Key role is one of the best ways to create intellectual and emotional engagement in people. Every level employee’s engagement is fluctuating. So, it is the responsibility of the management that they should have proper planning about how they are going to manage the available talent to get maximum output. If an employee is emotionally attached with the firm then it become very easy for the management. Emotional engagement of employee can be achieved through alignment of social value with business value. Means to say that, a company should have a social goal and sound economic mission to produce financial benefits should have social goals.

To achieve the social goals a firm should have corporate social responsibilities (CSR). Here, creation and communication of value has a big impact on the development of the employee engagement. And it should align with the leadership behaviour. That’s means whatever management is saying in their social goals it should match with their initiatives. Leaders should walk with talk. They should create trust throughout the organization on the basis of personal credibility and integrity. Here, we can compare the leader of SATYAM & INFOSYS. Satyam lost their image just because of one wrong step by the top management, on the other hand Infosys is one of the leading brands because of its mentor.

After setting the goals, management should take care about the continuous improvement and commitment level of their employee. Remind them and make them understand about the bigger picture. Give them authority to take action when required, it will shows their responsibility and emotional attachment. Tell them to give importance to the ethics. 360 degree feedback and system should try to monitor the leadership behaviour and adherence to ethical, social and business value.

In short we can say that shared vision, shared value should focus on company’s strategic goal. And at the same time employee and firm’s value should match for the maximum utilization of the talent.

What is CTC all about?

In simple language, CTC is the total direct salary cost faced by a company to employ you. Along with fixed compensation like your basic salary, allowances and perks, it includes other variable components like bonuses and incentive-driven commissions. Finally, social security payments made on your account, by your employer or compulsorily by you, also form a part of your CTC (for instance, your employer’s contribution or your contribution to your provident fund).

If you are looking for a new job or a salary hike, you are well advised to think about how to maximise your cash in hand, after all the deductions and taxes will be borne by you. Otherwise, you might be lured away by the promise of a high CTC, but one that results in about the same cash in hand as your previous job.

As a result, economically you might not be any better off. Here, Shyam’s case has been taken as example. See table to understand his salary structure and the CTC component. Net of all the taxes is the amount that will be Shyam’s cash in hand. The taxes that Shyam will need to pay are calculated on the taxable components of his compensation package after allowing all deductions and exemptions under the I-T Act. These taxes will be deducted by way of instalments from his monthly salary payments.

Shyam’s take-home salary, before his bonus, is around Rs 4.83 lakh. This is around 69% of his CTC of Rs 7 lakh. In case Shyam can negotiate a new salary structure with his employer, his goal should be to maximise his take-home salary as a percentage of his CTC. However, with the new rules for personal taxation, this has become more challenging, but not impossible.

The cumulative effect of the recent changes in personal taxation now puts a higher burden on the individual taxpayer. Previously, certain benefits that you received from your employer were taxed to your employer under the fringe benefit tax (FBT). For most of these items the tax rate was 6.79%, and your employer would pass on the economic cost of this to you — the employee.

Currently, the new rules (announced in Budget 2009 and with further clarification coming in late December 2009) are applicable. Under these rules, as of the start of April 1, 2009, all benefits given to you by your employer that were previously taxable to the company under FBT will now be taxable in your hands, as perks according to your tax slab rate (compared to the employee’s previous cost of 6.79%). This puts a higher burden on an employee, and will reduce the cash in hand, even though one’s CTC is not affected by it.

If Shyam’s employer offers a range of tax-efficient options as a part of the company’s salary structure, then Shyam can attempt to maximise his cash in hand. Every company will have its own range of options that they can offer, depending upon its internal accounting policies and interpretations of the tax code. Nevertheless, as employees, it is our prerogative to ask our HR managers for options that can help mitigate the impact of the recent changes to the tax law.

Change is something Gopalakrishnan willingly embraces but even he didn’t anticipate the upheaval that lay in store when he was handed the baton by Nandan Nilekani in June 2007. A global slowdown of unprecedented proportion, wild currency fluctuations, scuttled mega deals, clients under tremendous pressure, MNC competitors biting at the heels and amid all this, the exit of Nilekani himself. Not even in his wildest dreams would the soft-spoken CEO have predicted the rollercoaster ride that his tenure was to be. When Gopalakrishnan first took over the reins, times were actually quite exciting.

The software biggie was a $3 billion company, going on four, it had enjoyed an annual compounded growth rate of 41% under Nilekani’s leadership from 2002-07 and had moved on from being a 10,000-employee company to one with over 72,000 professionals. It was also spreading its wings in different directions: revenue from new services like consulting, BPO and infrastructure was gaining ground, it was set to open a new facility in Mexico and four years after its foray into China, it had 700 people working there.

Gopalakrishnan saw his task as carrying the good work forward. With the momentum going, Gopalakrishnan got off to a great start. Revenues in the 2008 fiscal came in at $4.18 billion with a year-on-year growth rate of 35% and Infosys made the highest private sector dividend payout in Indian corporate history. Meanwhile though, the currency environment was getting to be challenging and global economic uncertainties were bubbling. Then slowdown struck.

Third time unlucky?

On the 15 of September 2008 Lehman brothers filed for bankruptcy and the global economy turned upside down. “Everyone was caught completely by surprise. So were we,” recalls Gopalakrishnan . Ironically, he adds, the quarter ending September 2008, with 6% sequential growth had been one of Infosys’ best. The next few days were a wild scramble ; Infosys was due to announce results and give guidance in less than a month. For the first time in its history, the company had to revise guidance downward. The biggest worry for the company was holding onto its existing customers and making sure it responded to their needs. Not surprisingly, Nilekani and he spent the most of the next few weeks living on aircrafts and client locations.

