Summer Evenings - a short story

It's been twenty years since I wrote anything except poems so I thought I'd practice today. This one took about 3 hours of touch time.

SUMMER EVENINGS

Vir lowered his eyes to his watch. Yes, six fifteen already. Outside past these blind-covered windows the sun must be dwindling. Orange ink spilling into the western sky.

Man, that beauty outside seemed a world away. His collar felt awkward. His armpits were perspiring but he dared not take his jacket off because he had only ironed the front of his shirt. And anyway, it was all coming to an end, like water swirling around the sink one last time. Might as well keep the jacket on and go out looking good.

God knows how I’ll look like next month, don’t think I’ll ever get to put on a suit again.

The table was packed with people, mostly men. From time to time, someone would look at him then nervously look away. They all knew about his situation, of course. He started to avoid their eyes to spare them the discomfort.

He had known most of them for years – five, ten in some cases. He had even thought of them as friends once. When he had first encountered them, most had been pretty interesting - with eccentricities, secrets and dreams. Now they spoke only in stilted business jargon and looked like cardboard cutouts. There was no color to them, only the blue black of their frugal suits.

Talking of suits, what will I do with mine, I wonder? He looked down at the dull gray fabric with the thick weave. He hadn’t even opened the stitching on the pockets for God’s sake so as to keep it looking smart. And now his body would have no more use for it.

Difficult to give a used suit to someone who really wears suits. Bemused, Vir mulled over the irony; a suit was all about self-respect after all and one must buy that. Well, I suppose one of the janitors can get his son married in this. And then maybe a procession of people will get married in this suit, one by one. Wow, what a thought.

He brought his mind back to the meeting. Really, might as well go out looking good. Maybe I can chime into the conversation somewhere. He tried to concentrate and look for an opening but after a few minutes a haze crept over his mind and he gave up. The discussion was about some two-page form. Twenty people were sitting around arguing listlessly about changes to a goddamn form! Sometimes the stupidity of companies overcame him. Then he would remind himself it was only a game, a way to pass time… Our lives kept running out, tick tock tick tock, and if we had not had these charades to keep us occupied we’d just sit and wait in terror for the end to come. Much better this way.

But for him this diversion was now over. The rest of his life now lay plain before his eyes. The changes would come soon and rapidly. There was no knowing how he would take it. He felt a little shiver of fear.

He distracted himself with thoughts of the evening outside. Even without his watch he would have known the day was ending. He had this sixth sense about it. Evenings would make him feel empty inside and a little manic at the same time. It went back to when he was a child, perhaps it was even stronger back then. He’d have this urgent desire to rush outside and drink the evening in – fill up the emptiness with friends and games and with the loud chirping of the birds and three-abreast walks down evening paths. Then almost at once the trees would darken to black and the birds would go quiet and the sweet smell of night would rise unmistakably from the hedges. The children’s chatter would become conversations, the odd walking parent would be avoided on the empty streets, and for a while reality would be suspended as though by some magic spell.

Summer evenings used to be the best. They would be cool and comfortable and fragrant and would stretch out for so long that one would not feel cheated by the passing of the hours. There was enough time to play not just one sport but two or perhaps three. Yes, summer evenings were the best… particularly in the last days before the rains came. The suspense and the guessing games were well repaid by the thrill of the first downpour. Out of the blue would come the black of clouds and amongst the gently swirling dust and swirling doubts of “is this really it?” the sky would open up and drench them all, even the girls scurrying back to their homes but not really trying to move as fast as they could.

Not moving as fast as they could because it was beautiful to see the rain, it was a blessing to be caught in the water from the heavens, it was wonderful to be young and full of health splashed in the youthful monsoon that never aged.

“OK, see you all next week!” boomed the Vice President, the sonics pulling Vir’s mind back into the conference room. In one short moment that vivid world of his childhood disappeared wispily. That’s how worlds disappear, Vir thought, in the blink of an eye, like a dream evaporates when you wake up.

As everyone gathered their things, Vir looked wryly at the blank page on his own notebook. He had not taken any notes today and really, where he was going he wouldn’t need these notes.

His colleagues began to file out. They all made it a point to stop by him and shake his hand and tell him what a great guy he had been. “See you sometime” many said but he doubted he would see any of them ever again. This life was near its end. He felt a little weak.

Then the goodbyes were over and he walked down the stairs and out the door. He was surprised by the darkness and then he noticed the overcast sky. The wind was cool and even as he breathed it in, the first fine spray of water came down with a gust of wind and evaporated immediately on the road below. He felt some on his face and it lit up a wide smile. The monsoon was here. As always, it had kept its promise.

A clutch of twenty-somethings was waiting for their rides. Some of these guys had worked for him. One of them came up to where Vir was standing. His face was bright and his eyes were shining. And he was not wearing a suit.

“I heard you are leaving the company to become a novelist. All the very best, sir!”

Recommending an A2E duty

If I were President of the United States, I would push for an across-the-board customs levy that would be automatically triggered with rises in the unemployment rate (let's call it the ABCDE - Across the Board Customs Duty linked to Employment - or A2E for short).

So let's say we set the target unemployment rate at 5%. At this rate of unemployment, the A2E might be zero. If unemployment rose to 6%, the A2E levy on imports might automatically rise to 5%. If unemployment rose to 7%, it might automatically rise to 10%. If unemployment rose to 10%, it might grow to 25%. The mathematical function would be clearly defined up front. But in effect it would be a balancing factor trying to keep jobs in the US.

To minimize governmental bloating, it would be truly across the board, so that the push of special interests does not see this ballooning into the complexity of the tax code! Also to give business some time to adjust, this rise in the A2E levy would be for 6-12 months out. Probably closer to 6 is better.

Thus if unemployment rises in January, it would mean that an additional A2E would be levied on all imports - from yoga mats to software - in July. Simple and far-reaching.

Socialism collapsed some years ago - its modeling of man solely as a producer turned out to be flawed. Despite highly complex planning associated with socialism, even highly skilled engineers could not buy bread in the stores. Now we see what can only be called the partial collapse of capitalism which has proved the folly of the modeling of man solely as a consumer. Through and despite highly complex free market structures, you might own an iPhone but you might not have a job.

