Friday, April 26, 2013

The ‘Quiet Leader’ – and how to be one

Traits and critical roles of ‘quiet leaders’ who are often not at the top and don’t enjoy the spotlight. An interview with Martha Lagace of HBS Working Knowledge

Question: You write that one inspiration for your book titled, ‘Leading Quietly: An Unorthodox Guide to Doing the Right Thing’ was the unusual course you’ve been teaching MBA students on moral leadership in organisations. What is a quiet leader? Is quiet leadership a topic you had been thinking about before?
Joseph L. Badaracco (JLB):
I don’t think I really started thinking about it until just a few years ago. There were two things that prompted me to do so. One is that I had written a book called ‘Defining Moments: When Managers Must Choose Between Right and Right’ (HBS Press) which is about big deal, high-stake, traumatic decisions. And there was a natural question: “Is this all there is to writing about difficult ethical decisions?” Or put differently, what happens in between the big decisions – which don’t come along very often? For some people they come along very, very infrequently. Does this mean these people are on vacation the rest of the time? So that was one question that was in my mind. In the course, so many of the people in the works of fiction we read – who aspire to greatness or who achieve greatness – end up badly. There’s the age-old myth of Icarus trying to fly too close to the sun, and there is the suggestion that there is something dangerous about the pursuit of greatness. And at the same time while you read books and plays there are other characters, I noticed, who were what I came to call quiet leaders. You also end up defining quiet leaders almost through a series of negatives. They’re not making high-stakes decisions. They’re often not at the top of organisations. They don’t have the spotlight and publicity on them. They think of themselves modestly; they often don’t even think of themselves as leaders. But they are acting quietly, effectively, with political astuteness, to basically make things somewhat better, sometimes much better than they would otherwise be. Sometimes a few people were aware of what they did; sometimes nobody is aware of what they did. There aren’t medal ceremonies and often the people involved don’t think they would deserve one if the medals were being given out. But often they’re people, I found… in the cases I looked at carefully, who find that some situation or problem or difficulty affecting a person, affecting an organisation, is really bothering them; it gets under their skin. While other people would say, “Hey, why are you getting carried away about this?”, they care about it. They commit themselves and keep working tenaciously, so that over a period of time they find some ways to get stuff done.

Question: When most people think of leaders, they think of real brash types, even rebels. In business, for example, Jack Welch springs to mind as a well-known leader. The idea of a quiet leader seems almost the flip side of that.
JLB:
It is the flip side of a standard or stereotypical view of a leader who speaks the truth or says what has to be done, who inspires others to do it in a critical moment. But I’m sceptical that in the countless meetings Jack Welch spent his career going to, in each one of these meetings it was the Jack Welch Show, and that he heard what everybody had to say and then announced the right thing and inspired everybody to do it. You have the famous example of Rosa Parks (an African-American civil rights activist), saying, “I’m not sitting in the back of the bus.” Well, while that was a remarkable act of courage on her part, and in some degree was kind of a spontaneous event, she’d just had enough of this kind of treatment from one particular bus driver. She’d even stopped riding on his bus and got on by accident. She’d been to a number of civil rights training programs. After she was arrested, the people in the civil rights movement asked themselves, “Is this the right person... is this the right case to challenge segregated busing?” So there’s a lot of preparatory work and a lot of work afterwards. Quiet leadership is not really the flip side. If you look behind lots of great heroic leaders, you find them doing lots of quiet, patient work themselves.



Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
 

Wednesday, April 24, 2013

Letters to the Editor

Excellent magazine
Business & Economy is an excellent magazine. The amount of hard work that has gone into the entire exercise shows. The best thing about the document is the real clarity in terms of mapping of cities wherein all aspects of the market have been covered in simple terms. The visual appeal is brilliant and this is a great reference point for a layperson. It has some of the best financial articles I’ve ever read. The articles are deep, academic, and extremely well thought out. Business & Economy is intellectual, extensive and insightful. Articles range from macroeconomic trends to stock market trends to business news stories. I also wish 4Ps Business & Marketing all the best in their endeavor towards empowering people with invaluable information in one place.

Navin Raheja
Chairman, Raheja Developers Ltd.

A note of thanks
Thank you (for reviewing my book, Reverse Innovation) . That’s my simple message to my network of friends & supporters.

Since the launch, our new book Reverse Innovation: Create Far From Home, Win Everywhere, has appeared on several best seller lists:   Best Seller (#7), USA Today Best Seller (#1) & Wall Street Journal Business Best Seller (#1).

The dynamics of global commerce are changing quickly. I am hopeful that Reverse Innovation will have tremendous impact, both on global corporations and their customers in the developing world.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 

Friday, April 19, 2013

“Solar can trade up to 50 GW capacity by 2020”

Alternative energy isn't still the norm not just in India, but around the world. And even when we talk about non-fossil fuels, we end up discussing only nuclear power. But Ratul Puri, the scion of the Moser Baer kingdom, is extremely confident that solar will be a major game changer in the sector.

