Blackstone's Byron Wien Discusses Lessons Learned in His First 80 Years

Here are some of the lessons I have learned in my first 80 years. I hope to continue to practice them in the next 80.

1. Concentrate on finding a big idea that will make an impact on the people you want to influence. The Ten Surprises which I started doing in 1986 has been a defining product. People all over the world are aware of it and identify me with it. What they seem to like about it is that I put myself at risk by going on record with these events which I believe are probable and hold myself accountable at yearend. If you want to be successful and live a long, stimulating life, keep yourself at risk intellectually all the time.

2. Network intensely. Luck plays a big role in life and there is no better way to increase your luck than by knowing as many people as possible. Nurture your network by sending articles, books and emails to people to show you’re thinking about them. Write op-eds and thought pieces for major publications. Organize discussion groups to bring your thoughtful friends together.

3. Get enough sleep. Seven hours will do until you’re sixty, eight from sixty to seventy, nine thereafter which might include eight hours at night and a one hour afternoon nap.

4. Evolve. Try to think of your life in phases so you can avoid a burn-out. Do the numbers crunching in the early phase of your career. Try developing concepts later on. Stay at risk throughout the process.

5. Travel extensively. Try to get everywhere before you wear out. Attempt to meet local interesting people where you travel and keep in contact with them throughout your life. See them when you return to a place.

6. When meeting someone new, try to find out what formative experience occurred in their lives before they were seventeen. It is my belief that some important event in everyone’s youth has an influence on everything that occurs afterwards.

7. On philanthropy my approach is to try to relieve pain rather than spread joy. Music, theatre and art museums have many affluent supporters, give the best parties and it can add to your social luster in a community. They don’t need you. Social service, hospitals and educational institutions can make the world a better place and help the disadvantaged make their way toward the American dream.

8. Younger people are naturally insecure and tend to overplay their accomplishments. Most people don’t become comfortable with who they are until they’re in their 40’s. By that time they can underplay their achievements and become a nicer more likeable person. Try to get to that point as soon as you can.

9. Take the time to pat those who work for you on the back when they do good work. Most people are so focused on the next challenge that they fail to thank the people who support them. It is important to do this. It motivates and inspires people and encourages them to perform at a higher level.

10. When someone extends a kindness to you write them a hand-written note, not an e-mail. Handwritten notes make an impact and are not quickly forgotten.

11. At the beginning of every year think of ways you can do your job better than you have ever done it before. Write it down and look at what you have set out for yourself when the year is over.

12. Never retire. If you work forever, you can live forever. I know there is an abundance of biological evidence against this, but I’m going with this theory anyway.

Source: Blackstone Blog

The rise of incumbency

It is obvious by now to almost everybody that it has become incredibly difficult to set up new projects in India. Whether they are new greenfield manufacturing  sites or critical basic infrastructure, not much is happening in terms of new project activity. Talk, for instance, to any banker and they will tell you they have not seen a new greenfield project seeking approval for almost a year now. On the infrastructure front, the majority of projects awarded by the National Highways Authority of India over the last 18 months have yet to start work. They can’t get land, environmental approvals or financial closure — such is the sad state of our premier road-building programme. As an aside, power capacity worth 20,000 MW is stranded for lack of stable and price-competitive fuel linkages. With so much money stuck in these projects, who will start a new power venture today?

New investments are not taking place for several reasons: lack of clarity ingovernment policyland acquisition related issues, delays in environmental clearances, fund shortages, lack of fuel security and so on. All these issues are well known and discussed ad nauseam in the financial media. Everybody knows what the issues are. On the other hand, the solutions – while obvious – seem very difficult to operationalise. In the absence of a fundamental improvement in the business environment, no entrepreneur will be prepared to commit capital to new capacity.

What is more important, however, is the consequence of this investment famine and how it will affect various players in the economy.

The first consequence concerns the impact on economic growth. Since no investments are being planned by the private sector, a strong revival in capital expenditure is unlikely. Even though the public sector will accelerate its spending on new capacity creation, we are not going to get back to eight to nine per cent economic growth unless there is a surge in private sector capex. The lack of infrastructure is also a binding constraint; it will cripple our growth trajectory. The current absence of fresh projects for power and for roads will hurt us very badly two years from now. We will simply not have enough power to allow us to grow at eight per cent. Slow GDP growth has inevitable consequences for tax revenue, fiscal stability and job creation.

Second, given limited investment in capacity creation, supply-side issues will remain a bugbear. Much of our problem with inflation can be traced to the supply side, and this weakness will not be addressed. Inflation is not likely to decline in a sustained manner if we don’t ramp up the supply of all inputs across the economy. In such a scenario, any growth acceleration will inevitably trigger a fresh burst of rising prices, since companies use capacity constraints to exert pricing power. Will interest rates be able to trend down as much as the bulls assume? Can we get back to four or five per cent inflation?

The third issue deals with the current account deficit. We are already running deficits of between four and five per cent (among the highest in the world). With limited new capacity creation across the economy, we are likely to be stuck with high import growth; clearly, domestic production capacity will not suffice to meet the economy’s needs. We are already importing large quantities of coal; we will soon import iron ore (given the closing of domestic mines), most of our electronics, steel, fertilisers and so on. As domestic capacity creation stalls, our current trade deficit (over $180 billion) will blow out further at the first signs of an acceleration in domestic economic growth. What will be the consequences of this surging trade gap for the rupee? Any slippages on the rupee will fan the flames of inflation.

