Gaurav’s book on the offshore services business

Often caricatured and mislabeled in popular media, India’s Offshore services industry has emerged, within a single human generation, into the industry that defined India’s image to the world—a young, vibrant, upcoming nation. But how does the industry really work?

Industry veterans Gaurav Rastogi and Basab Pradhan explain what is really going on, using simple language and without resorting to jargon or code.  Offshore: How India got back on the global business map, raises and answers some powerful questions. Why did this industry come about in the era when socialist and bankrupt India was almost written off; its population bomb ticking ominously? Why should India be proud, and what has the industry done for the country? What gods have conspired to make this industry so profitable? Are the industry leaders really well managed or merely the beneficiaries of a flattening world? Will the industry find itself high and dry when the rising tide of globalization recedes, marooning the millions who work in and around this industry?

Whether you’re already in the industry, invested in the industry, or know someone who will soon be, this book is a necessary companion to make sense of the relentless news cycle.

The internet craze is back!

Looking at the newspapers in India these days, you would be forgiven if you felt a sense of deja-vu.  An internet gold rush, new models coming up every day, massive PE investments, fresh millionaires… did we just get transported back to Y2K?

Yes and no, it seems.  Yes – because the stories and the mood are the same.  No – because the underlying activity is a lot more real this time around.  Business models are built on revenue models.  There are now more than 80 mn internet users in the country.  Among the more attractive consumer segments (SEC A and B), internet penetration is near total.  A true web-generation has emerged.

How will is this panning out from a business perspective?  Well, travel has already moved online with a vengeance (perhaps repaying us for all those long hours we spent in queues trying to get tickets) – when’s the last time you didn’t buy a ticket off the net?  But that’s not the only segment.  Snapdeal claims to do 10,000 transactions a day (and are now in the market to raise 200 Cr).  Flipkart (valued around a 1000 Cr)  is rumoured to do revenues of 75 Cr.  If that sounds small –  compare that to the 200 Cr odd that Crosswords and Landmark make after dozens of years in the business.

The party’s just begun – and barring another recession, we’re certain to see mind-boggling levels of activity in this space.  And hopefully, we won’t be experiencing a sense of deja-vu in 2021!

Reverse Bata Pricing

We all know about Bata pricing

Marketers call it ‘Bata Pricing’, paying homage to the company that invented it and refined it to a fine art… Introduced nearly three decades ago when shoe-major Bata priced its shelf-star ‘Hawai’ chappals at Rs 39.99, this marketing mantra has outlived all the rules of the retail game except Kotler’s 4Ps. And is still going strong.

There are several arguments to justify the use of Bata Pricing.  One theory is that customers believe that an odd-price is indicative of a low or fair price.  Another popular theory is that a price of 99.99 is viewed as less than 100 – and is therefore more attractive.

But what about the opposite pricing strategy where a brand takes prices beyond a psychological threshold – and thereby sets the stage for future price increases without any major customer resistance.

Like the case of the Delhi-Gurgaon expressway which increased prices from Rs 20 to 21 earlier this month – causing immense customer dis-satisfaction – not because of the price increase, but because of the coinage issues. You can almost visualise the relief on customers’ faces when the price eventually moves to Rs 30!

The difference between Rs 99 and 101 is negligible – but the perception gap and the consequent expectations may be significant.  Is this an under-exploited, or under-documented pricing strategy?

Guest post: And the moral of the story is…

Guest post by Aarti Shyamsunder, who has posted here earlier.

Fairy tales, fables, fiction. We grow up on them, and then forget them, and try to forge some legends of our own, in business and in life. We battle our own idiosyncratic evil witches, look for fairy god-mothers and Prince Charmings, wearing our glass slipper occasionally but watching it fall away as well. Into the abyss of profit margins, quarterly results, research and ass-kissing.

It may seem quaint and naïve to believe in fairytales, but it’s not that different from believing in modern myths is it? The myth of a fearless leader who will lead us to triumph over recessions and corruption, of high-tech gadgets and flashy cars that will let us live happily ever after, and of that elusive promotion or bonus that will bring us the ‘crown’.

So instead of these delusions, how about bringing the magic of those ancient stories back into our work lives? If we look carefully, there’s probably more to them than advice on how to snag royal spouses. Here are a few ideas to get started…

–          Goldilocks and the Three Bears: The story of the little girl Goldilocks who wandered into the home of the three bears, and found that while Mama Bear’s and Papa Bear’s stuff was beyond her reach, Baby Bear’s porridge, chair and bed were all ‘just right’ for her. This story has inspired many analogies, including the idea of a Goldilocks Planet where conditions are ‘just right’ for life as we know it. Taking inspiration for business, one of the best-established axioms is from Goal-Setting Theory – goals that are challenging, specific and achievable are more motivational than mere ‘do your best’ goals. We may have come to know and love these as ‘SMART’ goals but it’s more fun to think of Goldilocks goals, right? Set your sights on something that’s neither too easy nor too difficult, build on ‘just right’ successes and move that dial up (to 11, even!) towards more and more challenging goals.