Closer home, another problem was brewing. Over 19,000 campus offers had been made by Infosys in April 2008; what of them? “After a lot of debate we decided to honour every offer,” he says. The grapevine on campus was working overtime with rumours of lay-offs ; was the blue eyed company of India Inc going to bite? “We went the other way,” says Gopalakrishnan. But in April 2009, as the slowdown showed no signs of abatement, he had to announce to employees that bonuses, wages, promotions were all frozen.

As deal sizes got smaller, decision making slowed down on the client side and along with it the overall pace of business; did Gopalakrishnan ever feel like this was not what he had bargained for? “I always believe you play with the cards that you’re dealt,” he says, “besides , the slowdown was affecting every company in the industry, every customer .” Neither was he the only one who’d seen tough times. It was hardly a cakewalk for Narayana Murthy himself to take the company from US$ 140,000 revenue in 1982 to US$ 535 million revenue in 2002 by, as he says, “ensuring that the fledgling Infosys survived during the dark days of business-unfriendly India prior to 1991 and the growing competition from much larger companies” . The booming growth only came post 2000 and even then there was SARS, the dot com crash.

But for the man whose favourite book is Bruce Lipton’s The Biology of Belief, a science and spirit saga, unleashing the power of mind over matter was imperative.

Running the “flat” company

As the slowdown worsened, Gopalakrishnan held things together. Then in June last year Infosys started seeing the first signs of stabilisation amongst clients. “Customers in the US and Europe started reviving shelved projects and allocating more funds for technology services,” says Gopalakrishnan. The worst seemed like it was behind them. And then came another blow – Nilekani surprised the entire IT industry by announcing that he was quitting his position as co-chairman of Infosys to head the government’s unique identification number project.

Until then Nilekani and Gopalakrishnan had shared the burden of the recession’s fallout. Gopalakrishnan was now left alone to engage marque clients and was spending less and less time at home. The larger issue was that Nilekani had been the public face of Infosys. According to Jessie Paul, who was global brand manager at Infosys between 1998-2003 , much of this personality-led branding was consciously inbuilt by Murthy. She recalls a time in 2000, pre-US IPO, when Murthy, who was CEO & MD, purposefully placed Nilekani in the limelight so that by the time Nilekani took over the role from him in 2002, people would identify Infosys with him. Nilekani also had a tremendous rapport with several top CEOs, something that his successor is working on building.

Troubles notwithstanding, Infosys came out of the 2009 fiscal with a strong balance sheet with cash and cash equivalents of over US$ 2 billion. But while it preserved its profits and operating profit margins; it had to sacrifice revenue growth; its rivals Wipro and Cognizant were growing faster. “We were as responsive as we could be. We continued our global expansion strategy, we continued to invest in people and in new campuses,” says the CEO.

Infy version 2.0?

Some may say that the Infy’s biggest transformation will be in the days to come. According to its guidance its fiscal 2010 revenues are expected to decline by 6.7% to 3.1%. And there is a ‘new normal’ in the IT landscape to be dealt with. In the short term the challenge for Infosys is volatility of currency, in the last two years there have been quarters when the currency movement has been 15-20 %.

Also the rise in protectionism in the US has pushed Infosys to hasten the amount of work it does in emerging markets like the Middle East and Latin America. The larger worries though, he says, are issues like staying relevant to your customers: “The expectations of customers are changing and if you don’t keep up they will go to your competitors.”

Infy Reset

The genial CEO has twin battles to fight: one on the global front, to lead Infosys to its rightful place amongst global biggies such as IBM and Accenture , and at the same time fight off their growing presence in India. His plan for getting Infosys ready for the next stage involves moving up the value chain and creating a more balanced distribution of revenues.

This includes increasing the share of higher value services like consulting, going big on IP to power future growth, new pricing models, improving efficiency and finding new locations like China and Mexico to take advantage of local labour pools (China now has 2000 employees). He aims to generate around one-third of Infosys’ revenues from high-margin new business models like cloud computing platforms; currently business operations (maintenance and infrastructure management) contribute over 60%. “We haven’t set a limit to this however because to some extent it is driven by how quickly the market accepts these business models,” he says, loath to cast anything in stone in an uncertain world.

Nasscom has projected that ITO-BPO exports in 2010 will increase by 13-15 % but for Infosys the challenge will be to sustain its leadership position among the four top Indian IT firms – TCS, Wipro and HCL. The key will be to sustain its industry leading margins. Will Infosys, under Gopalakrishnan eschew its preference for organic growth for acquisition led growth? “We are open to strategic acquisitions especially in non-English speaking geographies like France and Germany, but remember, 70% of all acquisitions fail. In the services industry especially, you’re acquiring people and their capability and if the people walk away then all you’re acquiring are tables and chairs,” he says.

Change of guard

Going forward, a key challenge will be going from a founder-led firm to a non founder-led firm. As was scripted by Murthy back in 1998 no founder CEO tenure exceeds five years and all founders will step down from operational roles when they turn 60 and leave the board at the age of 65. In six years, practically none of the promoters will be involved in the day-to-day running of the company. “Leadership development is something we are concerned with. We are very concerned with creating longevity for the corporation. And about creating a company that goes beyond generations of leaders,” says Gopalakrishnan. Murthy retires from the board next year and two years from now it will be interesting to see if Gopalakrishnan himself makes an exit in favour of the first non-founder CEO.

