Saturday, 29 August 2020
I am convinced that if Arvind Kejriwal plays his cards well, he may emerge as the biggest gainer from the chaos in the Congress.
Allow me to explain.
While we do not know who the 300 Congressmen are who are supposed to have agreed with the sentiments in the letter, it is likely that that the political future of those who have lent their names to the letter is over. Unless there are compelling reasons why the Gandhis can do nothing to them.
So, except for a few like Kapil Sibal whose legal acumen the party cannot do without or a Mukul Wasnik who is seen as a Dalit leader or Ghulam Nabi Azad who is seen as a Muslim leader, the rest have a serious problem of staying relevant.
Shashi Tharoor may appeal to people like us but he cannot win an election without the backing of the party in a big way. Jitin Peasad, his lineage notwithstanding, is a nobody in UP. There seems to be no place in the party for the likes of Sandeep Dikshit who simply cannot be a sycophant. From among all those who signed the letter, Sandeep is perhaps the only person who can mobilise the masses to some extent. Which is why he can even pose a threat to the Gandhis if he gets a party to back him.
Prithviraj Chavan may have been the Chief Minister of Maharashtra but with his clean image, he is actually useless to the party. He does not even appear on party posters in Mumbai, that is how much of a non entity he is. As for Renuka Chowdhury, when was the last time anybody heard anything from her anyway.
Manish Tewari too is no mass leader who will not even be visible without a party, his eloquence notwithstanding. Or Anand Sharma, I had even forgotten all about him until his name cropped up as a signatory. A scorned politician cannot really do much if his or her relevance comes from being accorded a position of significance by the High Command and not a mass following which neither of these gents have.
Others like Veerappa Moily have very little value for the party as their utility to the party is questionable. They are no Jagjivan Ram who sent the shivers down Indira Gandhi's spine when he switched loyalties.
The letter would have forced the Gandhis to act if atleast one of its Chief Ministers had joined them. It is also obvious that most of the signatories have the ability to lead a new political formation which could have emerged if someone like Kamal Nath had supported them. It is widely accepted that he has the guile backed by financial muscle to pull off something like this.
Where does this leave the signatories. Much like Trishanku, they are caught in nowhere land from which they can extract themselves only if they act decisively. Else they will be stuck in a corner somewhere, irrelevant and unsung and forgotten. Or they could make peace with the Gandhis and go grovelling but there is no guarantee that they will be accommodated.
But if they wish to stay relevant, and if they do not wish to join the BJP, and if they want a national platform, Arvind Kejriwal offers a viable option for them to consider. AAP's sphere of influence may be limited, but its appeal is national.
I hope some of them think about it. It will be good for the country.
Will Arvind let them in? I don't know. But if he does, it will be the loudest declaration that he has come of age in politics.
Sunday, 26 July 2020
Azim Premji turned 75 on July 24. Happy birthday, sir. Way back in 1994, I learned a valuable lesson from you which has stayed with me to this day.
It happened like this.
I had just embarked on my entrepreneurial journey. I had meetings set up in Singapore and I needed a laptop to carry with me for the demos I wanted to show. So we placed an order for Acer of which Wipro was the distributor. We had only one condition, that they be delivered in time for me to carry them on my trip.
At IRIS, the company of which I am the Founder & CEO, we were doing some crazy stuff and I was hoping to show it to some potential investors to raise funding.
Come Friday before the Saturday when I was supposed to leave, there was no sign of the laptop or the salesman who had sold it to us. I was livid. So I called Mr Premji's office in Bangalore and demanded to speak to his secretary. Some guy who identified himself as the security guard on duty, picked up the phone and told me that the secretary was not available. I became even more angry. I stepped up my demand a notch and asked him to put me through to Mr Premji. "Who's calling," the chap asked. "Tell him it is an irate customer," I told the chap. After a short wait which to me seemed interminable, someone else came on the line." How may I help you," the voice asked.
"Now who's this," I must have screamed into the phone. "This is Azim Premji," I should have recognised the voice from the couple of previous occasions I had met him when I was a journalist. My voice froze. I started stuttering, I had not expected this. I told him that I was looking for his secretary. "I don't know where my secretary is but perhaps you could tell me what this is about,: he said. So told him. He apologised profusely, leaving me totally embarrassed. "I can imagine what you must be going through," he said, as we concluded our conversation. The bottomline was that there was nothing that he could do in the limited time that was available.
