Wednesday, July 27, 2016
Aricle first published in +Mint Click here to read
Over a decade ago, one of the doyens of Indian business journalism had written an article, “Tale of two companies”, comparing two packaged consumer goods makers — Hindustan Lever Ltd (still not Hindustan Unilever Ltd (HUL) then) and ITC Ltd. Since then much soap and detergent have been washed down the Hooghly and Arabian Sea — as indeed millions of puffs have been blown through human chimneys. While HUL has regained its old act by re-engineering itself, ITC has got its new act together by reinventing itself.
Till the early 1990s, the punch line of all Hindustan Lever chairmen used to be “we are an Indian company whose largest shareholder happens to be a multinational”. ITC, on the other hand, used to be less apologetic about its BAT Plc. parentage. Following the eminently forgettable K.L. Chugh era, when Y.C. Deveshwar mounted the saddle, in a corporate coup of sorts with the backing of institutional shareholders, he decisively cut off the umbilical chord and embarked on a mission to establish ITC’s Indian credentials with a vengeance.
At the same time, with liberalization of the Indian economy, the new generation chairmen of Lever over time shed their trademark khadi silk bush-shirts in favour of bespoke suits when traversing the power corridors of Delhi. However, this piece is not about comparing the two companies but trace the evolution of ITC as an Indian consumer products giant.
It is easy to surmise why Ajit Haksar — the last of the corporate Mohicans — ventured into hotels. It was partly to hedge against the possibility of curbs on the tobacco business and also as a safe haven for the surplus funds of the mother business that could be easily encashed anytime by selling the brand or the real estate. It is to Haksar and ITC’s credit that they nurtured Welcomgroup for a long time before it became truly profitable. Printing and packaging (where Deveshwar first cut his teeth) and paper boards were but logical vertical integration.
Similarly, one would believe the lifestyle and apparel business was started to secure the Wills franchise. But the real serious diversification was kicked off with ITC’s plunge into the foods business — which arose both out of necessity and opportunity. Subsequently, it naturally extended to pure consumer products play.
The story of ITC’s transformation is one of turning a proverbial threat into an opportunity. As the time-worn cliché goes — cigarettes is a “dying” industry in more senses than one. With the intervention of World Health Organization and a judiciary increasingly sensitive to the hazards of tobacco consumption, the tobacco industry has had to brace itself for a premature sunset like its consumers (smokers).
Simultaneously, there was a need to divert public attention from corporate governance and health (tobacco) to being a socially-responsible organization. This, one would suspect, was the genesis of a “we also make cigarettes” strategy.
The ban on cigarette advertising came as a blessing in disguise as it left ITC flush with cash. Not having a majority foreign shareholding allowed it to enter the food sector — then reserved for domestic players (except those such as Nestle SA, GlaxoSmithKline PLC and a few others — who enjoyed the benefits of a “grandfather” clause). Food was largely an open field with no organized pan-India player barring Britannia Industries Ltd. From biscuits, atta, ready-to-cook or heat meals, it has seamlessly moved to instant noodles, juices and now, one hears, coffee is in the pipeline.
For a cigarette manufacturer with low technology and little product innovation except in packaging perhaps, ITC’s most remarkable achievement was in learning the ropes of an entirely different supply chain and gaining mastery of a new product category, not just in terms of marketing but product development and innovation. Equally challenging was building a network which — contrary to popular belief — had little in common with the cigarette retail channel.
The evolution into personal care was even more interesting because here it had to contend with a giant like Unilever with an 80-year legacy in India, international brands and world-class research and development. Making soaps, body-wash and shampoo brands is as different as paneer is from talcum powder. Globally, too, it is rare for companies to be equally successful in both food and packaged consumer products. Neither Unilever nor Procter & Gamble Co. can really be considered to have handled both businesses with the same level of success while traditional food makers like Nestle and General Foods Corp. have by and large stuck to their knitting.