B&E: Moser Baer has now become the first Indian solar photovoltaic company to install 100 MW of solar power globally. How has the alternative energy business been performing for the company so far?
Ratul Puri (RP):
Certainly, we have generated significant revenues from solar and we see these revenue streams increasing significantly over the next year or two. This alternative source of energy should be able to contribute 20-25% of our top line and an equivalent share of our bottom line by 2015.

B&E: For that kind of revenues to flow in, you must be having some big plans for alternative energy. What are these and how do you plan to achieve them?
RP:
For now, it's solar. We are looking at setting up around 300MW of solar capacity by June this year. We have already commissioned around a 100MW of solar capacity on a global basis and are looking at increasing this capacity to 300MW shortly. Our investment plans in solar this year are a little over Rs.4,000 crore, out of which, around Rs.3,500 crore are in India and around Rs.1,500 crore are planned in Europe.

B&E: Are the finances tied up for meeting your massive targets for developing solar power?
RP:
For ramping our global solar capacity to 300MW, we are looking to raise both debt and equity in the ratio of 75:25. We have raised close to a billion dollars in equity over the past 12 months. That makes us probably one of the most well-funded solar power developers in India. So, capital infusion is not a challenge.

B&E: Apart from India, which other markets are you looking at to exploit opportunities in an untapped non-fossil fuel market?
RP:
Besides India, we are major solar power developers in Germany, Italy, Spain and the UK. We recently commissioned UK's largest grid connected solar farm. I think our key focus market is the US after Europe. We are already one of the largest solar power developers in Europe.

B&E: Are you looking at other energy sources as well?
RP:
Moser Baer is a well-diversified energy producer and as such we are looking at the entire spectrum of energy options. We are into coal thermal power plants and are developing and building almost 4000MW of coal thermal power plants. At the same time, we are also building hydel capacity. We are into coal mining, both in India and outside India, to meet our fuel requirements. India needs a mix of fuels to meet its energy requirement going forward. Coal thermal cannot do all of it, solar cannot do all of it, gas cannot do all of it. We will end up with a basket and I think that there is going to be an increasing focus on renewables because they provide an ideal solution for meeting the challenges in the power sector today - whether it is land acquisition, availability of coal, etc.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
 

Monday, April 15, 2013

“There is a strong need to reduce the losses”

B&E: The financial health of the power sector is under scrutiny, given the rising stress in the sector.  What kind of policy actions are needed to reform this sector?

H.D. Khunteta (HDK)
Basically the regulators’ job has become more important because it takes all the inputs into consideration — the cost of purchase of power, T&D expenses, interest payments and the tariffs fixations. And it should also emphasize on the SEBs and discoms to reduce the losses and improve efficiency. Over the last 7-8 years, many states have not increased the tariffs. Now the Shunglu Committee is recommending that the role of the regulator is to revise the tariffs every year. At least the shortfall in the average revenue realisation (ARR) and average cost of supply (ACS) may reduce and if the government wants to provide power at a subsidized rate then it should make the payment in advance so that SEBs & discoms can meet their obligations on account of purchase of power and payment of interest. In the present situation, the losses are Rs.600-700 billion, excluding the subsidy but if we include subsidy then the losses are lower around Rs.400 billion. So some steps are required to reduce the gap between ARR and ACS and to improve the financial position of the discoms.

B&E: Do you feel that the initial promise of the power sector is coming off?

HDK:
On a long-term basis, the future of power sector appears to be good because nobody can live without power and it is necessary for everybody whether it is industry, consumer or agriculture. But in the short-term problems are there like fuel supply, financial health of SEBs and the efficeincy needed to improve their operations. The losses are more than 30% and there is a strong need to reduce the losses to upto 15% at least.

B&E: As a power sector lender, is your exposure to the sector safe?

HDK:
As far as REC is concerned, several steps are being taken to mitigate the risk. As on date NPAs of REC is only Rs. 2.7 billion on the loan book of around Rs.880 billion, so it is very negligible.

B&E: What are the immediate issues impacting the health of the power sector?

HDK:
In the coming months, the biggest issue is of coal supply and the second is the discoms’ financial position, which needs to be taken care of. If the coal issue is being sorted out or in case of increase in the cost of generation which is possible because of the import of coal, it will actually increase the input cost and definitely it will increase the cost of generation of power. States purchase power on average cost of generation of Rs.3.50 paise or Rs.4.23 paise, so adding the other expenses will certainly increase the average cost of power. But if discoms are able to improve their efficeincy, then the issue will not be there.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail

IIPM Links
IIPM : The B-School with a Human Face

Get more into third world driveways

Irrespective of all possible speculations before, during and post GM’s Chapter 11 experience, the brand has become a force to be reckoned with, and primarily in the eyes of Americans themselves. But the story beyond home ground is that GM still has a long way to go.