The other issue is the tilting of the playing field in favour of the incumbent across industries. Given the difficulty and the high cost involved in setting up new projects, producers with capacity already set up have a huge advantage when it comes to production. They will be given the chance to reap windfall profits. New players, on the other hand, will either lack capacity or suffer high costs of production (given the constraints of capacity creation). By tilting the playing field against new players, one is discouraging the emergence of new, more aggressive and more efficient players across industries. It will enable an otherwise incompetent management to effectively squat on assets, seek economic rents and benefits owing to their historic acquisition of land, environmental clearances, natural resources and so on — when these inputs were far cheaper and easier to obtain.

India has historically been very good at creating dynamic new companies, and this has been one of the greatest attractions of our market. There has been much churning in the list of the 500 largest companies by market capitalisation over the last 20 years, even as liberalisation wiped out much of the advantages of the older, more entrenched companies that thrived in the licence raj. This fundamentally improved the competitiveness and productivity of corporate India. By making it so difficult or expensive for newer entrants to either put up new capacity or expand, one is allowing incumbents to milk their good fortune of having functional capacity on the ground. Rather than skill and managerial competence, historical connections and access to cheap resources will be the greater driver of corporate profitability.

An environment of constrained capacity will also lead to high margins. I would not be surprised to once again see the current leading Indian companies holding among the highest margins and returns on capital in emerging markets. By erecting artificial barriers to entry, Indian policy makers are creating islands of high profitability, huge returns on assets and a potentially high-cost economy. I would expect corporate earnings to surge among these entrenched, incumbent players at the first signs of economic acceleration. Great news for shareholders, not for consumers of these products.

We are also going to make it very difficult for suppliers of capital goods in India to compete and survive. The bulk of corporate capex will go towards de-bottlenecking and productivity improvements (sucking more out of the existing assets), as opposed to fresh capacity. Again, this focus on productivity rather than on greenfield capacity is very good for profits and return on assets, but not for job creation. A lot more jobs are created through the creation of a new plant than by tweaking the productivity of an existing factory.

India should improve its business environment if it is to become an easier place to do business and incentivise capacity creation. The current choking up of private sector investments has multiple harmful consequences.

Source : Akash Prakash: The rise of incumbency 

 

Power of Money

Part 1 - Power of Money- By Adam Khoo (Singapore 's youngest millionaire at 26 yrs.)

Some of you may already know that I travel around the region pretty frequently. Recently, someone came up to me on a plane to KL and looked rather shocked. He asked, 'How come a millionaire like you is traveling economy?' My reply was, 'That's why I am a millionaire. ' He still looked pretty confused.

This again confirms that greatest lie ever told about wealth (which I wrote about in my latest book 'Secrets of Self-Made Millionaires').

Many people have been brainwashed to think that millionaires have to wear Gucci, Hugo Boss, Rolex, and sit on first class in air travel. This is why so many people never become rich because the moment they earn more money, they think that it is only natural that they spend more, putting them back to square one.

Part 2 - The truth is that most self-made millionaires are frugal and only spend on what is necessary and of value. That is why they are able to accumulate and multiply their wealth so much faster. Over the last 7 years, I have saved about 80% of my income while today I save only about 60% (because I have my wife, mother in law, 2 maids, 2 kids, etc. to support). Still, it is way above most people who save 10% of their income (if they are lucky).

Part 3 - I refuse to buy a first class ticket or to buy a $300 shirt because I think that it is a complete waste of money. However, I happily pay $1,300 to send my 2-year old daughter to Julia Gabriel Speech and Drama without thinking twice.

When I joined the YEO (Young Entrepreneur' s Orgn) a few years back (YEO is an exclusive club open to those who are under 40 and make over $1m a year in their own business), I discovered that those who were self-made thought like me. Many of them with net worth well over $5 m, traveled economy class and some even drove Toyotas and Nissans, not Audis, Mercs, BMWs..

Part 4 - I noticed that it was only those who never had to work hard to build their own wealth (there were also a few ministers' and tycoons' sons in the club) who spent like there was no tomorrow. Somehow, when you did not have to build everything from scratch, you do not really value money. This is precisely the reason why a family's wealth (no matter how much) rarely lasts past the third generation.

Part 5 - Thank God my rich dad foresaw this terrible possibility and refused to give me a cent to start my business.

Then some people ask me, 'What is the point in making so much money if you don't enjoy it?' The thing is that I don't really find happiness in buying branded clothes, jewelry or sitting first class. Even if buying something makes me happy it is only for a while, it does not last. Material happiness never lasts, it just gives you a quick fix. After a while you feel lousy again and have to buy the next thing which you think will make you happy. I always think that if you need material things to make you happy, then you live a pretty sad and unfulfilled life.

Part 6 - Instead, what makes me happy is when I see my children laughing and playing and learning so fast. What makes me happy is when I see my companies and trainers reaching more and more people every year in so many more countries.