There has to be a middle path. By recognizing that more-or-less full employment must be a fundamental part of our economic goals, the Across-the-Board Customs Duty related to Employment may be a sharp tool for achieving this balance between production-oriented socialism and free-market capitalism.

Manufacturing and the trajectory of the United States

In 1994, I took a class in Manufacturing Strategy at Stanford. One of the articles we had to discuss was something along the lines of "Is manufacturing even pertinent for the USA?" I had elected to study manufacturing for my bachelor's and my master's - and then this was a manufacturing strategy course, right? - so I of course thought that the answer was self-evident.

But when the class started, student after student began dumping on manufacturing. There must have been 50-60 people in the class, about 20 spoke, and no one thought manufacturing was worthwhile. They all talked about how the "service economy" had made manufacturing redundant. Towards the end, I raised my hand and nervously blurted something about how abundant raw material, cheaper power and good infrastructure made the US attractive for manufacturing, and at the same time the rising hordes of Indian software programmers and advertising folks and bankers (leapfrogging straight into the service economy) meant that America should not take dominance in services for granted. But it was a spindly voice against a storm. Far more representative was a small energetic American girl who made the eloquent case that keeping manufacturing in the US was just a CYA (cover your *** - I was shell-shocked!) strategy which a bold leader would simply get rid of, and if she led a company she would have none of it.

At the end of the class, Prof. Carlson revealed the opinion of Intel's Andy Grove - that manufacturing would continue to be important for the United States. But he revealed it in a mild way, almost not taking sides, and the class hemmed and hawed, and accustomed as I was to the black-or-white method of teaching in India, I left the classroom feeling quite disturbed (in part, I admit, at my total inability to influence opinion even an iota). I remember that there was a German student, Johann something, who said a few words of encouragement to me as we trooped out. We were two of the three foreigners in that class. And the third guy was Chinese, who evidently did not need to say anything.

(Don't you see we'll catch up with you if you share technology with us? - I could not help wondering. My American friends seemed too complacent.)

The next year, I was reviewing a Harvard Business School case study on Kodak for the legendary Prof. Wheelwright. In the case study, Kodak had to decide between situating a factory in Thailand and situating it in the US. Labor cost was of course much lower in Thailand. A group of HBS students had supposedly built a big Excel model and had concluded that the overall cost was lower in the USA, even though this was not a "core competence" for Kodak. The analysis had been accepted by Kodak and the case study had been taught for some time. When I looked at the model minutely, however, I saw it blithely assumed that the low labor productivity of Thai society - in very different realms such as agriculture - was being assumed for a state-of-the-art factory identical to what would otherwise come up in the US. From my Asian point of view, this was quite insulting. (Prof. Wheelwright seemed to agree this was incorrect, btw he is quite a great guy.) To my mind, this was the other side of the US arrogance on manufacturing - "we are always more effective, it's just that we think that our time is better spent on 'brains-intensive' stuff". Perhaps, given this brief context, my conclusion might seem unwarranted and prickly, but these weren't isolated incidents - this was what the younger generation of business students genuinely appeared to believe. I found it much easier to relate to the professors and older folks in the schools, they seemed to be more in sync with my own beliefs.

Fast forward maybe 10 years to Portland, Oregon. The US had started to feel software services slip away to suddenly-important companies like Infosys and Wipro. Software too was boring for the American wunderkinds. They wanted to "find themselves" or "express themselves", a luxury we had little access to or time for. Bill Kayser, a highly-skilled software colleague with a dyed-in-the-wool computer science background, was lamenting America's future. No one wanted to study software any more. What would happen to America and people's ability to earn a living?

I remember saying, "Well the rupee will appreciate against the dollar, and it will bring back balance. I also think that the US will be forced to turn back to the riches of its commodities and perhaps back to manufacturing." In retrospect, the rupee did not appreciate - but Indian salaries did. Year-on-year salary increases in software have been staggering. The delta between US and Indian salaries is now quite low for senior people, quite definitely on purchasing-power-parity terms.

And US collegiate interest in software education is picking up, at long last. You may credit "The Social Network" but I think at least part of it has to do with the fact that on-campus hiring in other areas has hit rock bottom.

The US has not returned to commodities or manufacturing in a big way, but perhaps it should. Deep and lasting unemployment is breaking the country's spirit. It is psychologically perhaps better to earn a low wage than to be unemployed, right? I was sitting alone at dinner at Munich tonight, reading the NY Times (hard copy!) when I came across this article, "Does America Need Manufacturing?" Some thoughts and experiences of the last ten years came back to me, sharpened by the immediacy of the worries about the US economy and the US people.

The USA's "service economy" of the last decade or two has been built on Chinese credit. The chickens have come home to roost. What does the US have to sell to China?

Perhaps it's time to put up a few fabs.

The first elections to the Municipal Council of Gurgaon

Many of the candidates standing for the Gurgaon municipal council elections are women. That seems like a good thing and a sign of India's modernization. Until one digs a little deeper.

Our cook lives with her daughter in a one-room "quarter" in a building owned by a local power broker. The landlord's daughter-in-law is standing (being put up?) for election. The landlord's brother owns another such building where our domestic help lives. I think that brother's daughter-in-law is also in the fray.

Both buildings are illegal of course, and they may own several others. Almost all of the tenants are migrants who have left their villages to try to find a better life. Many of these migrants are women who work in the nearby middle-class houses.

The landlords strong-arm these poor migrants. For example, once in a while they take a month's rent and then a few days later ask for it again. Since no receipts are handed out, there is no way to contest that claim. The tenants somehow pay up again - digging into their meager savings or borrowing money - rather than risk the landlord's anger. As migrants, they often don't have their papers in order and are always at risk from the police so they have no recourse (remember the Commonwealth Games when they were mass-shipped out of the region?) Yes, this does sound like the serfdom we thought we had abolished in the villages, playing out in this urban form of zamindari.

(Incidentally and ironically, these poor migrants pay 50% more for cooking gas etc. than you and I do, because they don't have the papers to get a subsidized gas "connection" and have to buy gas from the black market. Then despite being ready to pay for power and water from the money they make from their hard work, they get yellow brackish water in buckets from a tanker and spend many hot summer nights without electricity in their rooms. I wonder how they are able to come to work each day.)

