Category Archives: Lectures

The positivity leadership

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V Narayanan, former Chairman of Pond’s India Ltd was an inspiring visionary. He built a culture of character and competence and inspired ordinary people to do extraordinary things in the businesses he helmed. The Second V Narayanan Memorial Endowment Lecture instituted by well-wishers and Pond’s veterans was held recently in memory of Late Shri V Narayanan.

Mr Jerry Rao
Founder and Former CEO, Mphasis

The old theory that people are born leaders is simply not true. It was a very clever theory that was useful for aristocrats, monarchs and industrialists in the olden days to perpetuate their position. This is not a genetic trait like height or weight or diabetes. It’s a learned trait. The second thing we know about leadership is that it is situational. No person is a leader in every situation. When you are on a plane, the captain of the plane is the leader. If there is an emergency, you have to follow the pilot’s instructions. Leadership is not something like ‘a man for all seasons’ kind of story.

A Moses and a Joshua

The third thing about leadership is it is derived from situations. We need different kinds of leadership for different situations. This is where Mr V Narayanan set a great example. According to the Bible, Moses is the leader chosen by the God of the Hebrews, to bring the Hebrews out of Egypt. Then Moses dies. There is a new leader—Joshua, whose job is to take them into the Promised Land. I think the underlying message in the myth of The Exodus is that in different situations, we need different leaders.

Leadership a learned skill. It is situational. It means that one has to change one’s leadership style in different situations.

In the area of politics, the British public actually understood it. Winston Churchill may have led them through the war. But the moment the war was over, they defeated Churchill and gave the power to someone else. If Churchill had been re-elected, I don’t think he would have given India Independence in 1947. There might have been a violent insurrection and all kinds of problems. The British public were clever. They changed the leader, knowing that the situation required a different leader. So, leaders are not born. Leadership a learned skill. It is situational. It means that one has to change one’s leadership style in different situations. In the German army, they used to have different generals for offence and defence. Heinrici, for instance, was one of the greatest of German generals. His specialty was all defence. Nobody has heard of him like they have heard of Rommel or Guderian. It doesn’t matter. He was the best in defence. There are some who can do both. Narayanan was one of them. He was able to straddle multiple situations and multiple challenges.

Learn and Unlearn

Why are some leaders able to do that? Let me now move from science to the art. Till now, we looked at the research on leadership. We know that it’s not DNA driven and it’s situational. It has to change as per the situation. How does one change for situations and transform oneself from a Moses into a Joshua?

According to ancient Tamil poet Thiruvalluvar, a leader must learn flawlessly, unlearn and get rid of the dust in the brain and apply what he/she has learnt. Learning and unlearning are part of a leader’s evolution. The skills that will be useful in defeating a country militarily and the skills that will be useful in negotiating with the leadership of the country about freedom are two different skills. These are two different situations.

No knowledge will be useful, which is purely theoretical. We all, as managers, must understand that there is no point in knowing theoretically and doing nice PowerPoint presentations, if we cannot use them in practice.

License, MRTP and FERA Chains

Someone like Narayanan epitomized the art of excelling in theory and practice. He was a CEO and MD at a time when the Indian manager was in chains, tied between industrial licensing, MRTP and FERA. You had to operate with your hands and legs all tied up and at the same time, keep up the organisation’s morale. You had to keep your customers happy and brand values intact. You had to make sure that your market share didn’t go down and there was customer delight, managing products with an extraordinary brand history. You had to be faithful to the brand legacy.

It was a very difficult task. Narayanan and at least a dozen other people of that generation of managers managed that. Think of just one challenge they faced. You had to go and tell your foreign investor, “The Indian Parliament has passed some law. I know you people have been operating in this country for many decades. But we are going to dilute you, using a share price which is totally unfair to you. We are going to bring you down to 40%. But don’t worry. Be patient. Hang in there for ten or twenty years. We will continue to do business and over time you will recoup.”

Can you just think of the challenge? I am certain I would not be able to do it. But at least half a dozen managers of Narayanan’s generation did it. Navigating FERA, MRTP and Industrial Licensing was as difficult as Moses trying to bring Hebrew slaves out of Egypt.

It was unthinkable before 1991 that two foreign companies will be allowed to merge or one foreign company will be allowed to buy the equity of another foreign company. All that under FERA were impossible. Then suddenly things changed. The controller of capital issues went away. This required a different approach. Very few managers have been able to straddle different time periods. Narayanan was one of them. To go back to the myth of The Exodus in the Bible, he was able to be a reasonably good Moses and a very good Joshua.

Charisma is not something inherited. It is acquired. It is as much about leaders as it is about followers; research is still going on about the contribution of followership to leadership. Narayanan was a charismatic leader because of his qualities and achievements.

Charisma—Leaders and Followers

In all leadership studies, you will find a lot of mention of the expression ‘charisma.’ Charisma comes from an old Sanskrit, Persian word. It talks about miracles and magic. In the paintings of early Christian saints in Greek orthodox and Catholic churches, there will be a sun around the head of the saint. That is the Charisma itself. That is a holy touch given to the saint.

Charisma is supposed to be very central.

Charisma is not something inherited. It is acquired. It is as much about leaders as it is about followers; research is still going on about the contribution of followership to leadership. Narayanan was a charismatic leader because of his qualities and achievements. It was also because of people like Balaraman and Atul Vohra as his followers, giving their leader that charisma. There is a symbiotic relationship. That is why enduring organizations have both great leaders and great followers.

There is no such thing as a great leader without great followers. The best example in the last 150 years is Mahatma Gandhi. A good leader like Narayanan encourages and programs their subordinates to succeed and better their leaders in what they do. People who are insecure and scared that their subordinates will outperform and replace them can’t do that.
I think Narayanan started in sales. He never compromised on customer satisfaction and customer delight. He was obsessed with the fact that Pond’s vanishing cream or Dreamflower talc or some of those other brands had extraordinary association of customer satisfaction.

Selling the Backwater

In those days, for a variety of historical reasons, Cheeseborough Pond’s was headquartered in Madras (now Chennai), which was a bit backward those days. All the big companies were in Bombay and a few dying British companies were still in Calcutta. It was very difficult to attract talent to Madras.

Narayanan had the unique ability to convert that into a positive. He sent a subtle message that Madras might be a backwater but one could learn more and do better than going into the big ocean and getting lost. Since he had credibility and high integrity, the message got through. Instead of complaining, he changed the challenge into an opportunity and an armament in his armoury.

I was also a big supporter of making Madras a big centre for banking operations. We were able to attract a lot of people. I had our credit card marketing head office in Madras. Then I convinced HTA, our advertising agency to transfer one of their brightest people to head HTA Madras. He later went on to head their India operations and take up prestigious roles.

According to me, the managers of today must take interest and play an active role in the community. It can be sharing of knowledge, associating with management organisations like MMA or contributing to the community in other ways. They must grow beyond the company.

Mr Thyagi Thyagarajan
Former Regional Director & SVP, GlaxoSmithKline, Asia Pacific

I first met Mr Nari (Mr Narayanan’s nick name) when I came back to India after a stint in the UK. I joined as a special assistant to the Managing Director. It took some time for me to settle back into India. I decided to expose the company, to talk to people from different backgrounds and different industries and see what we can do with that knowledge, the pharmaceutical industry being pretty insular. They get very special in many ways and I felt important for the company to be exposed.

My boss at the time was one Mr Humayun Dhanrajgir. He was a classmate of Nari in Lovedale. He suggested to me to consider inviting Nari for our first talk and I got in touch with Nari. He came to Mumbai and spoke about the Pond’s story. It was a mesmerizing, captivating talk delivered in typical Nari style—precise and factual and yet, underplaying his role. It was a phenomenal story though, which resonated with everybody.

Power Packed Independent Director

After the talk, he spent a few minutes with me and asked about my background. He realised that I was Pond’s Balaraman’s classmate and I could straightaway connect with him. He joined our board. I joined the board of Glaxo India in an executive capacity and he came in as an independent director in a non-executive capacity. He did that role for close to 20 years. This is before the company introduced ceiling on tenures. I had 20-odd years with Glaxo as a board member.

Nari was instrumental in requesting Mr N Sankar, who was Nari’s very close friend and Chairman of the Sanmar Group, to induct me onto Sanmar Group’s Board. As a board member, I met him over 100 times and had the opportunity to interact with him many times.

On the very day, I joined the company, there was an ominous signal for me. The government amended the Act for drug patents and also withdrew the Drug Price Control Order (DPCO). These were two important events in the history of Indian pharmaceutical industry. I had to manage with my hands, feet and everything else tied.

At Glaxo, we wanted a high-quality board, not to supervise us, but to give us advice and from whom we could learn how to navigate in a highly regulated industry like Pharmaceuticals. Since we had a heavyweight board with people like Deepak Parekh and Nari, we were able to persuade our parent company to look at India as a special case and to view everything from the product portfolio angle and that we had to be different including on pricing.

