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CONTENTS
EDITOR Gp Capt R Vijayakumar ﴾Retd﴿, VSM
READERSHIP OUTREACH Gp Capt Dr R Venkataraman ﴾Retd﴿
Sundar R Vakeeswari M DESIGN D Rajaram, Tayub Refai
MADRAS MANAGEMENT ASSOCIATION Management Center, New No.240 Pathari Road, ﴾Off Anna Salai﴿, Chennai 600 006 Ph:044‐2829 1133 / Email:mma@mmachennai.org | mandate@mmachennai.org | www.facebook.com/mmachennai
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EDITORIAL
Gp Capt R Vijayakumar (Retd), VSM
A Nation's Giant Leap
T
he interim budget has reached out far and wide with
I am happy to present an article on the seminar in this issue
well-crafted messages. Any budget presented close
with an embedded video. Kindly watch and share your
to the election tends to have an overdose of colour
feedback.
and populist overtones, but this was not one of those, even though the polls are barely a few months away. The year 2023 ended on a positive note for the Indian economy. GDP growth in the second quarter—at 7.6%, led by a strong rebound in the Manufacturing sector—came in much
MMA Annual Convention 2024 India celebrated its 75th Anniversary of Independence in 2022. Milestones like these not only provide an opportunity to celebrate the achievements of the past but also serve as
better than market expectation. India is entering 2024 on a confident note with high growth and moderating inflation.
The critical question for 2024 is, whether India’s growth momentum will be sustained. A few areas of concern are increased geopolitical risks, strong urban consumption, high consumer borrowing, China-plus-one benefits, etc. There are uncertainties, but overall the mood is optimistic. As our
The accelerated pace of economic reforms in the last few years in the domains of fiscal, digital, physical infrastructure, and social
economy moves to a more stable growth path, our focus
inclusion has positioned India
should be more on growth that is more broad-based and
for a higher and sustainable
inclusive. In this context, MMA organized a seminar on “India
growth.
2024” addressed by two eminent speakers on various issues. BUSINESS MANDATE
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occasions to envision a future for the country. The
India is vast, and by adopting it and taking the lead in positive
Government of India has set for itself the goal of turning the
evaluation, we can propel India forward at an even faster pace
country a “Developed” economy by 2047. The accelerated
to improve lives and livelihoods.
pace of economic reforms in the last few years in the domains of fiscal, digital, physical infrastructure, and social inclusion has positioned India for a higher and sustainable growth. This, together with the largest and deepest labour pool—with a relatively
inelastic
labour
market—provides
a
great
opportunity for improving productivity at a pace faster than the growth in wages. This enhancement would improve the global competitiveness of enterprises doing business in India. The convention will help participants understand India on the theme "India@2047: Leapfrogging to the future,"
In this context, MMA organized a talk by Mr. Gopi Kallayil, Chief Business Strategist at Google AI, USA, on the theme “AI for Business.” It is indeed a privilege and an honour to host Mr. Gopi Kallayil at MMA. I am delighted to present the article on his presentation in this issue with an embedded video. Please watch and get inspired to adopt AI in all your endeavours.
MMA Amalgamations Business Leadership Award 2023
focusing on three special sessions: (a) The Future of Industry
Since 1969, eminent achievers in business and industry
– Capturing the $1Tn Opportunity in Shifting Global Supply
are being honoured with the MMA Amalgamations Business
Chains, (b) New Technology Frontiers – How India can Become
Leadership Award,
the Innovation Engine for the World, and (c) Developing the
Anantharamakrishnan, Founder and Past President of the
World’s Leading Talent Engine.
Madras Management Association. Nineteen luminaries, all
I would also like to congratulate Mr. Shankar V, Chairman, MMA Convention Committee, and our knowledge Partner, McKinsey & Company, for tirelessly working over the last few months to make the convention a grand success. I also thank the sponsors for their support in organizing the
instituted in memory of Shri
S
outstanding leaders and active proponents of social responsibility of business, have done this Award proud by accepting it. They reflect Shri S Anantharamakrishnan's business philosophy and beliefs. I am delighted to share that Mr. N. Chandrasekaran, Chairman of TATA Sons, has been selected by the eminent
event.
India and the AI Opportunity to Speed Up Growth We have grown so used to AI working behind the scenes to improve our web experience that we don’t even see it, but the next wave will take us from the Auto-pilot to Co-pilot mode. The opportunity AI presents in various facets of life and work is huge. India needs to adopt it strategically and also take a leading role in AI regulations so that it serves our economic ends with minimal risk. AI should be designed to align with human values, meet human needs, and be accountable to human stakeholders. The AI opportunity for 6
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selection panel consisting of Mr. Azim Premji, Mr. M. M. Murugappan, Mr. Seshasayee, Ms. Zia Mody, and Mr. Harish Mariwala, to receive the 20th MMA Amalgamations Business Leadership Award 2023. It's indeed a privilege and a proud moment for MMA & Amalgamations Group that Mr. N. Chandrasekaran, Chairman of TATA Sons, has kindly accepted to receive the award in person and deliver the 20th Anantharamakrishnan Memorial Lecture at the grand Award function scheduled to be held on Wednesday, 28th February 2024, at Hotel Taj Coromandel, Chennai.
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Family Business
and knowledge partner, EFL, are putting together a great
Over the years, some small Indian family businesses have established strong business ties internationally. This success was achieved despite the slowdown of the global economy due to COVID-19. Government policies and reforms have helped boost direct foreign investments. These measures were more applicable to large businesses; the presence of mediumscale businesses was virtually nil until the early 2000s. But since then, a small group of lesser-known businesses have established strong business ties with foreign entities.
convention with a galaxy of outstanding speakers. The convention content and structure have been finalized with great care, keeping in view the aspirations and expectations of our women delegates. Looking forward to seeing you in person at the convention on 16th March 2024 and you can also watch it live.
Eliminate Work Stress and Employee Depression A silent epidemic that stalks job-holders can be fought off with measures aimed at their well-being. Enterprises
In this context, MMA organized a discussion on the theme
nowadays face workplace stress and depression that take an
of the book, "Beyond Three Generations: The definitive
enormous toll on employees and corporate performance.
guide to building enduring Indian Family Businesses,"
Ultimately, it requires leaders who refuse to accept workplace
authored by Mr. Navas Meeran, Mr. M. S. A. Kumar, Mr. Firoz
stress and depression as unchangeable and who don’t
Meeran, and Mr. George Skaria.
promote initiatives like yoga classes and stress reduction
I am pleased to present the transcript of the discussion in this edition for your reading. Click to watch the video…
MMA Women Managers Convention 2024
workshops to overcome these problems. In this context, MMA is organizing a talk on February 19, 2024, by Ms. Irina Dwarak, a disciple of Swami Parthasarathy at Vedanta Academy, at 6:00 pm on the theme "Steps to
Come March, our women members step up their efforts
Mental Well-being." Kindly join us in person at MMA
in interacting with women thought leaders, entrepreneurs,
Management Center or watch it live to get rid of your stress!
and corporate executives at the Annual MMA Women Managers’ Convention. The event is a celebration of the spirit of women and the many diverse roles they play. We, at MMA, believe that Women’s Day is not merely another shallow exercise in tokenism but a genuine celebration of the spirit
In this issue I am also delighted to present articles on: “Dance of Disruption and Creation - Epochal Change and the Opportunity for Enterprise, Lessons Learnt in a Disruption” by Mr Gopal Vittal, MD & CEO, Bharti Airtel and “Drive: The Surprising Truth About What Motivates Us,”
of women.
transcript of event under Read & Grow series. The focus of the convention is to inspire and guide women to grow in every area of life. The theme of the convention this year, "Level Up," will focus on the highs and lows of being a woman in management, conversations that
As always, we would be happy to hear your views, comments and suggestions. Happy Reading….
offer support and engagement on common business struggles, and an opportunity to voice issues and ask questions. The MMA Women Managers’ Convention will take place on Saturday, 16th March 2024 on the theme “Level Up” at MMA Management Centre. The convention committee headed by Ms Mridula Ramesh BUSINESS MANDATE
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At a time when political leaderships in the country are going to be busy with the all‐important elections and later the post‐poll re‐arrangements, if any, and the bureaucracy too is likely to be stymied for the period, an independent assessment of what has been achieved and what awaits the nation in the short to long term is in order.
The year 2024 will witness an increase in global uncertainties
the Korean War broke out, most of the diplomatic efforts to bring the war to an end were undertaken by India. So it is not merely the size of the country or its economy alone that matters. The world is even more interconnected today than it was maybe a decade or two back. I do believe that our security, to a considerable extent, depends on the nature and extent of our relations with other countries across the globe.
Mr M K Narayanan
Maintaining unambiguous relations with all countries
Former National Security Advisor of India (NSA) & Governor of West Bengal
is vital for India. It is never easy to predict how the
P
eople don't quite realize how much the events happening outside our country affect our national security. Shaping a national security
policy is very important, particularly as we grow and become a country that people look up to. Maldives is a small country, but we see how they behave with us. It's important that we keep our focus.
future will turn out.
Need to Relook at Neutrality Neutrality is not the best option. The Ukraine war started in 2022, and Hamas attacked Israel in 2023. In this backdrop, we should not lower our guard, as we can never be sure what will happen next. The year 2024 will witness an increase in global uncertainties, and they will cast a shadow on our national security. It is possibly
We are a nation today with a great deal of economic
time for India to readjust our idea of neutrality, which
heft. But we were influencers of world policy even when
has been our stock in trade for many, many years. We
we did not have the economic heft. In the '50s, when
have reached a certain status. Shortly, we will be the
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two. Today that has changed. We cannot adopt a policy that is meant for a weaker nation.
Our neutrality means nothing. It is only good on paper. So, we
Three Hotspots Let me examine this from the point of each of the
may have to revise our policy of
problems that we face. The three hotspots in the world
remaining neutral.
today are Ukraine, the Middle East, and the Asia Pacific. Ukraine would have collapsed within weeks of Russia's attack, but NATO and the West came to its aid. That is
third most important economic power in the world. We
what sustains them today. Neither side is willing to give
have one of the largest armies in the world. We have
up and come to a compromise. Instead, they are trying
the best minds. So, neutrality is not really the best
to up the ante and may be even resort to nuclear
option for us.
weaponry. In such a situation, our neutrality means
I know for all the years that I was in the
nothing. It is only good on paper. So, we may have to
government, we used to keep talking about how
revise our policy of remaining neutral. We cannot shy
important neutrality was to us. Pandit Nehru talked
away from our responsibilities.
about non-alignment. We recognized our strengths and
Even if we are a reasonably big or medium power,
interests and decided that we cannot afford to take
we require friends. Traditionally, the Soviet Union or
sides, because everyday life of the people matters to us.