What makes me really happy is reading all your wonderful posts about how this blog is inspiring you. This happiness makes me feel really good for a long time, much much more than what a Rolex would do for me.

Part 7 - I think the point I want to put across is that

happiness must come from doing your life's work (be it teaching, building homes, designing, trading, winning tournaments etc.) and the money that comes is only a by-product.

If you hate what you are doing and rely on the money you earn to make you happy by buying stuff, then I think that you are living a meaningless life.

Business Development: 9 Questions You Should Never Stop Asking as a Business Owner

As a business owner, here are some questions that you need to ask over and over, as your the market evolves and your strategic plan changes. Very often, the answers to these business development questions will change in response to evolving conditions. It is important that you change as well when it is necessary.

1. What business are you in? What business are you really in?

A typical business owner will answer this question by explaining the product or service that they sell. But this is not the business that you are in. The business that you are in is customer satisfaction. As a business owner, you must always define your business in terms of what your products or service does to improve the life or work of your customers.
Free Business Report: The Way To Wealth
You don’t sell life insurance; you sell peace of mind. You don’t sell cars; you sell safe, dependable transportation. You don’t sell houses; you sell safe, comfortable homes for families.
In order to implement successful business development for your company, you must realize that customers’ wants, needs, desires, hopes and expectations are constantly changing, and you must change with them, or your sales, cash flow and profitability will suffer.

2. What business will you be in the future, based on current trends?

In business, the trends are everything. Which way is the market going for you today, and what changes do you need to make in your strategic plan to move with the market?
What business could you be in if you were to change your product or service offerings in some way? What business should you be in if you want to be among the most successful and profitable businesses in your industry?
Imagine that could wave a magic wand and make your business perfect in every way. What would it look like? Especially, how would it be different from today? These are questions that you must answer over and over again as a business owner. If you are wrong in any of these answers, your business can go sideways and your plan for business development could fail.

3. Who is your customer? Your ideal customer? Your perfect customer for what you sell?

You can’t hit a target that you can’t see. As the market changes, your ideal customer profile changes as well. You can tell if you have properly identified the ideal customer for what you sell if you have high sales, cash flow and profitability. If you do not, for any reason, you need to revisit this question. Who is my ideal customer?

4. What does your customer consider as value?

What does your customer want to enjoy or receive from your product or service more than anything else? What must your customer be convinced of in order to buy your product or service rather than that of someone else? The answer to this question is the core of your strategic plan for business development. It is the core of all of your marketing, advertising and selling activities.

5. What do you do especially well?

In what areas do you excel? What is your competitive advantage? What makes your product or service superior to that of any other competitive product being offered in your marketplace?
As Jack Welch said, “If you don’t have competitive advantage, don’t compete.” As a business owner, your first responsibility when you start your business, and throughout your business life, is to develop and maintain a competitive advantage, an area of excellence in comparison with your competitors that your ideal customers want, need and will pay for. What is yours?

6. What are your goals?

You know the importance of detailed, business development planning 12-18-24 months ahead. Before you create a strategic plan of action, you must know the answers to the following questions: What are your sales goals for the next year, broken down by month, or even week and day? What are your goals for profitability? How much do you need or want to earn from your business activities? What are your growth goals? What percentage of market do you want to capture? The more specific and clear you are about your goals, the more likely it is that you will achieve them.
Most of all, does everyone in your business who is responsible for achieving those goals know exactly what those goals are?

7. What are the constraints on your business today?

What is holding you back from achieving your goals of sales, cash flow, and profitability?
Of all the factors that are holding you back from achieving successful business development, what is the biggest single factor, and what could you do to alleviate this constraint?
In every business, there are limiting factors that determine the speed at which you achieve your goals. You must be absolutely clear about these constraints or limiting factors, and work continually to remove them. Sometimes the constraint can be a lack of sales. Sometimes it is the lack of skilled, qualified people. Sometimes it is the lack of capital for growth or expansion, or even operations.
Here is one of those “brutal questions” that Jim Collins talks about: Why isn’t your business already as profitable as you want it to be? What’s the reason? Of all the reasons, what is the biggest single reason? Sometimes, asking and answering this question can be the push you need to trigger business development success.

8. What are the 20% of your activities that can account for 80% of your results?

What are the 20% of your prospects that can account for 80% of your sales? What are the 20% of your customers that account for 80% of your business? What are the 20% of things that you can do personally that can account for 80% of your results?
You will always have limited resources of time, money and people. You must therefore allocate these resources carefully in order to get greatest return on your investment.

9.  Based on your answers to above questions, what strategic plan of action should you take immediately? What should you do now?

What should you stop doing? What should you discontinue altogether so that you have more time to work on those few things that can make an enormous difference in your business?

Source: http://www.briantracy.com/blog/business-success/business-development-8-questions-you-should-never-stop-asking-as-a-business-owner-strategic-plan/

How India grows at night while the government sleeps... a very interesting read....

Gurcharan Das is an author and a public intellectual. He is the author of The Difficulty of Being Good: On the Subtle Art of Dharma which interrogates the epic Mahabharata. His international bestseller, India Unbound, is a narrative account of India from Independence to the turn of the century. His latest book India Grows At Night – A Liberal Case For a Strong State  has just come out. He was also formerly the CEO of Proctor & Gamble India.