Retaining Indian Colour

Jerry mentioned about foreign companies being asked to reduce their share holding to 40%. We did that and when we had the opportunity, we were able to persuade our parent company to go from 40 to 51 and more recently, in the last few years to 75%. One of the advice I gave to our parent company in the UK was not to go for 100% because the fact that we were 50 or 75% gave us an Indian colour. We will be seen as an Indian company amongst the MNCs.

We were able to do that because we had people of the calibre and integrity like Nari, who were able to persuade the foreign investors that India was worthwhile. It’s always a longer term with India but it is a rich country of a billion people and for a healthcare company which has the vision of being a global company, how could you not for prioritize India? We are able to have that understanding with the parent company. That was thanks to the role the independent, non-executive directors played. I saw Nari do that. For every board meeting, he would come fully prepared. He would read the minutes from top to bottom, underline the key points and would ask probing questions, always in a constructive way. As an independent director, Nari was influential beyond measure. For many people, being on a Board is a prestige issue but not for people like Nari. When we asked him to join our board, the question he asked was, “Why do you want me on the board?” He wanted to act as a sounding board and help us navigate the tough times. I have always seen the independent nature of the board as a positive and not as a body that is trying to put a spoke in the wheel and obstruct the CEO’s plans.

Following Nari’s Footsteps

Later on, when I became an independent director in a couple of companies, the model I had in mind was that of Nari’s. He was a person who could serve any board, even if he didn’t have the domain knowledge of the industry. He would make it a point to be very well informed and educated on issues pertaining to the industry. From the questions he asked, you could never guess that he was not from the pharmaceutical industry.

So having a board with capable non-executive directors of the calibre of Nari was a great advantage. When Mr Sankar invited me to join his board in Sanmar Group, I participated in their Board meetings and Nari was also on that Board. I knew that Nari and Sankar were friends and had known each other for 50 years.

But in the board meetings, Nari who chaired the audit committee would ask tough questions. He would challenge and sometimes question the position that Sankar took. Sankar was one of the best CEOs I have ever seen. He knew his business and how to run his company like nobody else could.

When I was asked to join their Board, I asked Sankar why he wanted a powerful board, being a private company. His reply was a lesson to me. He said that his position needed to be challenged and smart people on the board would be able to see if he missed a right turn or not. The second reason that he pointed out was that as he wanted to induct his son into the Board, he wanted to have wise people around. Stakeholder management is talked about widely today. Nari practised it from day one.

Don’t Forget Your Roots

In 2009, when Glaxo and Smithkline decided to merge, we had to take a lot of difficult decisions. We had inherited nine factories. We needed just two. We had to downsize our operations significantly and take out a large number of people. As many of them had spent their lifetime with us, the Board unanimously decided to compensate their release reasonably well. That had the full support of people like Nari.

Post the merger, Glaxo being the larger partner, we decided to break away from the past. We wanted to completely move away from our Worli office to a new location. Those of you who know Bombay will appreciate that the location of Glaxo factory is iconic. It’s called the Glaxo bus stop. It is a landmark in Bombay.

When we sought Nari’s advice, he said, “Why should you move your entire set up from Worli? You can keep your HQ there and relocate your manufacturing operations.” His point was deeply philosophical and his advice was not to forget the roots from where one came from. It was not a mathematical or economic argument. We should not forget the origins of our organisations. This is something that has since stayed with me.

Great leaders do not think that they alone are responsible to drive the company. They believe in collective intellect. They should also ensure that in their team, they have one or two people who have the courage to question their decisions and to push them back. A leader must not be surrounded by yes-men.

Mr V Balaraman, former President of MMA and former MD of Pond’s India Ltd who succeeded Mr Narayanan spoke about how Narayanan handled the challenge posed by the then Union Minister Mr George Fernandes and converted an adversity into an opportunity. The minister wanted each company to bring in high technology and provide great value addition to India. He wondered what contribution could come from a talcum manufacturing company. The government levied steep excise duty on talcum powder. Hindustan Levers chose to invest in fertilisers & chemicals to justify their continued existence in India while Narayanan chose the route of exports. While continuing with talcum powder, Narayanan allowed us to start manufacturing of shoes, leather garments, mushroom and thermometers and we exported them. The exports brought in substantial revenues to the company. For a period of ten years, the exports were far more profitable than the talcum powder marketing. Narayanan trusted people, gave them challenging assignments and gave them the freedom to fail and learn.

How we destroyed India’s water and How we can save it

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In her fascinating, deeply researched book, Ms Mridula Ramesh takes us through 4,000 years of history to track how India’s water has reached a critical point. Mr N K Ranganath, Grundfos Water Ambassador and Mr G V Ravishankar, Managing Director, Sequoia Capital India, interact with Ms Mridula Ramesh, on what it takes to secure our future.

Ranganath: People were thinking that getting water was their birth right. Though there is enough water available, it is not available in the right place, at the right time and in the right quality. Usage of water responsibly is the duty of everyone.

Mridula Ramesh: The heart of any change, understanding or approach is philosophy. If we get the philosophy right, everything will follow from there. Sustainability comes from the root word, ‘maintain from below.’ Water is the foundation of sustainability but we all take it for granted. My journey is everybody’s journey. I didn’t care about water as long as it did not affect me. Nine years ago, we ran out of water at home. That’s when water became visible to me—visible when it became absent.

I learnt about climate change. I realised the seriousness of the water problem and wondered why no one was talking about it. In the last few years, as I participated in the climate related dialogues, not only in India but in the world, in every discussion, more so in the investor community, I heard about carbon mitigation. To attract funding, you have to manage your carbon emissions. Conserving water has been treated like a step-child and not been given any importance.

Carbon, no doubt, is very important. If you put out CO2, it stays in the atmosphere for hundreds of years and increases the warming. The temperature supercharges the water. That translates to the wet getting wetter and the dry getting drier.

I saw a lot of books on India’s rivers, drought, farming, sewage treatment and rain water harvesting. But I didn’t find one book on India’s water. ~ Mridula Ramesh

I saw a lot of books on India’s rivers, drought, farming, sewage treatment and rain water harvesting. But I didn’t find one book on India’s water. Poet Kalidas in his work, ‘Meghdoot,’ beautifully describes India’s water as a product of sun, sea, mountain and land including forests. Because it is the combination of the Himalayas, the Indian Ocean, the Bay of Bengal and the Arabian Sea, it has four characteristics.

One, it varies geographically. In Jaisalmer, we get an average of 165 mm of rainfall. Across the country, we get 5 metres of rain, in a matter of months. So, it is meaningless to talk about average rainfall in India.

Second, we have one of the seasonally, variable water in the world. It is much skewed. We have to manage this skew.

Third is the temporality. If you take the average number of rain days, Indian cities are outliers. Rain water harvesting is very important to store water and recharge the ground.

We have been taught in Geography that Indian monsoon is a land-sea breeze driven by the temperature contrast between land and sea. But now, this no longer holds good. We have global effects like El-Nino, Indian Ocean Dipole, The Madden Julian Oscillations, etc. Climate change disrupts the traditional rainfall pattern.

In the 1870s famine that India had, according to official estimate, 5.5 million people died. People died in Madras, Madurai and Arcot. In some of the famines, 40% of the Guntur district in Andhra Pradesh died. We forgot how variable India’s water could be. Climate change takes on each of these and makes them worse. It increases the rainfall in Jaisalmer. It brings down the summer rainfall and increases the winter rainfall in Chennai. Instead of the rain falling constantly over 40 hours, it now pours in 30 hours but with increased quantity and intensity. Therefore, not including water in sustainability is a scary thing.

I grew up in Chennai. We were a family of seven in a small 2BHK household. We had the same water problem that many Chennaiites faced—water would not come when we opened the taps. It came only at times. We had to take our pots, go to the street, stand in a queue and collect water. I always had a fear that someday as we grew up, there would be no water. I am now in Bengaluru. It gets lot more rainfall than Chennai. Despite that, I woke up in 2018 or 2019 to an article that one day, Bengaluru could run out of water by 2020. Why does a city like Bengaluru that gets so much rainfall and has so many lakes still run of water?

For many Indians, getting water is a luxury. The water problem gets worse due to the seasonality, temporality and climate change factors. Madras gets about 45 rain days in a year. Bengaluru also gets approximately around that. We use water every day. So we have to even it out.

Those days, we had distributed tanks. T Nagar was a huge tank many years ago. Chennai Boat Club was a 2 miles by 3 miles lake. They used to hold the winter regatta for a mile long course. Now we have floods in Chennai. In Bengaluru also, systems of tanks have been encroached.

At Sundaram Climate Institute, we did a study and found that if we rejuvenate the tanks, the ground water level goes up by 100 to 200 feet. Earlier, the lakes were a source of spiritual status and cash flow. Each tank was like a cash flow machine. If you clean the tank, you get karmic points. If you maintain the tank, you get status and village festivals. Fishing, livestock, lotus flowers were sources of huge revenue. Today, most lakes are pathetic with junk and solid waste. What status can they give you?

