Don't vote for XYZ Inc.

Murray Hill is running for the US Congress. At first glance, nothing seems to be wrong with that – surely anybody can run for Congress. But then Murray Hill is unique and a first. For its full name is Murray Hill Inc. It’s a company; not a person. An interesting article in the Economist (click here) examines this quirky issue superbly.

This is a consequence of a landmark US Supreme Court judgment in January. In a bitterly divided 5-4 decision, the Supreme Court ruled that the First Amendment free speech rights extended to corporations. The biggest impact of this ruling would be that no limits can be placed on political contributions by businesses. The impact of business on politics is bound to increase, and this has generally been considered to be not a good thing.

But another consequence of the decision seems to be what Murray Hill is contemplating. It faces huge hurdles for sure – there must be a myriad of other laws that require a candidate to be of flesh and blood. As The Economist says, Murray Hill is sure to fall foul of one requirement– all candidates have to be 18 years of age or above and Murray Hill Inc is only 5 years old ! In any case, it has little chance of getting elected – its slogan is “put people second” and “create the best democracy money can buy”. After all Murray Hill is a PR company trying to gain some publicity.

But underneath this lurks a real issue, The rather blasé view in The Economist that companies can be pressurised to act responsibly in engagement with the political process is dangerous. Businesses will not act responsibly – they will act precisely in their own self interest and to hell with everything else. After all that is their charter. They will lobby furiously for breaks; they will compete for pork; they will finance candidates who will do them favours after getting elected.

The Supreme Court decision has raised alarms across the US. The Court appears to have become as bitterly divided as the US nation itself – there is a big drift to the extremes on both sides of the political divide. All the “conservatives” on the bench voted for the decision. All the “liberals” dissented.

In my view businesses are crucial to economic activity, but must remain there. There is grave danger in allowing them to be part of the political process. Businesses are not members of society – only people are. Businesses already influence political processes far too much because they finance much of it. By their very nature they cannot aid sensible public policy. They should not be allowed anywhere near it.

There is grave danger in voting for XYZ Inc.

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Pip pip, toodle-oo; its just not cricket

If ever there was a misleading title to a post, this must be it. This is not about cricket at all. Neither is it about Bertie Wooster. Instead it’s a most ungentlemanly rant.

Readers may recall that I had railed about the behaviour of US Congressmen towards Akio Toyoda here. Something similar has now happened with British MPs and Kraft. This growing trend of activism by politicians towards business is dangerous.

What happened yesterday was this. Kraft was “summoned” to appear before the House of Commons’ business, innovation and skills committee (let us lightly pass over the delicious irony of the words skills and innovation being featured in the same sentence as MPs !) Unlike the brave Toyoda-san, Irene Rosenfeld, Chairman of Kraft ducked this one and sent Marc Firestone Kraft’s head of corporate and legal affairs. Marc Firestone, as far as I know, is a US national. He is not a subject of Her Majesty and British MPs have absolutely no right to behave as they did with him. You can read an account of the select committee hearing here. I happened to listen to snippets of the hearing on BBC Radio yesterday. Marc Firestone was virtually in tears and the bullying by the MPs was downright scandalous.

The problem relates to Cadbury’s Somerdale plant near Bristol. Well before the affair with Kraft, Cadbury had planned to close this factory. During the very public wooing of Cadbury, Kraft unwisely announced that it would not close the factory in a dumb move to get public support. After the deal had been done, Kraft announced that it would close the factory after all, saying that it had not known previously how far advanced the Cadbury closure plans were. Kraft clearly did a mistake, and was blatantly at fault. But the crux of the matter is this – it has done nothing wrong legally.

It is irrelevant to this argument whether Kraft was right or wrong. The British Parliament has no right to demand anything of Kraft US. Sure – it can proceed against Kraft UK. It can certainly action against British nationals, if they have done anything illegal. But other than that, it has no business calling foreign nationals and bullying them.

Unlike Toyoda san, Irene Rosenfeld chose to duck this, but for the wrong reasons. If she had upfront stated that British MPs had no right to demand anything of her, I would have applauded. Of course, saying such a thing would be a PR suicide. Instead she chickened out quietly. That would equally haunt her as a PR disaster worse than if she had come. Some readers of this blog know of an alternate person she could have sent, who I believe would have acquitted himself a little more credibly. On second thoughts, he would never have come; knowing which battles he could win and which he couldn’t. Would love to see some comments on this from those who know him.