Without doubt, Infosys has done a great job de-risking management under the present CEO. Firstly, five senior executives Chandra Shekar Kakal, Subhash Dhar, Ashok Vemuri , V Balakrishnan and BG Srinivas now make up the Executive Council (EC) to be mentored and evaluated as potential CEOs. The EC has also made the de-centralised decision making process by taking it one level below the Board and the Infosys Leadership Institute (ILI) is committed to grooming future generations of leaders, having identified 50 senior executives. The challenge for Kris will be to find the kind of perfect core group that the founders made up with their specific skill sets. “Murthy was the visionary and Nilekani followed up by being the institution builder. Kris came in as the solid operations guy. As a combination they were ideal,” says a former senior leader at Infosys.

The other challenge for Gopalakrishnan will be creating an Infosys 2.0 that retains the culture and DNA of the present corporation. Infosys has always had a simple rule – the interest of the firm overrides the interest of any individual. “Through continuous reinforcement and having the senior management walk the talk we communicate clearly that while poor performance can be excused, there is zero tolerance for value violation,” says the CEO. As Infosys adds between 20,000-30 ,000 people each year, the task will be to have these values transcend the lives of the founders, no mean feat.

Meanwhile, despite all the high voltage drama of the last two years Gopalakrishnan hasn’t lost his sense of humour. 2010 will be a great year for Infosys, he says laughing, because 2009 would make any year look good. He is also hoping he’ll have more time to read this year. He’s ambitiously juggling three books at a time and he’s finally getting that new laptop. The Apple iPad has been pre-booked and will be here in May. Just in time to launch his fourth year as CEO and Infosys’ 30th birthday.

Last week, the Supreme Court asked Gali Janardhana and Gali Karunakara Reddy, brothers, ministers of tourism and infrastructure and revenue respectively in the Karnataka government and owners of the Obulapuram Mining Company (OMC), to stop iron ore mining on the Andhra Pradesh-Karnataka border.

April 6 is the day the Survey of India is supposed to tell the Supreme Court whether OMC’s owners encroached on a reserve forest to gouge out vast reserves of iron ore.

The matter reached the Supreme Court after the Andhra Pradesh High Court gave OMC conditional clearance to continue mining in response to a complaint that they had not just encroached on land that was not legally theirs, but had also altered the Andhra Pradesh-Karnataka border to extend their jurisdiction to the neighbouring state.

The complainant’s contention was that the ruling party in Andhra Pradesh — the Congress led by former Chief Minister, the late Y S Rajashekhar Reddy — was in cahoots with the Reddy brothers in Karnataka to allow illegal mines to flourish.

This is a long way from the Reddy brothers’ first steps in business. Till some years ago, the Reddy brothers’ preferred form of transport was the scooter, on which they used to roam villages and towns of Bellary to raise money for their non-banking financial company which ultimately had to be liquidated.

Today, a Union minister told Neytri some months ago, the Reddy brothers use a helicopter from their place of work to go home to have lunch so that they can avoid the dust from the mines.

And in 2009, Janardhana Reddy was reported as having said to Telugu newspapers, quite frankly, “The net worth of myself and my wife is Rs 115 crores. I own a helicopter that I bought for Rs 15 crore, a deluxe bus for Rs 4 crore and cars worth Rs 5 crore. My group’s turnover in 2006-07 was Rs 2,008 crore for which I have filed IT returns. Out of this, OMC, which is in the iron ore business, had a turnover of Rs 1,200 crore.”

He is 44. His brother, Karunakara Reddy is 46. In the declaration before the Election Commission they have reported assets that add up to much less, around Rs 200 crore.

How did the Reddy family make so much money? Families that owned land in Bellary would mine iron ore and earn a modest profit. But engineering in the west soon created machines that modernised mining operations, making available with relative ease better quality iron ore that could be found deeper down. This, and the demand from China coinciding with the Olympics, sent demand for ore spiralling and the Reddy family’s cash tills ringing non-stop.

Much of this money was invested in Brahmani Steels, a company that was floated without any credit from banks to process ore from the mines. Although opposition politicians in Andhra Pradesh, including Chandrababu Naidu of the Telugu Desam Party (TDP), charge that Rajashekhar Reddy and his son Jaganmohan had a stake in Brahmani Steels, the Reddy brothers say this is untrue.

Meanwhile, the Andhra Pradesh government, in the parallel, is wondering what to do about complaints that Brahmani Steels diverted water from the Gandikota reservoir illegally to Brahmani steel.

For the Supreme Court the issue is simple: Did the Reddy brothers dig mines on land where this is prohibited? Or are they, as they allege, victims of political vendetta?

Hard to say, but if it is indeed political vendetta, it has little to do with party politics. In Karnataka, the Bharatiya Janata Party (BJP) government led by B S Yeddyurappa is defending the Reddy brothers for now.

Their association with the Congress government in Andhra Pradesh when it was led by Rajashekhar Reddy (whom they describe as a “father to us”) was fruitful for both and neither saw any contradiction in their association.

When they became ministers after having bankrolled substantially the BJP’s Assembly election campaign in 2009, they were irritated to find BS Yeddyurappa not sufficiently deferential to them. They had a powerful patron in Sushma Swaraj, who contested the Bellary Lok Sabha seat against Sonia Gandhi. But they wanted their power acknowledged in Karnataka.