Earlier, the lakes were a source of spiritual status and cash flow. Each tank was like a cash flow machine. If you clean the tank, you get karmic points. ~ Mridula Ramesh

We should develop sustainable tourism around water bodies like selfie-spots, cycling track, Wi-Fi hotspots, performance areas, etc., so that they thrive. In Madurai, when the Mariamman Temple Teppakulam (tank) was renovated, within a year of renovation, we found that 123 livelihoods came up around the tank. Tanks prevent rain water flooding. They become a place to hang out. It lowers our monthly water spend, easily by 100 rupees.

Have you come across any example where water went back to the community and got protected?

One of my mentors, Shri Rajendra Singh of Alwar has done that. His work is the most profound example. Water was always a community-managed resource in India but became centralized during British rule. The British reports decry the lakes in Chennai and describe them as a cesspool and a source of malaria infestation. For the British administration, centralizing water supply ensured better control and revenue. Building infrastructure gave them great returns on their invested capital. With centralisation, many good things like fishing from the lakes also disappeared. It is very important that community must be involved in developing and safeguarding the water bodies.

In Gujarat, by pumping water in, people pushed back salinity of the ground water by ten kilometers. There are private companies who are doing similar works as part of CSR initiatives. We are the first borewell manufacturers in India, starting them in 1954. Now, many farmers, during rainy season pump water back into the borewell which recharges the aquifer. There are three levels in an aquifer. The first level gets recharged easily. If you go down, there are issues and it may take several years for water to percolate down. We must have short, medium and long term plans to manage water. I am not against RO in houses. But we should use the discharged water from RO for watering plants or other purposes. I read that Chennai once had 300 man-made tanks which were connected to one another. Today, we have hardly 40 of them and they also need to be restored. Is technology a panacea? What is your stand on technology versus mindset?

Access to technology and money are not bottlenecks in solving our water problem. There are many technologies which are available today. Technology can be dangerous too. Borewell, as a technology, has been hugely transformational in India.

The bottleneck is the philosophy. The genie in the room is the value of water. How do we value it and price it? We live in an economic world and there is no going away from that. In an economic world, what is priced is prized and what is unpriced is invisible. In Arthasastra, Chanakya talks about progressive water tax, where the rich pay more. If a farmer took water manually, he should pay 20% of the tax. If he used a bullock cart, he should pay 25%. If he used a mechanical wheel to draw more water, he should pay 30% tax.

Compare it to today’s scenario. In Bengaluru, if you use a borewell, you pay Rs 10 for 1000 litres. If you use piped water, you pay Rs 22 for 1000 litres. If you are richer, you get cheaper water. If you are poor and you depend on the tanker water, you pay around 30 paise per litre.

The popular narrative, unfortunately, is that water is a birth right. This is a post-1960 narrative. In all of Indian history, water had a price. It was a season based, variable and progressive pricing. We need to crack this narrative of water as a birth right, to solve our water problems.

Why does not the market level this field?

Market needs a signal. Today, it is profitable to market a pair of jeans than a litre of water. Where are our startup investments? The forest-water link is one of the most underappreciated and critical links in India. For the British, forests were important because of the timber. Today, 60% of the forest value comes from the trees. They literally miss the value of the forests for the trees.

True. There is no business case for starting a business for water. If PPP comes in, all the risks are one-sided. When Tsunami came, many areas, especially Nagapattinam, became extremely saline. We put five or six of our own portable RO systems in that area, along with others, to provide clean drinking water. We took care of the capex and trained all the women. We requested for charging only for the opex on a per litre basis.

Thanks to self-help groups, this went on well for 5 or 6 years, after which the government asked us to take back the systems. When we asked for the reasons, the government said that they had dug borewells and were providing free water to the people. The water quality was horrible though, with 2000 ppm of salt. Saline water is 20,000 ppm. People prefer to buy free water rather than pay10 paise per litre of RO water which was not only clean but also saved them from many diseases. The mindset is an issue. They don’t calculate the health cost of water.

Decentralised water distribution, where the benefits and costs will somewhat match, is the best workable solution to manage India’s water problems. ~ Mridula Ramesh

Though people face water shortage, when asked if they would be ready to pay more if they get 24 x 7 piped water supply, they replied in the negative. In short, they want free water supply to be provided by the government. Water pricing becomes an emotive issue. We need a sustained narrative. How can our women be productive if they spend two hours of their time, getting up in the middle of the night and fight with others on the street to fetch their water? We pay a heavy cost. Water is also a social multiplier. Once we fix water, lot of other things get fixed. Girls start going to schools, marriages get fixed and we get better outcomes. Unfortunately, water has moved from being a responsibility to a right. The failure to stay with farm laws tells us how difficult it is to bring reforms in India. Reforms in the water sector also have to be carefully worked out. Decentralised water distribution, where the benefits and costs will somewhat match, is the best workable solution to manage India’s water problems. Farmer suicides have plummeted in India, except in two states—Maharashtra and Karnataka. These are the states where onions are grown. Most onion farmers are small, they depend on rains and are completely exposed to the volatility of water. We need to get more buyers for the onions. There is not enough market infrastructure and the farmers depend on the local traders. If a farmer sells to ten buyers, the dynamics will change. The other thing which we all can do is to question what we eat. If we eat rice and wheat and the government provides them in ration shops, the farmers will grow only rice and wheat. If they grow millet and we eat rice, what will the farmers do? The change has to start from the demand side.

What can individuals do to solve the water problem?

I have been insisting on decentralisation. Let’s not try to solve India’s water problem. The biggest advantage of India is its population. One Chennai is equal to four Singapores. If we can get just one quarter of Chennai to adopt meaningful regulations and practices, it can trigger a wave of innovations that brings jobs, contributes to GDP and creates water resilience. Each of us must feel that water is our responsibility. If we do so, then there is hope. n

Participative Leadership

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Mr P Jayadevan, Executive Director & State Head – TN & Puducherry Indian Oil Corporation Ltd (IOCL), touches upon the importance of grooming leaders by assessing their strengths and weaknesses. He also sheds light on how they managed to coach and mentor 14 of them, through a very systematic process at IOCL.

Coaching is a noble act of changing individuals and developing them to take on new roles. There are many factors in production and human beings are the most flexible in any organisational or production set-up. We may feel that changing human beings is the most difficult thing to do. But, I don’t think so, based on my own experiences in the oil and gas industry which is undergoing major transitions today.

The big transition
Our PM has addressed COP26 and talked about India’s energy transition plans from conventional to renewable energy. We have a big challenge in IOCL handling our portfolios, being in an oil and gas industry. We are now into solar, wind, hydrogen, biofuel and electricity as well. We are going to produce batteries. All these energy forms need much higher infrastructural needs. We need to prepare ourselves to handle these new forms of energy, any of which might proliferate in the next five to ten years. We keep our foot in all the boats and whichever goes faster, we get onto that. IOCL is the energy security keeper of India and we cannot afford energy poverty in our country. It is therefore a much complex situation that we face today. Compared to all these challenges, transforming individuals is easier. In public sectors, transforming individuals and coaching are required. We join public sectors at a lower cadre, grow and retire and thus have a long term relationship. Any positive change that happens to an individual, will contribute much more to the organisation in the public sector than in a private sector where people keep on changing. In public sector, we do have a long and heavy tail. We need to transform them as well. All these factors favour a coaching system in the organisation.

We are all generalists in public sector and not much of specialists. We keep on shifting from one department to another and there is very little prominence or value given to a specialist in public sector.

We are all generalists in public sector and not much of specialists. We keep on shifting from one department to another and there is very little prominence or value given to a specialist in public sector. So if you have to become a leader, you need to have better qualities, deep inside you. In spite of all this, my experience says that in public sector, human resource development is yet to mature, though there are initiatives happening. We have industrial relations, employee relations and human resources department. We have not gone deeper into human resource development.

I have had some experiences during my last 20 years in coaching, though I am in this organization for more than 34 years. It has given me some insights that there has to be some system for individual development. We have a Learning and Development Department and Training Department, but they focus on programs for a group of people.

Tweaking the appraisal system
In the early part of 2000, I was heading a small unit and I had 14 officers and 50 workmen under me. We have an annual performance appraisal system in order to rate them for giving promotions or rewards. When this appraisal was happening, I did a small exercise.

I asked every officer to write down two strengths and two areas of improvement for every other officer including me, naming the officer who is being evaluated but without writing the name of the officer who evaluated. All these were put in my in-tray. I compiled all comments received for every officer, put them on a single sheet and gave them back to the concerned officer. I asked them to ponder over the comments and called them for a discussion after two days.

All the officers, naturally, accepted their strengths but not all of them accepted their areas of improvement. Some officers concurred with the areas of improvement pointed out to them and promised me that next year, I would not see those comments. To my surprise, those officers really worked on those areas and vastly improved. Another set of officers accepted their areas of improvement but expressed their lack of knowledge and tools to overcome it and wanted handholding. I was totally at dark as to how to help them to improve, as I was not a psychologist nor a certified coach. I did this assessment of strengths and weakness exercise for four years and completed it in 2006, at the end of which, I had a clear picture of all the officers assigned to me during those four years and understood them thoroughly.