Russia has been our friend. We need to have a much
India had to play between the United States, which was
better understanding of the nature of our diplomacy,
number one, and the Soviet Union, which was number
essentially to protect our security. If we do not take
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While the West, and the US in
believe that they are a superior race and a superior
particular, want to demonize
country. The United States and the West would be happy
China, we should demonstrate diplomatic capability to ensure
if there is a war between India and China on the Russia versus Ukraine model. They will supply equipment and manpower. But at the end of the day, India and China
that while we differ, we do not
must go back to work. So it's important from the
have an open war.
national security point that we arrive at a modus vivendi with China. I was for seven years a Special Representative for
some position, then they will say, "What kind of friend
Border Talks with China. The Chinese are also human
are you?"
beings. They have an advantage when it comes to the
Maldives has now extended a hand to China, which is remarkably unpopular in that nation. The Middle East has been an area of great interest and influence for India. We have had a Middle Eastern policy over the years. Much of the Middle East has been built by Indians, and Indians play a role in influencing the economy of the Middle East. But in the recent IsraelHamas conflict, we seem to be hedging our bets, but how long can you do that? We are hunting with the hound and running with the hare. The same applies in many ways to the Indo-Pacific region, which is less incendiary than either the Middle East or Ukraine. But we are fast approaching a conflict situation there with China's intimidation of Taiwan. What is our position there? We need our friends. Pakistan is not our
border. While the West, and the US in particular, want to demonize China, we should demonstrate diplomatic capability to ensure that while we differ, we do not have an open war.
Internal Security Situation The internal security situation is far better than the external security. Terror attacks have become rare, partly because of some historical reasons. Many of the world's leading terror groups like ISIS and Al Qaeda are going
through
various
stages
of
restructuring,
leadership issues, etc. Across the globe, the number of terror attacks has come down. India has also been a beneficiary. That doesn't mean that terror attacks will not take place or that we can believe that we will be at peace at all times.
immediate problem.
Though people believe there is peace in Kashmir, I
India and China: A Peculiar Relationship
would like to differ and state that Kashmir is not at
The first answer that I have on the question of
peace. The violence levels have certainly come down.
national security is that we need to understand how to
There has not been a great deal of animosity towards
deal with forces that are not necessarily on our side.
the removal of Article 370. That does not mean that
The one country that we need to be careful about is
there has been an acceptance of it. Kashmir is still
China. I'm not saying that we should go to war. India
wrapped in a great deal of animosity. We need a much
and China will never be friends, but both countries
more acceptable political policy to deal with the
cannot afford to be enemies. It's a struggle. The Chinese
situation in Kashmir.
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An Uncertain Northeast
and national security. Most of our problems appear
The Northeast is much quieter today than it has been for several decades. But the Northeast is always an uncertainty. There is always struggle. Violence is just below the surface. We have seen what happened in
harmless. But that is not exactly true. We are in a better situation than we have been before. However, vigilance is the only protection that we have for our national security.
Manipur, which has always been difficult, but we have never seen a flashpoint as it happened now. The Northeastern states believe that they need to have a great deal of distance between Delhi and themselves.
The Union government must focus on those states that are lagging
Coming to the Naxalite movement, we have never had a situation of peace as we have now. The Naxalite movement has been under a great deal of check. But I'm hesitant to say that the battle over Naxalism is over and therefore, we need to be always on guard. Punjab today is at peace, and there are no major issues. But there is a great deal of economic resentment rather than
Dr S Narayan IAS ﴾Retd﴿
political resentment. The Khalistan movement is going on across the world. There is a patronisation for this
Former Economic Advisor to Prime Minister & Finance Secretary, Government of India
movement in the West. So, we need to keep a careful
From an economic development perspective, what
watch on Punjab.
does 2024 hold for us? What are the positives and negatives? What are the challenges? Recently, there has
Vigilance is the Best Defence
been the Davos World Economic Forum event. India was
If I add to the list of potential threats to national
very much in focus there. On YouTube, there are
security, the rapid onset of technology, cyber, and
numerous videos centered on India. I'm not sure
artificial intelligence will figure in that. Digital
whether they are only for the Indian audience. I am
uncertainty is becoming a far bigger threat than what
surprised that at that event, Telangana attracted more
many have been talking about. I am not talking merely
than about 30,000 crores worth of investment. For me,
about ransomware but about the rapidity with which
this is significant for a very particular reason, which I
cyber-attacks are taking place. Artificial intelligence, I
will share later on.
think, is going to be a far bigger threat to national security than anything else. Today, many digital devices, including even the cardiac pacemaker, have come within the high-risk category. While these may not directly come under the standard definition of national security, it demands attention. AI can weaponize hate speech, trigger violence, and threaten the fabric of our nation 16
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By and large, at the World Economic Forum, there was a lot of praise for India's growth and expectations that India will soon become the third-largest economy. The current issue of The Economist has come to the conclusion that India has done reasonably well. Of course, it highlights both our pluses and minuses.
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Three Summits, Three Messages
It shows that the basic nature of investment and development
I would like to bring attention to the three investor
is not necessarily connected to
summits that recently happened—one in Gujarat, one in UP, and one in Tamil Nadu. Looking at the kind of
the kind of politics that is there
investments promised in these summits, you can clearly
in the State.
see that the growth of industries is happening very differently in these States. Let me give an example. The investments promised in Tamil Nadu are largely in
years. This is one of the main reasons why the
electric
items
government was voted back for another term. All the
associated with electronics, automobiles, particularly
investments that they have been making in the last 10
automobile-linked manufacturing, and employment-
or 15 years are in irrigation, in the food chain and
oriented industries like non-leather shoes. Tamil Nadu
logistics. I think MP is the largest wheat-producing state
has talked about six lakh crores of investment, Gujarat
and the largest soybean-producing state. Indore is now
about 15 lakh crores, and UP much more than that.
coming up as an alternate IT hub because Indore is a
vehicles,
solar
power
generation,
very well-managed city. It's one of the cleanest cities in The investments promised in Gujarat are primarily in
petrochemicals,
downstream
of
chemicals,
the country. It's extremely well managed, and therefore people flock to Indore.
pharmaceuticals, and solar. In solar, they are not just talking about solar generation, but also manufacturing of solar panels. The investments promised in UP are in agro-based and agro-processing-based industries, foodbased industries, logistics, and basic manufacturing. The developments happening in Maharashtra, Madhya Pradesh, Bangalore, and Mysore, and to a substantial extent in Hyderabad, are also very different.
Politically Agnostic Development Why do I think that the investments promised for Telangana in Davos are so important? It is because Telangana had its elections only about a month ago and you have a total change of government. The earlier government, which was there for 10 years, was changed, and we have a Congress government. The new
Bangalore, as everybody knows, is an IT hub and a
government has been on the ground only for about a
hub of huge growth for new startups in technology, etc.
month or so. But even then, if 20,000 crores worth of
But let us not forget that Bangalore has a particular
investment is promised, what does it show? It shows
advantage - it is home to many defence manufacturing
that the basic nature of investment and development
units. HAL, the Indian Institute of Science, and Bharat
is not necessarily connected to the kind of politics that
Electronics are there. The numbers may not cross 10
is there in the State.
lakhs or 15 lakhs crores, but much more value addition happens there.
Even in Tamil Nadu, there's a continuum in development, whether it is party A or party B in power. To me, this is a very good sign because business,
The Amazing MP Story
industry,
Madhya Pradesh is an amazing story because it has recorded 10 to 12% CAGR in agriculture for the last 10
development,
innovation,
and
entrepreneurship are slowly distancing themselves from the politics of governance, which means that at least in
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these States, governance will be reduced to a lot of
are coming up right here in Madras too, in the next two
basics like providing infrastructure, power, land, water,
to three years. There is a huge cycle of financial wealth,
and to the extent possible, some clean administration.
which is being created. This has nothing to do with
Then the industries and entrepreneurship will take off.
manufacturing, employment, or any intellectual activity, but it's purely money chasing money. The plus side of it
Leave the Stars and Focus on the Rest
is the huge real estate growth, which will lead to a lot of
And therefore, the converse of this is that if you look at states where this is not available, you will see that the growth is very much softer and slower. What comes to mind are states like Bihar, Jharkhand, and Chhattisgarh, which have enormous potential to grow. What is missing here is not entrepreneurship. The entrepreneurs are all over the place. But basic infrastructure of power, roads, and logistics are missing. The central government, in the next 5 to 10 years, must leave the states that are already galloping and instead focus on those states that are lagging, so as to bring those states to a higher level of growth. UP, five years down the line, will be a very different state. They have a lot of problems - in population, space, etc. Development is happening in Assam in a substantial way. It has slowly started happening in Odisha as well. It is a little slow but I'm glad to see the signs.
employment- not just for construction, but also for labour in the joinery, carpentry, electricity, etc. Household consumption is growing very rapidly. So is travel. I believe in consumption figures rather than GDP which can be misleading. Within the next 10 years, there will be at least 20 crore people who would be earning an equivalent of more than 10,000 US dollars. CAGR of these people is growing at 14.1%.
Fundamentals Need to be in Place So, what will be 2024 like? If you're sitting in the government and looking at this scenario, you must say, "Look, all this is happening by itself. I have nothing to do with it. I just have to make sure that the basic fundamentals are provided. But all that is not happening is my responsibility. What needs my attention is the huge unemployment and huge skill gap. A high number of people are coming from UP and Bihar to work here,
The Financial Boom There is huge growth in the financial sector in Maharashtra. In the last one year, a lot of money has been made in the financial market by ordinary people.
because they lack basic skill education there to make them suitable for particular jobs. Finding people for employment is a challenge.
In Bombay and in Delhi, within two to three kilometres
If I look at the budget for the coming year, I would
of where I am staying, in the last two years,
strongly say that it would be not an investment-oriented
approximately 200 plus new apartments have come up
budget because investment orientation is no longer
by big builders, costing not less than 78 crores. We are
necessary. What is necessary is an infrastructure-oriented
talking about 2000 crores of investment in real estate in
and a much more welfare-oriented budget. Make sure
that locality. Where is this money coming from? This is
that people's livelihood is protected, and make sure that
coming because people are monetizing some of their
they are skilled and able to get a job in the next five or
assets, like an acre of farmland. The HNIs are looking for
six years. If we do that, then as a country we can go to
apartments in excess of 25 to 50 crores. Such apartments
great heights. And I'm sure we'll get that.
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Mr Gopi Kallayil, Chief Business Strategist‐AI, Google, sheds light on the impact of AI and how its growth is impacted by the triumvirate of consumers, communities, and companies. Mr K Mahalingam, President, MMA, led the conversation..
M
r Mahalingam: We both joined REC, Trichy (Now NIT) in 1980. Can you share a little bit about your days, prior to joining REC?
through the aperture of my classmates. It also gave me a level of confidence that I did not have, graduating from a high school in Kozhikode.