Anyway, coming back to these elections - on Friday, as the tenants stepped out to go to their jobs, they were stopped outside the building by the landlords and their henchmen. They were told that they would have to instead come with them on an electioneering march. Those that refused and went to work would have their belongings thrown out and their quarters locked. Most women complied. They marched in the hot sun for perhaps 10-15 kilometers, shouting slogans all the while. The next day their throats were so ruined they could barely speak.

One woman who defiantly went to work had left her child sleeping in the quarter. These guys pulled the child out along with her belongings and put their own lock on the room. The child had to go looking for its mother.

This is the real story behind the facade. This is how a lot of people are treated in India, like animals to be herded around. It is tragic that such situations are so complex and a product of myriad factors that we don't know how to address. Worse, when we see such a pugnacious and barbaric expression of naked power even we sometimes feel powerless in comparison.

High onion prices and income disparities

The New Year has been accompanied by record food inflation, especially in India where it crossed 18% this week!

I think a fundamental reason for this may be rising income disparity coupled with the unbranded nature of food. Let me explain my simple (over-simplistic?) thinking.

The proportion of rich and middle class people is growing and increasing the income disparity. This is much higher in certain parts of the country. For example, in Gurgaon, we appear to have a very high proportion of people working good white collar jobs (e.g. in IT and BPO companies or multinationals), or blue collar jobs in well-paying companies like Maruti Suzuki. If I were a groceries vendor in Gurgaon many years ago, I might have some well-heeled clients but a lot of my customers would have not made much money. As a groceries vendor today I may have as many "rich" clients as poor ones and many of them would be super-rich by Indian standards.

Now the rich customers of grocery stores are looking for high produce quality and freshness, more variety (e.g. imported fruit), a better shopping ambiance etc. and do not mind paying much more for it. I think this leads store owners to increase prices - sometimes increasing the money they take home but sometimes just adding more services such as refrigeration, air conditioning, accepting credit cards or free home delivery... or scandalously painting the fruit vegetables with wax or, even worse, injecting the produce with growth hormones like oxytocin!

In the long run, one would expect certain stores to cater exclusively to the poorer people, but this process takes time. Today all grocery stores in Gurgaon appear to be increasingly focused on the rich.

Think about it - it is also quite unlikely in practice for two stores in the same neighborhood to be selling the same product at two different prices, especially when there are no strong retail brands in play that accentuate the difference in their offerings. Even when strong retail brands are in play (e.g. premium Whole Foods vs. basic Wal-Mart in the US), the difference between the most expensive and least expensive groceries you can easily buy may be much lower than, say, the most expensive and least expensive electronics you can easily buy. After all, the product brands are mostly the same regardless of retail store - and owned by Mother Nature. At the risk of comparing, ahem, apples to oranges, it seems to me that it is pertinent that you can buy a Bose radio for several times the price of an unbranded Asian one that both fulfil essentially the same function, while an apple at Whole Foods is not that much more expensive than an apple at Wal-Mart. (I read somewhere that currently Wal-Mart's grocery prices are 12 percent lower than those of traditional grocers, while Whole Foods' prices are about 14 percent higher.)

Now, I have not come across much talk about this mechanism of income disparity increasing food prices. If you know of any articles on the subject, please let me know. Also, I am no economist, so I will be happy to be corrected by someone who knows more of that subject than I do (if that population is not still in hiding).

And of course there is another reason why income disparity might drive food inflation - the rich consume more food and waste a lot, and they consume more meat and poultry that are inefficient users of agricultural output. This I think has been well studied. But while this may be a big driver globally of rising food prices (as would be the corn-based ethanol production), in India around me I can see more basic factors at work.

Quick quantitative estimations

Some months ago I wrote a blog post on "Testing the numbers, on the fly". Well, yesterday I was flying - literally - out of Frankfurt and saw a sign that said, "New A Plus Pier in Terminal 1 under construction". It went on to say that the pier could handle 6 million passengers a year and was 180,000 square meters in floor area.

It's interesting to know this ratio of passengers to floor area, I thought.

Then I thought, hmm... does this ratio make financial sense? So I began to guesstimate.

Let's say that real estate here is about the cost of real estate where I live. At bulk discounted rates, it might be 100 dollars per square foot, plus minus a bit. Or 1000 dollars per square meter approximately.

So the new pier is 180 million dollars in investment. 30 dollars per passenger.

For a payback period of 5 years, you need 6 dollars per passenger per year - probably taken out of retail concessions in the West. But Indian airport retail doesn't do well yet.

Well, 6 dollars is equal to Rs. 300. Then it hit me - the airport tax at Delhi airport used to be Rs. 300. And I smiled.

Of course the calculations won't be exact. But it is always fun to get close.

On Indians and projects

When asked what type of management education India needs, I often say, "Most importantly, we need to teach people how to run projects - how to break the work into significant tasks, how to assign responsibilities and set timelines, and how to report consistently on those timelines, mitigate risks etc. I don't want MBAs with bookish knowledge, I want someone who can really get stuff done. And much of it boils down to planning and executing projects."

And I have blogged about it here and here and elsewhere.

Well, this week I am in Europe, mortified as the news of the CommonWealth Games dominates newspapers and television channels here. It even comes up in business meetings.

All because of very shoddy planning. I really think that corruption is a somewhat separate issue.

Yet I also want to add this (if only to calm myself) - yes, China can put up taller buildings than India can, better buildings than India can, and can put them up in a planned way. But when it comes to software, Indian project planning is as good as you can get anywhere in the world. There are two Indias, and software is part of the new India...

The role of testing in education

Shri Kapil Sibal is moving towards making school education more "holistic" in India - an effort most of us agree with - but he is also moving to reduce drastically the number, type and intensity of tests.

Honestly, that scares me. Mindless testing is, well, mindless, but are we throwing out the baby with the bathwater? The positive global identity of India in recent times has been shaped by the tens of thousands of analytically strong Indians who, despite a crushing lack of exposure in their homeland (to technology, to processes, to reliable electricity and running water in their homes), are able to tackle, say, the IT problems of the world because they have the analytical skills to wrap their minds around them.

Interestingly, new research appears to underscore the importance of testing. In an article in the New York Times titled "Forget What You Know About Good Study Habits" (incidentally the most emailed article on that site for several days running), Benedict Carey describes some of these experiments. A portion of the article is reproduced below.


