Pascal? What??

Ipad 2 finally arrives in India. And there is hope the volumes sold would be ok. Iphone 4 is already out and many of tech eager population uses/flashes the same. While Apple has this ability to generate pull for its products, the underlying reason is SIMPLE(icity).

When I bought my Ipad (version 1, alas!!), one of the first user of the same was my 18 months old daughter. And she has been able to use it very effectively to try out all the apps I had downloaded for her. We have reached such a stage in user interface with technology. Multitude of tablets are now out trying to better the Ipad. And all of them are so easy and user friendly. Same is true for the new set of mobile phones coming into market.

Sometimes, I look back to really marvel on how things have changed during my lifetime itself. The first time I set my eyes on a TV was in year 1982, when Govt rolled out TV services to beyond the 7 cities it was initially broadcasting to. And the TV world was only Black and White for most of us. Wednesdays used to be day of Chitrhaar (first time we were able to watch film songs on media other than movie halls) and weekends for free movies. Could not miss any of these for the world.

Cut to today.. more than 300 channels to choose from. You can catch a movie any time of the day in one of the channels. If not able to watch live, recording facility is made available by all the satellite TV providers. While we waited for the evenings to watch the programs, now the programs wait for you to take time out to watch them!!!

So far as Computers go, I was among a few privileged lot to touch a computer just at the time of entering college (in 80s that was surely a privilege!!). PC XT was the first machine I ever touched. PCs with Monochrome monitors took as much space as a server today. And we were thrilled to know that the storage space in the hard disk was all of 20 MB!!!! And on top of that you could carry data yourself in floppy disks... Disks which were 4-5 times the size of a regular cellphone of modern era. The storage space was a princely 1.44MB!!!! And carrying a box of floppies was like carrying a tablet these days. You could see admiration in the eyes of the people who saw you with the Floppy Box. We were geniuses who worked on Computers!!

Windows?? Those days they were part of the buildings and computers worked on Disk Operating Systems (DOS, the basis of Gates' wealth). And if you needed anything meaningful out of the machines, you needed to write your own code. BASIC was basic and COBOL was for guys with big thumbs. Guys who had arrived in life wrote in Pascal, C++.. Pascal, the computer language and not the scientist!! Anything to do with computer had to code written. And then arrived the state of the art PC AT!! Wow!! Storage increased to 60 MB!! We hear something about Windows!! Windows on computer!! What was that? It was IT Nirvana!! Not many would know that the first version of Windows was a program on the menu list of DOS and had to be activated once the machine was booted up and ready to work. Combining the DOS and Windows was the success of Windows which we all are aware of.

Cut to today, my 18 month daughter uses the Ipad!! No keys to be punched, just touch and flicks .. No operating systems to be started.. Pure Plug and Play. Start the machine and use it. Complexity as we saw it those days is in the machines and not outside as user interface and that I think is the success of Apple and others who made this happen! Apple took it multi steps ahead by letting the customer use the most basic form of communication, touch!!

Rs. 16/- per minute irrespective of whether you receive or call... Launch charges for the Mobile phones. Those were the days when we thought the pagers were cutting edge. Anyone remembers (or may be even knows) pagers???? When pagers happened, we had a phenomenal tool in our hands to increase communication with the field staff. Prior to that if a sales guy is gone on field for the day, he could have gone anywhere, field, field (playing), home.. anywhere.. If you had to catch him, you call all the dealers/distributors in his beat plan on their landlines, one by one to check his movements. Those were days of peace.. imagine you are out on the field and no one can contact you.. Boss, colleagues, WIFE!!! Students once they left for hostels, the only way to communicate was STD booths (legendary lines outside booths post 10 pm can be the plot for another blog) and that too if the house had a phone.. Else call the neighbour who had a phone at home, inform that you would call back in 15 mins (cannot hold, charges are high!) and get back to the line again.

Cut to today.. Sometimes, cannot even pee in peace!! With Google and Apple looking to provide locational services too, you know what is the game!!

So has all this advancement changed life for all of us? I do not need to answer, for we all know it. And what a change it has been!! Good or Bad, it is for every individual to decide. But I firmly believe that true happiness was witnessed by me in middle 80s, when we had nothing to distract us from pure fun!!

Sovereign credit rating - How reflective of fundamentals?

The recent "downgrade" watch call put out by S & P for USA, as a sovereign country, is no doubt a first of its kind. First of its kind for country like USA as well as S & P. It is a bold step by S & P seen in the light of it putting a question mark on the home country.