This growing political interference with businesses needs to be condemned. I could mouth some obscenities. But then , although the sun has set on the British empire (maybe the MPs haven’t noticed it as yet), some of the glories of British culture are alive and well in the Commonwealth. The British MPs behaved like boors with Marc Firestone. I will express disapproval in a more British way. Pip pip, toodle-oo ; its just not cricket old chap.

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Nuclear Noclear

Amidst all the ruckus caused in the Indian Parliament by the Women’s Reservation Bill, you could be forgiven for having not noticed the stalemate regarding the Civil Liability for Nuclear Damage Bill, 2010. You would even be forgiven for yawning at the very mention of this “exciting” piece of legislation. Spare a minute to consider how important this is.

Anybody even remotely familiar with India will easily relate to the abysmal power situation in the country. That Indians have come to accept power cuts as a way of life is a sad commentary on Indian stoicism. The worst way to solve the power situation is for each building and shop to own a DG set – it’s the most inefficient and polluting solution possible and yet this is exactly what we do.

As India grows, its power needs will multiply manifold. Where will this power come from ?? Coal ? Too polluting. Hydel ? Not much scope and in any case the likes of Medha Patkar will make it impossible to implement. Oil ? Will increasingly become unaffordable. Solar ? Too costly and the technology is not developed enough to be deployed on scale. Wind ? Tidal ? Ditto – same problem. There is really only one solution – Nuclear.

The word nuclear raises all sorts of visions of Armageddon. In today’s world there seems to be scare mongering and general distrust of science – witness the furore on genetically modified crops. But nuclear power generation can be as safe as any other means of generation, and less polluting. Sure safety standards have to be incredibly rigorous. But there is no risk free ticket to growth and prosperity. There has to be a balance of growth, risk, environment and a whole host of competing considerations.

This is part of the reason why Manmohan Singh was ready to risk his government to sign the US deal a few years ago. India has since then steadily progressed on this front. Multiple agreements have been signed with France and Russia. Now there needs to be legislation to cap liabilities in case of a nuclear accident , which is why the bill with the highly exciting name was introduced. The cap on liabilities is required to make any supplier of nuclear reactors to do business with you – the threat of unlimited liability is simply not a risk any company would take. At first sight, this might sound like a sell off of interests to US companies ; but it isn’t ; there are already international conventions on this subject - the Vienna Convention on Civil Liability for Nuclear Damage, the Paris Convention on Third Party Liability in the Field of Nuclear Energy, etc. India needed this bill to sign some of the conventions.

Opposition parties have shouted hoarse that this is a sale of national sovereignty to US companies (using whatever lung power they have left after the yelling over the Women’s Reservation Bill). Our elected representatives are not known for their dispassionate evaluation of issues on merit. Very likely, this bill will be shelved. And the power situation will drift, as it always has. Meanwhile, Indians will learn to live with more power cuts. And the rich will keep buying DG sets. And as a nation, we will keep finding the most inefficient way to meet the requirements of power.

I’ll leave you with this thought. When I came to China, I one day asked my IT colleagues, where is the UPS and what is its capacity. I was met by puzzled faces. UPS ?? What is UPS ?? The concept of a power cut is alien in this place.

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And the award goes to .....

This being Oscar season, it is but natural that some awards float around in the blogging world. But I was completely bowled over to receive an award from le embrouille blogueur. For those of you challenged on the intricacies of French, he is the very opposite of “le embrouille”. Superb blogger, who is however in “prison” these days and hence not blogging very often – but when he does, he produces masterpieces. Thank you THE blogueur.

I am much tickled by the “Beautiful Blogger Award”. I have been accused of many things, but beautiful ???? :)!! Whew ! I have been walking around with a silly smile on my face !

Bloggers love to keep chains going. Hence any award or tag comes with conditions. This one says - thou shalt

1) Thank the person who gave you the award
2) Paste the award on your blog
3) Link the person who nominated you for the award
4) Share 7 things you find to be beautiful around you
5) Nominate 7 bloggers or more

No 2, I cannot do – thanks to the Net Nanny. Complaints on this score may be directed to jindun gongcheng !

Nominating 7 or more bloggers is a joyful thing to do – for nothing is more pleasing than thanking the guys and gals who provide so much joy day in and day out. Le embrouille blogeuer has preempted me by awarding AJCL, The Thoughtful Train, Athivas and Adesh, who would have been on top of my list too. I am therefore going to nominate seven other bloggers, whose blogs I am very fond of reading. One favourite blogger I am passing because there’s no more space for awards on her shelf.

1. Sandhya – Superb blogger, who is equally at home writing a senti piece as she is in producing a treatise for publishing in a technical publication. A good friend and a warm commenter on this blog.