(C)ognitive scientists see testing itself — or practice tests and quizzes — as a powerful tool of learning, rather than merely assessment. The process of retrieving an idea is not like pulling a book from a shelf; it seems to fundamentally alter the way the information is subsequently stored, making it far more accessible in the future.


Dr. Roediger uses the analogy of the Heisenberg uncertainty principle in physics, which holds that the act of measuring a property of a particle alters that property: “Testing not only measures knowledge but changes it,” he says — and, happily, in the direction of more certainty, not less.
In one of his own experiments, Dr. Roediger and Jeffrey Karpicke, also of Washington University, had college students study science passages from a reading comprehension test, in short study periods. When students studied the same material twice, in back-to-back sessions, they did very well on a test given immediately afterward, then began to forget the material.
But if they studied the passage just once and did a practice test in the second session, they did very well on one test two days later, and another given a week later.
“Testing has such bad connotation; people think of standardized testing or teaching to the test,” Dr. Roediger said. “Maybe we need to call it something else, but this is one of the most powerful learning tools we have.”

Another article regarding the Chinese emphasis on testing can be found here. Chinese students are, perhaps consequently, extremely good at maths and analysis. The author, Elisabeth Rosenthal, quotes a Professor Cizek who specializes in educational measurement and evaluation:


“What’s best for kids is frequent testing, where even if they do badly, they can get help and improve and have the satisfaction of doing better,” he said. “Kids don’t get self-esteem by people just telling them they are wonderful.”


Testing in the Indian education system definitely needs to become more feedback oriented, rather than marks oriented. That said, I would rather that we in India not give up on the academic rigor that testing alone can bring. In my personal opinion, we should not destroy the existing framework unless we are sure we know what we are doing. Even the US is moving back towards more testing, somewhat regretting its rather relaxed approach in the past towards school education. In terms of academic rigor, I'd rather India continue to refine its own approach than follow the (old) US schooling model blindly.

By the way, one model I really admire is the German model for craftspeople. Having suffered at the hands of incompetent electricians, plumbers, carpenters and masons (among several other trades) and seen the supreme ability of their German counterparts, I can confidently say that India needs something like this desperately. No one will dispute that in this area, we can only improve. Why aren't we spending more time on this instead?

How to end a recession

Of late, there has been considerable debate - especially in the US and Europe - about government deficit spending to hit one's way out of a recession. A little like a side batting second in a one-day cricket match with few wickets left may choose to throw caution to the winds and go after the bowling, somewhat counter-intuitively.

Some left-leaning economists like Paul Krugman strongly advocate such spending, pointing out that Japan's tightening its purse-strings probably deepened that country's problems.

In fierce opposition, right-leaning economists point out that Germany has remained fiscally responsible and is doing well, while countries like Greece have had free-spending governments and have been the worst hit.

While reading yet one more article on this by Krugman in the NY Times, a thought dawned on me and I posted a comment (which I hope Krugman read!)

It seems to me that recovery from a major slump is ideally built around a theme of some sort, that businesses and individuals can rally around. Perhaps the theme may or may not involve major deficit spending.

A world war, a historic decision by businesses and trade unions to be flexible*, an appeal to the national character, an astrological prediction of a bountiful year, even a world championship win in a popular sport - in different contexts and cultures these could all be themes that pull an economy out of recession.

*as in Germany

You can see this in India. A lot of the richer people believe India is shining, so it is not doing badly overall. Currently growth seems to be a seriously lagging indicator of the stockmarket indices, rather than the other way around.

In the US, people and businesses are currently pessimistic, so the situation is worse than it might have been. There are fundamental problems - primarily too little genuine education and too much soundbite TV - but these are not insurmountable.

Perhaps the US should have been allowed to win the soccer World Cup?

Dreamland: At the library

I was self-righteously upset. I went up to the librarian. "Ma'am, the books are not where they should be..." And then, "I admit once or twice I myself have put books back in slightly the wrong place ... but at least I have always felt guilty about it afterwards."

To my surprise she did not see my complaint as an accusation and said, "I totally agree. I can't tell you how important that is."

Taken off guard, I looked at her face, thin and drawn with horned black glasses. I wondered who she thoguht was responsible for the problem - wasn't it her responsibility? "We have such a beautiful library here otherwise. But if you can't find the books, all that money is wasted." And as I said it I saw how well lit and sunny and airy the library was. Airy, yes, that was the word. "All that money is wasted", I said. I was about to add "and there is then nothing left of it for everyone" but held back - it seemed somehow too money-minded and suddenly I thought as well, "I don't know what a librarian makes. Maybe she doesn't make much."

"No, I totally agree", she said, and then she walked ahead of me into the bookshelves to show me something. Her clothes were all white, but a white that was as though seen through a slight fog... a foggy white.

She stood at a bookshelf and said, "For example, this book here has been filed under both Airlines and Section 1.4.02". I marveled just a little at how amazing library systems were and I reached out and picked up a random book.

It was a photocopied book, and I opened it at random to find the chapter title, "Don Bosco School". It presumably was an alumni list. Must be Calcutta - that's the big Don Bosco. But I looked a little closer and it said "Ahmedabad". "This is the alumni directory", she said almost as I figured it out myself. "It also has the listing for Don Bosco Indore..."

>>>>>>>>>

That's just the transcript of a dream I had a few weeks ago and wrote down minutes after waking up from it when it started fraying. Dreaming is an incredible activity. Many dreams are more vividly experienced than real life itself is.

The stitching together of so many subjects breathlessly - in just a few seconds of perceived action - is also fascinating. The library (I haven't really spent time in a library for more than a decade), the photocopied books (something from our IIT days in the early 1990s), the reference to airlines (I take care of the Lufthansa account at Nagarro), the reference to Indore and Ahmedabad (the Proton locations), the reference to Don Bosco (where I went to school till 1989).

The dream plays out like a story created deliberately and rapidly by some devilish genius... At each step the slightest of cues are used to switch context.

Dreams must play some critical role. It is difficult to believe that they are just by-products of our mind. If they are meant to remind us of memories in order to refresh them, then they must be quite a sophisticated evolutionary achievement.

The vividness of the dream of course can also make you question the reality of perceived reality. The only fundamentally different thing about reality is that it follows more detailed laws that don't change.