So, they launched a Rs 25-crore drinking water supply project in their mother’s name. A Rs 500-crore private project was launched to build 54,000 houses for flood-hit villages in six districts, bypassing the state government, which of course, was having none of it. During a heated exchange in the Karnataka Assembly, Janardhana Reddy said: “People say we are worth Rs 100 crore. I want to correct it — we are worth Rs 1,000 crore,”

The dénouement came with their bid to topple the BJP government in Karnatka last year, a venture that was prevented by the chief minister who sacrificed one of his most trusted civil servants to save his government.

With that abortive coup, the brothers have established that they can do that and more next time. Right now they appear to be in the rest and recreation mode. Telugu and Kannada film magazines report that Janardhana Reddy has now embraced another profession — the film industry. His first venture was Buddhimanthudu, a Telugu version of the Kannada film that was launched last year on Telugu new year.

Three Delhi Police constables are on duty outside the house, sprawled on plastic chairs. They don’t frisk you; before you can ask, they tell you how to find the person they are here to guard. The staircase is decorated with marigold. The devout have left their shoes, slippers, sandals and even ankle-length boots outside the door. A bevy of people — young and old, rich and poor, men and women — are here to see Swami Ramdev. It is the house of a follower. Ramdev is here on his way from Sikkim to his ashram in Hardwar. In a few days, he is off to Nepal, where the president, as well as the prime minister, is his disciple.

India’s well-known ascetic is seated on a sofa with his legs folded under him. He is draped in saffron, and his high-heel wooden sandals are under the chair. His torso looks supple. Ramdev, of course, is Indian rubber. His lunch has been served — cut mango, chikoos, grapes and watermelon. “I haven’t eaten any grain or cereal for 13 years now,” I am told. New-age yoga guru, PT instructor to the masses, healer to the rich and mighty, enemy of multinationals, television star, homophobe and now an aspiring leader — it’s certainly not easy being Ramdev.

Educated Indians have always been sceptical of godmen. Their sex, land and financial scandals — mostly sex — get exposed with unfailing regularity. What has worked for Ramdev is that he has put physical fitness first, and has taken religion out of Yoga. He has had his share of controversies, though. Communist leader Brinda Karat alleged that his medicine had bone powder. Tests carried out in laboratories found the claim unfounded. The sale of Ramdev’s medicine went up manifold. Neo-liberals have found his opposition to homosexuality primitive and galling. Undeterred, Ramdev says he wants to change the country for good. Next elections, his people will contest every seat of Lok Sabha.

A strong role for the government is an open invitation to corruption, I argue. “What is lacking is the will power to end corruption,” says he. The extent of black money in the country, Ramdev says, is Rs 30,000,000 crore. The government should recall all currency in circulation and issue a new one — all unaccounted money will fall into its hands. That money can be used for power, irrigation, waste treatment etc. Seventy per cent of the country is below the poverty line, 400 million people in villages are landless and another 400 million are without jobs. Ramdev’s solution is to give up to one acre to all the rural landless and raise minimum wages to Rs 10,000 a month. “And punish the corrupt with death,” says the ascetic with that trademark twinkle in his eyes. The legal and educational systems, he thunders, were imposed on us by the British to serve their own needs; there is no reason why we shouldn’t have our own systems. “What freedom is this,” he asks. “Our law says that not one innocent should be punished, even if a hundred guilty go free. We should see to it that all guilty get punished; if that includes one or two innocent, so be it.”

The buckwheat puris are delicious and melt in the mouth. More are on offer, but Ramdev asks the host not to force me. Rasgullas are brought for us, purchased obviously at the market. The host insists these are home-made. Ramdev knows better but still digs into the grandfather of all desserts.

However radical his thoughts may sound, I realise that Ramdev oozes confidence. This is because he thinks he has the numbers all worked out. About 30 million, says he, have attended his Yoga camps. Each of them goes back to a family of five to seven. So, that’s at least 150 million votes. He is also on television round the clock. That, claims Ramdev, gives him viewership of 1 billion! Then there are the latent supporters, says he. “Even evil idolises truth. Ravan’s brothers wanted Ram to win. A philanderer doesn’t want his kids to follow his footsteps.”

He also has a huge fan-following amongst Muslims. “I am the only saffron-clad accepted by the Muslims,” says he. Muslims, Ramdev has said, can recite verses from the Koran while doing Yoga. Ramdev says he has thought of a name for his party but will not disclose it to me. He will not contest elections. He wants to have an organisation of up to a million people in each district, and aspires for power at the Centre and not at the states because that’s where real power lies.

Is there a role for private enterprise in Ramdev’s world view? Definitely, says he, but the government needs to fix prices of all goods and services and, thereby, control profits! He says he knows most large businessmen and what kind of obscene money companies make.

Ramdev himself runs a business of no small proportions. This includes hospitals, the media and herbal products. He sells medicine worth Rs 25 crore every month; sale of his books and CDs fetch Rs 2 to 3 crore. He has set up a food park near Hardwar with an investment of Rs 500 crore. All told, Ramdev provides employment to 13,000 people. “What are your profit margins,” I ask. Sixteen per cent, says Ramdev, but quickly adds that his operating costs and retail margins are way below others and that’s why his products are priced on an average 50 per cent below rivals.