Mentoring that didn’t take off
Subsequently, we introduced a mentoring system in our organization. The young officers who joined us, were given mentoring. They had mentors within the organization. Initially, these mentors were the controlling officers or the officers to whom they report to. I thought this was not correct, as a controlling officer might impose certain things onto the officer reporting to him. It could be handled better.

I brought in three retired officers to do mentoring. I had 17 officers with me. I made them into three batches, connected them with the three retired officers—six in each batch—and then allowed them to do the mentoring process. We had some structured way of mentoring but I found that the experiment did not go well because the officers who were supposed to get mentored, never asked their mentors for any help, except one officer who met with an accident, sought some help when he was in the hospital bed. That was my second experience.

We had some structured way of mentoring but I found that the experiment did not go well because the officers who were supposed to get mentored, never asked their mentors for any help…

Selecting the directors
My third experience though was different. Recently, I was heading the Secretariat of our Chairman. We have a process of selection of Directors in the public sector. We have six internal and six external candidates and they go for interview by the Public Sector Selection Committee.

We had to appoint a Director for Marketing. In the list of shortlisted candidates for the position, six names appeared. I went through those six names and I discussed with our Chairman. I found that almost all of them had leadership qualities. But they had gaps in some areas like listening skills, communication skills, self-awareness and integrity as well. So, probably we were not able to get the best of the leaders for the organization. Had we initiated coaching and course correction for them four or five years back, we would have got six excellent candidates for the directorship. That was the inference or learning which I got.

I tried to have a coaching process at the Chairman’s level, but unfortunately, it did not really materialise. I came back and got a posting in Chennai as Head of Tamil Nadu and Puducherry and approached a professional coaching organisation. They helped me to set up a coaching process. In fact, I was very apprehensive when I started it, because, in Public Sector, coaching had rarely happened as a process of leadership development. So I had to start afresh.

Coaching the coachables
Initially, I took two officers for the coaching process. I was totally involved right from day one, on which we had an initial meeting. Here, the coaching philosophy and the value proposition was detailed to the officers. In that three-way meeting, the consultants assessed the officers if they were coachable or not, whether they had the willingness to come forward, understand their own areas of improvement and then work on them.
Then the other processes that were implemented included psychometric tests, asking the officer to narrate a story, getting 360-degree feedback and then consolidating the feedback as one story about the officer. Both the coach and the coachee sat together to identify three smart goals they needed to achieve. This was a three-month long process.

After three months, when the coachee and coach came to an understanding on the three areas they needed to improve, they came back to me. We sat again, to validate if these goals would serve the interests of the organization and not just cater to the individual’s personal development goal. I had to differentiate them, depending on the capability of the officer to become a leader tomorrow.

Finally, we arrived at the three goals. They sat through again for next 3 months and worked on those goals. We had a dipstick to check if the development actually happened and then closed it. That’s how the whole coaching process went through, on an individualistic and one-to-one basis. The coach and the coachee sat together and improved upon the areas, which we had identified. It was an extremely satisfying experience for me. Since then, we coached another six officers. We are doing another 10 now. So overall, in my small set up that I have in Tamil Nadu, we have done coaching for 18 officers by now.

Lessons from coaching
It’s a great journey forward and during this journey. I also picked up some inferences.

  • We need to have the developmental process almost error free. While this process is on, many of the coaches would have an apprehension if the information they share would be kept confidential. If confidential information gets leaked out, it can go against the officer. So as a sponsor of this program, the head of the organization has the responsibility to see to it that the information shared remains confidential. That is extremely important in a coaching process.
  • Second, the sustainability of this program matters a lot. What happens after six months? Will the coached officers go back to old ways, due to their job pressure? To take care of this, we introduced a sustainability tracker. The coaches were available for some more time and were hand-holding the trainees subsequently as well. I was also tracking many of the officers and if there was any remark against them by any of their superiors, I would take it forward for improving them.
  • Third, in Public Sectors, every process has to be a little more democratic and transparent. There are people who would come back and question why somebody was selected for coaching and ask, “Why not me?’ So one has to be very mindful about the selection of the people for coaching as well.
  • Lastly, can we have internal coaches? In huge organisations, an internal coach can one day become the superior or subordinate. That’s a big setback for the process. So I decided myself not to encourage any internal coaches.

This is my experience with coaching. There are some shortcomings which I would throw open to the coaches to really work upon. I do have a couple of suggestions related to coaching as well.

One, recently I have seen team coaching which is being propagated. That’s a good concept. It’s for a limited period for a group. There is a coaching process which is to be instituted. I have not experienced it but I feel, it will do good for some project based assignments.

The next point is related to young lady officers. During our annual performance appraisal last year, in a specific grade, we had 98 officers—28 lady officers and 70 male officers. When I rated them, I found that 21 out of 28 lady officers were outstanding while only 15 out of 70 male officers were outstanding. I was reflecting upon my organization and I don’t find these young officers getting into a management role. Something or the other happens to the lady officers over a period of time.

These officers were in the 25-30 age group, either married, or about to get married. When they get married and have their first child, they try to take a call whether the family is important or the career is important. Many of them tend to go towards the family and sacrifice their career.

I think there is a great opportunity of coaching them at this juncture. If we could do a one-to-one coaching of those young officers at that point, giving them opportunities and looking at their individual issues, I am sure that lady officers can get into much bigger leadership roles.

Leadership Coaching will lead to Coaching Leadership, and, Coaching Leadership will be the trend of tomorrow.

Driving Business Growth in new normal with cohesive employee relations

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Mr Ramkumar Shankar, Managing Director, Chemplast Sanmar Ltd, talks about the evolution of industries and how employee expectations and outlook have changed in recent times.

There are many clichés in life, in general, and in industry in particular. One of the most well-known clichés in recent times is the term, ‘The New Normal.’ This is a term that one just cannot escape from. It is used to refer from commodity prices and logistics to environmental norms and just about every business situation. While this may seem a highly overused term, one cannot escape the fact that indeed there have been significant shifts in industry over the last many years. Conditions have changed; needs have changed; approaches and methodologies have changed. The tools at our disposal have evolved. Opportunities which were not there earlier have emerged and where opportunities emerge, so do challenges. It would be interesting to take a giant step back and understand what really has changed so much. What is this new normal? For that, we would need to look well into the past and understand the path that has been traversed. Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum, in a very widely read article in 2016, identified four phases of industrial growth.

The Four Industrial Revolutions
The first phase, which he calls the first industrial revolution and what we say as Industry 1.0, saw the advent of the Machine Age, with the usage of water and steam power. This was the first significant step moving away from the dependence on human and animal power to mechanical power. This opened up huge new possibilities in expanding output, as one was no longer restricted by what was physically possible. This was a phase that ran from the mid-18th to around the mid-19th century. Sometime around the mid-19th century, the next phase—Industry 2.0 began. This transformation was driven by the proliferation of electric power in industry. Railroads connected places and enabled movement of goods and people, thereby reducing distances as a constraint. Telecommunications evolved further, linking distances. All of these enabled mass production and further industrialization. Industry 2.0 went on till the mid-20th century, interrupted by two World Wars. Progress was obviously incremental during this phase. Once World War II ended, the next era began. This was Industry 3.0, which ushered in the ‘Digital Era.’ This saw a massive growth of electronics and information technology. The shift from analog to digital progressed at an extremely fast pace during this period. Industrial processes changed and the size of both manufacturing units, and indeed companies, increased multifold. In communication, transportation, product discovery and delivery and in many other areas, including the way we lived, there were seismic shifts.

Maximum disruption happened during this period, and people had to evolve quickly to live with and manage this disruption. We are now in what Klaus Schwab called the Fourth Industrial Revolution of industry or Industry 4.0. This builds on the third phase, further digitizing the word. This is the era of metaverses and to quote Mr.Schwab, ‘the fusion of technologies that is blurring the lines between the physical, the digital and the biological spheres.’

With the world in their hands, expectations of the workforce today have gone up and acceptance levels are very different from what they were. Today’s workforce has a respect for deeds, not for positions, persons or even age.

In this current milieu, the gap opens up between return on capital and returns to labour. Many traditional jobs are being pushed to extinction while new job opportunities open up. Reskilling is of paramount importance. No individual in the workforce can afford complacence or hope to remain relevant without effort. The pace of change has shot up multifold. If one does not keep up, it is very easy to be left behind. This dizzying rate of change places enormous stress and strain on the workforce, especially mentally and brings into sharp focus the need to address the impact on mental health as well.

There is already a talk about Industry 5.0, which talks of even deeper cooperation between people and machines. But what about the people side of industrialization?

Those then were the four broad phases of evolution that the industry has been through—Industry 1.0—the mechanization phase, followed by the electrification phase, then the automation phase and now the digitization phase. There is already a talk about Industry 5.0, which talks of even deeper cooperation between people and machines. But what about the people side of industrialization? As the ways of business have changed, so too have people, their attitudes and approaches. They too have evolved with the times, especially in the latter part of the 20th century.