For example, you wake up day after day to the same wife. :-)

Without comment

Bhopal - learning lessons or finding scapegoats?

I support the right of the Indian judicial system to try Warren Anderson, the CEO of Union Carbide at the time of the Bhopal gas disaster.

At the same time, I think prosecution of Anderson now will be quite pointless and is not a priority. And the case against him is weak.

The media and Parliament frenzy around Anderson is mostly a waste of time.


The context

Folks, think about it. As per my quick research, at the time of the disaster Union Carbide ran over 500 installations in 130 countries, with about $9 billion in sales. Less than 2% of sales came from the Indian subsidiary UCIL, which was listed in India and in which 49% was held by investors other than Union Carbide (including individual Indian investors). Bhopal was only one of the dozen factories of UCIL in India.

So Warren Anderson is the CEO of a US company which is in 130 countries. It is invested in an Indian company along with many Indian shareholders, whose revenues are less than 2% of the group revenues. Water gets into a tank and triggers a disaster, and we are baying for his blood?


A culture of laxity

For better or for worse, we in India have a culture of laxity when it comes to safety. Perhaps it comes from a certain spiritual acceptance of the impermanence of life. Perhaps we are just a poor country and do not have the luxury to worry about low probability events.

Whatever it is, we leave wires exposed, drains uncovered, critical equipment poorly maintained. With us it is a way of life.

To illustrate this point, I searched the web to answer the following questions: When did the last person die in Delhi by electrocution due to careless wiring? When did the last child die by falling into a manhole? When did the last Indian Air Force MiG 21 crash?

I have the following results from the last few days. [Note: This article was written on August 11.]

August 11, Times of India

NEW DELHI: A six-year-old boy died on Tuesday morning after falling into an open manhole in Shaheen Bagh, Jamia Nagar. Three hours after he fell in, Adil Raza's body was spotted by children playing on the street, after which labourers who had been working nearby pulled the body out of the manhole. The boy's body was found 20 feet away from the manhole he had fallen into.

(While searching for this, I came across another tragic story from April, where a 10 year old boy died after falling into a 35 deep manhole. Rescuers tried to reach him but the power supply failed. They tried using a generator but - rather typically - it did not work either.)

August 10, Sify News

Man electrocuted in Delhi

A man was electrocuted after he came in contact with a live wire dangling from an electric pole in northwest Delhi, police said Tuesday. Ajay Gupta, a 32-year-old auto-rickshaw driver, had stopped his vehicle near a pit full of water by the roadside in Hyderpur area of northwest Delhi Monday and as he stepped out, he received a shock, a police official said.

and

August 8, Asian Defence

MiG-21 Fighter Jet of Indian Air Force Crashes

A MiG-21 fighter jet of the Indian Air Force (IAF) crashed in the eastern Indian state of Assam, local media reported.The pilot lost control and the aircraft fell on a paddy field some 25 km from the city of Tezpur on Saturday.

Remember "Rang De Basanti"? The story continues.

Such events occur ALL the time. We are inured to them by now.

I can understand how Jagmohan felt when he talked in the Lok Sabha about the Uphaar fire tragedy:

"This is really in my view not only a civic issue but also a civilisational issue. We commit a large number of crimes by omission. This is an omission. Can we find any other (place) which is disorderly, disorganised, chaotic, without any regard for rules and regulations? It shows that we are a dehumanised civilisation." [Source: Wikipedia]

I do not think we are a "dehumanized civilisation" but you will agree there is some truth in his words. The Bhopal disaster was quite likely a result of sloppy maintenance and upkeep, in the normal Indian tradition.


Low value of human life

The government sued Union Carbide for $3.3 billion. In the end, Union Carbide paid $470 million in a settlement negotiated by the Supreme Court even though technically its liability for its subsidiary and technological partner UCIL was unclear. This number was indeed laughably low by US standards. But it was in line with compensation awarded routinely in India where the value of human life remains low.

These days, with the media spotlight, the ex-gratia payments made by the government have started climbing up. When there is a spectacular train wreck, for example, the Railway Minister may loudly announce Rs. 3.5 lakhs or 4 lakhs or 5 lakhs for each person killed and 1 lakh for those injured. But even as late as 2002 an Indian Railways circular announced that:

The amount paid as ex-gratia relief payable to the dependents of dead or injured passengers involved in train accidents or untoward incidents as defined under Sections 124 and 124-A should be as under:-
(i) In case of death :Rs. 15,000/-
(ii) In case of grievous injury (Irrespective of the period of hospitalisation) :Rs. 5,000/-
(iii) In case of simple injuries :Rs. 500/-

And even today, when there is no media attention, ex-gratia payments of compensation are miserly.

In comparison, Union Carbide paid $470 million in 1984 dollars, which is equivalent in buying power to more than double the dollars today. The total payment in today's rupees is Rs. 4500 crores. If you take the toll as 20,000 killed and 250,000 grievously injured and 250,000 with simple injuries, and the ratio of death to injury compensation as in the railways case, you get - in today's rupees - Rs. 13,000 for simple injuries, Rs. 1.3 lakhs for grievous injuries, and about Rs. 4 lakhs for deaths. While not generous, it compares well with Indian government payments till very recently.

This is a macabre calculation and human life is priceless, but I just wanted to show that the Supreme Court settlement was probably not a sellout.


Slow relief effort

There is no law that only Union Carbide money can be used to help the victims. Yet the government's payment of compensation has been slow.

The first ex-gratia payment announced was only Rs. 1500. Till 1992, almost half the claimants for compensation had not been medically examined. The final sum paid for each death was less than Rs. 1 lakh. Even today the ground around the site is laden with chemicals.

Worse, many factories all over India continue to spew poison into wells and rivers. The air in our cities is noxious beyond all health norms. It is not clear that we are safer today against a catastrophic industrial accident than we were in 1984.


What about individual responsibility in government?

Of late, our courts have been more aggressive in fixing individual responsibility for accidents (e.g. in the Uphaar case), which is good to an extent (e.g. building managers are now a little more serious about fire safety). But the the government itself often gets away scot-free.