“But you must be a rich man,” I tell Ramdev, “Haven’t you bought an island off the Scottish coast.” The island of 700 acres, Ramdev counters, was a gift from the Poddars of Glasgow (Mr Poddar is from Bihar, Mrs Poddar from Nepal). Somebody has even gifted him 95 acres near Houston. Then there’s something similar in Canada. Individuals have also contributed towards the Rs 500-crore food park.

“But why do you hate multinationals? Even several Indians like the Tata group have now become multinational corporations,” I ask Ramdev. They take out a lot more money than they bring in, he answers, and take away more jobs from traditional craftsmen and local businessmen than they bring. Fuzzy logic indeed, but Ramdev speaks with conviction. Multinational corporations are not required. The Rs 300,000,000 crore of black money is more than enough to take care of all Indians. This is more economics than I can digest in a day. Ramdev’s aide whispers in my ear that my time is up.

I get up, but want to know about Ramdev’s healing powers. (He has been censured for claiming to cure AIDS; Ramdev, in turn, claimed he was misquoted.) How has George Fernandes benefited from his cure? “When he came to me, he couldn’t take a step; he now walks half a mile,” says he. “Weren’t you called to cure Atal Bihari Vajpayee’s bad knee? He had to go for surgery finally,” I counter. “He did not follow my prescriptions,” Ramdev answers. I take my leave. There’s a camera crew and a foreign correspondent waiting for Ramdev in another room. A family of six well-proportioned Sikhs has come for the Swami’s darshan. The constables ignore us on the way out.

Group chief executive of WPP Plc, Sir Martin Sorrell, was in India for the media and entertainment conference Frames 2010. He said in an interview that India was among the top markets for WPP and wealth creation has shifted significantly towards the so-called Bric countries—Brazil, Russia, India and China. Edited excerpts:

Last year was tough for advertising. Is a recovery under way?

We are no longer staring into the abyss; business was getting hit less badly in the second half of last year, and there’s stabilization in the first couple of months this year. As per GroupM’s forecasting, advertising industry (growth) is flat. But most analysts think we are being too conservative and most have put in a revenue increase of 1-2%. There are tremendously wide variations (in projections). Here, in India, in the first two months of this year, our toplines (revenues) are up by 7-8%.

How important is India as a market? Why is there a disparity in investments in India and China?

Our revenues in India are $400 million (Rs18,16 crore), about 3% of our total revenue—$14 billion. China accounts for $900 million, the US is about $4 billion, the UK $2 billion, Germany is a billion. India in terms of size is amongst our top markets.

Having said that, 2009 was a difficult year; India was stagnant, China was under pressure. The issues facing business in Taiwan were tougher than Mainland China or Hong Kong. People often say—is it China or India; and the answer is both. Absolute size is important but relative growth is even more important. What clients are interested in and what we are interested in is relative growth.

Is Omnicom a concern for you, especially in the China market, where it’s won the business of Pepsi and Unilever?

In the question of China and these businesses, Omnicom gave a guarantee (on pricing). Their approach to the Chinese market is different from ours. WPP gives the best estimates of what we can do; we talk to local media owners about what we can do but we don’t make any promises or give any indications without having discussed with media owners on what the position is. Our business in China is more than twice anyone else’s and the gap continues to widen between Omnicom and us.

Is WPP looking to hike its stake in Rediffusion DY&R and Ogilvy?

We hiked the stake in Rediffusion earlier with Dentsu. We were always interested in increasing our stakes but we don’t always believe in 100% ownership. We continue to have our conversation with Rediffusion DY&R. We are not looking to hike stake in Ogilvy and Mather (in which it has a majority ownership).

Are you looking at acquisitions in India? In particular, would you be interested in owning media assets at any point?

We are looking primarily at organic growth, but we would be interested in smaller acquisitions. As for media assets, we are aggressive in seeing what we can do. Our buying power allows us to take positions if it makes sense for our clients. So, yes, we are starting to look at it but no specific focus on that.

Twenty seven per cent. We want it to be a third. So you would expect it, within three or four years, to be 30-31%. If we make some acquisitions, we should make it to 33% fairly quickly. And we know that you and I might spend 20% of our time online, we know that clients spend 12-14% of their budget. So they’re not spending enough. So there’s this natural gravitation towards that 20%, but by the time we get to that 20%, they (consumers) may be spending more time online.

What are your expectations for 2010?

We’ve got five events. We’ve got the Asian Games in Guangzhou; we’ve had the Winter Olympics which, on balance, was pretty good; we’ve got the (football) World Cup in South Africa; we’ve got Expo starting in May in Shanghai and going through to October. And then we got the mid-term Congressional elections, which is not a sporting event though some would think it is, in November in the US. All those five events probably add about 1% to global growth. So if we were minus 1 before, that would drive the growth to flat.

Is the global economy out of the woods?

I think we are stable. I turned on the television this morning and, on CNBC, Nouriel Roubini, the noted economic bear, was talking about the potential of the double dip. He thinks the second half of this year is going to be quite a difficult period. There is a view on that; I think it’s unlikely. I think what is more likely is that, one, governments can cut spending and it (could) be more painful for us in the short term to reduce deficits. Or, two, they leave the stimulus in place for too long and we inflate our way out of it (the slump). The one thing that I would say about January, February is that relatively, the US got stronger. And that seems to indicate that the stimulus is kicking in a little bit more than we thought historically. But the question is how long does it last.

Are we overestimating the power of social media?