However, ITC’s real success lies in achieving this transformation with existing, home-grown talent with very little (or practically no) lateral hires at senior levels. ITC remains one of the few large companies that still believes in providing long-term careers to its employees. It is a key differentiator in a fast-changing corporate world where “turnover” and “velocity” are the current flavours of human resources management. Changing the corporate DNA and culture is no mean task. If an organization has to reinvent itself so have to its leaders. This is where Deveshwar scores above many of our present day corporate icons. Arguably, he had an extended stay at the top. But Deveshwar leaves behind a new ITC for the next generation.
In contrast, the much-hyped “Project Millennium” of Lever — riding on which many careers were made — lost steam. Among close to a dozen business ideas incubated — just about one (water, that too in a modified form) has survived the genetic implant.
It was generous of Deveshwar to praise Amul and Patanjali in his speech.The jury on the latter is still out. But, what it does underscore is the rapidly shrinking ramp-up time. What took Unilever 60 years to achieve, Amul did in 40 and ITC in 20. Now, Patanjali has managed to scale up in less than five.
A fascinating battle lies ahead between the global giants and the emerging “swadeshi” challengers.
Sunday, July 17, 2016
Why is Congress and Left Lib intlectual and media outraging most Kashmir?
|A Kashmiri family walks past paramilitary troopers standing guard during a curfew, in downtown Srinagar on July 15, 2016. PIC/AFP. (courtesy +ABP NEWS|
Resurfacing after his most recent – now famous and frequent – R&R break, when Rahul Gandhi thundered -“Lack of foresight & poor management has led to the escalation of violence in Kashmir” – a witty Twitter buddy quipped: “Is he referring to Nehru?”
It is actually ironical that, this statement could well be applied to any politician dealing with Kashmir – in the last 70 years. No doubt Jawaharlal Nehru made a massive political gaffe – that even the Nehru-Gandhi family and their apologists will find difficult to contest — on the referendum proposal.
But, looking at it counter-factually – would things have been any different in Jammu & Kashmir today if he had not capitulated then? Arguably, not.
But, a lot can be said and questioned about the handling of Jammu & Kashmir by successive Governments since Independence. It may be true that, without the shadow of the referendum faux pas, India could have been less apologetic or defensive in its Kashmir strategy. But, only so.
If it were Pakistan’s state policy to keep the Kashmir issue on the boil as an eternal bone of contention with India, it would not have relented on strategy just for the lack of a purported UN Resolution.
Equally, professional jihadists – whether sponsored from across the border or sons of the soil – would not have stayed idle waiting for the earlier editions of promised “acche din” to arrive.
There is little reason to believe that, in the absence of insurgency and internal strife, Jammu & Kashmir would have developed at a faster clip than the rest of India since Independence. Therefore, the much-flogged justification of separatism, unfulfilled ‘aspirations’ of Kashmiri youth, would have still been there either way.
In trying to tackle a seemingly insurmountable problem with knee-jerk, short sighted and, at times, ill-conceived solutions, the Indian state has progressively complicated the situation in Kashmir Valley. In the process, it has also created huge cesspools of vested interests not just in political circles but an entire ecosystem that thrives on “Kashmir war chests” on both sides of the LoC.
Although no real industrial development took place in Kashmir Valley, several ‘soft-skill’ enterprises flourished. These range from NGOs to media and, so-called, Track 2 “Kashmir Experts” (or call them the neo-KPs, Kashmiri ‘Pundits’ of a different kind) comprising politicians, journalists, retired bureaucrats, diplomats on sinecure, hibernating intelligence sleuths and even former Generals. They are like quacks to those patients with psychosomatic ailments keep running to.
Finally, there are the touts, brokers and middlemen coming in all forms and hues.
With each passing day these interest groups are growing deeper and wider roots. In trying to counter them, new ones are created and that becomes a self-perpetuating cycle.