Mr Kallayil: I come from a fairly modest background. Three generations ago, my grandparents were rice farmers
in
a
small
Palakkad
village
called
Chittalancheri. We were four children. Even though, my parents had no prior college education background, we went on to get ten advanced degrees between the four of us, including two US Ivy League MBAs. Getting into REC was a breakthrough moment for me. I was the first in our extended family to get into any kind of professional degree. My parents could not even guide me.
They
didn't
know
the
difference
between
mechanical and electrical engineering. We had very little aspirations, not because we lacked ambition, but we didn't have the environment or exposure. REC Trichy gave me access and exposure to classmates who had more exposure, more knowledge about the world and more sophistication than I had. It opened up the world
Considering that half of our batch went to the US immediately after college, you went to Uptron. From there, you joined IIM, Calcutta. How did that happen?
After I got into engineering, I realised there was one pathway where I could go for higher studies, possibly in the US. I had zero awareness of it and no one in my family, or anyone in my network had ever done it. I learned the process from my classmates. I just copied and mirrored them. One of the key emotional skills that I used was that if I didn't know something, I would ask people who knew about it and learn from them. I did it constantly, like a sponge. I asked a lot of my senior college mates and they told me about the process. I set that as a goal and applied for a Master's in Computer Engineering to ten US universities. I got accepted in all ten. But there was a financial problem. My family
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couldn't afford the tuition fee or even the airfare. So, I took up a job at Uptron. After joining there, I thought I could pursue MBA in India, applied to B schools and joined IIM Calcutta and when I joined, you were already there, once again!
encouraged me and gave me the freedom. After nine years of doing my IIM MBA, I built my financial capability and applied for my second MBA at the Wharton School of Business, University of Pennsylvania. Once again, there was resistance from the family circle. But I didn't bother. After Wharton, I joined
From IIM, you went to the Far East for some time and then to the US?
McKinsey to do strategy consulting and moved to their
At IIM, my classmates had an extraordinary amount
technology clients. I stayed focused and consistent on
of intelligence and sophistication that I was not used
one thing—to have technology clients. Soon, I quit and
to. In fact, I had a tremendous impostor-syndrome. But
did a couple of startups.
Silicon Valley office, because I wanted to work for
again, I learned from them, copied their ways and asked them for advice. We would also occasionally meet
How long did your stint in startups last?
people who had graduated from IIM, five or ten years ago and who were doing extraordinary things in
I did two startups in six years. Both the startup
corporate India. I looked up to them and told myself
companies were bought or acquired. Then I took some
that if they could do it, I could also reset my aspirations
time off to travel, as I went through a life crisis. Many
and come out higher. When I joined MBA, my extended
things in my life fell apart suddenly in an otherwise
family members questioned my parents as to why they
well-functioning life. I had let go of my last startup job,
let me study after quitting a job. Luckily, my parents
where I was VP of a Tech company, reporting to the CEO
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If you're making a career
useful.” It was simple and profound. The company had a great culture. We were experimenting, launching
change, don't come up with a list of 100 companies. Come up with a list of one, two, or three.
products, trying things and failing. There was something going on and I was determined to work there, no matter what my job was. Even the founders would not have known the
and it was very well funded. Nobody's life is linear and it always goes up and down. I took six months off and travelled around the world with one simple rule that I would not stay in a hotel and that I would only stay with someone. I went to Iceland, India, Dubai, Kenya, Tanzania and Zambia. I went to Mount Kilimanjaro. I came back to India and spent some time in a lot of ashrams and spiritual settings, where accommodation was cheap or free and the food was not great. During this period, sitting in a retreat centre in Bangalore, I had a vision of what I wanted to do next. One lesson I learned was, “If you're making a career change, don't come up with a list of 100 companies. Come up with a list of one, two, or three.” I put down a list of three companies. Google was at the top of the list. I was intensely focused.
direction the company would take. Part of the reason is that the computing power did not even exist then. Prior to 2006, nobody walked around with mobile devices in their pockets. If somebody had told me or people at Google, that one day humans would walk around with the map of the entire world on their phone, we would have said, “No way. That's not going to work.”
You're such a multifaceted personality. You're a yoga guru at Google. You spoke at world speaking championships five times. You are a Kirtan singer and you were considered for a nomination to the Grammy twice.
Just to put that in context, when I was at NIT, I went and lived in Shivananda Ashram and became a yoga teacher. Back then, yoga was not so popular and cool. My classmates ridiculed me. Now people around the world and celebrities are doing it. When I got to Google, I established a yoga program for Googlers, called Yoglers. It has become the largest yoga program in the
You've had some very interesting roles as chief brand evangelist and now Chief of Business for AI, etc. How did that play out?
world in a corporate setting. We have 150 classes a week.
When I joined Google 18 years ago, it was a very
I have written two books, given five TED talks,
small company. It had just two products—the search
competed in the World Championship of Public
engine and the little text ads that ran next to it. There
Speaking and ended up five times in the semi-finals.
was no YouTube, no Chrome, no Android and no self-
This year also, I was in the competition in Bahamas and
driving car. Now it's a much different company. But I
finished 15th in the world. Along the way, music
had this intuition based on my research that this
happened.
company would change the world.
The founders
Namasankeerthan. They started recording it and one
defined their mission in just 10 words: “Organize the
thing led to another. In the Grammy, they've created a
world's information, make it universally accessible and
new category called New Age Chant and Ambient music.
I
fell
in
love
with
the
sound
of
My work was considered in that category. The music is BUSINESS MANDATE
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actually very old age but interestingly, they put it in the
computers did not talk to each other, even though
new age category!
internet had been around. The invention of browser is
As I mentioned, in 2005 when I had a big crisis, I was thinking about things a lot. I was reading a lot. One of the books I read was about ‘Saying Yes to Life,’ in which, the author talks about how she experimented for one year with just saying yes to whatever showed up, trusting it and moving towards it without selfdoubting. I took a similar approach. From that point onwards, I decided to say yes to a lot of things. That year, I went to the Burning Man festival. It's a counterculture festival in the Nevada desert, where people practice radical self-reliance, radical selfexpression, radical inclusiveness and so on. Now I go there every year and this is my 17th year.
the first big shift that allowed ordinary people to get on to the internet, find information, book tickets, buy milk or talk to friends, etc. At the University of Illinois Urbana Champaign, Marc Andreessen and Eric Bina created the Mosaic browser, which became the Netscape. Then Microsoft created the Internet Explorer, then came the Firefox, Apple Safari, and many years later Google Chrome. Sundar Pichai led that project, which led to him being recognized and creating enormous success for the company. Then came the second wave. In 2007, Apple created the iPhone and a year later, Android was launched. Then the mobile phone became the most deployed piece of technology in human history. We now have more mobile devices than we have humans on this
There's a core principle of Burning Man that I really
planet. It has changed the way we deal with commerce,
liked and I made that a part of my life. This is my
communication and entertainment. We and our
summarisation of life. "All of our life... is one giant
businesses adapted the mobile.
experiment." In our life, we conduct lots of experiments —in our jobs, with our money, with our marriage, with the way we raise kids, with the way we practice our faith… We try to find out what sticks and what works. Experiments, by definition, lead to unexpected results. But we will never find out the results till we try. So, one decision I made was that I would experiment and experiment very big. I know I will fail most of the time, but I will learn something. That's what led to experience all these.
Now we are watching the third biggest shift, which is AI. Starting 2022, what we witness is ordinary consumers engaging with AI. We believe AI is the biggest technological shift humans have ever seen. I would put AI on par with the kind of innovations humans come up with, once in 100 years, like 1462 when Joseph Gutenberg created the printing press. That changed the way we disseminate and consume information. In the same way, in 1752, when electricity was discovered or in the 1890s or so, when the automobiles were invented, we saw massive change
The kind of things that you do is so engrossing. Gopi is also a triathlete. He is a yoga guru, a kirtan singer, TED talker, Toastmasters’ semi-finalist, a triathlete; and by the way, he is also the Chief Business Strategist -AI for Google!
We have witnessed in our lifetime, three big platform shifts. We saw computers showing up on our desktops and then in our homes. Till 90s, these
happening.
Tweak the Question When I meet CEOs of large corporations, a question that I often get is: What should my AI strategy be? I tell them, “Strike off that question. Tell me what is your strategy. Then ask, how can I enable AI with my
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strategy?” Another way of approaching this question is
of people have worked on it -from metal to lighting to
asking, "What is the biggest opportunity for my
electricity to computers and smartphones. But this
business in 2024 that AI can enable?" There's also fear
capability with natural intelligence is limited. If 15
and apprehension about AI and it is very common. The
people are on a leadership team of a company and they
Economist ran a cover story in May of this year on AI. It
take a break or a vacation, the work will suffer.
carried a picture with a lovely design. There was a ring of halo above 'A' and devil's horn and tail with the letter 'I.' This, in essence captures what most people feel about AI. Let me demystify some of these fears.
Natural Intelligence vs. AI natural intelligence is. There are so many human concepts that came from our natural intelligence that gone
into
various
products
This is what the computer science fraternity has been doing with artificial intelligence. At Google DeepMind, we define artificial intelligence as any computer system that captures natural intelligence and mimics it, and
To understand AI, we must first understand what
have
So then, how do we amplify natural intelligence?
and
services.
Everything we see around us is the sum total of enormous amount of natural intelligence. Generations
once you mimic it, then you can amplify it. If you look at human locomotion, we first learn to crawl, then to walk and run. There's a magic moment when someone teaches you to ride a bicycle- the simple system with two wheels, a gear system, and the handlebar. That allows you to go further and faster than you've ever gone before. You use the legs that you use for running,
What is the biggest opportunity for my business in 2024 that AI can enable?
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AI system that mimics the right side of a brain is called generative AI and the left side of a brain, analytical AI. Sometimes, they merge and come together.
but differently. It has amplified your locomotion. That
sitting in a rural place could take a picture of the eye
is the same concept that we are trying to bring with
on a mobile and an AI system will detect and say, 'You
artificial intelligence.
are susceptible to diabetic retinopathy and you need to
Let me give you two examples. First is a point solution, which is translation. We have AI based systems to translate languages, like Google Translate. We use machine learning to create the capability where you can speak in one language and get it translated to hundreds of languages. Another example is complex systems like Med-PaLM, which is used by healthcare professionals. It can amplify a doctor's skill. It is not going to replace the doctor. On the contrary, it will allow us to bring health care to populations that would not have access to it.
quickly see a specialist in your area.' This is how we can scale and deliver health care to a lot of the world's population that doesn't have access to specialists.
Right Brain and Left Brain As AI mimics the human brain, it mimics both sides of a brain. Right-brain thinkers, we say are good at creative thinking; and left-brain thinkers at being logical and analytical. Similarly, AI system that mimics the right side of a brain is called generative AI and the left side of a brain as analytical AI. Sometimes, they merge and come together.