Baby Boomers to Gen Alpha
Demographers have these very engaging labels by which they classify people since World War II. They start with those born between 1946 and 1964 and call them the Baby Boomers. These are people who were born during the economic boom that came about post-war. The generation that came after this, those born between 1965 and 1980, were turned Gen X. Following them are the millennials or Gen Y born between 1981 and 1996 and then the post-millennials born between 1997 and 2012. The next generation—Generation Alpha, spanning 2012 to now is not yet in the work force. They would be a subject for a conclave in the years to come!

This demographic classification is important because, when one was born defines the kind of change that one has seen and the thinking that defines the response to this change. For instance, I would qualify as a Gen X. We as a generation were needed to adapt to so many things—in communication, from the rotary dial phones for which we needed to reserve and wait; (How many of us remember the OYT and non-OYT scheme?) to the push-button phones to pagers, which we in India have mostly skipped; to mobile telephones to now the era of smart phones.

We moved from manual typewriters to electronic typewriters to computers that filled the room, to floppy diskettes and all the way to where we are today. In television, we had just Doordarshan. We have seen an explosion in programming channels to where we are today. The advent of the Internet and World Wide Web have essentially democratized access to information and knowledge and created a level playing field. We have witnessed tectonic development in so many areas.

Indeed, the Baby Boomers and the Gen Xers have seen the maximum changes in one lifetime, in almost all spheres of life. Now, multiply that by a factor of 10 and that is the speed at which development is happening. That is what the millennials and the post millennials are going through. The workplace has also seen the same rapid changes over the past few decades, starting from the very products that are produced. From products being manufactured to meet existing needs, today needs are being created around products or services that have been already designed. Cab hailing services, smartphones, tablets, etc., are all prime examples. Similarly, the existing paradigms in the workforce have changed dramatically both due to changes in the industrial construct and due to the evolution of employee expectations.

The world in your hands
The personality and character of today’s workforce have also changed dramatically. The explosion in smartphones has meant that today’s employees are very well informed and exposed to what is happening elsewhere. We would all remember this very early cellular services ad in India, which said karlo duniya mutthi mein—that is, “Take the world in your hands.” Truly, that was prescient. For, that is exactly what has happened.

With the world in their hands, expectations of the workforce today have gone up and acceptance levels are very different from what they were. Today’s workforce has a respect for deeds, not for positions, persons or even age. One can no longer expect or demand respect because of the position one holds or one’s seniority. Respect has to be earned. There is very little fear of losing jobs, or of saying the inappropriate things or of just about anything.

They don’t stand and wait
The millennials and post-millennials have the confidence, maybe sometimes not so well founded on reality, which shapes their behavior and approach to situations. Emotional connects are less of a given than before. There is more of a transactional construct to most interactions and relationships. There is an immediacy of needs bordering on impatience. John Milton’s lines on ‘they also serve who only stand and wait,’ would fall on deaf ears today. For, very few are prepared to wait for their turn in the sun.

Already businesses in the US and Europe are being roiled by what is being called the Great Resignation. In the US alone, post the pandemic, within the last six months between April and September 2021, it is estimated that 24 million workers have resigned and exited the work force.

Walls are breaking down, opinions are freely shared and social media offers a more-than-ready platform for this. All of this has been further complicated by the Covid pandemic and the havoc that it has brought on health—both physical and mental—and the restrictions on so many things that we have so long taken for granted. These restrictions have pushed us to make so many adjustments to how we do things—be it at home or at the workplace. These are likely to pose a fresh set of challenges, whenever the world ultimately emerges from the pandemic. I hope that Omicron is the last of these variants.

The great resignation
Already businesses in the US and Europe are being roiled by what is being called the Great Resignation. In the US alone, post the pandemic, within the last six months between April and September 2021, it is estimated that 24 million workers have resigned and exited the work force. This extraordinary situation has been attributed by sociologists to the pandemic induced existential questions that people have grappled with and the decision of many to just abandon the stresses of making a living.

A similar situation is actually playing out in China, though not much is heard about that, with what is called the ‘lying flat movement.’ This started as a push back against the 9-9-6 schedule or 9 to 9 work day, six days a week.

Life-work balance
There is a shift in work focus worldwide from a work-life balance to a life-work balance. The priorities have changed. Businesses are now grappling with decisions on the balance between working from office and working from home.

An article in the Harvard Business Review in May 2021 on ‘what your future employees most want,’ talks of a talent accelerator study conducted among over 2,000 knowledge workers and 500 HR Directors in large corporations based in the US. As per this study, 88% of knowledge workers stated that when searching for a new position, they will look for one that offers complete flexibility in working hours and location. 83% feel that workers would be more likely to move out of cities and other urban locations, if they can work remotely. Interestingly, over 85% said they would prefer to work for a company that prioritises outcomes over output—In other words, in organizations that value action over activity.

Thus, this is just a small example of how employee outlook and expectations have changed in recent times. Not all of them may be acceptable; not all of them may even be practical but the change has to be acknowledged, identified and definitely cannot be ignored. This then is ‘The New Normal,’ a rapidly changed and changing industrial and business environment and a highly evolved, confident and non-conventional workforce and a complex interplay between the two.

Business leaders would need to manage this intricate and delicately balanced equation between business requirements in a world which is in churn and employee sensitivities and needs. It will not be easy. But as yet another advertisement goes, ‘Impossible is nothing.’

Rising from the Ashes

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MMA in partnership with KAS organised a Start-up Series event on “Chai Kings – Rising from the Ashes!” Mr V Shankar, Founder CAMS & Director, ACSYS Investments Pvt Ltd., was in conversation with Mr Jahabar Sadique, Co-Founder & CEO, Chai Kings.

Shankar: As with every other techie, you started your life coding but very soon moved to the business side and shortly became an entrepreneur. Chai Kings is, I guess, your fourth or fifth iteration at entrepreneurship. You have over 50 outlets now and are rapidly aiming to reach 100 outlets. What drove you from a steady salary, no surprises sort of job into entrepreneurship? What were the first challenges you faced?

Jahabar: We moved from a regular working job to entrepreneurship for very silly reasons. We—my partner Balaji and I—were working together almost for about 12 years. Every now and then there was a little bit of discussion about starting something of our own, though we had zero knowledge about what business and entrepreneurship were all about. We wanted to get away from the mundane job of doing the same thing day in and out. We thought if we could start a business, we could take our vacations whenever we wanted and be our own boss. Such sort of silly things drove us towards entrepreneurship!
We started off with a lot of franchisee businesses. A good thing about that was we learned a lot of things. If we had started the brand at that point, we might have failed. We had such big brands like Toni and Guy, Green Trends and Subway—all of them taught us how to run a business. They all had the frameworks done. We did that for about four years. That gave us confidence to start our own brand.

When we decided to do our own brand Chai Kings, the initial issues that we had were never anticipated by us. For instance, nobody was willing to let their places on rent for us. We went neatly dressed, travelled in nice cars and told them, “We are going to open a chai shop.” It didn’t sync with them.

The kind of jobs and profile we had and our aspiration to start a tea shop did not go hand in hand. That was a huge disconnect initially. We had to convince them that it would really go well. We would tell them our blueprint and how the shops would be five years down the line. That was early days, till we had 10 to 12 outlets. Now we get calls all over. Wherever there is a small 400, 500 square feet shop, people think of us and ask if we want to rent that space to start Chai Kings there.

How did the thought of Chai Kings occur to you? How did you address the customer perception of serving tea in more stylish way?

Before Chai Kings, we thought we could do a small, non-vegetarian restaurant. That’s how we started. Since a restaurant would be capital intensive, we thought of starting a coffee shop and our discussions led to chai shop. Once we decided to go for chai, for one and half years, we did a market study.

To our surprise, there were a lot of brands up north and a lot of brands outside India as well. We knew what would work in Chennai. All our discussions led us to believe that if we could position the product at the right price, give them the right ambience, not overdoing it to give a Starbucks kind of an environment or give them a hundred Chai options to choose from, if we didn’t do all that and keep it simple for the customer, then it could always work.

Since we had plans to go outside Chennai, Chai was our preferred name.
We opened four stores at a stretch in three months. Balaji and I were always in the stores. Whoever walked into the store would always say that they also had this idea to start a similar shop. I think people were very hesitant about starting a tea shop because of social reasons or maybe they thought that it might not work out because people sell tea at Rs 8 in local tea shops and that it might not work out economically, and that if it is priced at Rs 50 like in Starbucks, then it will not be a mass product.

So positioning the product was the difficult thing maybe for the first time entrepreneurs. Since we there in the market, we were able to figure out that this might work. That made us come up with the product.

What was the initial customer reaction? Were they happy with it or thrilled? When did you decide on scaling up?