–          The Frog Prince: This fairytale has undergone many avatars over time. Some involve a spoiled princess who has to kiss a frog in order to retrieve a golden ball that’s fallen in a pond, others require her to let the frog spend three nights on her bed (with her in it! Hmm..shady!). In all versions, it ends with the frog miraculously transforming into a handsome prince who of course, marries said spoiled princess and they live happily ever after. Be that as it may, this story has some interesting implications for entrepreneurs and change agents. Starting up a new business is not all glamorous, and one may need to wade through swamps after elusive golden balls, kiss more than just frogs and watch them turn into worse creatures instead of morphing into handsome princes in the form of angel investors. If one keeps at it, though, and tries new approaches, the fairy tale could come true…just be open to the form that the frog prince might take!

–          The Emperor’s New Clothes: Now this story is one for the times. Duped by weavers who claimed to make cloth that would be invisible to anyone who’s ‘unfit’ for their role, the emperor parades around naked until a child calls it like he sees it (or doesn’t see it, rather!). So many business metaphors here. How many times have we come across such weavers – literal ‘spin-doctors’ – who confuse and confound us with their theories and their data? And claiming to not understand them would make us seem unfit or foolish so we hold tight, until it’s too late and the world finds out that we have no clothes on. Also, think about the vain-glorious and foolish emperor who is too blind to accept that he’s being taken for a ride – sounds like a lot of our leaders, right? But let’s not forget the good part – the part where the voice of truth and innocence is heard and validated. Let’s stay in touch with that voice within us that’s unafraid to question and comment on what is going on.

So what’s your favorite fairytale and how closely does it mirror the truth of your work? What about it inspires you, and what moral does it hold for you? With due apologies to Mr. Hendrix, let your circus mind run wild…butterflies and zebras and moonbeams and fairytales…if it’s good enough for a song, it’s good enough for life!

Sholay and the principle of non-linearity

Kitne aadmi the?!

Has there ever been a more powerful dialogue?

Gabbar Singh, master of all he surveys (actually – some pretty pathetic rocks in the outskirts of Blr – but thats a different story), finds his authority challenged by the village of Ramgarh.  His first question is – Kitne aadmi the? (how many men were they?) .

For India’s services sector, this obsession with head-count continues.  A person’s importance is measured by the number of people he manages (Kitne aadmi hain?). Kaalia and his friends were more perceptive –  they refer to the mass of villagers as a gang of incompetents – knowing they faced no threat from them.  Little did they know of the real danger.  As Gabbar painfully realizes later on, a smarter, small team can be a lot more effective than a gang of followers .

Today, firms that are truly able to leverage the capabilities of a its people are found to demonstrate non-linear growth.  Analysts worship these companies.  But really, they should be thanking bollywood!

Headline bingo: this one’s a winner

Now I am a discerning news reader, but there are times when my self-control slips, and the mouse-wielding hand is guided by the eyes to the crass and vulgar. I am glad to report that some headline writer in the ToI family has come up with the winning formula, capturing centuries of human breeding and social selection. Combine the desi male tendency for lecherousness with desi aspirations, and you have a winning combination. The only other word that could have finished out the headline was “BMW”. It’s all there. I’m telling you!

The winner of the screaming headline of the year goes to “Munni & Sheila seize sizzle IIMA classroom“. Need I say more?

I had excited visions of said ladies actually taking over one of my classrooms (CR-1 for Section A) for an impromptu performance. I can imagine Yogi’s bathroom songs would go well with the performance, as will the desktop drumming that everyone in India is an expert at. Now to add to the mix, one could imagine that lecherous male hooting would be replaced by orderly tempo shouts and announcements of random quizzes, as behooves IIMA’s students and their future glory. Rapturous hoots of “Munni ka tempo high hai” are met with equal gusto from the Sheila camp’s “Sheila ki le li, zig zag zig zag”, (WIMWI folks- I KNOW why it’s “ki”). Wait, remember the Prof who took his shoes and watch off for every class? We could have his shoes stolen by the class clown, and somehow the class could be dancing around a pair of marketing prof shoes to the beat of his stolen watch! Yes, yes, yes! Sheila ji, Munni ji, please bring it on! The sizzle, the steak.

Puerile fantasies aside, the actual article was interesting, but not quite Sheila/Munni material. Why the world needs to know that there’s a class on contemporary Indian films…I don’t know. But, hey!, the diversion was worth the time.