Creditability of rating agencies in recent times has been under weather, to say the least... With most of the mortgage 'radioactive material' classified by these agencies as AAA, the mess created in the financial meltdown recently will take some time and tax payer's money to clear.

So what needs to be made out of this rating downgrade warning? (Warning because the timeframe for downgrade is 2 years..2 years????) Two ways to look at this...

1) As is a habit with most of us, forget how rating agencies were hand in glove with Financial companies to rate junk as AAA and believe in the rating downgrade warning. If that is so, it merits to look at what S & P is basing the arguments on.

2) See it as a ploy for the rating agencies to repair some credibility damage. What better way to do it than question the supreme force in market economy.

The two dominant parties of the US politics not locking down the financials is seen as the biggest predicament in US emerging stronger. And that could cause great imbalance in the US economy and result in stunted growth. So it deserves a downgrade warning. (By now you would have noticed that I am using the warning word repeatedly and I feel it might not go beyond the warning bit). But what about other things like fiscal deficit, sovereign debt etc? US debt today stands at about 10T USD (nearly half of that is held by the Asian economies) and the fiscal deficit is nearly in double digits. Let me do the easiest thing which comes naturally to us all. Compare it with other countries like India which fare fare better than these fundamentals? S & P does not think twice before putting the rating at "junk" grade. So how is US different that it still keeps the AAA rating despite having worse fundamentals than other developing/developed countries?

It is all about the green bucks, Man!! Dollar being the reserve currency of the world, nothing can go wrong for the US. No debt is big for them. Need more dollars? Just print more. And there are countries like China, India, Japan, Korea which are ready to pick up the extra dollars and fund the debt. No doubt China is now very vocal about the reserve currency.

Despite all future projections, US would continue to be the most Dominant Economy and will continue to be the leader in a unipolar world for at least another 30-35 years. And hence it can never falter on ratings despite the unhealthy fundamentals.

And the best part if that all legal, political, economic entities have high vested interest in the sovereign maintaining its AAA rating due to cost of funds, returns on investments etc. Home country effect. Where does the maximum business for S&P come from? US, naturally and hence it cannot have anything going wrong for it in US. But natural.

Coming to the point of credibility damage control for rating agencies, this would be topmost priority for all financial markets. While the primary motive is for the agencies to get back their "Clean Image", there is huge interest in other financial entities too, to get people's faith back into these agencies. They need someone to fall back on, to justify their work, their fundamentals... How can you sell loans/derivatives/financial instruments when there is no creditable agency to rate them? This would lead to anarchy in the financial world.

So for a change the rating agencies would indulge in these kind of antics to close the credibility gap.While some part of media has given some prominence to this news, I guess almost all know that it is not a news worth wasting time to read and mull about, least of all, take time out to write about it.

Outsourcing protests too??

Last few days, most of the print and electronic media has been playing the Anna Hazare card to the hilt. Coverage of the hunger strike was on minute by minute. And finally when it ended with Anna taking a glass of juice from a little girl, victory was declared. Victory?

Two observations which call for a debate...

1) Protest by Anna and subsequent "support" by people of India.

2) What are the implications of this form of protest?

As Anna decided to sit on hunger strike against the Lokpal bill, he was joined by a motely of celebrity supporters, some of whom decided to sit alongside him. And we had multitude of Cyber savvy people trying to garner support by clicking yes/like etc on multiple Social networking platforms. Many of us were inundated with requests to like/support the cause. Kind of cyber peer pressure to be a part of the movement. A few celebrities also threw in their hats in the ring by announcing support for Anna. There was a daily ticker on how many are supporting him cyberally (if I can use this word)... Running into tens of thousands.. With some terming the cyber instance as a Tsunami support for Anna.

And I am thinking, some decide to go into physical form too conducting silent gatherings/candle light march etc. How many did take part there? Not more than hundreds.. But not a shade to the number who participated cyberally (using the word again).

Why is the physical part far lower? Is it due to the effort required? Does this point to a issue where we are very participative in anything which does not require additional efforts from us? It is always easy to click a button of the mouse/track pad, that too while chatting up with a few friends in the comfort of home/office. Is this a new trend of outsourcing your thought process to a few social networking sites? You do not like something; you click a button to protest... You like something; you click again. But when required to physically move yourself, make an effort to be a part of the activity, there is no time.. No time from the daily chores, no time from hectic work schedules, no time from networking with friends in the cyber/mobile world. I will click, someone else would do it for me.. Great outsourcing model.. (me thinks this is a great business model too). This is the root of the issue which led to Anna forsaking food for some days.

