Wednesday, July 27, 2016

How ITC reinvented itself to “a company that also makes cigarettes”

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

Do even Kashmiris know what they want ?

Why is Congress and Left Lib intlectual and media outraging most Kashmir?

Atrticle first published +ABP NEWS  Click here to read 

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

In the fatness of things

Tele Bhaja Shop in Kolkata
(photo courtesy:
Kerala has introduced a “Fat Tax” on “junk food” like Burgers and Pizzas. Before that I believe Bihar has already a levied a tax on Samosas. (Click here to read Chitra Narayanan’s sharp take in HBL). Both are odd. The first since – I am yet to meet an obese #Malayali. If Coconut Oil and Banana Chips can’t make them fat – nothing else will. And, taxing Samosas could actually threaten the fate of alliance in #Bihar. After all – who can forget Lalu Prasad’s famous declaration – “jab tak Samosa mein rahega aloo…..”

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
(photo courstesy

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.

Tale of Didi, Amma and Priyanka Caste Vs Charisma in Indian Politics

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.

Smriti Irani - the Bahu who all Bhabis Love to Hate

Picture Courtesy +DailyO India Today 

Article first published in +DailyO India Today (Click here)

No, Smriti Irani was not the best human resource development minister the country has had (though names of some of her predecessors like Arjun Singh also do not evoke much respect). Many think she was a walking-talking disaster and they are entitled to their opinion. But, there is absolutely no doubt that she has spunk. And, therein hangs a tale.

One cannot easily recall when the portfolio change of a Cabinet minister caused so much of elation and merriment - almost putting into shade all other changes in a mega Cabinet rejig. A leading daily carried the headline "Smriti Irani dropped", forgetting or ignoring the fact that she had been moved (or call it "shunted") to a ministry that oversees an industry that is the second largest employer in India after agriculture.

The liberal intellectual establishment and its friends in the media can barely hide their glee (not that they are trying particularly hard).
Interestingly, the nastiest jibes are coming from women - educated and accomplished by all accounts, some of them cultural czarinas in their own rights. Many of the quips and tweets are downright distasteful, which would have surely set the internet on fire if used against any of them.
One woman TV journalist was tickled to bits when a cerebral celebrity she was interviewing regaled her with an apocryphal anecdote of Irani snapping at an IIT director: "Why are you asking so many questions - are you a TV anchor?"

Front-page banner headline in mainstream newspapers calling her "Spinderella", which defies all standards of editorial decorum and should have left feminists fuming; have been lauded as "epic" by doyens of the profession.

Even before Irani became a minister, she has been a butt of jokes (such as those on the XXXL size of her dresses - the famous Fabindia episode in Goa) and people have not stopped short of making innuendos about her personal life.

Professional women who champion the cause of gender equality in all walks of life have made not-so-subtle suggestions about her rise to power for considerations other than merit. Similar insinuations about one of their ilk would have been met with angry outrage about misogyny in public life. The uncouth remarks about her by the likes of Sanjay Nirupam do not even merit mention.

So what makes Irani the "bahu" (advisedly not calling her "aunty") that all sisters-in-law love to hate?

Surely, she is not the first woman politician with a streak of arrogance - nay, haughtiness. There have been many queen bees of the political circuit. Granted, she did not have commensurate academic qualifications to be the HRD minister (if it is indeed a pre-requisite to head the ministry) and we shall not get into the predictable argument about the credentials of some other politicians of stature either.

The problem with Irani is similar to that of her perceived mentor - the prime minister himself. Both are considered as lacking political pedigree and outsiders in Delhi. They are first-timers in the government - compared to say a Sushma Swaraj or Arun Jaitley. Therefore, in her, opponents see a surrogate of Narendra Modi - and by attacking Irani they are hitting back at the big man by proxy.

Secondly, as the HRD minister, she was instrumental in striking at the root of the traditional bastions of academia and culture that have since independence remained the exclusive preserve of a privileged class nurtured in the Nehruvian ecosystem. That an alternate narrative could even exist was beyond the imagination of this pampered lot, who saw it almost as an assault on their fundamental right to life.

Thriving in the same symbiotic universe is a very influential community. This is the set that Modi recently referred to as a section of the media who never thought he could become the prime minister and is still not able to digest the fact.

Again by extension, the ire of this community falls on Irani. And, with good reason - for other than Modi himself - Irani is perhaps the only minister who has dared to take on the hostile media head-on. There are few as articulate as her in the BJP in one-on-one engagements with the media. Her sharp reactions on social media might appear petulant and immature drawing her more flak, but they never fail to rattle her detractors.

The cardinal sin Irani committed was not just contesting the scion of the Nehru-Gandhi dynasty in his family fiefdom, but bringing him precariously close to biting the dust. Even after the elections she has shown no signs of relenting and continues to nurture her adopted constituency with passion, much to the discomfort of the local political managers of the "family".

Again, besides Modi and BJP national president Amit Shah, she is the most vocal against the "dynasty", which resonates deeply in her stunning speeches in Parliament always hitting hard where it hurts the "family" most.

It is for this that she will remain a target as long as Modi himself remains a threat for the Gandhis. It would not be far-fetched to conjecture that the anti-Modi factions within the BJP and RSS have also been adding fuel to the fire to get even with the "boss".

But in their enthusiasm, most people have missed nuances and sub-texts that only some astute observers have picked up.First, by no means is textile a lightweight ministry. In the next phase of the Modi sarkar, economic reforms will be much more important than a cultural revolution. For that, someone bold and with high energy will be an asset, especially to bring in much needed labour reforms in the industry.
That doesn't mean the BJP's core ideological agenda will be abandoned. For that, a Prakash Javadekar groomed in RSS akharas, unlike a lateral entrant like Irani, is an apposite choice.

Finally, opposition and intrigue has only augmented Modi's meteoric rise. The same may also work for Irani, particularly if she is able to prove her worth as a star campaigner for the BJP in the upcoming Uttar Pradesh elections. Here, she can be the BJP's trump card and an answer to Priyanka Gandhi's charisma that the Congress is so heavily banking upon.
Even on Wednesday (July 6), when she was assuming office in the textile ministry, the media arrived in hordes. She did not miss the opportunity to have a dig at them: "It may be the first time that many of you have come to this ministry."

If not anybody else, at least the Banarasi sari weavers in Modi's constituency should be happy with her move to the textiles ministry.