2. Deepa – Writes lovely fiction that is blended with reality and lovely reality that is blended with fiction. Trouble is that she writes once in 746 days - having too much fun hobnobbing with millionaires in the promised land. Wake up Deepa !

3. RamMmm – Lovely regular blogger, who makes me barking mad when he writes superb pieces on idlis – Oh the pleasures of life that we miss when we are in Net Nanny’s land.

4. Half Indian – This is supposed to be a blog by Dave Joneja, aged 6, but actually by his wonderful mom who is Chinese and has some of the finest photos you can see in blogosphere.

5. Sri – Although I have done this before, I want to “award” him again and again, for the brave soul has ventured in a brave new direction and deserved all our best wishes. Lovely foodie, travelogue writer , warm human being.

6. Reflections – The Begum is a superb blogger and routinely get 176 comments; for everybody loves her.

7. Gils – Of all the bloggers in this world, this one is totally unique. If your Tamil is not great, you may have some difficulty in following him, but nobody can comment as he does and nobody can blog as he does. In addition to the Beautiful Blogger award, I am inventing a Most Beautiful Commenter award for him.

Here are 7 things which I find beautiful around me in the blogging world

1. A snippet from Chotu
2. A thoughtful hoot from the train
3. A nice tale from the marathon runner
4. Wordless Wednesdays
5. Hope that a post would come from this eminent scholar - just discovered that she has deleted her blog when I tried to link it. OMG - athivas - please get it up again. That's an ORDER !
6. The occasionally literary piece from the Bach and Bradman fan
7. The thought of 46 comments for this post !!!!

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Crash, bang, tring tring

National stereotypes are always wrong, but that doesn’t prevent us from indulging in them for fun. This blog has some pretense, to serious, thoughtful(?) and boring discussions on business. But on Sundays, this blogger takes a break to write an irrelevant, and opinionated rant on anything other than business. This Sunday, we shall venture shamelessly into an outrageous extrapolation of day to day incidents into national stereotypes, which are of course wrong - but then, since when has blogging got to be “right” ?

Take this situation you see everyday on the road. Some vehicle has hit another. Nothing much has happened – just a few dents. But what happens next is dependent on where you are.

If you are in Europe – both will stop, get out of the car and start to “talk” to each other. The more northern you are in Europe, it shall be an admonishment for not following the traffic rules and a firm statement that you are in the wrong. The more southern you get, the voices are more raised, shriller and perhaps a few curses shall pepper the dialogue. There will then be a detailed examination of the damage – almost always of the other vehicle; not yours. More dialogue of the above nature. If you happen to come from another country rather the one you currently are in, there shall be disparaging remarks of the driving ability of your countrymen. Europeans love to talk and argue, but do nothing.

If you are in the US of A – both parties are sizing what and how they can sue. And for how much. In which jurisdiction can you sue in order to maximize the chances of winning. You immediately start to evidence the mental anguish, the trauma, the post accident stress syndrome that you are bound to suffer from. You examine whether a case can be made for racial prejudice. You weigh the probability of invoking the Fifth Amendment. Chances are that the first words spoken after the incident is the Miranda warning. Americans love their lawyers and courts.

If you are anywhere in the vicinity of “Tupai”, it all depends on who you are and who the other guy is. If you are a Sheikh then you simply don’t stop; for you can’t be touched. If you are from the Indian subcontinent and the other guy is a Sheikh you just shake your fist at the speeding car and mutter a few curses. If both are either Malayali or Pakistani (the two tribes from the Indian subcontinent that inhabit Dubai), then you deal with the situation as Indians do – see below.

If you are in South Africa, you just take out your guns and shoot each other.

If you are in India, you get out of the vehicle and first bash up the other guy irrespective of who he/she/it is and who is in the wrong. If you are in Calcutta, then nearby minibuses will be stopped in the middle of the road, everybody gets down from the minibus and joins in the bashing up for fun. As you progress in the bashing, wonderfully inventive invective starts to emanate – at the other guy’s mother, sister, mother in law, grandmother, and even perhaps third cousin twice removed. Meanwhile a traffic jam of 1 mile on each side has built up and everybody cranes his neck out to watch. Indian’s are an angry lot and love to display their innovation in cursing and their completely unathletic ability in hitting the other guy.

But the strangest reaction of all happens in China. It never ceases to amaze me. Immediately after the incident , both drivers get out. They don’t even look at each other. They immediately fish out their mobiles and start calling their insurance company. No yelling, no cursing, no casting aspersions on the other guy’s manhood. I swear, I am not making this up. The Chinese love their money !