For example, did any senior government person go to jail for the string of errors of omission that led to 173 people dead and 300+ injured on 26/11/2008? Did anyone get arrested for not planning a serious anti-terrorist force in Mumbai, or for the 10 hours it took for the NSG to get to Mumbai (by road from Manesar to Delhi airport and by bus from Mumbai airport to the site!), or for the fact that NSG commandos were fighting in the dark without night vision devices? The world watched as the fatal lack of training and preparation of India's security forces unfolded on live TV and people paid with their lives. The FBI's investigator had some chilling commentary on the amateurism of the Indian security establishment.

I shudder to think what will happen if we ever get into a real war, how many of our soldiers' lives will be needlessly lost due to lack of basic equipment and real training.

The point

I started this post by saying that "I support the right of the Indian judicial system to try Warren Anderson, the CEO of Union Carbide at the time of the Bhopal gas disaster. At the same time, I think prosecution of Anderson now will be quite pointless and is not a priority. And the case against him is weak. The media and Parliament frenzy around Anderson is mostly a waste of time."

But I want to make a broader point. The "soundbite media" is very dangerous. I think the United States today has been hollowed out by the soundbite-driven media to just a shadow of its former self. I frankly think that the media is the dominant disease that has crippled America. And I don't really know what the solution is. It will always be easier to watch a sensationalist TV "news" show than read the Economist or The New York Times or to listen to the BBC World News.

So as a young person, you must be skeptical of the populist noises coming from the media and politicians of all stripes. Subscribe to sober media. Think critically for yourself. Look at the facts carefully.

As a US Senator nicely observed, "Everyone is entitled to his own opinion, but not (to) his own facts."

And the Bhopal disaster is not about Warren Anderson. It is about us.

The economist and the 100 dollar bill

Yesterday's Financial Times had an amusing little reference to the "apocryphal economics professor who left a $100 bill lying on a busy street, figuring that it would have been picked up already if it were real"!

Even before you think of starting a company and consider whether you are well placed to do it, you have to predict how long the sectoral opportunity will last before others pick it up. It is a very challenging question.

When Indian companies got into IT services in a big way, they were pilloried for providing a commodity service and not being in products and were widely expected to plateau in a few years. That hasn't happened yet!

Then came the turn of the BPOs - everyone was highly enthusiastic. But the golden opportunity lasted only a few years before famine set in and took out the weaker players. Still, some companies did exceedingly well and on hindsight, it was silly for people like me to sit on the sidelines arguing theoretically that BPO services were a pure commodity.

When we started SupplyChainge, I would go to bed each night sick with worry that someone else would "discover" our key insight and blow us out of the water. I was as wrong as I could have been - it has taken a decade for the "lead time optimization" or "flexible supply planning" ideas we espoused to start to become mainstream.

So perhaps the final analysis is this: In the long run, everything is a commodity and we are all dead, but in the short run, there is money to be made off sectoral opportunities. When the tide comes in, even the dead fish rise, said Hemingway.

When the tide goes out, you find out who is not wearing any clothes, said Warren Buffett, but if you are comfortable in your state of (un)dress you should perhaps not be too nervous about taking the tide at the flood.

For as Brutus say in Julius Caesar:

There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

***

Yet as regards macro-economic trends, I feel attracted to the mindset of that professor. I seldom believe anyone can be wiser than the broad market, especially when it is going up. I feel that all positive information must already be factored in. (Yeah, I'm an optimist.) And when I see a sustained broad surge in share prices or property values that seems to prove my caution wrong, I become even more skeptical.

Luckily I have never been energetic enough to try to (legally) short the rising market, else I might have lost a lot of money! Because as we have seen over the last several years, bubbles can become VERY big before they burst.

The only time I have felt confident about predicting a big surge in the broad market was in the early 2000s. Each time I returned to India from the US I saw such dramatic and fundamental changes that I took a small bet on the broad market that proved prescient or lucky, although true to form my enthusiasm turned to skepticism as the markets continued to rise.

Very small events and very big happenings appear to be difficult to predict. There seems better predictability somewhere in between for some reason.

"Truth and oil will out"

A few days ago, talking about how people always get what they deserve, my father said, "Truth and oil will out".

The phrase resounded with me. It sounded very poetic and accurate...and faintly familiar though later I could not find it even on Google. I interpreted the oil part of the analogy as "If you crush oilseeds long enough, the oil will drip out and, yes, it IS hard work".

But as I write this, it strikes me that the oil this refers to may be petroleum, since my father is a petroleum geologist. Perhaps this is an oilman's phrase.

Be that as it may, coming back to the underlying theme - truth is very prone to coming out.

So when you are a company, it is sometimes easier to actually change your products or services or operations to conform to a truth that you can live with rather than convince everyone around you about a non-existent truth. In the long run truth will out. (Although it is, unhappily, true that in the long run we are also all dead.)

I have realized over time that established companies can more easily speak the truth, even if they choose not to. It is easier for an established company to say that it doesn't do something well but it will fix that or that a product has defects but, yes, it will fix them. There is always a cushion - of cash, of goodwill, and so on - that an established company has. If there is a failure, it is easier for an established company to say "mea culpa" and make the right noises and get away with it.

It is far more difficult to speak the truth when you are a small company angling for new business, or an aspiring company shooting for the stars. Speaking the truth is mostly about admitting weakness, and any sign of weakness may become a deal-breaker if you are not fully established.

I have lived this dilemma some years ago at our software product company, SupplyChainge. Each time a customer would ask, "Does your software do xyz?" I would honestly answer "No, but it could in 2 weeks!" This was in the US and mostly the customer was unimpressed. Finally, a very senior and experienced sales colleague gave me this tongue-in-cheek advice, "If you are 100% confident that you can have that feature up and running within six months - the very minimum time it will take for the customer to buy your product - then in this software industry at least you are not lying if you say you already have that feature!"

Anecdotally, this tradition dates back at least to Bill Gates and MSDOS. I later learnt through observation that many software product customers *expect* it and if you are being very factual what you say gets discounted anyway.

(In balance, I must also say that I also have some friends who think that all software product salespeople are cheap liars.)

Incidentally, most people with international experience will agree that it is most difficult to admit weakness in US and UK sales situations. In Europe, the Nordics are perhaps more forgiving than, say, Germany, although I am not so sure about this. And Asia is even more forgiving but if and only if you belong to some inner circle.

