing, we’ll all live longer. But as we live longer, a variety of old age diseases and disabilities will become inevitable. Medical costs can be one of the biggest liabilities of the future and it is only prudent that we provide for it.

This post argues that employer provided insurance is the worst system that can be. It’s a dinosaur that should be quickly made extinct. Here’s why .

In the good old days, when you joined a company and you retired from it, the employer providing medical cover was a great idea. The employer even provided for cover after your retirement. Perfect. And then came Armageddon. Just look at what happened to General Motors.

This stone age practice has continued. Employers still provide medical cover in countries where there is no public or government cover. This is the situation in the US, India and China. (unlike in the UK where there is National Insurance). And I’m willing to bet most of us are covered by our employers and are sleeping easy. I was covered by my employer too. And I slept easy too. Big Mistake.

The biggest argument against relying on employee cover is what do you do when you retire. That’s when most of your medical expenses might come up. At 60 or so, when you go for cover, you’ll find it either refused, or with a zillion exceptions, or at an outrageous cost. All the years when you were young and had little medical expenses are “lost” – your past employer has taken the benefit in terms of reduced premiums.

What happens when you get sacked ? What happens when you might decide later in life to “do your own thing” ? What happens when your employer goes bust – you’ll find gaping holes in his insurance plans, I ‘m prepared to bet.

I suggest each of us, irrespective of how old we are, and what our employer covers, goes out and buys a private insurance. As early in life as possible. And hope to God that we never have to use it. It’s the best investment we can make.

And to those of us who have children, buy the insurance, the day our darling is born. That’s one of the best gifts we can give the child for the future.

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Affirmative Action

Does affirmative action work ? Especially in an economic setting ? News on this theme, from two corners of the world caught my attention yesterday.

In Malaysia, they have eased the minimum Bhumiputra limit on investment in listed companies from 30% to 12.5 %. Bhumiputras are ethnic Malays. They are by far the majority ethnic group in that country although the ethnic Chinese are economically more prosperous. Ethnic Indians also constitute a significant minority. Laws in Malaysia , on virtually every aspect of life, are heavily tilted in favour of Bhumiputras and resented by the ethnic Chinese and ethnic Indians. In the economic sphere, this requirement of Bhumiputra ownership has brought little economic value.

From the US, of all places, I read yesterday of the incredible legal fight in the New Haven firefighters case. The New Haven fire department conducted a written test as a means of deciding who to promote. The test was mostly passed by whites ; black and Hispanic candidates failed. New Haven was terrified of a legal suit of race discrimination. So they decided not to promote anybody. Now the white firefighters brought a suit alleging discrimination. It went all the way to the US Supreme Court who decided 5-4 yesterday and upheld the white firefighters’ case. It’s a classic situation of damned if you do and damned if you don’t.

India , of course has a long history of affirmative action which is caste based. Various politicians stoke this at convenient points in time. In South Africa, Black Economic Empowerment is another race based affirmative action, similar to the Bhumiputra model.

I raise this subject, because China seems to follow a different model, at least on the economic side. While China is overwhelmingly Han, there are 55 recognised ethnic minorities. In economic matters, China seems to favour development of the inputs to the ethnic minorities rather than reserve or favour on the output side. They build infrastructure in the ethnic minority regions. They invest heavily in education in these regions (ethnic minority students get extra points in entrance exams but there is no reservation, I think). They force teachers from other regions to go to these regions as a means of developing education. They provide incentives for companies starting economic activity there. But at the “output” end – in terms of jobs, or promotion or shareholdings, there is equality. No discrimination for or against. Whatever we may say about the cultural or religious situation of China’s ethnic minorities, on the economic side this seems to have worked.

I am no expert on this subject, but China’s approach of heavily providing “inputs” and having no affirmative action on the “output” seems to appeal. Sure, it doesn’t win minority votes, but economically, it seems to be a better model.

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