30 March, 2012

Sack Ramamritham

Ramamritham must be sacked - plain and simple. He is usually just a nuisance and a pain in the posterior, but otherwise a good man. But recently he has crossed the barrier and is now a genuine danger. He must be read the riot act and told to go.

I am referring to his contortions and nonsensical behaviour in the Vodafone case. For those not familiar with this saga - here's a short summary.

Some years ago Vodafone bought a 67% stake in Hutchison Essar. Vodafone's Dutch company bought the shares from Hutchison Telecom which is a Hong Kong company. Neither the buyer, nor the seller was an  Indian company although the shares they bought were of a company whose operations are in India. Under ordinary tax laws in most countries in the world, including India, the place where the selling company is and the buying company is dictates where tax would be paid on the gains from the sale of shares (in this case neither was in India). This should have been a straightforward matter.

But Ramamritham decided to put his grubby fingers in. He levied a demand on Vodafone that capital gains tax was to be paid in India as the underlying asset was in India. Specious argument, but then Ramamritham is not exactly renowned for cold logic. The judicial process being what it is, Vodafone had to cough up a substantial amount (Rs 2500 crores of the total demand of Rs 12,000 crores ), before it could go on appeal.

The case duly went to the Supreme Court which told Ramamritham to *$%& off. That should have been it.

But Ramamritham decided that he would not return the money he had expropriated from Vodafone (you see he had spent it on giving free colour TVs to all and sundry). So he amends the law with retrospective effect in the latest budget to say that Vodafone has to pay. He has excelled himself - he has amended the law with retrospective effect dating back to 1962 !!!!! He can now open every sale or purchase of shares from 1962 and go after everybody. His justification - government will lose a lot of money if it has to refund Vodafone. The mind boggles - next he can simply rob you and me of all our money and then refuse to return it on the grounds that government will lose revenue.

It does not matter to him that the Supreme Court has ruled time and again that the law cannot be amended retrospectively. Ramamritham is trying to get away in this case by claiming that he is not amending the law but the notes to the law !

Have you noted that the blighter is going after Vodafone, which was the buyer and made no capital gain - it was Hutchison Telecom as the seller which made the gain. The simple reason is the Vodafone is in India and unfortunately in Ramamritham's grasp. Ramamritham can always find logic for his tantrums ( in this case the grounds are that Vodafone did not deduct tax at source). Hutchison Telecom does not exist in India; so he cannot go after them. They exist in China which of course has told Ramamritham where he can go and stuff it.

No sensible businessman can do business in India if Ramamritham continues to get away scot free. He must be sacked,  banished to Dhanushkodi and told never to return.

PS - For newbies to my blog, here's an introduction to this frustrating character called Ramamritham.


28 March, 2012

Vision, Mission and all that claptrap

Every organisation worth its salt has a vision and mission statement. Often crafted by expensive consultants. Those that can't differentiate between the two, have a single statement that's both a vision and a mission. Those who profess to know the difference, have two statements. They are often held in reverential awe. I suggest they must be binned as unadulterated claptrap.

Firstly these motherhood statements have virtually no meaning. Take these examples

"To experience the joy of advancing and applying technology for the benefit of the public" - Sony

"To help people and businesses throughout the world realize their full potential"- Microsoft

"Ford Motor Company is focused on creating a strong business that builds great products that contribute to a better world "- Ford

Can anybody decipher what they mean other than Mom and Apple Pie ?

Some are laughable . Take these for example

"To be the company that best understands and satisfies the product, service and self-fulfillment needs of women – globally." - Avon. Really ?? The self fulfillment need of many women is to watch Saas Bahu serials. By that standard Avon must be in the business of making TV soaps.

"Saving people money so they can live better" - Walmart. Oh Yeah ? The best way to save people money is to tell them not to buy the stuff they don't need.

"Be the best in the eyes of our customers, employees and shareholders" - American Standard. Ha Ha. Fat chance.

I am not at all sure who these Mission Statements are written for. It certainly can't be for employees. 99.99% of employees work only to earn a salary. Their daily job is  a mind numbing grind - answering emails, yelling at people, doing phone calls, looking busy and doing some boring piddly stuff. Not achieving some lofty mission. For more than two decades I was supposed to "meet everyday needs for nutrition, hygiene and personal care with brands that help people feel good, look good and get more out of life". I did nothing of that sort. I wrote ledgers, closed books of accounts, borrowed money and helped put people in other countries out of a job. I certainly did not, and do not,  look good (aaaahhhh, if only ) and as for feeling good, we shall let it pass without an unparliamentary comment !