Around the world, we need a single ophthalmologist for 20,000 people. In some parts of India, there might be only one ophthalmologist for 200,000 people. Therefore, many people don't get proper eye care. In
Four Capabilities for Business With AI, we now have four capabilities available to us in the world of business.
the future, because of systems like Med-PaLM, someone BUSINESS MANDATE
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1) It can synthesize vast amount of data and analyse them.
marketing team. It amplifies the marketing team's capability. Instead of one version of an ad, you can have
2) It can drive predictions based on that model. 3) It can create new content, art, music, etc. 4) It has conversational capabilities, like ChatGPT, about which, the world has got excited.
1000 versions, each of which can be highly localised and personalised. Everything we discussed so far deals with physical things that can be digitized- like words, images, music, video, etc. We live in a physical world. Can we build a model that understands our physical environment, and change the way we interact with this physical
Large Language Models
environment? Of course, we had robots in the past, but
Let's start with traditional programming. If we want to teach someone to drive, we teach him step by step how to drive, how to look out for and interpret the
robots work like traditional programming. We are working on a futuristic model called Visual Large Language Model.
signals, how to follow the rules, etc. To teach a computer system how to drive a car, for every possible outcome, you must write a line or many lines of code.
3 Audiences, 4 Pillars
From there, we evolved into a concept called neural
At Google AI, we are focused on three audiences:
networks. Then came the concept of large language
consumers, communities, and companies. The question
model.
we ask is- how can we use AI to help these three
The computer is fed with lots of information. It synthesizes everything that is fed and it can even come up with a new theory that humans did not even know about. This is how large language models work, like Gemini from Google, or ChatGPT from open AI. It can draw a picture based on dictation of a scenario. It can summarise YouTube videos and generate lists from that video. It can create music. It can create a movie. There
audiences reach their highest potential? It means four pillars to our strategy. First, we help consumers. Consumer
behavior
will
shift
because
of
AI
empowerment in their pockets or the desktops. As a result, businesses will adapt or will have to adapt to that. The second, we look at big societal problems (like healthcare), and try to solve for them. The third area that we look at is how we can help companies market in a much better way to the consumers.
are endless possibilities. You can use these capabilities in your business. You can use AI to run a marketing campaign. AI can generate numerous options and you can select from those options. For instance, you can come up with 1000 variations of a face cream display, shortlist six and get them tested to see which of the six will work best, and then amplify that. AI here is not replacing the
The fourth one is besides marketing, every organization does a lot of other things--for example, a bank does a risk assessment; a shoe company does a product design; a shipping company does logistics. How can we make these processes more efficient? These are the four pillars of how AI will reach more consumers, more societies and more companies.
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Authors Mr M S A Kumar, Family Business Advisor, and Mr Navas Meeran, Chairman of Group Meeran, in conversation with Mr C K Ranganathan, Chairman & Managing Director, CavinKare Pvt Ltd and Mr Tatwamasi Dixit, Founder Chairman, Family Business Research International Centre ﴾FABRIC﴿.
M
r Kumar: Navas Meeran and I know each other
compounding for scale up, will follow. The six are
for the last 20 years. Eastern Condiments is
interrelated. It has a positive synergy effect. One feeds
the company started by his father Meeran
into the other.
Sahib. Navas is a second-generation family business entrepreneur and he is very simple and unassuming. After building the business, three years back, they sold Eastern Condiments with an enterprise value of around 2000 crores to Orkla. Navas continues to be its CEO. From the third generation, his son has also joined the family business.
Running a business successfully is not easy. A lot of people start a business. But the failure rate is very high. It is around 70%. In this context, taking a family business up to the third generation is a big task. History says that the third generation actively destroys wealth. The first generation builds the business. Their son and daughters carry the values from the first generation, as
Mr Ranganathan: I am happy that the authors of the
they have risen from the bottom of the pyramid. But
book have discussed eleven other successful family
the third generation doesn't experience the pain at all.
business companies apart from the Meeran group. I
They grow up with the affluent mindset. Often, they are
like the seven C's, which are prescribed by them for any
pampered. They have no hunger. They don’t need to
family business or entrepreneur. Even professionals
work. Everything is given to them on a platter. That is
need to know these seven C's, which are Clarity,
why, family business running successfully up to the
Commitment,
third generation is a miracle. I am also intrigued by the
Consistency,
Courage,
Cohesion,
Competency and Compounding for scale up. If you do
fact that many companies prefer to remain small.
the first six Cs right, the seventh one, which is 32
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Fail Fast but Cheap
Mr Tatwamasi Dixit: As a child, I was deeply
Experimentation is a way of life. That's a very important foundation for any business to grow. A flourishing environment is created when failure is not punished. We only learn from the failures. In our company, we have one very important philosophy: Fail fast; Fail cheap. We have started embracing it in the last four or five years and there is no looking back. We were able to do multiple experiments.
influenced by two great scholars—Chanakya and Confucius. Chanakya said that if you want to be happy, you have to follow your dharma. In India, each human being is supposed to have some Swadharma.
A
carpenter’s son becomes a carpenter, a teacher’s son becomes a teacher and a businessman’s son becomes a businessman. This has been the dharma of this country and the basis for family business. The family business concept originated in India, but unfortunately, we did
There is no sense in spoiling your future for the
not have a scientific framework or a research structure.
mistakes of your past. Forgive yourself, grow from it,
We did not have support from educational institutions
and then let it go. While we must not brood over past
to do all the research. Thanks to the Western
failures, we must ensure that we don't keep on doing
contribution, there is so much of literature available in
them. The cohesion among family members and
the field of family business, because the universities
between family and professionals is also important,
there largely support them.
without which businesses, have failed. Finally, you must have the courage and risk-taking ability to scale up the business.
India started to wake up to the concept of family business in late 90s when John Ward came to India and started educating everybody about the family business.
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I have found that the first‐
of the individual must be subordinated to the family
generation entrepreneur has a
group.
clear purpose and it is to meet
Children
must
be
taught
to
restrain
individualism to maintain harmony in the family. Today, there is too much of individual identity and family is
the economic need of the
slowly disintegrating. The concept of joint family
family. But from the second
system has been facing a lot of challenge and nuclear families are taking over.
generation onwards, their
Fading Away Through Generations
purpose is not curated.
As the authors have mentioned, only 13% of the ~ Mr Tatwamasi Dixit
family businesses transition to the third generation and only 4% of the family businesses go to the fourth generation and beyond. It's a very tiny number. By the
Chanakya goes on to say that if you want to follow your
third generation, the entrepreneurship dies in the family
dharma, you need money. It's very important to make
system, because they have so much money. 75% of
money. I have worked in the West where the big wealth
India's GDP comes from family run businesses and 85%
creators are big business houses and they are revered
of the businesses are family businesses in India. That
and respected because they say that they build the
underlines the significance of family businesses.
country's economy. But in India, the businessmen are not respected. They are perceived as if they loot.
I have found that the first-generation entrepreneur has a clear purpose and it is to meet the economic need of the family. But from the second generation onwards,
Debt‐based Model It is difficult to build a business in India, because India has been a debt-based economy. We never had capital in this country to build the business. The equity was never available. Building a business by taking a debt is not an easy task. Chanakya further says that if you want to build a country, then you have to build an economic model, which can continuously support a country. That is possible only if you support family run businesses. The Vaishya community have been deeply working to build the business framework in this country.
their purpose is not curated. The only purpose they find is that their father or grandfather started the business and so they need to support them. What makes the family businesses special is that the older family members are working together. That's how the family business story comes alive. One big differentiator is the ownership dimension of the family business.
Parallel Strategy There is a strategy in the family business concept called parallel strategy for ownership, where we look at three things. One is: what is the control I want to have
Confucius says that the family, not the individual,
as an owner? The second is: what kind of growth do I
is the basic unit of the society. Family is more
want to have? And third: what is the liquidity as family
important than any individual member. Harmony is the
members, we are all looking for? There is a big trade-
most important value for all family members. The will
off between these three all the time. If you want to
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Underneath every business
board
journey, there is a strong push
shareholders.
member.
They
are
pure
investors
and
If you do not create an alignment between these
and support for value system,
four different roles within the family members, where
which the family inherits. That
some of them are working and some of them are not
is non‐negotiable.
working, it will be a huge challenge to perpetuate the business from generation to generation. Each one has
~ Mr Meeran
a different expectation from the family business. Amidst all these things, there's always a conflict running between the family members.
grow, you must be ready to dilute to create the growth. If you're going to dilute, you're always going to be challenged by the controlling stake in the company,
Hats Off I want to quote a case study. A father and son were not getting along with each other. They worked for 10
which will start going down. You must have a dividend policy. The family members expect dividends to support their lifestyle. In larger organizations where there is a great CEO, then the CEO will prepare the business plan and the family business owner can prepare the ownership strategy plan. They both have to interact with each other. That's how the business grows from generation to generation. If there's going to be disharmony between the owners and managers, it's going to invite troubles.
years together. I and my colleague happened to work with them in Europe. One day, the father called his son. He wore a hat where it was written ‘Boss.’ He said, “Look, I'm not happy with you. So, you are being fired from this role.” He gave him a pink slip. After one minute, he took out that hat, wore another hat where it was written ‘Father.’ Now, with this hat, he asked him, “Son, I believe you are just being fired and I am very sad for you. How can I help you?” These are two different roles.
Four Roles
There must be governance to ensure harmony in
There are basically four roles the family businesses
the business. India is going through a great transition.
have. The first one I call as owner managers, where you
Globally, many businesses are changing hands. We are
are involved in the day-to-day function and you are
going through a situation called, ‘a great wealth
driving it. The second role is an owner strategist, where
transfer.’ About $68 trillion is changing hands. At this
you have a CEO to run a day-to-day operation and you
juncture, so much of research literature must come out
are only involved at a strategic level. As the generation
in India on family businesses and it is the need of the
becomes deeper, the family members grow. The third
hour.
role is called owner governor, where you are only on the board as a governor. The fourth one, which is common in large families in Europe, is where they do not have any interest -either to be as a manager or a
Mr Meeran: I feel sorry for the third generation. If you shoot from a revolver and there is a 0.01 mm difference at the starting point, you can imagine what will be the difference at the 100-meter level. That is the
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curse for the poor third generation. Many of the family
It again reflects the mindset. We always say the battle is not lost
run businesses tend to push the issues under the carpet. They don't have the courage to talk about
in the battlefield but the minds
succession, about letting it go and about value
for the soldiers.
unlocking. When you're creating value, you must know how to unlock it, so you can enjoy it. If in a family of
~ Mr Kumar
four brothers, let’s assume that the third one is the most entrepreneurial. But in the Indian condition, when succession happens, only the eldest is going to rule the business. The wives of the brothers may bring in their own conditions. These are some of the challenges of running family organizations.