In this interview he speaks to Vivek Kaul on why Gurgaon made it and Faridabad didn’t, how the actions of Indira Gandhi are still hurting us, why he cannot vote for anyone in the 2014 Lok Sabha elections and why democracy has to start in your own backyard if it has to succeed. Excerpts:

What do you mean when you say India grows at night?

Essentially the full expression is “India grows at night while the government sleeps”. I thought that would be insulting to put in the title. So I left it at India Grows at Night. And I subtitled it A liberal case for a strong state. The basic idea is that India has risen from below. We are a bottom up success, unlike China, which is a top down success. And because our success is from below, it is more heroic and also more enduring. But we should also grow during the day, meaning we should reform our institutions of the state, so that they contribute much more to the growth of the country. We cannot have a story of private success and public failure in India.

Could you explain this through an example?

I start chapter one of the book with a contrast between Faridabad and Gurgaon. If you were living in Delhi in the seventies and eighties, the big story, the place you were going to invest in was Faridabad. It had an active municipality. The state government wanted to make it into a showcase for the future. It had a direct line to Delhi. It had host of industries coming in. It had a very rich agriculture. It was the success story. So if you were an investor you would have put your money in Faridabad.

And what about Gurgaon?

In contrast there was this village called Gurgaon not connected to Delhi. No industries. It had rocky soil, so the agriculture was poor. Even the goats did not want to go there. So it was wilderness. And yet 25 years later, look at the story. Gurgaon has become an engine of international growth. It is called the millennium city. It has 32 million square feet of commercial space. It is the residence of all the major multinationals that have come into the country. It has seven golf courses. Every brand name, from BMW to Mercedes Benz, they are all there. And look at Faridabad (laughs)…

Faridabad missed the bus?

Faridabad still hasn’t got the first wave of modernisation that came to India after 1991. It escaped Faridabad. Only now it’s kind of waking up. And Gurgaon did not have a municipality until 2009. This contrast really is in a way the story of India grows at night. And the fact is that the people of Gurgaon deserve a lot of credit because they didn’t sit and wait around. If the police didn’t show up they had private security guards. They even dug bore-wells to make up for the water. The state electricity board did not provide electricity, so they had generators and backup. They used couriers instead of the Post Office. Basically they rose on their own.

So what is the point you are trying to make?

My point is that neither Faridabad nor Gurgaon is India’s model. Faridabad is a model where you have an excessive bureaucracy. Why did Faridabad not succeed? Because the politician and bureaucrat tried to squeeze everything out in the form of licences.

And Gurgaon’s disadvantage turned out to be its advantage. It had no government. So there was nobody to bribe. But at the end of the day Gurgaon would be better off, people would have happier if they had good sanitation, if they had a working transportation system, they had good roads, parks, power etc.

All that is missing…

All the things that you take for granted that you would get in a city, you shouldn’t have to provide them for yourself. This is the point. Neither model is right. And we need to reform the institutions of our state. And we need to create what I call a strong liberal state.

What’s a strong liberal state?
A strong liberal state has three pillars. One, an executive that is not paralysed, like Delhi is right now, where you have push and drag to get any action done. Second, that action of the executive is bounded by the rule of law and, third, that action is accountable to the people. When I mean a strong state, I am not talking about Soviet Russia or Maoist China. I am not even talking about a benign authoritarian state like Singapore, which is very tempting, because it has got such high levels of governance. I am talking about a classical liberal state – the same kind of state that our founding fathers had in mind or the American founding fathers had in mind when they thought about the state. And so that is not easy to achieve.
Why do you say that?
It is not easy to achieve because some elements in these three pillars fight with each other. In other words you have an excessive drive for accountability then the executive gets weakened.  I mean right now the Anna Hazare movement has so scared the bureaucrats that they won’t put a signature on a piece of paper. The Anna Hazare movement is a good thing because it awakened the middle class but it also weakened the executive. So, today more important than even economic reforms are institutional reforms – i.e. the reform of the bureaucracy. If a person is promoted after 20 years regardless of his performance, there are repercussions. If it doesn’t matter whether he is a rascal or outstanding, and both are treated the same, you won’t get high performance. You will get a demoralised bureaucracy. Those are the kind of reforms we need.

What are other such reforms?
Take the case of the judiciary, why should it take us 12 years to get a case settled when it takes two or three years anywhere else? You go to a police station to register an FIR, do you think they will do it? Either you have to bribe somebody or lagao some influence. You have this rising India amidst a very very ineffective state.

One of the things you write about in your book is the fact that India got democracy before it got capitalism. World over it’s been the other way around. How has that impacted our evolution as a country?
That also explains some of our problems. By getting democracy before capitalism, you had a populist wave. The politicians, when they thought about going to elections, started realising ke bhai we will tell people that I’ll give you Rs 4 for a kilo rice and get elected. In Punjab the politicians said we will give free electricity to the farmers and got elected. So you killed your finances through this populism. The states which did this really went bankrupt. Punjab and Andhra Pradesh, which did these two things, couldn’t pay their salaries to their bureaucrats.