I hereby suggest a common mission statement for all businesses - " To make money in whatever way possible". If some would like to add the words legally and ethically at the end, that's optional.

PS - With all due apologies to Stephen Covey who wishes to make people like you and me write a mission statement for life !

18 March, 2012

The world still has hearts beating

Public fancy has generally degraded into thoughtless inanity , right ? The silly antics of some starlet, whose only discernible feature is the shape of her nose, is what whole nations are riveted with. I mean, if some hundreds of millions can listen to a character called Justin Bieber, you can pretty much conclude that dumbing down of a whole species has occurred.

In such a world, what chance do you think a heavy, macabre, 30 minute video has ? Set in a bleak part of Africa. With a grim, sad, awful story. Not much you would gather. I would have gambled everything that  a grand total of 28 people would watch this video. Well, I would have been dead wrong and would have lost miserably. Kony 2012 is the name of this video. It was uploaded onto You Tube on 5 March. A small matter of 80 million people have seen it in 2 weeks.



Its about child soldiers in Uganda. Its about a monster called Joseph Kony and a horrible organisation called Lords Resistance Army in Uganda. It specialises in abducting children and turning them into sex slaves and child soldiers. This monster has been indicted for war crimes, but is at large. The video is about the awful story of children abducted and forced to become child soldiers.

The response simply shows that people care. That stories such as these still deeply affect the world. That human hearts still go out to the misery and awfulness in the world. That the world has not been numbed into inaction by a succession of woes daily chronicled by the media.

Joseph Kony is now a finished man. He will be caught and should receive the same treatment he has meted out to thousands of innocent children. Meanwhile we should salute public awareness and opinion. The world is still a great place if people can care enough. We can even forgive them  listening to Justin Bieber !

PS : Alas, public reaction is not always uniform. Jason Russell who produced this documentary has been subject to a variety of scathing criticism, including that of making a monster like Kony into a household name. Jason never bargained for this level of attention or for the criticism. Yesterday, the poor guy suffered a meltdown.

15 March, 2012

Coke at the end of India

It is a common mistake to equate marketing with advertising. Marketing is not just advertising, although that's one important component. Decades ago, a marketing guru defined the 4Ps of marketing - Product, price, place and promotion. In countries like India, its often distribution (place) that is the key to a business success. Getting your product to every one of the 5 million or so outlets is a monumental task, but is often the key to success. Nobody does this better than Coca Cola.

I am hardly the first person to marvel at Coke's distribution capability all around the world. Melinda Gates, for example, did it in one of the TED talks - What non profits can learn from Coca Cola. It was a brave talk - the not for profit sector often derides and holds in contempt the corporate sector. But you can't run away from the lessons that Melinda Gates draws from Coke.

Consider this





The place is Dhanushkodi, almost the very tip of India - well past Rameshwaram. Its virtually an abandoned place. Almost nobody lives here. You have to drive by a 4 wheel drive across the sands of the sea to reach there.  There is no electricity, no road, no buildings, no nothing. But a few hardy souls go there, some as pilgrims, some as tourists. And what awaits them is a shop that sells Coke. There is nothing else. You can't even get a cup of tea. But you can get a Coke.

For a fascinating account of the history of Dhanushkodi go here - its a lovely post from a fellow blogger who often comments here. It was her post that prompted me to actually go to Dhanushkodi.

About 200 hardy fisherfolk live there now. All in thatched huts on the sands. Its a hard life , for other than the catch of the sea they have to trek 20 kms across wet sand to reach anywhere or buy anything. The memory of the 1964 cyclone that destroyed the town is everywhere - see the remnants of railway station of that time.





But in the midst of this desolation, there is one sight that warms the heart - in many ways it foretells the future of India. There is only one pucca building in this place.



Its a school !



11 March, 2012

The day (my) cricket died


The title is borrowed from Don McLean’s famous song American Pie – the day music died. On Friday, cricket died, at least for me. 

Of all sports, cricket stands unique. For it’s not just a sport. It’s a way of life. It’s where (at least in theory)  gentlemen rule . Where fair play reins supreme. Where there is class abundantly in display. Where you simply don’t do something, that’s “not cricket”.