Some of the things I said today during a sales meeting in Copenhagen would have completely destroyed a typical meeting in the US. It took me several years to realize that disarming honesty doesn't really disarm in typical US sales situations. Gandhiji, with his mixed and changing messages and periods of self-doubt, would have been labeled a crank. Similarly, I could not have said these things had Nagarro not been more or less an established company by now.

Changing contexts, in non-business life too, I find it simpler to tell the truth as much as possible. If the truth cannot be told for any overriding reason (e.g. adhering to the dictum that "satyam bruyaat, priyam bruyaat, maa bruyaat satyam apriyam") it is best to tell a story that is as close to the truth as possible. The great thing about a true story is that it HAPPENED, so every bit of evidence taken in or out of context from what actually happened, every sampling of the multitudinous ripples of effects that the event sent out, will all be completely CONSISTENT. No matter how odd any fact may seem, if the WHOLE truth surrounding the fact is considered its various aspects will be completely consistent, by definition.

I love this simple quality of truth. "Truth and oil will out". I likes.

Defining your region of excellence

A business benefits by positioning itself in an established business category - potential customers can easily understand its offerings and business model. So today if you say you are offer "outsourced IT services with a global delivery model", everyone immediately knows what you do. Similarly, if you say you are trying to start an "online social network", you have conveyed a lot with just those three words.

On the flip side, by being part of a well-established category, your business ends up herded together with all the other players in that category. A balance is perhaps ideal: one must be different but not scarily different.

Yet far too many small businesses are so busy with their day to day operations that they do not figure out how to position themselves uniquely. It would be good for these companies if their management could spend a day or two to come up with the "one-liner" that expresses their positioning with respect to customer needs and shows how they are (or want to be) different from their competition. This is also the concept of a Unique Selling Proposition or USP, which appears to date from the 1940s. Ideally every employee of the company must know this one-liner USP and understand what it means in terms of his or her job.

So how do you go about choosing a USP for your business? Some questions you may ask yourself are:

1. What is the biggest pain point for my customers, and how are we better than my competitors in solving it?
2. When customers compliment us, what are they complimenting us for?
3. When customers complain about the competition (or when I talk down the competition), what are the chief shortcomings aired?
4. What are our best people good at?

... and so on.

Such a methodical approach is also important beyond the one-liner. Remember, the customer prefers to buy not just from any adequate company, but from a company that is the *best* for her. So when selling to a customer, you may have to:

1. Find out who the competition is,
2. Choose that subset region of requirements where you can realistically argue that you are better than all the competition, and then
3. Try to convince the customer that excellence in this region is very important for her.

For example, if you were Nagarro, an India-centric IT services company, you could possibly define your region of strength as the intersection of a) between 500 and 1000 people in size, AND b) working equally for both software product companies as well as leading corporates. In this smaller niche, Nagarro is probably number 1! Suddenly your job as a Nagarro salesperson is easier - you have a good chance with all those customers for whom this might be an important combination of requirements.

At Proton, we set out to create "Positive responsible professionals". We were well aware that our typical student might not be the best at, for example, hardcore analytics. So we decided to create MBAs who, while being acceptable in other areas, were second to none in positive outlook, taking responsibility and professional conduct. In this smaller region of an employer's search space, we believe that the school can be number 1. And we believe that we can convince employers that for many jobs, this is the most important combination of attributes that they require. As employers ourselves, we know we'd give anything for a positive young man or woman who knows how to take responsibility and knows how to get things done.

I typically end up needing two or three requirements to meaningfully bound the region of excellence in which a small company can credibly claim to be the very best (in the Nagarro example, 1. Size, 2. Diversity of client portfolio). Perhaps a larger, better-known company can make do with just one. And beyond three, I think you start to lose the customer's attention. I find all this quite interesting as an exercise in rhetoric.

Finally, not every attempt at differentiation comes from the heart. Some companies are a little cynical in their attempts at differentiation. They may pick points of difference that are obviously quite irrelevant and yet customers may be quite willing to be taken in by them. I have tried hard to understand this phenomenon - my best guess is that the customers are so happy to be "intellectually" engaged in absorbing or evaluating the claims that they forget to consider whether what is claimed should indeed be important to them!

This morning, I was shaving in my bathroom while outlining this blogpost in my mind, when I noticed that the bottle of hair product on my shelf announced in large font, "NO ALCOHOL!" It is probably a perfect example of misleading differentiation. Why should I as a consumer care if the product contains alcohol or not, especially if I am not meant to drink it? But somehow that confident declaration probably makes some consumers say, "These guys are making such a big deal about this alcohol thing - it must be important." And they presumably reach for their wallets.

It is at points like these, in my opinion, that marketing - somewhat inevitably - goes from being a useful concept for creating variety and innovation in the marketplace and crosses over to the Dark Side!

It happens only in India

A Meerut couple eloped and was murdered by the girl's family. The police found the young man's body and arrested the girl's father and brother.

Subsequently, the girl's brother confessed to the murder. The press picked up the juicy story.

But then the 'murdered' young man and woman walked into a police station at Muzaffarnagar!!!

The implications on how the police works are mind-boggling.

The top 18 things that a businessman should know

I'm returning to this blog after a long period of inactivity. Inactivity on the blog, that is - in real life the degree of activity around me has soared like Delhi's blazing heat in this, the hottest early summer in decades.

Manu, Varun and I have been designing the Family-Managed Business program that we are going to launch shortly. We have been thinking that in this program we will focus on a different aspect of family-managed entrepreneurial business each month. Thus the 18 month course will allow us to dive into 18 different things, which should together provide a practical and comprehensive 360 degree view.

To decide what these top 18 things should be, we first drew up independent lists. When I compared my list with Prof. Varun's this morning, I was not surprised to see that there was a 90% overlap. (I haven't compared it with Manu's yet.)

This then is my informal list, in no particular order, focused solely on practical topics for the small-scale or medium-scale business:

Defining your narrower market niche (in which you are THE best)

Developing a vision for your business (this is closely tied to the first point)

Leveraging the power of Internet marketing (using websites, SEO, SEM, social networking, blogs, etc.)