Depends on what your estimates are (laughs). Social networking is an editorial form of publicity rather than a paid form of publicity. If that’s the case, there is a lot of potential there to explore. But it’s not a medium that really lends itself to commercial exploitation. And when you look at the times that people have tried to commercially exploit it, it’s not always failed but often failed.

These are extremely powerful channels and new media. The more you try and invade it with commercial messages, the more at risk you are. Everyone is keen… They get the hits and get the traffic but it’s very difficult to monetize. So, people are searching for ways to build advertising revenues, e-commerce transactions through this media. It may be intrinsically due to their personal nature; they are not media that lend themselves easily to what we’re talking about.

The other thing is that a few years ago, we would have been talking about Second Life and virtual reality sites, but we aren’t now. MySpace was obviously in a much stronger position, two or three years ago than it is now. So, there is going to be a lot of oscillation and a lot of it will be about fads. There will be a lot of volatility.

With social networking sites and targeted online advertising, where do you draw the line at privacy?

I think it’s very difficult. We had Eric Schmidt (chief executive of Google Inc.) at our strategy session in New York last year, and he talked about what Google is able to do now in terms of predictive modelling. So if they see that when I land in Mumbai, I look for the best Indian or Japanese restaurants; when I land in New York, which they know, they can tell me what the best Indian, Japanese restaurants there are. Look, as long as you have the right to opt out (it’s all right).

And what they call inertia selling, when people write or communicate with you and say, ‘here is an offer’ and you have the ability to say no in 30 days, that’s inertia selling. Maybe it should be the other way round—before I enter into a dialogue with you, tell me if you want a dialogue. Don’t enter into a dialogue and tell me I can opt out.

The EU is conducting an enquiry into Google’s algorithms—three small companies in Europe have asked for more information about how the search rankings work. And Google’s reaction was a very positive one. Certainly in the beginning, they said ‘we welcome any enquiry, we have nothing to hide’. Which is a good way to deal with it. There are a lot of issues, privacy issues, people have information. All those issues are surfacing, and I would much prefer to have us regulate it than have someone else regulate it. We’ve seen it on advertising of alcohol, on advertising to kids that governments intervene. Self-regulation is always far better than forced regulation.

In a similar manner, organisations too have memories which are essentially the sum total of experiences of the current members. While these collections of memories or knowledge are certainly useful in building and scaling expertise contained within the organisation, they often become impediments to change.

Such organisations find themselves with a ‘culture’ that is un-supportive to change and prefers old habits that are unproductive and safe. The only exceptions are tipping point situations where the cost of holding on to memories becomes far greater than the benefits of change.

In the face of such situations, some organisations finally reinvent themselves, while others just become extinct or fade away.

Another point to be considered is that even in such extreme situations the change process is designed in a top-down way, and thus there is an inevitable resistance through the levels within the organisation, making it all the more difficult to create change when it is most needed.

Designing organisations for change

The question then is whether change can actually be designed to occur well before such extreme situations. The best way to go about achieving this would be the creation of decentralised change protocols at the micro level ‘sub-systems’ within the organisational system. This is because the idea of change is closely linked to the idea of ‘spontaneity’, or the ability to respond to a situation without stopping to consider the past (memories) or future.

Decentralisation & capacity building

Decentralisation: As organisations get larger, there is a strong tendency to centralise all protocols for change. This leads to tedious bureaucratic processes of ‘approvals’ and over-analysis which inevitably quell not just the proposed change initiative but reduce the tendency for future such attempts.

Thus, the first key is to decentralise the origination and execution of change initiatives almost entirely to the sub-systems. There would still be ‘rules’ to be followed, but these would be known in advance.

Building capacity for change: The immediate criticism of the first suggestion is that too much decentralisation may lead to excessive risk-taking or poorly thought out initiatives that fail to take into account the larger impact of the changes in the sub-system on the system as a whole.

Thus, the second key is to actually build capacity within the sub-systems so that there is a deep understanding of how changes within the sub-system impact different parts of the larger system, as well as the ‘whole’ of the system. This capacity could be built into individual change agents within each sub-system.

Emergent change

From the foregoing discussion it may appear that the entire process of change can only be autonomous at the micro level, and not at the macro level as a whole. However, one may argue that the best change for any organisation is the sum total of the spontaneous changes in all its sub-systems.

In other words, if the mechanisms for rapid, spontaneous change are embedded into sub-systems, there is no need to worry about the system as a whole. It will automatically reach the place where it needs to be.

Thus, change at the level of a system is essentially an emergent property of change at the levels of the sub-systems. As such, there may be no need to be too concerned about where the system as a whole is headed as long as the sub-systems have the required capacity to design and execute change.

In such a situation, the only ‘central’ role in the organisation as far as change initiatives are concerned would be the design of efficient and simple change protocols for the sub-systems, as well as capacity building to understand the impact of sub-system change on the system as a whole.

In summary, any process of change is dependant on the capacity of an organisation to temporarily discard its memories in favour of spontaneous responses to the environment. However, in most organisations, particularly the large ones, this process can happen easily only at the sub-system level. The key then is to ensure that there is adequate intelligence built into all these smaller units that make up the organisation, while believing that the sub-systems’ process of change will automatically result in the evolution of the system as a whole for the better.

(The writer, Mohit Kishore, is a management professional and can be contacted at mohit.kishore@gmail.com.)