The initial customer reactions were very, very promising, but then there was very less walk-ins into the shops, predominantly because people were not able to relate to the shop and the product. We’ve always seen tea shops with a boiler outside, a guy standing and making tea. We gave a small space for customers to walk in and there is a counter for billing and a counter to collect the tea. The kitchen is not visible to the customer.

Five years back, people were not really able to relate the name Chai King to a tea shop. Then Swiggy and Zomato happened. In 2016, they moved into Chennai and we already had our cardboard flask ready. It helped us to take the product to about 10 km surrounding our shops. It also gave us the confidence that this was going to work.

Three months down the line, the product received very good feedback. Nobody was complaining. There were repeated walk-ins. We almost knew all the customers coming into our shop. We had to figure out how the financials would work. From there to now, the numbers have multiplied.

Even before we started, we allocated some funds for this venture. We put aside some amount and were determined to make it work. We couldn’t afford to lose our complete life savings.

Let’s move to 2018 when you decided that you needed some fresh capital and you decided to pitch to angel investors. Tell me about the pitch process. How did you convince them?

Venture funding, angel investors and valuation—All of that was completely new to us. Yet, even before we started, we knew this was the route we’d go as we’ve seen other companies take this road. Franchising or debt option was not a viable option to scale. We knew we had to have a working model and a working product in hand. We did six outlets in total. Before that, I met a couple of investors to see what kind of questions they would ask me.

Five years back, people were not really able to relate the name Chai King to a tea shop. Then Swiggy and Zomato happened.

All of them were small time investors. I just met them to figure out their mentality. One of my friends who’s into fundraising introduced me to a person called Piyush in Chennai Angels. I met him sometime in November 2017. He liked the product and the brand. He put me on to Chennai Angels. I sent the pitch deck and presented to Chennai Angels by end of 2017. The room was full of guys between 40 and 50 plus. All of them were entrepreneurs and who have seen it all. I was scared. I pitched for about 15 to 20 minutes. There were questions for about 10 to 15 minutes. Very simple questions and to the point. I answered them and went out. There were two or three pitches that day. I was waiting outside. One gentleman came out and said that my presentation went really well and there was a lot of interesting discussion. That person is none other than you, Shankar! I knew about you only after enquiring with others! I went back home. They came back and told us they liked the product. We asked for 1.5 Cr but it got over subscribed to 2.1 crores. Valuation and all that were discussed later but we were really happy with the way the entire process happened.

The customer behavior was the most encouraging part for us during Covid. When the authorities allowed the takeaways, we could see huge walk-ins to the shops. That was a big morale booster for us.

From 2018 to 2020, things were humming along. You had money in the bank and were adding stores. Then the entire country came to a halt on March 24th. Tell us what went through your head when that announcement of lockdown came on TV.

Complete chaos. Just before the lockdown came, we opened three stores at a stretch in Coimbatore. We came to Chennai and the next day was the lockdown. We didn’t know what to do. We left everything and made sure that everybody was safe. Even after three weeks down the line, nothing was very clear.

Tell us first about the period from April to September 2020. How did it impact your finances and how did you organize the finances? How did it impact the morale of the team? How did you keep them going? Lastly, how was the customer behavior?

We had funds in the account at the start of lockdown, as we had raised funds by end of 2019 to do a total of 55 outlets. We had done only 45 and we had some money in the bank. So finance was not a concern at that point, but then we knew that growth was going to be shunted for at least about a year. And if we didn’t take any drastic measures, we might lose all the money in the bank. We had to do a lot of cost-cutting measures in terms of manpower, food costs and pricing.

We also wanted to raise some more money from Chennai Angels. So we went back and told them of our requirement and we could raise one round of 1.6 crores, so that we were safe at least for another one and half years, even if the lockdown continued for a prolonged period. Everywhere, people were running away, going back home. We did not sack our people because once things opened up, it would be difficult to go and hire anybody. We need people who are trained with us.

Up to 60% of our kitchen staff are from North East, mainly Assam. Another 40 to 50% are local staff who manage the counters. During the lockdown, most of the locals went home but those from North East stayed with us. We have given quarters to our staff. Even before Covid, we ran a culture that people will be taken care of by the company. We just had to make sure they were all safe and didn’t get Covid.

The customer behavior was the most encouraging part for us during Covid. When the authorities allowed the takeaways, we could see huge walk-ins to the shops. That was a big morale booster for us.

There is a little bit of infighting between Swiggy and Zomoto but then, they have their own markets shares. We also have a market share and we have become slightly bigger now. So it has evened out. It is working out for us and for them too.

Did the hygiene factor become important at that point relative to normal chai shop?

There’s only one change we did. Majority of them liked the glass cup that we served. We had to stop that as sharing cup could be contagious, if it was not cleaned properly. Apart from that, we put all safety and hygiene measures in place. By July-August, we could see more customers. They preferred us because they thought we were more hygienic.

How did you manage the online part of your business and the costs associated with the platform and the unit economics of that segment?

Online aggregators like Swiggy and Zomato are definitely an advantage for companies like us. For well-established brands like Saravana Bhavan, it may not be a big plus. For us, only because of them, in the initial days we became popular faster. Otherwise, it would have taken much more time. Initially we started out with a few delivery staff in our outlets but we could do a maximum of about 15 deliveries each, between evening 4 and 7. With Zomato and Swiggy, we do between 100 and 150 orders a day. When we started off in 2016, it took us time to understand the model. We were getting orders. Money was coming in but it was going out as well. We had to really work out what the pricing had to be, because there was a huge amount of 25% going out as aggregator fee.

Then there is discount that we have to offer on the platform to attract customers. Our online and offline pricing are completely different. Our online pricing is slightly hiked but we also need to make sure that we don’t really hike it up so much that we scare away the customer. So that was the difficult part. Once we got that cracked and figured out the food costs, the discount that we could offer and aggregator fee, then this model really worked wonders for us. Our 50% of revenue comes from online orders. We get approximately about 1.5 crores a month from Swiggy and Zomato. That is a big number for any business. We really had to work hard for that.

A lot of other factors also helped us because when we came in, there was nobody else in the market who could give them hundred orders per store. So that meant there was a stiff competition between Zomato, Swiggy and Uber. Now, Uber is gone. There is a little bit of infighting between Swiggy and Zomato but then, they have their own market shares. We also have a market share and we have become slightly bigger now. So it has evened out. It is working out for us and for them too.

Can you explain to people what a cloud kitchen is?

Everything is same with a cloud kitchen. We will prepare the product and send it the customer either as takeaways or online orders. A customer cannot walk in and have tea or coffee in the shop. It’s just a kitchen, a small shop. We normally take a first floor property where the customer wouldn’t walk in. We just dispatch online orders from that. With cloud kitchen, we cut down our investment by about 60 to 70% and just do the kitchen part. We don’t do the customer area, nor the interiors, seating or furniture. All of that is completely removed. Your investment is safe and you almost get about 50% of the business through the online platforms.

In the field of entertainment, OTT and home theatres have sort of become mainstream. People are happy with that. What is going to be the balance between online delivery and on-premise dining?

Online platforms are going to be there and they’re going to only grow from here. In our shops, I can accommodate only about 150 customers between 4 and 7 pm, by rotation. Both online and offline can completely co-exist. We cannot bet on one and lose the other.

Will on-premise dining be preferred for specialty restaurants like Thai restaurant or Mexican restaurant? For restaurant chains that want to expand, is cloud kitchen the way forward?

Everyone have got their own strategy. For example, there is Rebel Foods, which has got about 10 brands with them. They don’t have a single store. It is working wonders for them and they are able to generate revenue, but they are heavily funded as well. But there are brands that struggle without a store and having only a cloud kitchen. They’re struggling very badly to generate orders. It’s not working out for everybody. Whoever can get the balance of both online and offline worlds will really click.

What is your short message for entrepreneurs?

You need to have a really good support system. My partner is my pillar of strength. It’s good to have someone to talk to, to understand, to reflect what you think about, discuss things and take it forward. For some people, the support system is the family. For some, it is their partners and for some, it’s their investors. You can’t build the support system during a difficult time. You have to build it along, even as you build your business from scratch.

Jahabar Sadique, Co-Founder & CEO, Chaikings

Emerging Global Civilisation Paradigm and India

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Delivering the 3rd R K Swamy Memorial Lecture, Mr S Gurumurthy highlighted the growing gap in the current geopolitical space and India’s role in the emerging world order.

Three weeks ago, I addressed a chosen strategic community in Delhi on strategic defence and war models of India. The strategic thinkers said that only in 1905, at The Hague, the International Convention was held to recommend that we should distinguish between combatants and non-combatants. They said that they listen to the international people who say that it is they who brought the noble rules of war.

In Mahabharat, after the day’s war was over, the Pandavas and Kauravas used to sit and dine together and talk as if nothing had taken place, forgetting that they were going to hit each other the next day. We all thought that this was just a poet’s imagination. I had done a lot of research on this. V R Ramachandra Dikshitar was one of the famous minds who wrote a very, very powerful treatise on the Hindu rules of war. He had said that Ashoka’s Kalinga war was an adharmic war, because he hit a weaker enemy without giving him notice.