Getting the most from real world marketing (ranging from smarter business communication to cultivating newsmedia for PR)

Conceptualizing, planning and executing initiatives (project management)

Scaling an organization through modularization and processes

Understanding accounting and tax optimization

Understanding people and what they are good at, developing reporting systems

Leveraging business IT

Understanding business law, contracts and litigation

Managing your time and your mind

Understanding quality

Maximizing profit and cash flow, not just sales

Balancing family relations and the business

Professionalizing the family business without affecting the bottomline

Learning the art of selling and negotiation

Managing business risk

Handling the regulatory environment

Most of this I learned by trial and error and had we been taught this through our formal education, we would have done better and gone further.

Anything I left out?

Acceptance vs. Striving

These days I often find myself seeing human issues in the basic framework of acceptance vs. striving - should one accept something external as it is or should one strive aggressively to change it?

I was reminded of this by talking to Hulesh Sahu this week. Hulesh is a student of the Fall 2008 Indore batch. When Hulesh joined PROTON, he was one of the two students I remember who appeared to be most overwhelmed by the business school experience. (The other one quit in the first week.) I remember prodding Hulesh gently in class to say something, anything, to get into the flow of conversation, even as I wasn't sure if I was doing the right thing by singling him out. He was simply unable to participate, tongue-tied in his nervousness. He had grown up in a 500-person village, studied in a Hindi-medium school, and the class appeared to be too much for him.

Today, less than two years later, he is fairly articulate and thinks very smartly on his feet - a good catch for any employer. While a few other much more gifted students may have expended energy in identifying faults in our environment at PROTON, Hulesh embraced the system and worked single-mindedly on improving himself. And, interestingly, this week I was there asking him for advice on how we can improve the system!

The human emotion of calm acceptance of the external environment is precious and frees up a lot of energy. However, if you don't try to improve things around you now, you might have cause for regret later. Hence the dilemma, even for a thinking person.

Traditionally, Indians are a rather accepting people. Many of us live in terrible conditions without a murmur of protest. In fact, the dirt-poor Indian extraordinarily manages to preserve a semblance of elegance and grace. I am reminded of a couple of lines from a poem describing a rickshaw-puller, "To call him stoic would bestow on him too much dignity / And yet there's rhythm in his rise and fall and he knows it".

Perhaps this calm acceptance is because so much of Indian philosophy stresses that you should look within yourself for shortcomings to fix rather than criticize the world around you. India is the birthplace of Gautam Buddh and Vardhman Mahavir and countless other great personages who made this idea the cornerstone of their teachings.

Yet arrayed against this is perhaps the most rousing call to action over inaction - the Bhagvad Gita. "Karmanyevaadhikaar astey / Ma phaleshu kadachan / Ma karm phal hetu bhu / Ma te sangato akarmani !" ("You can control your efforts / But you can't control at all what they result in / So your efforts must not be for the fruit / And yet you should not embrace inaction!") It's the "Ma te sangato akarmani" which distinguishes this from the accepting or passive nature of much of Indian religious and spiritual thought.

Another interesting angle is provided by the Tao Te Ching, the classic Chinese text. One sentence from the English translation is stuck in my mind: "The Master doesn't DO, he IS." The context appears to say - act, but don't be activated by the action, the action should just flow from who you are. To me this appears as the most brilliant synthesis.

Each situation is different. But I think I would like to teach my son Ekagra to be able to look at his own self critically while also being constructively critical of the world around him.

Zero Percentile

A senior colleague at Nagarro, Neeraj Chhibba, has surprised us all with his first book, "Zero Percentile", which is published by Rupa Publishers. It must have made it to bookstores all over the country by now and is also available online.

A lot of young Indians used to go to the Soviet Union to study. Many decades ago, my father got a PhD in geology from Moscow (he wrote his thesis in Russian). Many of my friends too went to the USSR to study engineering and medicine. But while they were there, the USSR disintegrated and everything went haywire. They saw the socialist system collapse before their eyes. Many were shunted from institute to institute and their futures were in doubt. As if that were not enough, the Medical Council of India began to raise questions about the validity of the medical degrees out of some of the ex-USSR institutes. It was a tumultous time, and the book is set in that era.

What I liked about it is that it makes you smile innocently from time to time. Although the book is semi-autobiographical (luckily I do not figure in it like my brother and I did in another friend Amitabh Bagchi's book, "Above Average") the author always seems to be making gentle fun of the story and its characters, including the protagonist, even in the most tense and violent moments.

Just BTW, the title "Zero Percentile" is a bit of a pun on www.100percentile.com, an education software company that we are also associated with.

Neeraj works long six-day weeks at Nagarro, so it is a tribute to his focus and energy that he managed to write this book. I feel motivated by this to try to publish a book of poems sometime in 2010.


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Taming "video-game capitalism" - Part 1

I've been trying to think of an all-encompassing metaphor for what supposedly ails capitalism - the superhuman greed, the recklessness, the immense volatility, and the lack of ethics - and for what supposedly are capitalism's strengths - the courage, the focus, the absence of passivity. The metaphor that seems to come the closest is that of the video-game.

Most capitalists are not crooks or thieves. They are more akin to video gamers, taking big bets with bravado and no fear of consequences (and no fears of consequence, either, if you know what I mean). If you get killed, you just re-start that level and try again!

In a way, this is by design. Many decades ago, Schumpeter trumpeted the virtues of the "creative destruction" inherent in capitalism.

But such creative destruction adds little value to human progress when the "creation" is not speculation in a genuine innovation (such as an entrepreneur pursuing a new technology) but simply speculation (as during the Tulip Mania in the 1600s for example). And there can be a large human cost, as livelihoods are lost and lives are ruined.

For sure, it is difficult to separate "good" creative destruction from "bad" creative destruction in practice. The first pet store in a town may be an example of an innovation, but the tenth such store might not be particularly innovative and yet its bankruptcy may have a high human cost (even if the pets did not mind). We all know how bad central planning is at mandating which ventures are worthwhile and which are not - in India, we probably lost decades of growth as the government tried to figure out just how many licenses should be issued to produce motor cars, television sets and light bulbs.

Still, is "video-game capitalism" going too far? Perhaps playing pure finance by the numbers is a bit like persecuting a video-game war such as the Operation Desert Storm in Iraq, where CNN carried almost-live green-tinged infrared footage of Paveway bombs floating towards and then striking their targets. The ripping of bodies, burning of skin and spilling of bloody guts was all sanitized.

How do we tame "video-game capitalism" without snuffing out the very essence of capitalism?


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