We have more than 40 to 50 people who are with us for 25 years. Even if somebody works with us for a decade and moves out, they're treated as family and they have the liberty to come and have a cup of tea with us, though they probably might be working with the
Mr Ranganathan: Other than the seven C's, how important are the family values in holding the family together?
competition. That is the power of values. Mr Kumar:
In the case of Orange County, they
focussed on three things: positioning, purpose and
Mr Meeran: One of the groups which we studied is
partnership. They positioned as super luxury resorts.
Orange County. They decided to get into the niche
If you go their resorts, say in Coorg or Hampi, it may
super luxury resorts and created an SOP. Eventually,
cost 60 to 70K a night, but still people flock there. The
that SOP became the values of that organization.
positioning led to certain ground rules for everyone and
Underneath every business journey, there is a strong
evolved as a practice. And that, over a period of time
push and support for value system, which the family
became their values. Informally professional is also one
inherits. That is non-negotiable.
of the values in organisations.
To give an example, one day, my dad was upset with a mistake committed by a family member but he was very angry with one of our lower-level staff, whom he knew, had not committed the mistake. During lunch, he called that staff and asked him, “When I was angry with you, why didn't you tell me that you were not the guy who did that mistake?”. The staff said, “Sir, when you shouted at me, the person to whom it should have been told to, was also listening to it. So, I did not think it was necessary on my part to say so.” That was the
Mr Dixit: You have written about the concept of mindset for long haul. What do you mean by that? Mr Kumar: In the case of Eastern, Navas’s father Meeran Sahib had the mindset to start the business. He passed it on to his son Navas who wanted to expand the business. In funding internally, there were restrictions and he decided to go for private equity. It again reflects the mindset. We always say the battle is not lost in the battlefield but the minds for the soldiers.
maturity shown by a lower-level staff. My dad told this
Mr Meeran: Lack of clarity is one of the major issues
to me once and said, “In organizations, we must never
which troubles the entire organization. In the last 3
abuse people.”
years, I've taken out my entrepreneurial cap and worn a professional’s cap. I am working as per contract, for
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the father doesn't want to let go of any decision. One
A top line of 2500 or 5000
day, I had a session with the next generation and said,
crores always fascinates people
“Why don't you think in your mind that your father is
but ultimately, if it is not
working for you? Think that you have done a reverse delegation. It's good for you.”
backed by bottom line, there is no fun in it.
Mr Kumar: The next generation should not think that their father and grandfather are useless and that they have done nothing. He or she is sitting on a platform
~ Mr Meeran
generated
by
the
father
and
grandfather.
The
responsibility lies with both sides -the previous generation and the next gen. Orkla as the CEO of Eastern. Having been an entrepreneur, to be in a professional CEO’s role and doing the same things, sort of bores me. But top line and bottom line have gone up extremely well.
Mr Meeran: The second generation, when they join the business, must create a strategy within their mind. They must have the patience to talk to the father, at a time when the father is in a good mood. My dad and I used to have arguments. A very senior friend of my dad
As an entrepreneur, we keep experimenting and
called me once and said, “You're talking about strategy
may lose 4 to 5 crores, launching new products and
and you have not seen money. Your father has seen
failing in the market. When you talk about long haul,
money. You have to be within the boat to navigate it,
you must be clear about what you're trying to achieve.
rather than being out and saying that my dad is not
What will drive the business at the end of the day? A
doing it right.”
top line of 2500 or 5000 crores always fascinates people but ultimately, if it is not backed by bottom line, there is no fun in it. Those businesses with less margins and less of profits, will not survive.
I'll tell a classic case. We had a brand logo, which was outdated to the core. If we had to scale up, that was not the logo. If I go and tell my dad, he would not accept. So, what I did was, I took photos of most of the
Business owners have the moral responsibility to protect the profitability of their business because if
big brands and placed the old Eastern brand alongside, all one in poster.
profitability comes down, it will have a social impact. I've got thousands of people working with me. These are the people who are immediately getting affected, if I have a problem with the organization. We need to carry in mind that in the long haul, if there are too many verticals, they need to be balanced.
In another poster, I put the newly designed logo and placed both in my dad’s room. When he came there, he asked my wife, “What is this?” She said, “I don't know. But Navas was telling that this is the old Eastern logo and this is the proposed new Eastern logo.” He just had a look at it, called me and said, “The new logo is
Mr Dixit: With one of my clients, the father takes all the decision and the next generation is fed up because
approved. Start working on that.”
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Authors Mr Nandu Nandkishore, Former Global CEO, Nestle, and Mr Neeraj Chandra, Business Advisor and Former COO, Britannia, discuss about innovating for change in the age of disruption and the opportunities it can create. The discussion also included Mr V Balaraman, Past President, MMA & Former MD, Ponds India Ltd; Mr Srikant Sastri, Chairman, I3G Advisory Network & Co‐ Founder, Crayon Data; Mr K Mahalingam, President, MMA & Partner/Director TSM Group of Companies; Mr Lakshminarayanan Duraiswamy, Managing Director, Sundaram Home Finance Ltd; and Ms Shuba Kumar, MD, Natesan Synchrocones Pvt Ltd.
M
r Nandu Nandkishore: Technology,
and
security run to 300 million. One in every four Chinese
technology induced societal changes have
is not part of the economic universe in creating value
been the biggest driver of changes that we
anymore. No wonder, China has all the economic issues
have seen in the last 150 years. Some of the resulting societal changes are very dramatic in their impact. I'll just highlight three of them.
few old people and a number of young people. Today, is
getting
probably
still
has
three
decades
of
become old. Africa is still very young. In the year 1900,
The first is ageing. We are used to a society with a pyramid
India
demographic dividend before the young people also
Beware! We are Ageing
that
that they are facing.
inverted
in
developed
economies. Even in India, if you draw a line between Srinagar and Hyderabad, everything to the south and west of that line, you can see that the birth rates are
one in every 25 human beings was African. By 2050, one in every four human beings will be African. The demographics are changing. In one part of the world, a lot of old and aging people will be driving consumption. In another part of the world, the traditional youth will be driving and shaping economic opportunities.
already below replacement levels and societies are aging
Urbanisation: Urbanization is the second big trend.
dramatically. That line is moving northeast steadily at
When I started working, in India, 15% lived in urban and
a few kilometers every year. We don't realize it today.
85% lived in the rural areas. Today, 40% of India live in
India has 100 million people who are older than 60. In
urban areas and this is accelerating worldwide. Globally,
China, people who are above the age of 60 who are
one in every two human beings now lives in a city. Cities
already retired and are non-existent under social
are incredible engines of change and they influence
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fountainhead of excellence
demography, culture, ideas, religions and new thought
Around 2007, the first iPhone came out and you had
paradigms.
the birth of apps that enabled a lot of benefits for the
Institutions: The third change is in institutions. The family, the role of the state, the religion and educational entities are all being disrupted. Institutions are being unbundled and recreated thanks to the internet. Historically, your profession was determined by the profession of your family. All of a sudden, education is no longer the preserve of the family, but it's the result
consumer. The democratization of phones happened and suddenly the phone became a symbol of identity. As we go further, we see the dimensions of connectivity, transforming many things. 5G is enabling better latency levels. We are seeing waves of technologies and each wave is a consumer pivot, around which, people have seen opportunities.
of the state of meritocracy, which gives you the freedom to choose the profession that you excel in.
Global
migration is an interesting driver of this change.
Formal studies by McKinsey show that two thirds of the
Mr Neeraj Chandra: Gautam Buddha said that what
benefits of even older
we think is what really determines what we do. We see
technology are still lying on the
that happening in a variety of ways. Alvin Toffler said many years ago that technology is a great growling
table, because industries
engine of change. The mobile phone is perhaps the
haven't taken them ahead.
most profound technological shift that has happened. The phone has grown to be used by two thirds of the
~ Mr Neeraj Chandra
world's population and has become fundamental to life. BUSINESS MANDATE
fountainhead of excellence
43 FEBRUARY 2024
Technologies today combine to create larger effects. Some of them are totally unintended. ~ Mr Neeraj Chandra
With
phone,
we
get
connected.
But
more
reconnaissance and for surgical strikes. It has brought
importantly, it has helped us realise our purpose. If
in a level playing field for a number of countries,
somebody opened an app, others think of it and create
because they don't need a large budget and fancy
new applications. The power of technology is yet to be
equipments. They can take simple drones and
tapped fully. Formal studies by McKinsey show that two
weaponize them to achieve significant damage or
thirds of the benefits of even older technology are still
impact. This is creating a number of challenges and
lying on the table, because industries haven't taken
opportunities.
them ahead.
Drones have been around for a very long time. But
Technologies today combine to create larger effects.
what has changed now? We have now miniaturized the
Some of them are totally unintended. In 2005 or 2006,
cameras, the GPS and the equipments. Costs have come
when Facebook got its 1 million consumers, who would
down and we have economies of scale. The second
have thought that the little chatter groups would
thing is that the regulatory change has happened. Most
become the foundation for today’s marketing industry
countries today have regulations around robots and AI.
or politics? We see opportunities which we haven't even
There are commercial applications that are allowed. The
seen before.
third part is, the society has changed. We have new
Ms Shuba Kumar: We fight wars in the world today in ways that we've never imagined so far, using the unmanned aerial vehicles, colloquially called the drones. We have seen them in marriage functions and in a lot of creative applications for the consumer. There are
materials and new battery technologies. We have swarm drones to do very complex tasks that cannot be done easily and effectively. There are technical challenges that
need
to
be
solved
for
using
drones
in
transportation of human beings.
also a lot of serious applications like in agriculture,
Mr Neeraj: The point is, through technology, we have
where we can plant seeds and spray pesticides. We can
the ability to do different things and to do things
use them for surveillance and in construction to
differently. It helps our imagination take wings. We use
monitor progress. For transportation of packages, there
technologies to impact society and thus create
are successful trials by a number of companies. In
disruption and opportunity. Also, the changes in society
essence, our imagination is the limit to application of
create
technology.
fundamentals of a society are changing. Anytime,
When 9/11 happened, to counter the terror threats, expensive drones that cost almost $60 million were pressed into service. But what we see in the Russian war is very simple drones, which are similar to the commercial drones. On top of these, they put the warheads. In defence, they use drones both for 44
FEBRUARY 2024
a
disruption
for
the
enterprises.
The
anywhere and assisted living are the new paradigms. Consumers
want
hyper
personalization.