As it turned out, the Singapore trip was a washout. In none of my meetings could people relate to what I was trying to talk to them about. A demo would not just have helped, it was critical.
It was on the flight back as I was trying to find if there was anything good that had come from the trip, that it struck me that Wipro must be amazing organisation for the security guard to not think twice of putting the call through to the boss. The guard clearly used his intelligence to decide that the call could be important to his boss. Clearly, he was not scared of the consequences. Anybody else could have just taken my number and told me that he would have the secretary call me back. But he didn't. It is clearly a reflection of how Mr Premji must be treating his subordinates, I concluded. In hierarchy bound Indian society, this was stunning.
I forgot about my Singapore meetings. I had learned a valuable lesson from Mr Premji for me to internalise. I knew the kind of organisation that we had to create here at IRIS. If any of my colleagues at IRIS believe that we have created a different kind of organisation, they should thank Mr Premji for the lesson that he taught me.
Tuesday, 31 March 2020
I have always been a huge votary of the work from home idea. I have never believed in having office timings, I have not ever bothered if people came into work or not. So long as the work got done, none of this should matter, I would argue. I believe that people should be mature enough to deliver on the responsibilities assigned to them and that managers should know how to make them accountable.
But alas, that is not how the real world is. It does not have to be that way, but then that is how it is. Most of our companies work in a time clock punching world. We live in a world where HR keeps an eye on how many hours you put in but not whether you did any work during those hours that you clocked. Much too often to my liking I run into a colleague in the elevator who would tell me that he had to stay late to log the hours that HR expected of him. We live in a world where managers are aware that somebody who clocks the hours may not be delivering but won’t take action until delivery on the task has been compromised. The blame for this would be assigned to everything except the manager’s unwillingness to put in place a system to continuously monitor people for the work they do and not the hours they keep.
Here at IRIS, a company of which I am the Founder & CEO, everybody loves the flexibility that I have ensured is never taken away from them. They love the flexibility of coming to the office when they wish and if they wish, they love the flexibility of being able to spend their entire afternoon at the local mall without being questioned. The managers have stopped criticising me for allowing such flexibility because they too have benefited greatly from it or maybe they simply know that this is a subject on which I am inflexible.
There have been huge abuses of the system. A colleague was granted permission to work from home on the day of his marriage. I learned about it only because I happened to call him for something at the precise time the nuptial vows were being exchanged. Yet another colleague spent a week working from home when she was actually shopping for her wedding. The abuse that left me wondering whether I should laugh or cry was by a colleague on our inbound help desk setup for clients was given permission to work from home when she had exhausted her maternity leave but wanted to be at home for the baby. When asked how she could work from home given her role, her supervisor blamed it on my unwillingness to entertain any discussion on limiting flexibility.
He is right, because the only time I veto my colleagues is when colleagues curtail such freedom. But he is wrong, because he I never told him to not set up systems to make her accountable. In the 25 years I have been an entrepreneur, my biggest failure has been to get my colleagues to embrace the idea whole heartedly and make it a success. My colleagues in HR don’t take the initiative to roll it out either, they take refuge in my frequent comment that it is up to the line managers to formulate a framework with HR in a supporting role to help with the execution of the system.
That is really the nub of the matter. Work from home fails because we refuse to even try and measure performance. It is uncharted territory. But people like status quo and are simply unwilling to tread outside their comfort zones. Even when some people were willing to explore the idea, they are persuaded by reluctant colleagues who give reasons why it is simply not feasible. I may be the CEO but my writ clearly does not run on this issue. But I continue to persevere.
Because I believe that except in manufacturing companies and services companies where one needs customer facing people, work from home should be possible in almost all other areas. In fact, given the automation that is happening around the world, it may be possible to work from home even in manufacturing companies, with a need to go work only if and when physical attention is needed. A friend of mine consults for a company with a factory in Germany which is controlled from a small office in Powai in Mumbai, he tells me that there are no shop floor workers!!