The old Dogra Royalty may be on the wane but new political dynasties have emerged who want to rule Jammu & Kashmir — keeping their families and partners safely ensconced in Delhi or London. But, obviously the rewards of power are far too lucrative for them not to answer the call of the valley.
Against this backdrop, the BJP is the only national political party that has an ideological position on Jammu & Kashmir rather than just a political one. Retaining Jammu & Kashmir as an integral part of India for the BJP is part of its belief system – for which their leader Syama Prasad Mookerjee – the founder of the Bharatiya Jana Sangh — laid down his life.
The BJP and RSS are committed to the idea of Jammu & Kashmir being integral to India, which is not negotiable as far as they are concerned.
But, for Congress and others it is more a matter of political compulsion or geostrategic imperative. One may recall – from time to time – the Congress has in the past tried to soft-pedal a “let go” policy on Kashmir, especially through friendly journalists.
That makes the task of Narendra Modi’s Government all the more unenviable. Any signs of a pragmatic pact with a “Kashmiri” party like PDP immediately draws flak from the BJP’s core constituency of Jammu Hindus and Kashmiri Pandits.
On the other hand, the slightest offensive against militants immediately has the entire world – most notably the Lutyens’s Liberals — coming down upon them like a cloudburst in Srinagar and New Delhi.
One does not recall so much outrage on the decades of military action in the valley as over firing pellet guns in Srinagar (not that the former justifies the latter). The protests after Hizbul Mujahideen Commander Burhan Wani’s death received more prime time and front-page coverage in Indian media than what one can remember about the anti-Kashmiri Pandit pogrom in the valley in the 1980s.
Interestingly, if one cares to note, it is the Congress, the Left and their friends in the media who have been most vocal in attacking the Central Government on Kashmir. In comparison, one has not heard the voices of other political parties, especially the regional biggies at all. Is there a story in that too?
With BJP-PDP 2.0 in power – with the more strident Mehbooba Mufti following a protracted courtship – Jammu & Kashmir watchers assumed that the BJP had put on anklets that would deter New Delhi from taking a hard line against militants.
Suddenly realisation seems to have dawned that power sharing does not necessarily mean going soft on separatists. The Prime Minister’s silence and even Mehbooba’s muted reaction to the events of past week has further brought home this message. This has rattled the self-appointed conscience keepers of the Kashmiri cause.
The question one is inclined to ask these “neo KPs” is: can the Kashmiris be so counter-intuitive to believe that their lot would be better either under independent self-rule or in Pakistan?
How many of their youth who are being sacrificed in the self-styled jihad for ‘Azadi’ really understand what it entails for them. If unfulfilled ‘aspiration’ is really the cause for their taking up arms, as some intellectuals suggest, do they think their fellow Kashmiris across the border are any better off?
If the leaders and benefactors were really serious about their welfare and future of Kashmiris, they would negotiate with the Central Government on a specific agenda for development, health-care, skill-building and employment generation, rather than lead them to a mirage of jannat.
Sadly, ordinary Kashmiris do not seem to know what they really want.
Wednesday, July 13, 2016
|Tele Bhaja Shop in Kolkata |
(photo courtesy: http://writethecalcuttadiaries.blogspot.in/2013/05/veritable-vintage.html)
It seems the real reason behind these dyspeptic moves is to make up for the revenue loss on Excise Duty for liquor – post imposition of prohibition.
A few days ago – newspapers said #WestBengal Government was also mulling a liquor ban in the state. That set me wondering – what additional tax can Mamata Banerjee impose. A Fat Tax won’t work – because the problem of Bengalis is not ‘Fat’ but ‘Gaas’ (pronounced “gaash’).
|Fried (allegdly) in 'Virgin' Diesel Oil |
Now to control “Gaas” She may have to target “Mudi-Telebhaja-Chop” (Puffed Rice and Fritters fried in recycled Mustard Oil) – the staple evening snack of Ma, Maati, Manush. Those a little higher on the food chain – dig into the ubiquitous Chicken / Mutton Egg Rolls on the way back from with Paranthas fried in Virgin Diesel Oil, allegedly. But, that can’t work because – it will drive a large vote-bank – street hawkers and street corner Tele-bhaja vendors out of business.