Link here. Nothing exciting in the article, really, but the headline was a winner.

ymMBA: Today’s special

Series of posts titled “Your movie MBA”, where we’re using famous hindi movie lines to make management gyan more approachable. So you thought you couldn’t learn anything from a David Dhawan-Kader Khan movie. Yep, you’re right! Unless you count that bit about the blood clot.

Of all the outrageous comedy movie settings I can recall, there could be none more moronic than Kader Khan’s greedy landlord in “Mujhse Shaadi Karogi” where the running gag is that Kader Khan has a mysterious blood clot in his brain. Everyday he wakes up, the clot shifts to another part of his brain, stopping the flow of sensory information from another part of his brain. One day he wakes up deaf, while another he is blind, mute, mad, and so on. Being that the clot is inside Kader Khan’s brain, the people around him cannot tell what’s broken that day, and find it enormously inconvenient to interact with him.So this guy walks up to him and starts talking, only to realize a 5 minute monologue later that “Aaj Bahre Hain” (today’s special: deaf). How much damage can this do to a guy’s social life, especially in the era before facebook? Kader Khan comes up with a unique device to improve his social interactions- he uses a white board to announce his “malady of the day”. As you’ll see in the screen grab below, the board of the day says “Aaj Andhe Hain” (today’s special: blindness). This eases things tremendously. Now visitors can alter their communication style based on what’s missing that day. You walk up to the man, read up the special, and choose to communicate accordingly. QED.

Go to the 5:17s mark for the sequence.

And you’re still wondering, what the!? What could possibly be the practical use of this wisdom? You’ve got this golden nugget from me, and yet you are unable to encash it, or tuck it away in some cranny in your brain to use it later. All this wisdom, and nowhere to put it to use…let me tell you something. Top secret. Come closer so I can whisper it into you ear.

Psst…the company you work for has a brain clot too.

Sometimes its Aaj Green Hain, (Today’s special: Green), while other times its Aaj High Growth Hain. You never know where the clot has hit the company, and what’s the fad of the month. If you read the company wrong, you’re still talking green while the company has woken up overnight to the joys of profitable growth, or global integration, or, I don’t know, saving the african rhino.

Do yourself and your company a favor- Get with the program, people! Go and figure out what your company’s fad is today.

Once you find out, put it on the white board to let everyone know today’s special.

ymMBA: Dog of Dance

Series of posts titled “Your movie MBA”, where we’re using famous hindi movie lines to make management gyan more approachable. Today’s theme-customer segmentation! The source material is illegal phone-taps, so reader discretion advised.

Follows this base post. And oh! This is fictionalized.

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In the wake of 2010’s 2G scandal in India, newspaper offices have become used to receiving strange packets with USB memory sticks full of illicitly recorded telephone conversation. One such package arrived at our doorstep yesterday, marked simply “Gabriel’s Dogs, 1994“. Our curiosity piqued, we plugged in the USB drive to hear the inner workings of the IT industry in its infancy. The year was 1994, and this was a recording of a conversation between Virendra, VipInTa Technologies’ founder, and Haema, the company’s relationship manager with Gabriel Electric. Haema, as readers will recall, later became (in)famous as a corporate lobbyist and her other phone recordings have already been made public. It appears that Haema’s calls were being tapped much earlier in her career as well. This was one of the recordings. The uncut transcript is below.

Haema: Veeru, this is me. I know it’s late…sorry…but I need to talk with you urgently ya!

Virendra: Haan bol! Did you get any sleep? Those crazy guys at Gabriel have made me completely sleepless. I don’t know why we have to do this renegotiation tamasha every year. Why don’t they bloody ask for our first-borns and right arm as well? Buggers!

Haema: No ya! I didn’t get much sleep either. I was working with Balu on the financials. If we give Gabriel’s guys any more discount, we will make no money on the deal at all. Balu is furious, and I am ready to give up now. It’s your company, ya!, you tell me what you want to do!

Virendra: Arrey…we gave them a discount last year as well. They keep coming back every year to arm-twist. Tu aisa kar, you tell them that you’re not able to reach me. Let them give us some more time.

Haema: What are you saying Veeru? This is our largest client, and they are negotiating with all the other desi companies. I can’t just go and tell them I can’t reach you. Tell something else…should I just give the discount, and we will try to be better prepared next year?

Virendra: Basanti..<audio garbled>

Haema: Hellow?! What did you say?

Virendra: <muffled audio> Basa…ton ke saam…<muffled audio>

Haema: Can you repeat? Your voice is cutting off…Hellow?! Should I call back?