To make work from home work for the company, managers need to change, managements need to change, the rule book needs to change. We have to stop looking at employment through the prism of work hours and work days. In a world where the employee can work from anywhere and any time, the work leisure divide is set by the employee and not by the employer. But then it will work only if the employee is mature enough to understand the significance of the flexibility being accorded by the organisation.
The approach to compensation has to undergo a radical transformation. It cannot be a time and material approach to fixing compensation, it would be ideal instead to try and fix compensation based on an estimate of the value of saleable output generated by the employee. It gets tricky when not all output is for immediate sale or when there are people who are not creating output for sale, these have to be dealt differently. In the perfect work from home world, the nature of the contract between an employee and an employee will change.
Many managers hate the idea of allowing their subordinates the opportunity to work from home because they simply are not used to being precise in their instructions to their subordinates. I believe that allowing subordinates to work from home will make a supervisor better, the operations of businesses will become more efficient. Meetings will be productive and the respect for each others’ time will increase in tasks that require collaboration.
Work from home will also need fundamental changes in law. I remember a visit a PF inspector paid to our offices in our early days. He wanted to know why we don’t take the attendance register more seriously than we did. After listening to my spiel on how I believed in giving my colleagues total freedom to come when they wish and go when they wish and come to office only if they wish to, he told me that the attendance register is actually a right of our staff. He told me that the attendance register was not so much about employers keeping an eye on their staff as it was about the staff having a record to show that they are employed in the firm.
Above all else, the staff need to recognise that it is entirely upto them to make work from home a success. Companies need to recognise that a work from home possibility will do the company a lot of good. Managers need to recognise that it will make them a lot sharper.
I just hope my managers are listening.
Friday, 27 March 2020
RBI's announcement earlier today is certainly very good for banks. But for RBI's initiatives to actually end up helping the real economy in any significant manner, a lot more needs to be done.
It is not really a moratorium
Whether or not to extend a moratorium has been left to the banks. What RBI has said is that if a bank reschedules a term loan to a borrower to allow the borrower the flexibility of not paying the next quarterly instalment, the bank need not recognise it as a default. Though if a borrower simply refuses to pay the next instalment, banks get the same benefit of not having to classify it as substandard.
Similarly, banks have been given the flexibility of rescheduling the interest dues from borrowers without having to worry about the loan being classified as substandard. The interest is deferred for a quarter but the borrower would probably have to find the resources to pay up thereafter for the bank to escape the requirement of classifying the loan as being in default.
Both of these initiatives help the bank hugely but do little by way of providing succour to the borrower who has to hope that cash flows after a quarter recover enough for things to be back to normal and even better than normal to support the repayment of deferred interest.
Forbearance must be extended to credit card dues
Forbearance to credit card dues is something RBI may wish to consider. Many MSME promoters use their credit cards to borrow to keep their businesses going. Ironically, while they are able to service the expensive loans that these are, banks find them lacking in credit worthiness to borrow similar amounts of money at lower interest rates! If the forbearance is not extended to credit cards, lakhs of SMEs will be hit very hard. Defaults are inevitable. It is important for RBI to bear in mind that these businesses turned to credit cards because banks turned them away.
Liquidity is the need of the hour
What is needed is liquidity, what is needed is an infusion of funds as an extra ordinary measure. Until things get back to normal, companies will be incurring much of their regular expenses with no inflows. It is inevitable that this will put many of them in a huge liquidity bind. It is important that these firms, many of whom, are fundamentally sound don't go belly up because of liquidity issues.
The time is ripe for a new metric: Loan Book Ratio.
Banks have been prescribed several ratios that they need to adhere to and conformity with each of them is non negotiable. SLR or Statutory Liquidity Ratio is about investment by banks in government securities. CRR or Cash Reserve Ratio is about the percentage of balances held in cash by the bank. Then there is the priority sector metric with sub targets.
Perhaps, to ensure that RBI gets banks to lend to industry, it is time to impose a Loan Book ratio. The Loan Book Ratio would be the percentage of assets in a bank's book that it has lent to the real economy.
If the liquidity provided by RBI to banks is used by the latter to buy bonds in the secondary market, it defeats the purpose of increasing liquidity to boost economic activity. It is probably time for banks to report their Loan Book Ratio on a weekly basis so that the transmission takes place.
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