And this started with Nehru’s socialism?
Nehru’s socialism created the illusion of a limitless society, that the state would do everything. Jo kuch hai, which we used to do for ourselves, through our families, etc, we now expected the state to do. That was the message given by the socialists. The fact is that the state did not have the capacity. In the courts judges knew their jobs. It was a good judiciary. Even the police was very good but suddenly you expanded the mandate so that half the cases today are government cases. You haven’t been paid a refund. Or the government is taking your land or something and so you go to court.  So the guilty in many cases is the state.

What you are suggesting is that the mandate of the state was expanded so much that it couldn’t cope with it?
And they did not expand the capacity. Suddenly you needed a 10-fold increase in judges and a 10-fold increase in bureaucrats. This is because the jobs you expected this people to do were so much greater. And you told people, especially workers and government servants, that you have rights. So a school teacher suddenly realised that he did not have to attend school, he could get away with it. The person who was his boss or her boss was too scared because of the union of teachers. So one out of four teachers is absent from our schools. And nothing happens to that person. I am answering your question about how embracing democracy before capitalism hurt us.  We became more aware of our rights. We tried to distribute the pie before the pie was baked. Before the chapati was created we started dividing it.

In fact there is a saying in Punjabi ke pind vasiya nahi te mangte pehle aa gaye (the village is still being built and the beggars have already arrived)…
Bilkul. Perfect. That’s an even a better saying. This has been one of the problems. In 1991, we did start building the economic base to support a democracy like ours. But these people frittered away some of the gains. Just see how much subsidy is being given on petroleum products. It is around Rs 1,80,000 crore. I mean you could transform your school system with that kind of money.

And the health system…
Yes even the health system.

How much do you think the socialism of Nehru and Indira Gandhi is holding us back?
The damage that Indira Gandhi did was far greater. Her licence raj combined with the mai baap sarkar, this double whammy, gave the illusion to the people that the state would do everything. Nehru had never talked about a mai baap sarkar. The second was the damage she did to our political institutions. We owe Nehru a great debt because he built those institutions. Our modern political democracy we owe it to him. But she did a lot of damage to those institutions.

Could you elaborate on that little?
During the period she was the Prime Minister, I think she dismissed 59 elected governments in states. Now we hardly hear of this. This is partly a reaction to what she had done. She tried to change India’s culture and change our political system. A lot has been written about the emergency and so on. But the enduring damage we don’t realise. Before her, Chief Ministers were a little afraid when a secretary said no sir you can’t do this. And if you tried to do it, the secretary wouldn’t bend very often. Now they just transfer. Look at what Mayawati did. Also, after Indira Gandhi, the police became a handmaiden of the executive. The police lost its independence.  Even the judiciary was damaged. She wanted committed judges. Fortunately the Supreme Court did not succumb to that rot.

“It is tempting to compare crisis-ridden Hastinapur with today’s flailing Indian state,” you write. Could you explain that in some detail?
Before this I wrote this book called The Difficulty of Being Good. I interrogated the Mahabharata in a modern contemporary way. And I realised that the Mahabharata is us, still. The great scholar Sukthankar, the editor of the critical edition of the Mahabharata, had once said that the Mahabharata is us. And I had always wondered what he had meant. I realised after reading the book that really it’s a story of India. And why I preferred the Mahabharata to the Ramayana is because in the Ramayana the hero is perfect. The brother of the hero is perfect. The wife of the hero is perfect. Even the villain is perfect. Luckily I had done Sanskrit in College and so I went back to my roots. I went to study in Chicago.

And what did you realise after studying the Mahabharata?
Essentially the Mahabharata is about the corruption of the kshatriya institutions of that time. The way the rulers, the nobles behaved, it clearly upset the author of the Mahabharata, or we should say authors, because it was continuously evolved over 400-500 years. They were very upset and enraged as today young Indians are enraged by the government. They were enraged by the institutions of these kshatriyas. The sort of big chested behaviour.  The idea that you went to heaven if you died fighting on the battle field. That sort of notion. So most people think Mahabharata is about war, but actually it’s an anti-war epic.

So what is the point you are trying to make?
In Mahabharata, Hastinapur is the capital of the kingdom of the Kauravas. The Pandavas have created a new capital at Indraprastha. The point is crisis-ridden Hastinapur is somewhat like our crisis-ridden institutions of today. People were impatient and they were enraged by what was going on and so they had to wage a war at Kurukshetra. And I just hope that we don’t have to do that. We can reform the institutions before we reach that point. That’s the comparison to Kurushetra and Hastinapur that I spoke about.

You were a socialist once?
I was a socialist like all of us when we were in the 20s and 30s. But then we could see that Nehru’s path was leading us to a dead-end. Certainly a part of India Unbound is a story of the personal humiliations that I experienced, and on top of that Indira Gandhi’s failures really converted me. When the reforms came in 1991 I had become a libertarian. I really celebrated the reforms. For me that was Diwali and so I began to believe that the story of India rising without the state was a sustainable story. And I began to believe that this was a heroic thing and a laissez faire state was the best state. Back then, in my view, the state was a second order phenomenon.
Now, writing this book partly, and looking back over twenty years, I have concluded that state is a first order phenomenon. So I have gone from being a socialist to a libertarian to what I would go back and say is a classical liberal, who really doesn’t believe that laissez faire is the answer, and who does believe that you need the state.