As
an
enterprise person, if you live up to these trends, which are fundamental shifts, you get an opportunity. Mama Earth is one brand, which has got a valuation, in a short period of time, in excess of 13,000 to 14,000 crores. We
BUSINESS MANDATE
fountainhead of excellence
It is important to remember that even unexpected and traditional industries are getting disrupted. ~ Mr Srikant Sastri
may question the valuation, but there's no denying the fact that they have made an impact. They've lived up to the trend of how people want to buy and shop. They have come up with the concept of personalized products, while a lot of giants in personal care haven't moved. The concept of leisure and entertainment has changed dramatically.
companies have to watch out for this trend. Mr Neeraj: So, what should be our action mantra? We need to reimagine in many senses, our value spaces and enterprises. The urban infrastructure requirement is 5 trillion a year on a worldwide scale, which is largely in the developing world. 70% of the greenhouse gases are released by urban centers. We know the air quality
Mr Srikant Sastri: It is important to remember that
challenges that Delhi faces and for which, solutions
even unexpected and traditional industries are getting
need to be found. These are mother loads of change
disrupted. The earliest example was an iconic company
and opportunities.
like Kodak, which was riding high in the late 1990s. Suddenly, by 2012, they declared bankruptcy because they were just blind to the fact that digital cameras were throwing them out of the game. They became complacent. In a country like India, television channels, we thought were evergreen, but Disney is planning to sell its entire entertainment business and merge it with Reliance. The automobile industry thanks to EV is in for serious
disruption.
Cement
companies
will
get
disrupted because of advances in material science. Things like geopolymers are coming in. We don't know what will happen to the traditional cement.
Mr Srikant Sastry: Innovation is not just for startups. Innovation and reinvention are absolutely needed for large enterprises too. It is not a question of survival, but opportunity. Can I use this to propel myself into a higher orbit? That's the big question. We have examples all around us. Bill Gates stepped down in January 2000 as the CEO of Microsoft. For the next 14 years, the share price of Microsoft remained very low. During those 14 years, Microsoft did not reinvent itself. It was slow to the mobile and cloud computing game. They got left behind by Amazon Web Services. In 2014 February, Satya Nadella took over as the CEO, came in with a fresh
Every business is getting disrupted and they need
pair of eyes and perspective and transformed the
to be watchful. During COVID, I was involved in leading
company. Today Microsoft is one of the most valued
a task force, mentoring two young engineers to design
companies in the world.
and build an ICU ventilator and bringing it into the market in 90 days under the lockdown condition. MNCs like Philips, GE, typically take 18 months to move from idea to market. We could do it in 90 days. It requires a different mindset and the ability to orchestrate a team of people, who are very agile and willing to work 24 x 7, irrespective of the geography they are in. This will be the new paradigm of working in future and large
More often than not, it's the leadership that makes a difference. Steve Jobs came back to Apple and transformed it. When Ratan Tata took over the Tata group, it was a sleepy giant, but the sleeping giant went global under him. Reliance is a great example of how a mammoth industrial company could become one of the biggest consumer businesses under Mukesh Ambani.
BUSINESS MANDATE
fountainhead of excellence
45 FEBRUARY 2024
Mr Neeraj Chandra: It's not only the private
ne of the things that companies
enterprises that have been impacted by disruption. The
can do to manage disruption is
biggest impact of disruption for betterment is seen in
the leadership stance that they
the public space- the government space. The Aadhaar
take.
card has changed lives based on a technological practice, applied across different platforms and largely supported by the government. Similarly, we have seen
~ Mr Nandkishore
the UPI phenomenon. ONDC is another area, which is coming
up.
These
present
opportunities
for
governments in a variety of ways.
model grew as fast as possible. Value maximization was the name of the game. Today, you need both value
Mr Nandkishore: One of the things that companies
creation and value maximization. How do you play both
can do to manage disruption is the leadership stance
games?
that they take. Traditionally, companies have an inside-
organizational culture that allows you to play the two
out stance. Based on the strength and core competency,
different games at the same time. You must create
they decide what they can do. Today, you're almost
managers and leaders who are ambidextrous, who are
called to reverse that and take an outside-in stance.
able to learn and play two different games.
Look at what else is happening out there, what new technologies are coming, what new capabilities are enabled by technology and therefore, how do you need
The third big challenge is to create an
Mr Neeraj: What is your perspective on the role of ESG and DEI?
to remodel the organization? How committed are you
Mr Nandkishore: Sustainability is probably the
to really change? If Steve Jobs wasn't committed, he
biggest economic opportunity that our species has ever
would not have launched the iPhone, because the first
seen - moving from a linear business model to a circular
business the iPhone killed was the iPod, which was his
business model. Without diversity, you aren't going to
cash cow. You must have the courage to disrupt your
get value creation.
current business model. That's not easy and it is a huge call. That's one reason why Microsoft in the initial days, was hesitant to get on the mobile and cloud computing domain because they were afraid to cannibalize what they already had. The second tension that comes for companies isn't the traditional S curve. The big tension is: Should I
Ms Shuba Kumar: From an organization perspective, we are a net contributor of green energy to the grid. We have taken some steps towards water neutrality. Sustainability, I believe, is a journey. Mr Neeraj: What is happening in the automobile and real estate segments? What is changing there?
focus on value creation or value maximization phase?
Mr Mahalingam: Covid dramatically changed the way
Many of us in my generation grew up as growth
many of the businesses are run. Work from home had
managers, because India was growing and our
its implication on the commercial real estate industry.
companies were growing. Our job was not to reinvent
There was immediate fear that people would continue
the wheel. We just had to make sure that the business
to work from home and there would be a glut of
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fountainhead of excellence
commercial space. But it has not played out that way.
enabled Uber and Ola drove the shared transport model
It definitely stunted the growth in the short term. But
and private car consumption went down and we were
it did two things. As people started the hybrid model
really worried. But covid put a fear of the hygiene factor
of working from home and office, on the residential
and people started going back to private cars. Covid
side, people now look for slightly larger apartments. It
changed many things -for both good and bad. There's
has redefined the way buildings and apartments are
now a big fear that EVs are going to replace fossil fuels
designed. There is also demand for independent houses
in cars. I don't see it happening in a hurry because many
and land. This has made land prices shoot up.
factors like the battery life and resale values are getting
The other thing has happened is the startup environment. People who are not able to afford large commercial spaces, look for co-working spaces. So, dramatic changes have happened in the commercial real estate, residential real estate and the land industry businesses, which we are in.
established in the industry. At the same time, it has thrown up loads of opportunities in the service side, in the charging infrastructure, etc. The biggest beneficiary is the startup ecosystem, where we have young people, who have no fear of failure. They are experimenting and creating opportunities for themselves. I think it's a wonderful time to be in any business or industry. I look
On the automobile side, pre-covid, the technology
at it very positively.
BUSINESS MANDATE
fountainhead of excellence
47 FEBRUARY 2024
It's not just the technology per
because people are suddenly borrowing more. The fact
se that is disrupting a lot but
is that all these people who were otherwise borrowing
the adoption of technology that is driving the change.
through unconventional means, are now becoming formal
borrowers
because
banks
and
financial
companies like us are quite confident of lending to them, as we see a track record. Today, everything is
~ Mr Lakshminarayanan
formal. The smaller towns pay GST. Everything is coming to formal economy.
Mr Neeraj: Are changes happening only in the elite part of the society or the larger part of society?
and
technology.
One
is
the
we are talking about is the consumer. We don't need to go to a customer to do a KYC or a lending transaction.
Mr Lakshminarayanan: Three things play out in disruption
The ultimate beneficiary of a lot of disruptions that
We do a video KYC with the customer. We can do a
digital
WhatsApp video with the customer. The customer logs
penetration. Look at the number of devices that are
in and shows his PAN card and other documents. We
being sold in the country. The second thing is the large
can conclude a transaction digitally and the customers
middle-aged population that India has. The third is the
get the money wired to them. Payments come back to
rising per capita income in India.
us through UPI or digital modes. We're also talking
It's not just the technology per se that is disrupting a lot but the adoption of technology that is driving the change. Earlier, we used to get technologies 15 or 20
about artificial intelligence, blockchain technology, etc. This means, the real change is yet to come in this space.
years after they came to the West. Now that lag has
Mr V Balaraman: I have been watching the space of
disappeared. In fact, in some of the spaces, like digital
darknet with some apprehension. I am also worried, as
payments and Aadhar network, we are the leaders in
darknet is obviously part of the economy today. What
the world today. None of these are isolated changes.
we do not know is the percentage of the economy that
They all have an impact elsewhere. For instance, we
the darknet represents and where it is growing. You no
never thought we could be sending money to smaller
longer need to be geographically within India to commit
towns to the bank accounts of our customers. The
a crime. That is totally frightening.
digital payment has enabled that. We operate in tier four and tier five towns in the lending space, where our customers are traders, electricians, carpenters, and selfemployed workers. All of them accept digital payments. They are banking customers and that helps us to get a credit score for them. The credit score enables them to access bank finance. Thus, the benefits are multitude. Today when the Reserve Bank talks about the surge in unsecured lending or small ticket lending, it is not 48
FEBRUARY 2024
There is one other aspect which puzzles me. The economic growth in India seems to be far more than the government estimates. The tax collection is growing. I never imagined that the Indians would love to pay more tax. My village is as well connected as Chennai is because the mobile phone substitutes for everything else. There is an element of growth in India that I believe has still not come to the surface. We will all be pleasantly surprised with that.
BUSINESS MANDATE
fountainhead of excellence
BUSINESS MANDATE
fountainhead of excellence
49 FEBRUARY 2024
Mr Gopal Vittal, MD & CEO, Bharti Airtel Ltd., shares insights from the Airtel saga and how the company learned to disrupt and manage disruption. He was delivering his speech at The Fourth V Narayanan (Pond’s) Memorial Endowment Lecture in Chennai recently.
I
joined Ponds in 1990 and worked with Mr. V
seven players with 20% of the market and 80% of the
Narayanan only for a couple of months, after which
spectrum. It meant that the spectrum resource that was
Mr. Balaraman became the managing director. I had
available was very poorly distributed amongst the players.
the good fortune of meeting Mr Narayanan even before I joined Ponds. He was a very dear friend of my uncle who
The Jio Storm
lived in Cenotaph road. I was in college, and my uncle had
Then Reliance Jio came in 2016. It was an absolute
invited me to his house for dinner. I met Mr Narayanan
onslaught that happened in the industry. This was one of
there and he regaled us with stories. I want to share some
the few industries globally, where services were run for
of the lessons I've learned, distilled from what happened
free for almost nine months. Anything that you give away
in the telecom industry.
for free in India is obviously very valuable. We had people
Airtel is a young company, launched in 1995. We
queuing up in shops and taking away the Jio services.
started in Delhi and by 2010 or 11, we were pretty much
Telecom is a very capex heavy business. The product
a national company. In 2016, we had a revenue market
that you sell is air. You can’t smell it or touch it or feel it.
share of about 30%. It was a very fragmented market with
To build the networks, it requires very heavy investments.
10 players. Spectrum is a resource pool on which telecom
This was the first time in the world that a new player had
networks work. As you have limited spectrum, you need
come in and put in more capex than the incumbent
few players, in order to make sure that you use the
players. We had invested about $20 billion, up to that
spectrum well. But India had a strange situation when you
point in 2016. They came in with an investment of $40
had three players, which accounted for about 80% of the
billion. Overnight, they had doubled the capacity. They
market, with just 20% of spectrum. There were another
had more towers than us; they had more fibre which is
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the heart around which all networks work and which
This series of bankruptcy hit many of the players. The
needs heavy investments. They had far more capacity than
number two and number three players - Vodafone and
us.