Why is Anna protesting? Why was it required? Whatever the outcome of the protest, the root cause of this activity itself needs to be questioned. Why was it required? This govt was elected by us. We empowered those guys against whom Anna was leading the protest. We elected them, didn’t we? And once we have put them into power, we protest their ways? Politicians are a very predictable breed, we knew at the time of election on what they are capable of.. By protesting now, we are slapping ourselves.... Is this not a tacit admittance to the fact that we did not bother to do anything at the elections? My view on outsourcing works here too. We have outsourced our authority to vote to a few set of people who due to various motivations make the effort to walk across to polling stations to vote.

How many of us exercise out franchise? How many of us are "busy" with other "daily activities" to go voting? How many of us are actually on the voter's list? And then we protest the outcome or support anyone who is protesting. Anna is actually not fighting the corruption in the govt, but actually highlighting the inability of all of us to elect a govt which works for us. Wake up and smell the tea!! And we all are gloating in the so called "Gandhian" style of protest. Protest against the people we elected (or elected by proxy, as we did not vote) and try to showcase it as standing upto forces for a good cause. We are not a middle east country to tout Jasmine revolution. Here, we have elected the govt....

And while Mr. Hazare has every right to protest and garner support, the outcome is continuation of the vicious cycle of not electing the right kind of people and then protests again. Not helping the cause. If we cannot elect right, we deserve the govt we get. While the intent of the protest could be right, the outcome is not conducive for the long term good governance.

Now that everyone at Jantar Mantar/India Gate and other places have packed their bags and gone home smiling, I feel the outcome is not a victory but a way out by the people in power to deflect the issue right now before it gather further steam. This takes out the pressure and helps to ease out the issue over some time. Unless people have the courage to stand up and take action, this would continue.

Looking at our penchant for everything cyber, government should move polling to being an online activity. Maybe, maybe then we would see more of the franchise looking to participate in the election process just by clicking “like” a candidate.

Change is in the air!!

Other than creating history, the new president elect in US got something back in fashion – Change. Change is now the buzzword, be it change in leadership, change in the way this world is looked at, change in the products, change in the channel, you name it. World is ready to accept change in all aspects of life.

This entire environment of change begets one question – When is anyone ready for Change? What is different in environment today for people to welcome change so openly? We do not have to go back too much in history to understand this.

A win by any one of the two Democrat candidates would have created history (either the first Woman President or the first Afro-American, which it finally was), but the actual lead by Obama started the day Lehman Brothers filed for Bankruptcy and Dow tanked maximum since 9/11. Indicators for worsening economy were visible from the start of the year itself and saving of Bear Sterns was an attempt to rein in the downturn. However, Lehman did it in. Not a single week has passed since then without more gloomy news and further tanking up of Wall Street. And all this while Obama was building up lead. The lower the market went, the deeper the cut got, higher the lead for Obama. Change was getting acceptable. Was it because there was nothing left to lose?

For the last 15 years, the world economy has seen robust growth. The portfolios have steadily climbed, targets have been surpassed and huge increments & bonuses were the norm. Obviously everyone loved this phase and wanted this to continue. Talk about change was met with resistance and the change advocates were seen as party poppers. After all the going is good, why change at all? Unless the advocates of change were management writers (notice how the most covered topic for writings at any time is inversely proportional to acceptance of the same?). They were the people who could ‘visualize’ the future and were advocating change to be ready. However, only a few managers saw this as a way forward.

Poof, and here came the economic crisis. Dashboards are not looking good, matrices are worsening, targets not met, and bonuses etc are only in dreams. Keeping one’s job without much of bloodshed is seen as a huge incentive. Portfolios have halved, and with no capital left to invest, situation could not be worse. So, is change acceptable? Damn well it is!! The way things have worked till now are not yielding results anymore and time has come to look at things differently

Most of the newly affluent Indians have entered the workplace in the last 15 years. So this essentially is the only downturn they have witnessed. Hence there is a resistance to accept the sudden change. Our leaders still talk about high growth for Indian economy in coming years, despite the data for last few months proving to the contrary. The realities on the ground are in line with a downturn. There has been compression in the loans being offered to customers. New projects are on hold; no new investments are being planned. Cost cuts, squeeze on travel budgets etc are only a few instances in the public knowledge of results of downturn (the public fiasco of a leading Airline on sacking staff, is an example), but the fact is, it is happening. So is there openness to change? I bet the staff of the above mentioned airline today is open to any changes the management wants to make including a cut in Salary.