Can you elaborate on that?
You need a limited state and not a minimalist state as Nozick (Robert Nozick, an American political philosopher) would have said. But that limited state must perform. So I have come to realise that the success after 1991 has partly been because there were regulators in those sectors which rose. The election commissioner, the RBI, Sebi, these have all contributed. Or even the first Trai (Telecom Regulatory Authority of India, the telecom regulator) under Justices Sodhi and Zutshi. That first Trai sent the right signals. If we had left it to the Department of Telecom (DoT) and did not have any regulator things might have been different. DoT wanted to crush the new private companies. So what I am saying is that you need good regulators. You need government as a good umpire. You don’t need government to own Air India. But you need a good civil aviation regulator who will ensure a level playing field for everyone in the market.

You explain in some depth in your book as to why Indian political parties treat voters as victims. One can see that happening all the time and everywhere…
And it also explains why I cannot vote for anybody in 2014. Really, as an Indian citizen I have been thinking who will I vote for? Every party treats voters as a victim. They are all parties of grievance. We don’t realise that one third of India is now middle class. This new middle class are tigers. They have just made it. They don’t want to be reminded that they are victims. They are looking for the state to further their rise. And they are looking for good roads, good schools and these things.

But nobody talks about development in India…
Yeah. The BJP, if you scratch them, they are talking about 1,000 years of Muslim oppression. Congress says you are victim of globalisation and liberalisation. So we will give you free power, free this and free that, NREGA, etc. The Dalit parties say you are a victim of oppression. OBC parties say you are a victim of upper caste oppression. Nobody is talking about the reform of the institutions. Even the Anna Hazare movement was talking about only one Lokpal, which is fine, but it had to be couched in a bigger story.

You critique the Anna movement by saying that they have further undermined politicians and political life. Could you explain that in detail?
They have undermined politics and political life. It is very easy to do that. When you attack politicians then you are also unwittingly attacking the institution of elections. The good thing is that it has put fear in the minds of politicians. Whether the Anna Hazare movement fails or succeeds is no longer important. What is important is the legacy that it has woken up the middle class. That won’t go away easily. The question then for a young person today is that the Anna movement may have gone, but what can I do?
The answer is start with your neighbourhood. Start with your ward and see what can be done. And that is the local democracy I am talking about. That’s where politics begins and that’s where habits of the heart created. I am so in favour of grassroots democracy, the fact that we should put the power downwards. Also, even in the rhetoric of the Anna Hazare movement, they talked about the gram sabha, the mohalla sabha, that’s where we get the habits of the heart.

What about Arvind Kejriwal’s decision to enter politics? How do you view that?
Before I get to that let me discuss something that I talk about in my book. In this book I hope for a formation of a new political party along the lines of the erstwhile Swatantra Party. But the agenda of this party is not just economic reform but institutional reform. At the Delhi launch of my book Arivnd Kerjiwal was there. TN Ninan, Chairman of Business Standard newspaper, was moderating the discussion and he said since both of you are advocating a political party, why don’t you join hands. I said, I admire Kejriwal, but he has got all kinds of crazy people around him, who still think that reforms were a bad India. Also, they never talk about institutional reform. So I am not sure that we could be together.  But I said where we would be together is that both of us are tapping into the new middle class, which is impatient, confident, assured and which wants to get rid of corruption. But I feel that we need the hard work of institutional reforms and that street protest is not the answer. I also said I am so glad that Kejriwal is now looking at politics because that is the right route to go.

One of the things that one frequently comes across in your book is that you are hopeful that the politics of India will change in the next few years as more and more people become middle class.
Yes.

But it doesn’t look like…
It doesn’t look like because politics has been left behind. But now they are realising. They have been shaken up because so many of them (the politicians) have gone to jail. Even the language is a little more cautious now.

So you see the kind of chaos that prevails right now will go away?
It is only out of chaos that something happens. As Nietzsche (Friedrich Wilhelm Nietzsche, a German philosopher) said, it is the chaos in the heart that gives birth to a dancing star. I see things positively even though we have been a weak state. But as they say, history is not destiny.

“The trickling down of power has made India more difficult to rule,” you write. Could you explain that in the context of the politics that is currently playing out?
It has made India more difficult to govern. But it remains a very important development because I am in favour of federalism. The best thing about FDI in multi-brand retailing is that they have given the states the freedom to decide whether they want foreign investment or not. So imagine an FDI decision is now in the hands of the state. And I think that is wonderful because each state is like a country in India. The state of UP has 180 million people and I have no problem with the trickling down of power. My problem is that we should be able to have an effective executive at the centre. Today we have a very weak Prime Minister. We need a stronger person in the role. We don’t want an Indira Gandhi, but we want a strong person who can be an institutional reformer.