Idea merged together to effectively become the number one player. They ended up with a 45% market share; we
Giants Collapse
were at 30%. Reliance just about started pricing.
We were subjected to a series of regulatory shocks. Almost $7 billion was effectively wiped out. A billion dollar was transferred from us to the other players. Another $6 billion hit us as legal fees for cases that we had won in many courts. The consolidation was dramatic. Ten players went down to three players effectively. People were bankrupted overnight.
queuing up and demanding money from the distributors. threw
stones
at
the
offices.
Reliance
communication, which was a large company at that time, went into bankruptcy. Telenor, which is one of the largest Scandinavian operators across Scandinavian markets, effectively shut shop and handed over the keys to us. Tata Communications, again from the large Tata conglomerate went bankrupt.
which was about $32 billion or 240,000 crores effectively became $22 billion. 33% of the market revenue evaporated because of the low pricing. Out of every 100 rupees of revenue that we were earning, 50 rupees was the operational expense. We were effectively left with 50 rupees of cash flow and we had to put back those 50
I remember that the offices of Aircel had people People
Given the low prices that were operating, the market
rupees into capex. Taxes were separate. So, we were deep in the red. In effect, what happened was three things. The penetration of smartphones went from almost nothing to 70% in a three-to-four-year period. The usage per customer of gigabytes of data went from 0.8 gigabytes to 23 gigabytes a month, which meant more capacities. Also, the rate per gigabyte went down from 250 rupees to six
BUSINESS MANDATE
fountainhead of excellence
51 FEBRUARY 2024
rupees. This was the perfect storm that really happened
There are four lessons that I've learned out of this whole
in that three-year period between 2016 and 2019.
exercise. They are applicable,
Stellar Show and Four Lessons
not just at moments of
Today, four years down the line, Airtel has 40%
disruption. When I look back, I
market share. The revenue in the last four years has doubled from about 50,000 crores to 108,000 crores. The
wish we had absorbed these
EBITDA, which is a measure of profitability, has more or less tripled from around 18,000 crores to 55,000 crores.
lessons even before all of this
The market cap, which is an outcome of all of this, has
had happened.
gone from $20 billion to about $80 billion. I'm
also
quite
amazed
by
our
non-wireless
contribution because we were very mobility centric
to three was something that we knew would happen
company and heavily dependent on the mobile business
because you needed nerves of steel, and enormous capital
to the extent of about 85%. The non-mobility business,
to survive the onslaught. By the way, we had to raise $15
which was about 15% contribution has now become 25%.
billion of capital to fight this battle and strengthen our
We have a stronger and more resilient portfolio. We also
balance sheet. We had a rights issue; we had to dilute
have a range of digital services. For example, we have our
promoter holdings and we had to raise a series of
own payments Bank, which is a thin bank, where you can
perpetual bonds and a whole bunch of things to actually
remit money. It is the only profitable Fintech player. We
raise capital.
have got a very large data center business. We also build some of these businesses.
The second area around tone and mindset is also the metrics that you set. When you know that your revenue
There are four lessons that I've learned out of this
is going to fall by 20% 30%, what are the targets that you
whole exercise. They are applicable, not just at moments
can set your teams? You can’t set a target of -10 or -20%
of disruption. When I look back, I wish we had absorbed
revenue. It's a really a tough question. Also remember, if
these lessons even before all of this had happened.
revenue is going to fall, margins are going to fall. We have 14 operating units across the country. All our operating
Tone and Mindset
units are measured on the basis of revenue, margin and
The first lesson is about the tone and mindset. For me, the battle is fought in the mind first, before it is
market share. You can’t set targets that make people feel like losers every day.
fought in the marketplace. I remember standing up in
We had a deep conversation at the board. I said to the
2019 and addressing the whole company. We have
board that I would be the only one who carried the target
leadership meetings once a year. I put up two charts. One
of revenue and margin. We put two targets, which were
was a chart with very stormy seas, which is exactly what
more controllable - market share and cost. Market share
we would encounter in the country. I said that this was a
is a barometer of competitive performance. You can
once in a lifetime opportunity. Ten players coming down
control your cost. The consequence of that is that people
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felt, even at a point when things were going down, that
It unclogged a lot of our networks because these
they needed to do something in contributing towards the
customers were just receiving incoming calls. But more
company.
importantly, it convinced everybody in the organization
I contrast this with Vodafone Idea who was much larger than us at that point in time with 44% share. Their target was that we were going to defend the market share. If you say you're going to defend share, you're inevitably going to lose the share. If you say you want to win share,
that we were serious about what we were trying to do. We put all our energies and our limited capital into these 245 districts and vowed that we are going to be better than anybody else. We also kept the price premium, to attract quality customers.
then chances are, that at least, you will hold the share. So
Postpaid plan became a very big area of focus. We
through that battle, we came out in those first two years,
have the leading position in postpaid - about 60% market
not losing market share.
share in postpaid segment in India. 80% of our customers are on family plans. This means if you've got the chief
Know Your Customer Segment
wage earner or one person in the family on a plan, they
The second thing I would call out as a big lesson is
can add two or three other people on the same plan.
that we had to be very clear about which customer
Thanks to this, the stickiness is very high. The churn really
segment we would want to go after. We are competing
crashes, because if you want to move or switch the
with a player that has almost infinite amount of capital.
network, you've got to switch the whole family. 80% of a
It's a bottomless pit of a big balance sheet, which is being
postpaid business works on family plans. We were crystal
funded by many businesses that the company is running.
clear about the customer segment we were we were going
They have regulatory muscle and clout. If you compete
to target. That was the second big thing for me as a
on their terms, then you're going to lose. Winning the best
lesson.
quality customers is what we decided that we would do. In India, about 35% of customers account for 70 to 80% of revenue. 245 districts out of the 770 districts give the industry almost 80% of the revenue. We decided to focus on just these 245 districts and forget about the other 450 districts. We were very clear that we want the best quality customers. This was a very big call to take. A group of people who had built the company for 21 years thought exactly the opposite. Convincing them and persuading them to make the shift was a challenge. We
Differentiation: The Airtel Way The third big lesson was on differentiating our intangible service business. We are in a business, where we are remembered when we fail, unfortunately and not remembered when we work. One percent of the time when we fail is when, everybody would curse us saying that this is our fault. Often, it's the fault of the device or the application, but we are the ones that actually face the music.
made a very bold move to shed customers. We had 289
For us, there were two sources of differentiation –
million customers. We put in an entry price plan, which
customer experience; and crafting that customer
was like a surrogate plan where we knew we were going
experience through technology. We decided that on
to lose about 60 million customers. Finally, we ended up
experience, we've got to be the best in these 245 districts.
losing 50 million.
We had to have the best network and the best experience. BUSINESS MANDATE
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53 FEBRUARY 2024
We asked ourselves: How do customers assess experience?
houses to install a broadband, do a fault repair, or go to
When you open up a YouTube session, you want it to load
a network site to repair it. All of them sit on one
up fast. When you're paying a bank online, you don't want
application, which is called Airtel Work. Everything is
it to fail, just as you go through the transaction. We had
monitored real time at the back, through a network
to do a lot of engineering to ensure this. In telecom
operating centre. The quality of the work, authentication
language, it's called latency. It's the time it takes to boot
and scheduling of the work happen real time, done
up a page or a YouTube video. We got better at it. We tied
through the same platform.
up with the banks and told them, ‘If your application is failing, then my customer thinks it's the network problem.
Digital Services
Let's work together to correct the problem.’ As a
The third layer is our bank. If we can create digital
consequence, many companies rate Airtel for the best
services, we can get more and more share of wallet of the
experience on several parameters- be it gaming or video
customer. So we have a bank. We do over 20,000 crores
application or voice calling. Not that we are the best but
of throughput in the bank, a month. It's the only profitable
we are definitely great.
FinTech player in the space in India. We have a lending business. We do about 3000 crores of lending on our
The 3 Stacks
platform. Again, that comes from the digital infrastructure
The second source of differentiation is about crafting
layer. We have so much of information, that we have credit
the experience, looking at all our technology. In Airtel, we
scored our customers and we are able to lend using
think in three layers. The first layer is the data
partnerships with banks. We have a large data center
infrastructure layer- the digital infrastructure and
business.
network. Data is a real goldmine. We have spent the last five years building up the finest state of the art data infrastructure layer. We have almost 2000 attributes that we can look at, on customers, based on the device usage, its applications and various things. The response rate for a query is in milliseconds. This is one of the reasons why our average revenue per user is at least 18 to 20% higher than the number of any other player in the industry. This is the first part of our style.
We have another product called Airtel IQ. We help customers on things like phishing, spam and fraud. We work with HDFC Bank to create an artificial intelligence led, anti-phishing, anti-spam shield on the core network. As millions of messages are coming through the network real time, we are blocking potential spam and phishing. HDFC has seen almost a 99% reduction in their spam and phishing attacks. Thus, differentiation in a service that is quite intangible is the third big lesson.
The second part of our stack is the digital experience layer. We have to think from a customer's perspective.
Culture of Ownership and War on Waste
What do customers do? They buy stuff and we have to
The last lesson, I would call out is culture. I cannot
serve them stuff. Typically, in telecoms, we have a lot of
underscore this more. If I were to define the culture of
billing systems, with great, underlying complexity. We
Airtel in just one word, then it is this – ‘ownership.’ Across
have built platforms on top of this complexity, so that we
the company, people feel it is their company and it is their
simplify the journeys for a customer. Let me give you an
money. They are empowered to do what whatever it needs
example. Today, we have 70,000 people, who go to the
to be done to build the business. One aspect of ownership
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is frugality. We have a program that we've been running
I believe my role as CEO is to be the glue between
for the last 11 years. And this program is not about cost
different functions and business units, so that space is
reduction. We don't call it cost reduction. We call it a war
achieved within the company. Wherever there are friction
on waste. Because when you say cost reduction, people
points and cross functional fracture points, I attempt to
start getting tense, because it's almost like they're being
iron it out through more real and authentic conversations.
questioned. But if you say it's about waste elimination,
As part of our rituals, every quarter, we get together and
the ingenuity that you get from the teams to actually strip
talk about what's coming in the way of our leadership.
waste is dramatic. In the last five years, we have taken out
That is not a general discussion. It is based on surveys
$3 billion, almost 22,000 crores of waste from the system-
that
reducing our network and call center costs and just
quantitatively, to assess how the leadership team is
stopping costs from happening in the first place.
performing and where they can help to do the job better.