The General has been through this a few years back, when Toyota toppled it to become the world’s largest automaker. During the recession, they were also humbled by Detroit cousin Ford, which survived on its own, while GM earned the embarrassing label of ‘Government Motors’. And now more recently, three analysts surveyed by Bloomberg have concluded that Volkswagen, with an expected sales of 8.1 million vehicles this year and growth of 13% yoy, will overtake GM and Toyota to be the world’s number 1 automaker in 2011.

For GM, those kind of numbers are very relevant as it would be itching for the crown again. But they may not be as much of a concern at the moment; mainly due to the fact that their balance sheet is beginning to look healthy now. For the quarter ending June 2011, the company posted revenue of $39.4 billion, a growth of 18.6% yoy while net profits grew by 33.33% to $3 billion in the quarter. As of june 2011, GM had nonrestricted automotive cash and investments at around $32.8 billion. The Bloomberg trio have also projected that GM would gain by 8% yoy this year to reach around 7.55 million units, which will give it the second rank in the global pecking order followed by Toyota, which is looking at dropping sales especially post the tsunami.

So how is the former number 1 from Detroit looking at its sales in global markets. This is a stage where its past nemesis Toyota is facing a rough patch, but it has to confront an aggressive rival from Europe. Volkswagen’s ascent has a lot to do with their growth in both China and India. As far as GM is concerned, it is getting a positive contribution from all regions other than South America as region-wise EBIT figures indicate. More importantly, it is making a comeback in its own backyard. North America was particularly robust, where EBIT increased by 41.27% to reach $2.25 billion. CEO Dan Akerson credits this to better customer focused innovation and production of more design savvy and economical vehicles. The Chevy Cruze, Cadillac CTS Coupe and GMC Terrain are instances of vehicles that have gained favour with American customers.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail

IIPM Links
IIPM : The B-School with a Human Face

Friday, April 12, 2013

Ravages of substance abuse: economic costs and implications

Substance abuse as a Societal Issue not just has an Adverse Impact on Individuals and Stakeholders, but also Impacts Organisational Performance in ways Unimaginable. There has been no formal Approach to Addressing this ill, but recent initiatives might Succeed in Working out a model that appeals to The Business fraternity as well.

Do you have any idea how much economic and social damage is caused by substance abuse? And are you aware of how much could be done to address the problems if only the business opportunities inherent in finding solutions were better developed and more widely known?


The social and economic costs
Think about the distribution pertaining to the severity of substance abuse in India. It ranges from low to high, with a large proportion of the population in the category of those with little or no use, the lowest level of severity, and with no need for any sort of special treatment. In the US, this category includes roughly two thirds of the population. At the high end are alcoholics and addicts whose problems have been diagnosed and are under going treatment. This is a very small proportion of the population, less than 1% in the US. In between these two extremes, however, are two other groups – those who would be diagnosed clinically as being dependent but who are not receiving treatment and many more whose alcohol and other substance use – though not addictive — is significantly harming their ability to function soundly. You would be surprised at how much of the population falls into these two categories. In the US, for example, some 24 million people are dependent but are not receiving treatment, and another 60-70 million people are not clinically dependent but fall into the category of “harmful use”, i.e. their use of substances has harmful effects not only on themselves but also on those around them. While, we don’t have reliable information for India, we suspect that the proportions are not too dissimilar, with somewhere around one-third of the population needing or standing to benefit from treatment but not receiving it.

Now stop and think for a moment about how substance abuse affects people’s performance in the workplace. Not only are employees less productive than they might otherwise be, but the probability that they will have accidents in the workplace increases and their impact on their fellow employees reduces overall productivity. And these are the people whose level of substance abuse is moderate; despite their involvement with alcohol or opiates, they are able to hold down a job notwithstanding their absenteeism and diminished productivity. They fall into that category described above called “harmful use”. What if there were interventions that employers could use to help them reduce their involvement with substances? How big would the economic payoffs to the companies be? Were they to receive treatment, we can hypothesise that not only would they be more productive in the workplace, they might be more effective in other roles they play in their families and communities. And finally, what about those people who would be defined clinically as dependent and who need treatment but are not currently getting any? What are the costs, economic and otherwise, to Indian society? Estimates of the economic costs alone run into tens of billions of dollars or more.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 

Thursday, April 4, 2013

Would you Send your Child to a Government School?

From Infrastructure to Accountability, Government Schools seem to be Perennially lagging behind. It’s high time The Government wakes up to the newer methods to force The Government-run schools to perform and deliver the best to Educate the future Citizens of this Country.