Now that I’ve got it in my head, I can’t wait,” says Ashish Rajpal, as he goes hunting for the second time in less than a minute to find the errant waiter who’s supposed to bring us our beers. We had started the meeting at 5pm at the coffee shop of the Park Plaza Hotel in Gurgaon, and since the sun was still up and neither of us wanted to be the first to ask for an alcoholic drink, we settled for cappuccinos. But at some point the 41-year-old iDiscoveri founder said, “The stories I can tell you after a couple of beers”—and that was cue enough. The shining sun notwithstanding, he hailed a waiter and we ordered our beers.

In the course of the evening, I realized that when Rajpal gets something into his head, it often leads to life-altering consequences for him. As it did when after two years as a brand manager for Procter and Gamble’s Ariel detergent, he thought that working in the beer-brewing business in Russia would be a good career move. Or when, at 30, as the worldwide marketing director of Group Danone, living in Paris—a stone’s throw from Champs-Élysées—and travelling the world, he got it into his head that he should return to India and do “something” in education. So he went to Harvard, studied about education, came back and initiated his attempt at changing Indian education by setting up iDiscoveri.

But let’s start at the beginning.

“I grew up in Delhi and spent my teenage years trekking in the mountains and that was my first contact with the other India. That led to some kind of desire to do socially relevant stuff—for lack of a better terminology. During college (economics honours from Delhi University), I hung around NGOs, doing internships in Uttarakhand. But I came from a background where I needed to get a job quickly, so this NGO romance didn’t last long,” he says.

“My mother was the only remaining grandparent when my daughter was due to be born, and her flight was delayed. So my daughter was born in a Russian hospital, with a Russian midwife screaming davaai, davaai  (push, in Russian). It was a marking episode in my life. My son came along a couple of years later and I got intrigued about what makes children different. I guessed that education is the area and along the way this vision started crystallizing that I want to go back to India and change education,” he says.

By then he had learnt Russian. When the global giant Danone went to Russia to set up a $50 million (around Rs227 crore then) plant, Rajpal was hired. It was 1997. In a year, they moved him to the head office in Paris as worldwide marketing director. “It was a big, fat job for a young, brown boy. Everything I thought what life was about in terms of aspiration was done. I was 30 years old. It was hysterical,” he says.

But Rajpal interpreted this as a pair of golden handcuffs. He secretly researched courses and zeroed in on a one-year programme on education in Harvard. “My friends called me mad again. But my wife was not unsupportive, and that’s saying a lot,” he says. So she came back to India with the children while he went to Boston. “That was a year of rebirth for me. I became a disciple of Howard Gardner (the American developmental psychologist known for his theory of multiple intelligences) and met Anustup Nayak, who became my partner,” he says.

In 2002, he returned to India and iDiscoveri was born. They started with a programme on teachers’ training. “It was so hard, after the kind of life I led, to wait outside principals’ rooms for 2 hours for an appointment and have totally crummy people talk down to me,” he says. But he had “burnt his bridges so completely” that there was no question of abandoning this project and going back to another job.

In the meantime, the company got some attention. Kanti Bajpai was joining Doon School as headmaster and he invited Rajpal to check up on the teachers there. Some more premium schools followed, some low-end schools signed on. Three years later, though business was growing, Rajpal got the feeling they weren’t really driving any change in education. He spoke to the schools that had signed on. Initially, the principals said the programmes were great. “But then they would drop this great Indian umbrella phrase —frankly speaking—and say that most teachers had reverted to their earlier methods of teaching.”

Then the penny dropped. Whoever learnt anything from a training programme? So they changed the model, hired academics with a research background and started writing practical lesson plans that teachers could use in classrooms. “This programme is called XSEED and the idea is to provide teachers four or five entry points to the same subject. We have 4,000 ready teaching plans,” he says. The focus is on making learning experiential, rather than just reading from a book. “With Taare Zameen Par and 3 Idiots, Aamir Khan has become an unofficial salesman for XSEED,” he says.

Today, XSEED covers 305 schools, mostly in tier II and tier III cities. It covers around 100,000 students. “Now the hardest period is over and we have to consolidate. Once we have a million children, we will be a force to reckon with. We are serving schools mostly in the Rs500-1,000 fees bracket, which are not the most profitable to serve, but our mission is larger. I am certain this will be profitable in the long run—in the short run, it’s a different story,” he says.

What happens if he gets something else in his head before that? “Oh, I have several more careers in my head, many mad ideas. But there is a time for everything. Right now, my job is to do this well,” he says.

The Subhas Ghosal Foundation had brought out a book titled Brands Under Fire some time ago. I believe the time is ripe for an updated version of that book. I recall (I am scared to even use the word ‘recall’ casually these days) the book had case studies on the ‘pesticola’ episodes, the UTI debacle and the Cadbury’s worm infestation crisis, among others.

Somehow, in all three cases, the brands have weathered the storms and shown their resilience. Coca-Cola, Pepsi, UTI and Cadbury’s are all alive and well, thank you. So what does that tell us?

It is almost certain that brands will have to face crises in the course of their lives. The way these crises are tackled, and more importantly, the quality of the product or service after the crisis would define whether we would be looking at brands with long lives, or those with truncated ones.