The second part of our culture ownership. We are in a fast-paced industry and we have to move fast. One of the first decisions that we took and in hindsight, which I think was a good decision was that we stripped out one layer in the company. We have 14 circle units and each circle has a Circle CEO. They report to a Chief Operating Officer. We don't have a layer in between, because we believe the circle CEOs are the most empowered General Managers in the company. One supervisor is more than enough to manage that, which effectively means that we're not breathing down somebody's neck. They have full empowerment to run it.
are
done
by
our
teams
qualitatively
and
We discuss how we're going to change over the next 100 days. That generates a sense of pace and trust.
I am Airtel The last part of ownership is a culture of rigour. We have an incredible amount of data within the company. Today we have 280,000 mobile towers across the country. Every single tower has profitability. We know the cost, revenue and profitability of each tower. In Airtel, you'll hear a lot of jargons and one of them is LRLU, which means low revenue, low utilization. The low profitability towers are identified. We've now taken that one step further. The 2500
The Power of Rituals
stores that we have across the country are now divided
We also have a concept of rituals. We do this every
into catchments. Each catchment has a grid and a grid is
morning, with all our 2500 stores. Today I was in a store
literally 500 meters by 500 meters. Within the grid, we
in Anna Nagar. The ten store staff will get together, talk
know exactly what the customer experiences. We know
about the good customer stories and the not-so-good
our assets and what the sales teams or network teams
customer stories of the previous day. These customer
need to do and make sure that they happen. So ownership
stories will get aggregated along with all the calling and
comes through different aspects- frugality, pace and
the patterns that we see centrally. We try to structurally
rigour. We have three words in Airtel, which we use and
solve those problems and report back to the store staff
talk about it often. All our emails get signed off like that.
about what we're doing to solve their problems. This
Those words are, ‘I am Airtel,’ which is really the symbol
creates a sense of energy in the in the organization. This
of that ownership.
is again, an example of pace.
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Mr Sreenivassan Ramaprasad, Director, CADD Centre Training Services in conversation with Mr Bhargav Sundaram, Chief Executive, Callidai Motor Works and Mr Madhu Raghunath, COO, Dealership Businesses, TVS Mobility Private Ltd., on Daniel H. Pink’s captivating book.
M
r Sreenivassan Ramaprasad: In his book,
The author divides the book into two parts. The
‘Drive,’ Daniel Pink fundamentally challenges
first part is about what motivates us. In the early years,
the conventional wisdom of motivation. He
all human beings had the only objective of survival.
starts off the book with the experiment done by a
Then came the industrial revolution, where the
scientist named Harry F Harlow, who put a monkey into
industries started coming in and humans became part
a cage and gave the monkey a problem to solve. The
of the factories. People started doing the same thing
monkey had to remove a nail and open a clip.
again and again. For monotony, they devised the
Unlike the normal motivation theory of carrot and stick, he did not give anything to the monkey. He thought that the monkey would not do anything. But to his surprise, the monkey started solving the problem and repeated to solve the problem, which indicated that it actually enjoyed solving the problem, despite not being rewarded. He also talks about the most popular digital encyclopaedia- the Wikipedia whose contributors
motivation strategy of carrot and stick, which is nothing but to give incentives if you produce more and punish if rules are not followed. But today, we are in a knowledge
economy,
where
creativity
is
more
important. People want their own time. They no longer read. They want to view YouTube and listen to audio. Things have changed and, in this scenario, the carrot and stick will not always work.
are not paid. They voluntarily contribute. It means that
There are two types of behavior- one is the X
there is something other than reward to motivate
behavior which is based on extrinsic factors. The other
people.
is the I behavior which is based on intrinsic motivation. Extrinsic motivation is like getting the reward for doing BUSINESS MANDATE
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anything or getting a punishment like a salary cut.
talk of mastery, almost immediately, Sachin Tendulkar,
Intrinsic motivation comes from within, which is all
the master in cricket, comes to our mind. He achieved
about creativity. This, according to the author, comes
mastery by continuous practice. Practice is painful. It
from three key elements- autonomy, mastery and
comes with the growth mindset that you have to
purpose.
perform well. It is important that you develop mastery in whatever you do. It's a continuous journey.
Autonomy Thirty years ago, I was working in JK Tyres. It is a
Purpose
well-paying company and I was paid well. But it was a
In CADD Centre, we want to enable engineering
completely hierarchical, control-oriented company at
students to get a livelihood and we want them to be
that time. Then I joined CADD centre, where I saw
employed in a very good company. That is our purpose.
young people doing responsible work, like giving
Recently, we started the program called Easy Hire,
training on CAD. They had absolute freedom. I got
where we also made it easy for companies to come and
attracted towards the freedom and sacrificed 50% of
hire, by training the students as per their requirements.
my salary to join CADD centre. Autonomy is a pure
That is a pure purpose driven motivation. Yes, there is
intrinsic motivation for me.
profit. But profit driven companies will get tired after some time, while purpose driven companies with profit
Mastery
are likely to stay for long. So, autonomy, mastery, and
What is mastery? When you achieve your peak
purpose are the intrinsic drivers of motivation.
potential in anything you do, that is mastery. When we 58
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Everybody has varying degrees
destination, you will follow a process of your own. Your
of creativity and imagination in
creative thinking will come to the fore. You can hitch a
them. The employer or the boss must make the best use of it
ride, or walk or call a friend and ask him to take you to your destination. When the late Tamil Nadu Chief Minister Mr MG Ramachandran died, there was a complete lockdown. We were studying and staying in
~ Mr Bhargav Sundaram
the college hostel in Coimbatore. One of our friends wanted to go to his residence in Trichy. He didn't have money with him. He walked some distance, then went
Mr Madhu Raghunath: I want to use an acronym-MAP.
by bullock cart and travelled in a lorry but he managed
While the author puts autonomy first, I have taken the
to reach his destination. He was on his own. When
liberty to put mastery first. I also found another
everything was stacked against him, he had a plan.
takeaway. Daniel Pink says that we should not worry
Autonomy gives us a lot of freedom to take our own
about the results of our work. This is very familiar to
decisions. Management and employers should not
what Bhagavad Gita says. The work itself becomes a
micro-manage their teams.
reward. People who don't worry about external rewards and recognition are the ones who actually get them. It's very paradoxical. But it is very true. Many of your
Mr Ramaprasad: How relevant is the carrot and stick principle in your business?
successful events in your life will be those moments
Mr Madhu Raghunath: Daniel Pink states that there
where you worked with a lot of passion and love and
are two forms of work - algorithmic and heuristic. In
not because somebody asked you to do so. That is what
algorithmic work, there are a set of rules and the
they refer to as intrinsic motivation. I am a big fan of
outcome is clearly known to the people. So, they can
school of positive psychology by Martin Seligman.
easily chase the target. But in the long run, they might
Mr Bhargav Sundaram: We are manufacturers of customized mobility equipment for people with extreme disabilities and senior citizens. We don't have a huge turnover but still, we are 25 years old. I believe that entrepreneurs and businessmen, especially those
tend to lose interest and we see that happening in the real world. Sometimes, you wonder why, even though you create some fancy incentive programs, people are not interested in pursuing those incentives. Rewards can sometimes lead to unethical behavior.
who are pioneers in the field, will be highly intrinsically
In heuristic work, there are no strict hierarchies. It's
motivated to be in a business. They do not look out for
like using your creative intelligence to accomplish a
a market; they don't do surveys to calculate how much
task. The ‘how’ part of accomplishing a task is left more
they can sell. They just come there with a gut feeling
to the individual, rather than a set of rules. For such
and some dream. Everybody has varying degrees of
type of work, incentive-based reward system will not
creativity and imagination in them. The employer or the
work. People must be inspired. Leaders and HR
boss must make the best use of it. Next comes the
professionals who design the reward systems must
autonomy. If you are left on the road, without much
appeal to the larger purpose of why a company exists.
money with you and you have to reach a particular
We need to work on the interplay between the larger
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purpose and the reward. Only then, the rewards will become effective. A simple carrot and stick approach
My significant impact would be
at the workspace, through my
will not work.
own policies and decisions
Mr Ramaprasad: What is working well in your organization?
~ Mr Madhu Raghunath
Mr Madhu Raghunath: On the sales front, we have incentives. I am not saying that it doesn't work. Almost all companies have structured a portion of the salary as incentives. But beyond a point, it's only the intrinsic
The blue collared workers can improve their efficiency
motivation that works.
by muscle memory. When they do the same things over
Mr Bhargav Sundaram: The author refers to carrot and stick policy as Motivation 2. Ninety percentage of the organizations offer Motivation 2 to their employees. Very few have Motivation 3, which is the intrinsic motivation. In my organization, 80% of those who work are blue collared. They work in the shop floor. They already have a lot of personal issues and problems. If they get their salary, they are happy and if you give them a reward, they will be happier. But these are people who cannot take the stick, so you cannot punish them. The white coloured like the marketing and sales guys are at a level where intrinsic motivation can work.
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and over again in the factory, their performance will improve and they could get an incentive. Mr Ramaprasad: Among mastery, autonomy and purpose, what resonates with you the most? Mr Madhu Raghunath: For me, purpose is very important. When I moved from Unilever to TVS, a lot of people questioned my decision. I was just 37 years old then. I had a very clear purpose in my mind, though it was not so well articulated or framed in my mind then. I have learned a lot in Unilever. I wanted to use my experience and give it back to an Indian company and
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make an impact on the lives of the underprivileged. In
teams in your institution, if as a leader or boss, you
TVS, our main audience set is an entire set of people
know only the business model but do not know the
who
richer
process or the technology. For example, in 1998, when
environments. The switch to TVS has given me a
I started my business, I thought wheel chairs would
wonderful opportunity to go and impact the lives of
have a good market. I'm a commerce graduate and I
people. That was the overriding purpose.
didn't know anything about the technology and how the
are
less
fortunate
than
people
in
Now I have reached a stage where I will be able to not just learn the business or develop it, but I can actually get to a level where I can contribute in a very significant way. That propels me even further. For me, the entire world is about work and home. My significant impact would be at the workspace, through my own policies and decisions--on hiring people, bringing in diversity, developing people and so on.
material can be fabricated. Later on, when it came to motorized wheelchairs, I had no idea about electronics. I had no option but to give some of my employees the autonomy to work on it, progress and then deliver the product. Eventually, they did that. The challenge was in identifying people who can work in an autonomous atmosphere. Purpose is why your business exists in the first
Achieving mastery is like saying tomorrow never comes. It is a journey. Mastery comes with pain. You may get autonomy or not in your place but you have to create your own space and autonomy. I feel that once you have purpose, then autonomy and mastery will fall in place.
place. The purpose or the overall objective of our organization is to provide mobility solutions for people with extreme problems and to put a smile on their face. Talented employees joined us, but did not understand the purpose and they quit. So, it is important that the purpose of the organization is very well communicated and understood by the people who are with you and
Mr Bhargav Sundaram: Autonomy is the space that is given to you for planning and implementing your own
that they must be able to work autonomously and acquire mastery.
work. You can give autonomy to your employees or
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