Virendra: Basanti, in kutton ke saamne mat naachna! <translated: Don’t dance for these dogs>

—

<Editor’s note> Customer segmentation is a very important part of a company’s strategy. Not all clients are alike, and some clients are not worth having. VipInTa had run into a very big problem- their biggest customer, Gabriel Electric, was now a problem client. Gabriel’s men routinely came down to India to ask for discounts, and the relationship had become toxic. Veeru had to decide whether to continue to give discount to the single client that gave them 40% of revenues, or to walk away and take their chances with other more profitable clients. They chose to walk away, and the rest is history. The company still doesn’t do any business with Gabriel’s men, but happens to make the most profits in the industry. Those who danced for Gabriel’s negotiators have had to sell their companies for a deep discount. (Non-fictionalized version of the story here at #19). (Non-fictionalized reference to a company that likes dancing for Gabriel is here. They sold the company in early 2011, at a fraction of the valuation of the other companies in their industry. Cheap clients make poor business partners!).

Not all customers are alike. Learn to pick well. That’s your bollywood line for the day.

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Basanti, in kutton ke saamne mat nachna! Can there be a more iconic bollywood line? For those who slept through the 1970s, the line is from Sholay, and involved Hema Malini (as Basanti) and Dharmendra’s character-Veeru. Veeru is strapped to a pole, and the arch-villain Gabbar’s henchmen have asked Basanti to dance on shards of broker glass as a life-line to save her boyfriend Veeru. Incensed, Veeru is asking Basanti not to dance. She does. He lives. Happy Ending, bollywood ishtyle.

Bachne ka koi tareeka nahin hai…

… apne aap ko police ke havale kar do!

Thus spake the hapless police in movie after movie.  But true to our national resourcefulness (applicable only to those who are trying to break rules, or do jugaad), the bad guys always find a way out.  Spoofed brilliantly in Hero Hiralal, when the police comes in after all is over and proclaims that they are indeed at the right time!

It’s a bit like that in corporate settings.  H.O. spends enormous energy putting together rules and “governance mechanisms” to catch the rule-breakers.  Enormous energy goes into creating this rule-infrastructure – with non-compliance being threatened by a revocation of coffee privileges (actually, that might be a very effective deterant – wonder why no body’s thought of that yet?).

Everyone has their favourite inane Dilbert rule.  My personal preference is for attendance rules.  So much time spent on tightening the screws… par bachne ka tareeka hamesha hota hai!

What’s your favourite corporate noose?

ymMBA: Empowerment and initiative

This is in the series of posts titled “Your movie MBA”, where we’re using famous hindi movie lines to make management wisdom more approachable. The opening post is here.

We have all come across people in our professional life who go above and beyond the brief and deliver that truly “Wow!” experience. People who don’t refer to their job descriptions every day, but go do whatever it takes to get the job done. The “Can do”  people. They don’t need direction, go out on a limb, have distinct personalities, and create their own momentum. The A players. The goto guys. The movers and shakers. The “buck stops here” heroes. You know the type.

Are you one?

Unfortunately, most people in corporate situations are far removed from this ideal. They find themselves under-empowered, at the mercy of forces outside themselves, and desperately in need of coffee and carrots to get their job done. They have excuses for answers, and hyperlinks for results (ask him, tell her, don’t look at me!). The buck passers. So who’s to blame? Is there a simple way to check if we’re in this rut, and what to do to get out of it?

The movie “Khosla Ka Ghosla” is a fantastic comedy about underdogs who con a Conman. The capital C Conman is a land-shark, and has stolen the underdogs’ land. The underdogs enlist the help of a drama troupe to create an elaborate ruse about a wealthy NRI who needs to sell his land to the Conman. To get access to the Conman, the drama company must first get through the Conman’s underling, a lowly property broker. In their first meeting, the drama company must convince the broker of their wealth and power, and the actor playing the role delivers brilliantly with a 5-word question that I propose must be embossed in gold and adorn the desks of all self-respecting professionals. He asks, “Aap broker hain ya party?” (Are you a BROKER or a PARTY). The insinuation being that no one wants to deal with a middle-man, a broker or an underling. No business discussions are real unless the opposite party is a PARTY- someone who has the authority to make decisions, take risks and is accountable for results.

(read on below the video …post abhi baaki hai mere dost)

Go to the 1:55s mark for the sequence.

So do yourself a favor and ask yourself this question- “In what I do, am I a BROKER or a PARTY“? Am I just acting on behalf of others, have no real decision making authority, and have no stake in the outcome? Am I just making excuses for my performance. Do I blame others for what’s going on around me? If that’s the case, why should anyone respect me professionally…I’m just a broker, no!? A broker that has no skin in the game, no real value addition, no accountability and no reason to be part of any decisions. Am I just a broker? Do I want to be one?

Ask yourself, How can I become a PARTY instead? How can I take more accountability for the bottomline. How can I bring the locus of control back to me? How do I exude can-do confidence in my dealings, proud of my rights, aware of my duties and ready to take all the risks and rewards in this transaction? How can I stop slouching and start standing up for what I believe in?

Don’t be a broker. Take charge! Be the PARTY!

You have my permission!