You hope for the rise of a free market-based party like the erstwhile Swatantra Party (a party formed by C Rajagopalachari and NG Ranga in 1959 to oppose the socialist policies of Nehru). Do you see really see that happening?
You have to be lucky to some extent and hope to get a young leader. I don’t know who it will be. But there will be somebody in their thirties and forties. Then the country will rally behind them. The way they rallied behind the Kejriwal-Anna Hazare movement. In one sense the last thing India needs is a another political party. But I also see that I cannot vote for any political party. I see that there is a wing of the Congress which does not like this free power and entitlement culture and the corruption that is being bred in the Congress. There are people even in the BJP who have faith in the past, but they are not anti-Muslim necessarily. So I think they will come together for a secular political liberal party.
Similarly there are people in the regional parties. And this is a good time for a liberal party. Swatantra Party was at the wrong time. They were too early.  They were ahead of their time. So if we are lucky we will throw up a leader, but you can’t depend on that.  But the hopeful thing is the rise of the middle class which will make the politics change.

Source : http://www.firstpost.com/india/how-india-grows-at-night-while-the-government-sleeps-469035.html

My Views in Percept -O- Speak

Komal Shah
Head - New Business Development
Percept Profile

Good to Great: Why Some Companies Make the Leap... and Others Don't 

Friends, I am keen to share some insights that I gleaned from Jim Collins wildly popular book Good to Great: Why Some Companies Make the Leap...and Others Don’t. Released in 2001, this book was an instant bestseller in the genre and even today is widely regarded as a modern classic of management theory by management practitioners, corporate leaders, students and investors.   

Jim Collins presents the factors that allow a small fraction of companies to make the transition from being merely good to truly great. One overarching theme that links together virtually all of Collins’ arguments is the need to define a narrowly focused objective and field of competency and then focus all of the company’s resources toward that area of strength. Repeatedly, Collins warns that straying too far from a company’s established strengths is inimical to the attainment of greatness.

The key points presented in the book are:

• Discipline: Disciplined people, disciplined thought, and disciplined action are the most significant factors in determining a company’s ability to achieve greatness.
• Level 5 Leadership: Quality and nature of leadership in the company is of paramount importance. Great companies are led by “Level 5” leaders who have an unusual mix of intense determination and profound humility. These leaders often have a long-term personal sense of investment in the company and its success, often cultivated through a career-spanning climb up the company’s ranks. The personal ego and individual financial gain are not as important as the long-term benefit of the team and the company to true Level 5 leaders.
• “First Who”- “Then What”:Jim asserts that the process of securing high-quality, high-talent individuals with Level 5 leadership abilities must be undertaken before an overarching strategy can be developed. With the right people in the right positions, Collins contends that many of the management problems that plague companies and sap valuable resources will automatically dissipate. As such, he argues, firms seeking to make the Good to Great transition may find it worthwhile to expend extra energy and time on personnel searches and decision-making.
• Get Real: Great companies identify and assess the real defining facts in the larger business environment accurately and realistically. Jim warns that an inability to keep pace with changes often results in company failure. Collins outlines a four-step process to promote awareness of emerging trends and potential problems: 1) Lead with questions, not answers; 2) Engage in dialogue and debate, not coercion; 3) Conduct autopsies without blame; and 4) Build red flag mechanisms that turn information into information that cannot be ignored.
• The Hedgehog Concept (Simplicity within the Three Circles): The way to make the transformation from Good to Great is often not doing many things well, but instead, doing one thing better than anyone else in the world.  Collins uses the metaphor of the hedgehog to illustrate the seemingly contradictory principle that simplicity can sometimes lead to greatness. When confronted by predators, the hedgehog’s simple but surprisingly effective response is to roll up into a ball. While other predators, such as the fox, may be impressively clever, few can devise a strategy that is effective enough to overcome the hedgehog’s simple, repetitive response. It may take time to identify the single function that will be a particular firm’s "hedgehog concept," but those who do successfully identify it are often rewarded with singular success. In order to help expedite this process, Collins suggests using the following three criteria: 1) Determine what you can be best in the world at and what you cannot be best in the world at; 2) Determine what drives your economic engine; and 3) Determine what you are deeply passionate about.
• A Culture of Discipline: Great companies have an overarching organizational culture of discipline. Each manager and staff member is driven by an unrelenting inner sense of determination. Each individual functions as an entrepreneur, with a deeply rooted personal investment in both their own work and the company’s success.
• Technology Accelerators: Great companies are careful while deploying new technologies and carefully assess the cost and benefits of adoption. They apply technology in a manner that is reflective of their "hedgehog concepts" -- typically by selecting and focusing solely upon the development of a few technologies that are fundamentally compatible with their established strengths and objectives. Collins characterizes the ideal approach to technology with the following cycle: "Pause -- Think -- Crawl -- Walk -- Run."

• The Flywheel: By making decisions and taking actions that reinforce and affirm the company’s "hedgehog" competencies, executives initiate positive momentum. This, in turn, results in the accumulation of tangible positive outcomes, which serve to energize and earn the investment and loyalty of the staff. This revitalization of the team serves to further build momentum. If the cycle continues to repeat in this manner, the transition from Good to Great is likely to transpire. This is the flywheel effect.
• Longevity of purpose: Collins contends that companies need a set of core values in order to achieve the kind of long-term, sustainable success that may lead to greatness. Companies need to exist for a higher purpose than mere profit generation in order to transcend the category of merely good. According to Collins, this purpose does not have to be specific -- even if the shared values that compel the company toward success are as open-ended as being the best at what they do and achieving excellence consistently, that may be sufficient as long as the team members are equally dedicated to the same set of values.