Mrs. and Mr. Khanna (Vasant Vihar, New Delhi) have been extremely worried since the last few months – the reason being their four-year-old daughter’s education. The major tussle was regarding the selection of a private school over a government one. “We just couldn’t risk a government school for our daughter,” is what they have to say. Unfortunately, they are not the only ones who have to go through this turmoil of parenting (deciding on the right school).

Even worse, this problem is not a recent development in the Indian education scenario in spite of the fact that the present government spend per child per month is more than the fees in 80% of the private schools. But still, the government schools in rural India are a pitiable sight. The scenario certainly differs a lot in the semi-urban and urban areas in terms of proper infrastructure, but the peril right now is that as much as 80% of the funds allotted to government schools is spent only on infrastructure and teacher’s pay and not on enriching the way education is imparted. Using it as an advantage, the private schools have managed to gain popularity among the parents.

Cut to the metros and there is a sea change in the way parents look at the type of schooling they want for their children. Most, if not all, believe that they should rather spend more and send their children to the nearest DPS (Delhi Public School) instead of a government-run school. As one of the parents points out, “I want my son to get educated in the new westernised method where there is much more than mere classes of English, History and Maths. Public schools have classes like mental maths, playing with ceramics, fashion and textile, and teachers are readily available for counselling to help build up the personality of a child.” In fact, these parents believe that the teachers in such schools are helpful and are willing to extend help even beyond class hours. But this is possible only for those who can afford such form of education. Thus, the question remains: What about the major part of the population that still can’t afford to send their children to these plush private schools?


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles

Monday, April 1, 2013

Dial RBI for Missed Numbers!

From Inflation to Liquidity Deficit, The Fiscal gone by has seen RBI missing on many Projections; still, The New Monetary Policy has Proposed high hopes. But Considering that India at Present is Living a trade off between growth and inflation, RBI needs to be more Serious and Realistic in its Approach.

For the past 18 months or so, India has been at the crossroads – unable to decide whether to control the inflation menace at the cost of growth or concentrate on a double-digit growth allowing inflation to take its natural course. Perhaps, that is the reason for which, we have only RBI fighting against inflation through its monetary policy measures. But what is hilarious is the performance of statisticians at the RBI headquarters. Because of them, the RBI is even more confused as to how far and how fast it should move to control inflation.

Amidst a high inflation rate of over 9% prevailing all throughout the last 12 months, perhaps, few must still be remembering RBI’s annual policy statement in 2010. With great amount of determination, the apex bank targeted to bring down inflation to as low as 5.5%. But after 5 rate hikes of 25 basis points each between April and November, the RBI finally realised that they are heading nowhere. So, by January the inflation target was revised to 7% and then to 8% in March, yet it was wide off the mark as WPI in March climbed 8.98% and this provisional figure, when revised, could get close to 10%. After the disastrous predictions in the last fiscal, in the Monetary Policy announced for financial year 2011-12, RBI has now pegged inflation at 6% with an upward bias. But, considering the increasing pressure on commodities in the country due to supply side crunch in particular and the instability in global crude prices, a revision of this target may soon become necessary despite RBI’s bold 50 basis point hike in repo and reverse repo rates early this month (eighth consecutive rate hike in less than 13 months).

But it’s not only on the inflation front that the RBI economists have floundered. RBI was also found in soup in case of liquidity management in the system. The bank’s measures to control liquidity was certainly in line with its measures to combat inflation till liquidity deficit shot up to unparallel levels. While RBI’s comfort zone is plus/minus 1% of net demand and time liabilities (NDTL) or Rs.500 billion, in the second half of the fiscal liquidity deficit climbed up to as high as Rs.1,700 billion and the deficit remained over double the RBI estimate for a good part of the second half of the last fiscal. So much so that the RBI had to undertake open market operations (OMOs) and other measures in the third quarter to ease liquidity pressure. In total, RBI had to purchase government securities of Rs.670 billion to control the situation till the government started increasing its spending in the last quarter.

But the question remains, why could the RBI economists not see this coming? Were they expecting this liquidity crunch to take care of inflation by anyway and it was just about to be proven as a fatal hope than a well calculated risk? The second seems to be more appropriate, at least for the way RBI kick started a number of measures to mitigate the liquidity deficit in the last quarter including reduction in the statutory liquidity ratio (SLR) from 25% of NDTL to 24% with effect from December 2010, and additional liquidity support to scheduled commercial banks (SCBs) under the liquidity adjustment facility (LAF, this facility, which was initially available upto 2% of NDTL, was brought down to 1% after reduction the SLR by one percentage point). In fact, the average daily net liquidity injection through LAF was at around Rs.1200 billion during December 2010 (Rs.900 billion in January 2011).


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist). For More IIPM Info, Visit below mentioned IIPM articles