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Beware of the super performers !

The mantra of all business (actually most walks of life) is superb & outstanding performance isn’t it ? It shouldn’t ! If this sounds absolutely ridiculous, read on …

Everywhere, the great performers are the stars. They are the ones who get big bonuses. They are the ones who get promoted lightning fast. The division that shows triple digit growth is treated akin to God. The bunch that didn’t meet its target is screwed. The lot that exceeded target by 354% is taken on an all expenses cruise to Hawaii. Right ? Maybe not so right.

One of my blogging friends took a light hearted dig at me for a mantra that features about once every month in this blog – If its too good to be true, its too good to be true ! I have learnt over the years to watch out for superlatives. Good performance – absolutely the minimum. Better than good performance; holy grail. But superfantasticstupendousunbelievable performance ? Take it with a huge pinch of salt.

One of the truisms in the business world is that there are a lot of smart people and lot of smart companies around. Its difficult to beat everybody all the time. It’s the same as in the stock market. Nobody can consistently overperform the index over say 20 years. Not even Warren Buffet. The right investing strategy is to pick an index fund and simply hold it for a long time. Actually all the smart alec fund managers are redundant. In the short run, you can beat everybody by a mile. In the long run it is empirically proven that its tough to beat the index. Good performance is the goal – not superfantastic ….

This post was prompted by the news of the sale of AIG’s Asian businesses to Prudential for $ 35bn. This business, called AIA is a star in Asia. It’s a solid business, performs very well, growing very well, etc etc. In fact most of AIG is like that. Its full of very well run businesses. One division – the Financial Products Division brought the whole house down. They were actually star performers in the years before. The Board should have looked critically at the “star performer”, instead of treating them as royalty. But then business, as indeed life, is full of "If only ...".

I am not making a case for mediocrity. Far from it. I am just cautioning not to go ga ga on exceptional performance. Look at it critically. Is it sustainable ? Was too big a risk taken ? Has there been jugglery with the numbers ? Is something being hidden ?

Superfantasticstupendousunbelievable is applicable only to God. When man lays claim to it, …. Beware. Watch out.

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NGO Terrorism

NGOs find companies as soft targets for bullying. Companies, who are incredibly image conscious can easily be bullied – so catch hold of a company, drum up enormous publicity and companies have no choice, but to fall in line with whatever aim that particular NGO is propagating.

Let me state up front – I have no quarrel with many of the objectives that most NGOs are propagating. Some are loony, but most are very laudable. Many NGOs are highly motivated, care genuinely about their cause and altogether want to make the world a better place.

But NGOs have fallen prey to the classic trap of the end justifying the means. The causes that they propagate, relate to public policy. The correct way, in a democracy, is to take these to the voters, convince them of the merits of the policy, get elected to parliament and then pass legislation to that effect. That’s of course inconveniently long and painful and often fails to get voter endorsement. Therefore the quicker, easier (and wrong) way is to bully the soft targets – the corporates.

This post is prompted by the news that Caterpillar finally bowed down to the New York-based pressure group United Against Nuclear Iran (UANI) and announced that its foreign affiliates would suspend sales to Iran. Now American companies are already debarred from operating or selling to Iran, by US law. That’s why you cannot have Windows or MS office in Iran. It also applies to subsidiaries of US based companies. But it does not, and cannot, apply to foreign companies or companies which are not subsidiaries of the US company (much as US Congressmen like to think otherwise, the laws of the United States stop at the boundaries of that country).

UANI has also successfully bullied Siemens, Munich Re and Allianz to "boycott” Iran. There is currently no law in Germany to this effect so UANI has been “naming and shaming” to force companies to do its bidding.

This is a blatantly political issue. We may have our own private views on a nuclear Iran, but its certainly not the lot of companies to take positions on such a matter. This is for governments, parliaments and the United Nations. Companies have no business meddling in political affairs.

Corporates should follow the law of the land. Period. They are not instruments of public policy. The press, and NGOs, have every right to expose companies that violate the law. They have every right to name and shame law breakers. But they have no right to force their own point of view and achieve policy change by bullying companies.

The UANI should really be going to every major government and campaigning them to pass laws to prevent trade with Iran. Sure, that’s fiendishly difficult. But then that’s the route that is legal, ethical and moral. Forcing somebody to do something that he’s not required to do by law is simply immoral.

"The end justifies the means”, is the normal mantra of a terrorist. Do NGOs want to be bracketed with that lot ??

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