Source: http://mypercept.in/Percept_newsletter_2009/May12/percept_o_speak.html

My Interview in Percept Newsletter - Up Close

Komal Shah
Head – New Business Development
Percept Profile (A Division of Percept  Limited)


How has your experience been so far with regard to your association with Percept Profile?
I am basically a Marketing and a Brand Management Professional and have worked on both sides of the table – agency as well as for clients. I have worked on branding, communications, new product development and marketing for past 12 years. Hence, working with a PR firm - Percept Profile - has been a novel and different experience. However I believe that when professionals with different skill-sets and diverse backgrounds work together, it truly helps in what an agency can eventually offer to its clients.  I strongly believe that professionals who have joined the agency from client end and the brand management functions bring in a different perspective not just from the discipline point of view but for the category itself.
Heading the new business development function at Percept Profile has given me in a short span of time many opportunities to work on various brands across different sectors; to understand various markets, customer realities, brands marketing & their communication objectives. The journey of developing effective PR programs that influences all stakeholders pertaining to the brand is truly exciting.

What’s currently in the works at Percept Profile?
Percept Profile is constantly targeting new clients in new sectors with new kinds of services and solutions. We currently offer communication solutions across various sectors. We are sector agnostic. We provide strategic counseling to various brands grouped around five verticals/themes – Corporate & Finance, Lifestyle & Retail, Media & Entertainment, Sports and Talents.
In today’s world of instant feedbacks and a fragmented media scenario, there is a growing and strong community on social media. To meet our clients’ communication needs in the social media space we have started a Social Media division in August 2011. Today Percept Profile has a separate team and division to deliver solutions and monitor the social media for our clients.

Can you share with us some milestones of your advertising career?
I have been fortunate to get many opportunities on various challenging assignments such as Corporate Campaigns, Product Launches, Theme Park, Launches, Services Launches, Large Promotions and Contests. Some memorable ones include the Corporate campaigns & launch campaigns of  esteemed brands such as Reliance Mutual Fund, Reliance Industries Ltd., Hindustan Construction Company (HCC),   Parle Agro’s - Frooti, Jolly Jelly, Bailley mineral water, Tata Chemicals - Shudh detergent, Essel group’s-  Water Kingdom theme park , Esselworld amusement park. Direct marketing/ promotion and contests at pan India level of Tata Tea and ICICI bonds. Working on all these brands has been great, it was a rich learning and challenging experience.
What is the most memorable project you’ve worked on?
I have been truly blessed to get a wide range of experience across different products & platforms, on different and innovative campaign structures and in different geographies, and those experiences have been very enriching.
My most memorable projects have been handling marketing and entire Brand management functions of Esselworld – India’s biggest amusement park and Water Kingdom- Asia’s largest theme park.  These projects gave me an opportunity to demonstrate leadership and handle independently all marketing and brand management functions. Water Kingdom was my dream project, it was completely my baby, I was solely responsible for the Water Kingdom launch right from research on industry, competition and consumer insights to the launch campaign, direct promotions and contests, event management, handling celebrities, aligning customer relations functions, merchandising and tie ups with various Food and Beverages suppliers to park such as Coca –Cola, Frooti, Mcdonalds, Shree Sunders and more. It was a very satisfying, enriching and thrilling experience.

How do you envision the PR in the next five years?
Earlier PR was about relationships, but today it is about knowledge and the flow of information. The PR industry needs to evolve from an expense to an investment space in near future. If we want the business world to take Public Relations seriously, Public Relations Communications Program have to function in tandem with other business and marketing initiatives to allow the process to deliver results that are tangible. Having said that PR programs have to be accountable and add value in lead generation, conversion, thought leadership, Web traffic and Brand awareness. The PR industry in India is facing a talent crunch. There is an acute need to train and retain people in this space. I believe that advocacy and image management will be critical functions of PR.

Do you think traditional media is losing ground to the rapidly growing social media sites such as Twitter and Facebook ?
I don’t think traditional media is losing to social media sites. In fact social media is giving us more communication tools to engage, interact and communicate with target audience. Both mediums have to work hand in hand and play supplementing role in fulfilling the communication needs of various brands and support in effective implementation of PR Programs.  The PR industry has to incorporate social media tools along with tradition media tools in their PR campaigns to meet client’s priorities. 

How do you unwind after a hard day at work ?
Playing with my kids or reading to them in the evening is my way of de-stressing after a challenging day at work. I do spend time on my iPad at home to catch up on the latest trends on the social networks or read some blog posts. I don’t do any business-related work on the weekends. It makes me more focused and effective during the week.

What is your personal success mantra ?
Success is the sum of small efforts, repeated day in and day out. I learn from my mistakes. I reflect on what’s working and what’s not working for me. And adjust my vision, my strategy, or my communication to improve my efforts.

Any parting shot for our readers?
Always remember what’s really important in life and what gives you happiness and a sense of satisfaction. Unfortunately, you won’t be remembered after you’re gone, for how many hours you worked.

Source: http://www.mypercept.in/Percept_newsletter_2009/Nov_2011/up-close.html