But, eureka !! the “gorment” can think of levying a sur-charge on Gelusil, Zantac, Uni Enzyme and the whole range of antacids and digestive cures – the life line of Bhadraloks.
Article first published in +ABP NEWS Click here to read
|Picture Courtesy +ABP NEWS (AFP)|
Moving decidedly towards the second half of the fifties in life – Vanaprastha beckons. A home in the hills is something one had always dreamt of. But, Maslow’s hierarchy has been redefined to suit needs of modern times and include Broadband connectivity at the base of the pyramid. So, after an extensive search of hills from Uttarakhand to Kerala via Darjeeling and Coorg – finally settled for The Nilgiris in Tamil Nadu – which seems to balance nature and nurturing necessities of life the best.
As one planned the transition, there were the unavoidable comparisons between Didi and Amma. A sizeable section of friends and associates felt – if one were to scratch the surface there was not much difference at the core of the two dispensations. Both were based on strong identity politics and personality cult. But, that is probably where the similarities end.
If one were to go by popular perception, the difference in the scale of corruption between the two states – would be like that of the budget of a Rajinikanth blockbuster and the most expensive Bengali Tollywood production. While in Tamil Nadu it is believed to have reached epic proportions ages ago, in Bengal it is still at best nascent. Yet, Tamil Nadu is the most industrialized state in India and continues to be among the top investment destination. It is this conundrum that baffles many at first sight – but the phenomenon is not difficult to explain.
At the risk of appearing cynically pragmatic, it is must be said – notwithstanding righteous remonstrations – corruption is not alien to industrialists across the world. But, what businessmen essentially seek is predictability and stability. Above all, they are interested in delivery (of promises). These are non-negotiable conditions precedent of investment without which no industrialist will put money on the ground. It is precisely on these metrics TN scores consistently high and other states – especially in the Indo-Gangetic belt (UP, Bihar and West Bengal) fail dismally.
Therefore, even in his third term and despite significant progress in infrastructure – Nitish Kumar has little to show in terms of big-ticket investment in the state. Investors take time to build confidence especially if past experience has been negative. The enabling factors for development – obviously, remains work-culture, education, law and order and bureaucratic efficiency – that build an ecosystem conducive to progress.
Thereafter, principles of free market economy take over – where corruption is merely a ‘price-tag’ that people will pay for only if they find what they get in exchange is worth the quote. This also reveals the massive value-creation potential of the Indian economy – which if successfully harnessed can generate sufficient surplus for all to share. So, it is not surprising that the per-capita income of Tamil Nadu stays at the top-end of the chart irrespective of which party is in power.
The analysis above may appear simplistic. But, fundamentals are seldom too complex. It may be argued that, the situation in the Hindi-heartland and the Eastern states are equally predictable – but in an uncharitable sense – because nothing can really ever change there in a hurry. Worse still, the people seem to have reconciled to that fate. So, even if Nitish Kumar won his earlier mandates on the promise of “Vikas” and Mamata Banerjee on “Poriborton” – voters did not hold them critically accountable for it before returning them to power in subsequent elections. This may also be because – the idea of development is bound to be different for those not sure about where their next meal is going to come from and the ones who are spoilt for choice between a TV, Washing Machine or Mixer-Grinder as poll freebies.
But, electoral equations are more complex than econometrics. So – as we inch towards the all-important battle for Uttar Pradesh – the moot question is whether caste considerations of BSP and SP will prevail over charisma of Priyanka Gandhi, Smriti Irani or Anupriya Patel. And, it will not be just the Economy, stupid!!
The author is a marketer, writer and blogger who views life from a Right Angle. Opinions expressed are his own and not that of his employers.