That era is long gone of course. Modern day cricket more resembles a gladiatorial contest, where anything goes. But even in the modern day Colosseum, one man stood apart. He stood for the old way of cricket.  The way cricket was played through most of its history. And he proved that you could do that and still be immensely successful. But alas, he has now decided to hang up his boots. It was coming, perhaps even a long time coming. But still, when it came, something of cricket died for me.

He was the last of the gentlemen left standing on the cricket field. Soft spoken and humble. Would do anything for the team  - keep wickets, open the batting, come at number 6, whatever,  without a fuss.  No bling bling. Despite being incredibly handsome, no off the field  escapades to fill up Page 3.  Courteous to a fault to teammates and opponents alike.  Worlds like sledging were utterly alien to him.  Even staring at an umpire for an awful decision giving him out would be unthinkable – the raise of an eyebrow would the maximum permitted dissent. Who else in the world is capable of saying  “ I laud the selectors who have a thankless job – they had, on occasions, more confidence in me than I had in myself” !!

Even in the way he played, it was all about the spirit of cricket. No agricultural shots, thank you. The front foot would face the direction of the shot. Bat and pad close together. All grace like a ballerina. Grit and determination in plenty. Stoic defence – boring to many but invaluable to the team and brilliant to a connoisseur. 

A great student of the history of cricket  - he is an acknowledged expert in the game’s history. A man with huge respect for the game’s traditions.  Wonderfully articulate –see this earlier post of mine. Even the way he went on Friday was understated and all class – if you ever want a model for a going away speech, look up what he said.

His place in cricket’s Hall of Fame is assured, of course. His exploits on the field need no further mention – a few tons of newsprint have just done that yesterday.

I don’t think I’ll be a hard core cricket fan anymore. The game has changed , as it indeed should. But not in the direction to my taste.  I’ll still go to the odd game.  But the heart won’t beat to that seemingly  impossible rhythm.  The spirit of cricket was the reason I played it, watched it and followed it with such intensity. But now, the expression “its not cricket” cannot be used anymore. The last of its upholders won’t be there.  

For,  Rahul Dravid has retired.

04 March, 2012

The futility of Minimum Wages

In virtually every country in the world, the government fixes minimum wages that must be paid to workers. In India it is a state subject and each state fixes minimum wages. Seems a very sensible move. After all the poor unskilled worker has no bargaining power [unlike coders :) ] and the power equation between employer and employee is heavily tilted in favour of the employer. A decent civilised society must ensure that workers are not exploited with wages that condemn them to subhuman existence. Seems a straightforward case, right ? It turns out to be not so right, after all.

The biggest problem with the Minimum Wage is that in reality it has become the ceiling and not the floor. Whole industries have abandoned having any remuneration policies at all and simply have adopted the Minimum Wage as their policy. In fact the largest number of legally employed people in the country are probably on Minimum Wage. Construction labour, Security guards, cleaners, and virtually every form of unskilled labour is on Minimum Wage. With all good intentions, governments have ended up fixing the Maximum Wage rather than the Minimum Wage.

The consequence of this is that if the level is higher than what the market can bear, there is every attempt to evade the law. It also ensures curtailment of employment - employers restrict hiring if its too expensive. If the wage level is fixed too low, then the employee can't make both ends meet and job hops all the time in the vain attempt to earn a bit more. Attrition levels in states with low minimum wages touch 50% per month. Getting the level right is the key - but then you can bet that the last agency that can get it right is the government.

Ramamritham has a field day with Minimum Wage law. The state of Tamil Nadu has 65 different categories where it has fixed Minimum Wages. In his infinite wisdom, Ramamritham has fixed that a worker working in the footwear making industry must be paid Rs 121.91 per day while the worker employed in coconut peeling industry must be paid Rs 121.24 per day. There are annual revisions. Very productive employment for hundreds of Ramamrithams (alas at much higher than Minimum Wages).

Let supply and demand fix wage levels. Only legislate that employee benefits such as PF and ESI must be provided. Leave the job market to fix sensible remuneration levels. I am willing to bet that the wage levels would actually rise in many states in India.

I am reminded of a quotation attributed to a famous business leader. You should be a capitalist in the mind and a socialist at heart. The sure road to disaster is if that equation is reversed.