Our war model was different. I studied the entire thing through the History of Dharma Shastras—11 volumes of profound knowledge. It was brought out by Bhandarkar Institute and the Government of India funded it at that time, when it had some inclination for civilizational understanding of the country. When I read this, I was stunned by the noble rules of war, which our people had instituted and how it was followed right down to our Pallavas, Cheras and Cholas. We had very elaborate rules. If somebody dropped their weapon, he should not be considered a fighter. A wounded man is a patient.

In the 16th-17th Century Kerala, the Zamorin kings had wars with the Portuguese. The Zamorin kings had told the Portuguese as to how they would wage the war and this was brought out by Whiteway, an English scholar.

Their rules said, ‘We do not wage war where people are involved. Agriculture should not be affected. People’s lives should not be affected. There is a playground outside and on both sides of the huge ground, there is a lake. You can perch your army there. We can be on the other side. We will beat the drum to say that we are ready for the war. Only if you beat the drum, we will start the war. ‘There will be neither night fighting nor ambushes. There should be no surprise attack on the enemy.’

‘War had become a game governed by a series of elaborate rules and to break one of these rules involved was dishonour, which was worse than death,’ wrote Whiteway.

In the entire 18 days of the Mahabharata war, only one night fighting was allowed. Otherwise, it was only day war. Whiteway adds, “Soldiers of both armies mingled at the time, put on their armour, ate their rice, chewed their beetle, gossiped and chatted together. At the beat of the drum, either side drew apart and formed ranks. It was incredible.”

The Encyclopaedia Britannica says that all ancient wars were barbaric. No Indian stood up to counter this with information about the kind of war which we had for thousands of years and it was followed right down to 17th century. You can understand the civilizational poverty in India.

The Post-Covid World Order

Discussing how the world is now turning and what we should do calls for a helicopter and silos-free view. We have to put together everything—politics, economics, trade and military—and see where we are, where our intellectuals are and where our media is.

There is near unanimity that the post-Covid world order will change forever. The man who structured the post-cold war order, Henry Kissinger wrote a 600 word article in which he mentioned that the post-Covid world order will change forever but didn’t elaborate. No one knows what is likely to be the change and who are going to be the actors.

The Rise of China

The most important aspect of the post-Covid world order, which has been visible in the last decade or so, is the rise of China. The rise of China has stunned the West. But Deng Xiaoping had told even 30 years ago, “Let’s hide our strength and bide our time.” That the West, with many strategic think tanks and great minds running all kinds of aspiring institutions, failed to read China is surprising.

Brookings Institution brought out a paper which said that the entire American system has been bribed by China. The whole of American think-tank is today not free from Chinese influence. The World Bank admitted that China bribed them to give them good ranking in the Ease of Doing Business Index.

After Biden got elected, on 30 December, the European Union entered into a Comprehensive Agreement on Investment (CAI) with China. It was a slap on America.

We have a rising China and fatigued West. This is a paradox. The whole picture has changed over the last decade. China’s rise is the most debated issue in the last five or six years, without any answer.

Decoupling from China is going to be as difficult as China decoupling from other countries. It’s not easy because it is like doing a major operation to separate two entangled bodies. The only way is to look at India.

Agreement with China on Hold

After Biden got elected, on 30 December, the European Union entered into a Comprehensive Agreement on Investment (CAI) with China. It was a slap on America.

Then something dramatic happened. In February, they raised the issue of human rights. In April, the EU Parliament asked to stop this agreement in which Xi Jinping had put his entire political might. He had opened the entire Chinese market for European products. The most important beneficiary was going to be Germany and Angela Merkel was driving this whole process.
Everybody thought that the American space has shrunk, but in one turn, the whole thing stopped. The CAI collapsed in April. In June, three important summits took place, which completely turned the situation against China. One was the G7 meeting. Second was the NATO meeting. Third was the EU meeting. It all happened in three days.

I have not seen great reports in India about this. G7 said that China is a systemic problem. The next day, the NATO meeting said that China is a systemic adversary. Last year, in 2020, Emmanuel Macron would not utter even one word against China in the NATO meetings. In twelve months, everything changed. The European Union endorsed the fact that the CAI won’t be implemented.

Don’t think that pure economic forces are working here. Forces deeper than that are working. Only the Anglo-Saxon countries first declared that they would not use the Chinese 5G technology. Everything was centered on Australia, England, America, and Canada. Everyone else had to fall in line. The world is being shaped by a group of nations, which feel threatened, not just economically, politically militarily but also civilizationally. This is an important aspect. So everything changed in a matter of four months and that is not even discussed in India.

Who did this? Which mechanism invented the great idea of human rights problems in Xinjiang? It has been happening for the last 20 years. They have been shooting and killing people and suddenly they put sanctions on the Chinese who were so confident that they had conquered the EU and even put sanctions on the EU Parliament members under the Green Party President of Germany, which was China’s greatest supporter. So we can understand how arrogance leads to actions which are difficult to recall. If CAI had succeeded, there is no way America could have countered China.

Relocating Supply Chains

Decoupling from China is going to be as difficult as China decoupling from other countries. It’s not easy because it is like doing a major operation to separate two entangled bodies. The only way is to look at India.

There is a paradigm shift in the approach towards supply chain. The world used to look at cheap supply chain. Now, they are looking at safe supply chain. Geopolitically, autocratic China was seen as a stable and safe supply chain for 28 years. Democratic India was seen as unstable and unsafe, but this has changed after covid (where the role of China and America are both suspect in producing covid. America funded the production of Covid infection and this is a fact).

Many studies reported that India would benefit largely from businesses shifting from China and would be aided by Washington’s strategic decoupling from China. Now you can understand why China is after India. In May 2021, Global Trade Review reported that India, Japan and Australia’s ministers met digitally to frame supply chain resilience initiatives to squeeze China out of critical technologies’ supply chain like semiconductors, batteries, etc. India is entering into a strategic investment and technology agreement with Taiwan, which is the leading semiconductor production country in the world. This is the shift that is taking place.

Why China? Why not India?

Forbes Magazine wrote an article comparing the three gorgeous dams that China built with the Narmada Dam built by India. ‘The three dams flooded 13 cities, 140 towns, 1,350 villages and displaced 1.2 million people. But China completed it in a decade.’

‘In contrast, the Narmada Dam inundated no city, no town, impacted just 178 villages and displaced less than one tenth of the people that the Chinese dams displaced. But how long did India take to complete the Narmada Dam? 48 years! Jawaharlal Nehru laid the foundation for it in 1961. The World Bank agreed to fund it in 1965 but went back after Narmada Bachao Andolan (NBA) began its agitation. The NBA moved the Supreme Court to stop the construction in 1995.’

‘In 1999, the Court lifted the stay and limited the dam height to 88 meters. Then over 19 years, it raised the height in five painful instalments—90 metres in 2000, 95 meters in 2002 and 110 meters in 2004, 122 meters in 2006 and 139 metres in 2019 to its full capacity.’ If democratic India took five times more the time that China took to build the largest dam in the world, why will not China fly and India only grow?

India’s democracy alone is not the problem. We had four elections and seven Prime Ministers in ten years. The world had to choose between India and China, particularly the West and even more particularly America. Their choice of China was a bad one. It was a businessman’s and a financial institution’s choice. It was the choice of political miscalculation, which has made China as the biggest danger of not only India but also the west.

China had a strange combination of Marxian politics with market economics. We had a strange mix of Marxian economics and democratic politics. Indian human rights will be highlighted by our media. Nobody even talks about Chinese human rights issues. There is a huge Chinese lobby in India in the media and the administration and in all the policy-making mechanisms. These are all real issues.

China Goes Back to its Past

Many think that China’s rise is because of trade, economics, geopolitics and military. But it has to do with its civilization. China is now paradigm shifting the word. Chinese have no respect for the past. They hate the past and focus only on moving forward, so much so, the Communist China was hating the Confucian China and demolished all his statutes, burnt all his books and termed him a person who was responsible for the downfall of China. They called his thoughts semi-barbaric.

But the West has a problem. It has regarded its past as dark. It has also regarded every country’s past as dark. Only in the enlightened world, they produced a Hitler and two world wars.

Now there are 572 neo-Confucian centres in almost all American universities and think tanks. They began this shift in 2005 and now Communist China has become Confucian China. In the hundredth anniversary of the party, Xi Jinping addressed ten million people and said, “Historical and cultural heritage not only vividly tells the past but also profoundly affects the present and future. It belongs not only to us, but also to future generations. Having gone through over 5,000 years of vicissitudes, the Chinese civilization has always kept its original roots.”

If the Indian Prime Minister talks like this, he may be called a backward looking man, communal and xenophobic. Xi in one speech destroyed the very idea of communism, about history, civilization, culture and values. He spoke as if communism did not exist at all. Has there been any article written in India pointing out that China is now looking to civilizational moorings, civilizational roots and civilizational inspiration, not only for the present but also for the future?