Essentially, openness to change is directly proportional to the mess anyone is in. After all, there is very little to lose. And the logic on resisting change loses significance in these times. This is true for all kind of entities, countries, organizations, sporting teams, everyone. If ever there was an opportune time to effect that change you have been thinking for quite sometime, it is now!! Go ahead, do it now, you would face the least resistance. But the change has to have a clear objective, clear goals. And then it has to be communicated clearly and in a transparent way to get the team along. It would be accepted and implemented. Manager would have to detail out the change to the last leg. Every member of the team needs to be explained the contribution that person brings in. So to repeat, the time to change is here and now!!

Unless you are one of those far sighted managers, who had already seen what was coming and put changes way ahead of time, sometimes even pushing despite opposition. In that case, believe me you are already being hailed as a ‘visionary’. And yes, you can write a book!!

Customer is King!!

Customer is King!! Oft repeated statement but is customer the king always? Is it true in these times also? Times when we are hear some market or economy melting everyday? As the owner of Balance Sheet, what is the most important to the CEO today? Cut costs to remain alive (to serve customers later) or to continue offering great customer experience despite higher costs? Or can both be combined?

These days the newspapers are replete with details on how organisations are cutting costs in every area. Be it knocking off toilet paper in the office to cutting down travel of its executives. But in this push to cut costs, is customer getting the axe too? The oft spoken statement about putting customer first, might be the most compromise-able commodity in these tough times.

Layoff of employees has negative connotation across the world. So the most common strategy adopted by organisations is to not to replace executives leaving, thus bringing down the cost. But to continue servicing the customers with fewer employees assumes increased productivity. This may not be the case all the time resulting in compromise on customer service. Less people on the floor in a call centre would mean lower phone calls picked. An alternate is to have full house but for lesser time. The reduced timelines of customer helplines by many banks are a result of this. Many of these banks would tout 24X7 customer helpline till a few months back. Now 12 hrs a day customer helpline with no access during weekends/holidays are getting to be a norm.

In a bid to cut costs, erstwhile partners have become vendors. So there is a maniacal push to redraft service agreements at lower costs. Dashboards indicating the service levels are scrutinised in lesser details. Compromise by vendors to manage within costs leads to a bitter customer experience.

Training is another area which typically gets lower focus while belt tightening. Training is important not only for personal enhancement of employees but also to provide for good customer experience. These days there has been increased activity from the so called wealth managers of various banks. They claim to help you wisely invest to maximise returns. What strikes you when you meet them is absolute lack of knowledge of the markets and various instruments. They repeat verbatim whatever they have been fed through internal reports and are at a loss to explain the offer beyond the rudimentary talk. Again in a bid to contain costs, lower quality manpower is employed (at lower cost, of course) and what they do is only push products which earns the bank (and them) high incentives. Whether the customer gets any return is none of their concern. Is Customer the King here? Why are incentives paid to the bank and/or wealth managers at the time of customer subscribing to the instrument hawked? If incentives are paid at the time of customer redemption and making money, then the wealth managers have interest in the customer's portfolio going up in value. What we have today is a scenario where the customer might be losing money on his investments whereas the wealth manager has walked away with a handsome bonus/incentive. Banks would have to invest in training of these people to be aware of the products they push. Train them to be aware of various levers and how they impact the returns. Train them to be partners in the growth of a customer's portfolio rather than be just a peddler of new instruments.

Needless to say, a great experience leads to customers sticking (again oft repeated statement). One of the best run loyalty program, I feel, is by one of the leading Airline in the country (one that has been in news recently, again trying to cut costs by laying off employees). The members of the elite tier of the loyalty program of this airline have gotten so used to the service levels that when they are forced to travel by other airlines (again, due to cost pressure on travel budgets), the experience is not in the same league. Good experience is addictive. Hopefully post the issues with layoff of staff, this airline would not look at other ways of cutting cost.

Yes, these are tough times. History indicates that excesses happen during the growth phase which needs to be corrected. We are in the midst of a correction time. Many working Indians are going through probably their first economy downturn. Ditto with most of the decision makers. So the requirement today is not to throw the baby with the bathwater but to plan it right. Great customer experience in these times would ensure continued business while at the same time building the base for great rewards once the economy goes up.

Customer sure is King!!