Problems of the West

But the West has a problem. It has regarded its past as dark. It has also regarded every country’s past as dark. Only in the enlightened world, they produced a Hitler and two world wars. In fact, there was no enlightenment and it was just an anti-Christian movement. The entire Western history of enlightenment was about how to keep the Church away. But they continue with the same aggressiveness, dominating and world-conquering spirit and the colonising idea.

In India, if all Indians become like Americans, 60% of the people of India will be standing outside our Prime Minister’s house for two square meals a day. Can India run this way? Whether there can be anything called Indian economy?

The western theory of enlightenment as the only source of modernity has been thoroughly demolished by their own intellectuals.

Every country is becoming modern in its own way and there is no one source of modernity. They even advocated a one-size-fits-all model of economic development. In 1951, the United Nations issued an advisory to all under-developed nations that if they want to develop, they must give up their philosophies, social values and relationships. In short, it encouraged contracts-based societies. Everyone caught on to this paradigm and began introducing those concepts in education.

The Perils of Modernity

Today, if a father scolds a child, it is not considered a responsibility of the father, but child abuse. Can you understand how those values have been interpreted and imposed on us? My neighbours have slapped me and corrected me in my village. I look at them as my teachers, mentors and guardians. Today, a teacher can’t correct a child.

We have transformed all relationships into contracts, jobs and transactional. This is the difference between modernism and civilization. We are a civilizational nation. The entire Asia is civilizational. It is not just a model of life, but it reflects in politics too. You will be stunned to know how civilizational democracies are faring—democracies where there is a relationship between the people, independent of the constitution and law. It is a normative society. We are living in a normative society.

What is the economic consequence of it? In America, no son will take care of the father, and no father will educate his son. When I went to the University of California, Los Angeles, and asked the management students there as to how many of them were being supported by their parents, out of 300, not even two or three lifted their hand.

When I addressed the same question in IIT Madras Management Institute, the entire audience lifted their hands. This is the difference between a civilizational nation and a contract-based modern nation. In the West, 55% of the first marriages end in divorce, 76% of the second and 73%, third. This is according to Psychology Magazine.

What are the economic consequences of a modernity-based society? The Universal Social Security is a product of destruction of our relationships. In 1983, eleven economists including Milton Friedman who got the Nobel Prize in 1970 argued in an article not to interfere with the filial responsibilities of a father and the responsibility of a child, having handed over the kitchen to the multinationals. Kitchen is a rarity in an American family. May be, you can see a kitchen but no cooking. He pleaded, ‘If cooking and caring for children and caring for each other are the two important functions of the family, we have already destroyed one and let us not destroy the other. Don’t bring universal social security.”

Civilization Impacts Politics and Economics

Universal Social Security has come to stay in the US. They have to pay social security tax for their fathers to be taken care of, children to be educated and all unhealthy people in the family to be taken care of. Individuals have no responsibility. The cost of these unfunded social security obligations of America today is $68 trillion, against which it doesn’t have even $1.
In India, if all Indians become like Americans, 60% of the people of India will be standing outside our Prime Minister’s house for two square meals a day. Can India run this way? Whether there can be anything called Indian economy?

We have a civilizational drive in India. This has political and not just economic consequence. The entire structure of liberal democracies is collapsing today, according to Freedom House. The voter turnout in liberal democracies is continuously decreasing. 35% of those below the age of 25 do not vote at all. They have no interest in public affairs. Can you run a democracy like this?
The democratic paradigm is a vanishing act. Many citizens do not see politics as central to their identity due to many social and economic interests as per the study. Majority of the people are too busy for the political involvement. This is because of liberalism which lays too much stress on individual liberty. When they have so much to enjoy, why should they bother about electing a Prime Minister?

The Flawed Supremacy of Individuals

Since the 1980s, with the rise of Thatcher and Reagan, politically, the individual has been held at the heart of the society and with the radical rollback of the State, lassie faire economic policies have resulted in deregulating the market, privatisation and radical tax cuts. Citizens are being encouraged to become more self-sufficient and self-interested.

I remember an incident in 1993 or 94. One of my business clients had an appointment with State Bank of India to discuss a high value settlement worth 200 to 300 crores. As he was driving out to go to the airport, his neighbour’s wife came and cried that her husband had a chest pain and had to be taken to the hospital.

My client just went to the neighbour’s house and took that person to the hospital. As a result, he could not travel for that important meeting. It took him another seven years to reach a settlement. Did he regret missing that trip? He said, “If only I had gone for the bank appointment and something had happened to my neighbour, I can never have peace in my mind.” This is our relationship even with our neighbours. This is not the relationship between an American father and a son.

Liberalism Led to Trumpism

Social impulses produce economic results. Too much of freedom has undermined liberal democracies, which constitute just 13% of the world. The result of liberalism in America was the advent of Trumpism. It was a movement. It changed America once and for all.

I wrote in the second year of Trump’s rule that Trump may go, but Trumpism will last forever. Now Trumpism has not only become an American security, economic, trade and strategic policy, but it has become the policy of the European Union itself and it has been accepted by G7 and NATO.

Trump was a poor articulator of his own policies. He failed to say what he stood for. Trump’s political doctrine has now become the doctrine of the entire West vis-a-vis China. He identified China as the adversary of America. If Trump had not spoken about the 5G technology of America and banned Huawei, what would have happened to the world today? Trumpism has left United States completely divided between the liberal and civilizational US.

Just printing money is no solution. America is printing money. There is no alternative and all countries have purchased that printed money, including China and India.

Civilisation US feels that there is a higher US. Wokeism is the opposite of it.

Huntington, in his book on Clash of Civilizations, wrote that in the post-cold war world, which is called the globalised world, liberal democracy and free market mechanism have won once and for all and that it constituted the victory of the west over the rest forever.

Huntington was a poor representative of civilization just as Trump was a poor representative of Trumpism. Both Trump and Huntington promoted conflicts. America was shaken by terror on 9/11 and economically in 2008. It has not recovered still. If anybody feels that America has recovered as an economy, they have very little knowledge of financial economics.

A World Bound by Dollars

Just printing money is no solution. America is printing money. There is no alternative and all countries have purchased that printed money, including China and India. The world has been co-opted by America into the dollar mechanism. So we are all praying for America’s welfare.

How long will this be sustained in a divided word? America has been running current account deficit from 1976 till today, except for two years in Clinton’s period. The current account deficit incurred by them is in excess of $13.5 trillion. That is the extent of dollar that America has printed. In 1989, the Economist even wrote that the most profitable export-oriented industry of America is printing dollars. This mechanism is now being challenged not just politically but, in my view, civilizationally too.

India is the Golden Lining

We have to compare Indian democracy with American democracy. The liberal democracy is failing. Their youth, poor and minorities are not voting. Is that the discourse in India? We are a very strong bottom spread economy. In India, we vote as castes, as villages and as families. We discuss as a family which party we should vote. This is civilizational democracy. We share everything, including votes and parties. Is destroying all these called liberal democracy? In Asia, as compared to 1960, the voting percentage has risen to 70. That is why, the civilizational democracy is strong.

We want an elected government, which would work efficiently and work in the interests of the country. Whether somebody is free in his own house or not is not the test of democracy. In the West, the test of democracies is whether a child is free in its own family. An Indian lady fed her child with her hand in Norway and she was arrested. Can you believe this? We have our civilization and value systems. We have our way of mothering children. Asia’s rise is due to the rise of relationship based politics. It has its own problems but we are managing them. The Brookings Institution came out with a paper in 2019 January saying that ‘all liberal democracies are shaken up. There is backsliding of the democracies in the Central and Eastern Europe. India is the silver lining and golden lining of democracies in the world.’ We can even live without a government. We have 6,68,000 towns and villages. We have just 12,800 police stations. Crime levels in India are lower compared to the West. India is a country with the lowest murder rate, lowest rape rate and lowest dacoity rate in the world.

The Importance of Values

Policing does not reduce crime nor do the courts or law. It is the value systems which reduce crime. Carbon-copying the ecosystem in the west to an unsuitable and inappropriate, culturally different ecosystem is not correct. Which society doesn’t have a problem? American problems can never be resolved. Research psychologist Robert Epstein has recommended the Indian marriage system to solve America’s relationship problems.

In India, the boy or girl to be married is chosen by the entire family. This has its own impact in politics and sociology. This civilizational paradigm has suddenly gained prominence in the post COVID world.

The Western liberal democracy and Indian civilization democracy, both have to work together, if autocracy has to be resisted. Without India, the West and the US cannot fight China. This is the USP of India. This is a strategic position which we have gained.

The roots of Indian democracy are civilizational. Freedom House in its report based on the annual survey they did in 1999-2000, stated that there is a strong correlation between electoral democracy and Hinduism and there is a significant number of free countries among traditionally Buddhist societies like Japan, Mongolia, Taiwan and Thailand.

We are going to be one of the major influencers of the course of the world. We need a very courageous intellectualism in India to articulate this and speak the truth. We have to empty our thoughts and think afresh. This is my appeal to all Indian intellectuals.