Take the cola companies. They have run up against a determined, media-savvy NGO not once, but twice. The first time, the companies went on the offensive with some plain-speaking advertising, and with the CEOs taking centre-stage to defend the brands. One must remember the charges against the brands (that the levels of toxicity in them were far in excess of norms) were serious. After some sputtering starts, they got their act together and when the allegations were made the second time around, they were far better prepared. This time they orchestrated the media better and created advertising that used a celebrity (Aamir Khan in the case of Coke) and a CEO (Rajiv Bakshi in the case of Pepsi) to articulate their point of view. Many years later, evidently all has been forgiven and colas are being guzzled in even greater volumes than they were before.

The Cadbury’s case was a nightmarish experience for any chocolate manufacturer. Yet, Cadbury’s came out with a combination of straightforward and honest communication, packaging changes and a well-thought-out advertising campaign featuring Amitabh Bachchan that explained what went wrong, and what was being done to ensure it did not happen again. The campaign not just pleased the Effie jury, but also the consumers who returned in droves to keep snacking on the biggest chocolate brand in India.

So what is common to all these brands that have managed to weather severe storms? Well, they all had quick responses, good communication, and all of them made sure that quality became something that could not be debated any more.

And that brings us to the huge Toyota case that is being hotly debated the world over. As everyone knows, faulty floor mats and accelerator pedals made Toyota recall massive numbers of their top-selling brands. One must keep in mind the fact that here was a company that had built up its leadership position based on a promise of quality. At the heart of the brand architecture lies an apparent unwavering commitment to superior quality. And when that single yet huge core competence is rocked at the very foundation, you have a crisis of epic proportions on your hands.

On the one hand are the immediate financial implications. Toyota’s stock tanked after the announcement of the massive recalls. On the other, is the more frightening road ahead. How do you continue a global communications campaign with quality as the centrepiece of the strategy? Would Tiger Woods be able to sell fidelity? The comparison, though made, is odious.

Toyota is a brand that is synonymous with quality. After overcoming its Japanese lineage (which was an issue in those days), the brand went on to overtake the great American brands such as GM and Ford, and the formidable Honda which had a great bestseller in the shape of its Accord, in their own backyard. The Camry and the Corolla, the Lexus range in the luxury segment, and the Landcruiser and Prado in the SUV segment are all symbols of quality and leadership. Yes, it was unfortunate that public perception seems to indicate that Toyota was slow off the block in crisis control. Yet, having engaged gear, it has pulled out all the stops – public apologies from the top brass in print and television, direct mail to take care of recall letters, press releases and adequate action on its Web site.

So will all be forgotten and forgiven? The future guards the answer to that big question carefully. My own opinion is that in a fiercely competitive field, this is a body blow for Toyota in markets such as the US. It will have to work long and hard to reclaim its position at the top of the quality pile. I do not think it is impossible. The company has the resources and the ability to do it. The brand has the resilience to bounce back. In other markets, especially India, I don’t think anyone even considers the massive recall as a threat. Sure, we have not yet reached the stage of maturity where we will react strongly to such issues. In fact, recalls are so rare here that when Honda and then Suzuki spoke about recalls, the first response from the public was a grudging admiration for companies that own up and take remedial action.

Remember we have grown up with cars such as the Ambassador and the Premier that might not have cleared the quality assurance stage in assembly lines across the developed world. I believe as consumers, we are just beginning to scale the quality-conscious curve. In the past, we have been battered into submission by monopolies and the lack of regulators and almost forgot how to protest loudly. All that is changing rapidly. One has to just look around an airport to see that consumer tolerance is wearing thin. A decade ago, an announcement of an indefinite delay in the departure of an Indian Airlines flight would be met with a stoic shrug of the shoulders. Today, it would lead to a dozen passengers storming the poor traffic assistant’s counter with a barrage of questions and demands. The fact that consumers are increasingly aware of their rights and are becoming increasingly intolerant of shoddy quality and service standards is a welcome sign and has been brought about by competition on the one hand and a young consumer who did not live in an era of rationing on the other. We still have a long way to go before stringent regulation and a more cooperative bureaucracy would help us cut through a maze of red tape and delays to ensure redress of genuine consumer complaints. However, the flood gates have been breached and the wave of consumer expectation cannot be checked anymore.

Toyota has something called an ‘andon cord’ that any worker on the assembly line can pull if something is wrong, immediately shutting down the entire production line. Manufactures and service providers should all install their version of this andon cord and ensure it is pulled with alacrity if the need should arise. The alternative would be the cord of consumer reaction which would be far more difficult to deal with.

(The author, Ramesh Narayan, is a communications consultant.)

We were at one time the people who took giant leaps in discoveries — Aryabhatta came up with the zero, and Sushruta performed miracles in medicine and surgery. Sadly, today we have become a people of incremental improvements. You could put it down to the lack of time. This is a post-modern reality catching up with India, I guess. Everything that had to be discovered has been discovered. But that should not deter us from exploring a little more. One never knows what good may come out of it.

Coping with the need for indigenous transport solutions where none existed, rural India combined a steering wheel with four tyres, the diesel engine of a water pump and some used parts to fabricate a vehicle for rural transport. When it is not laden with people or farm produce, the engine can be found in service in the fields — as a water pump! The Jugaad can be seen all over the countryside. No word in the English lexicon comes close to describing the phenomenon.

Jugaad is omnipresent in our lives; so much so that it has become inconspicuous. Modern business practices, where everything is perfected to a science, end up completely missing this trick.

Take retail, for instance. The word throws up pretty pictures of swanky new shops with rack after rack of glitzy merchandise. The point missed by most is that there can be some interesting build-on or Jugaad to the existing vending systems. The lettered world will call it ‘mash-ups’. So be it! While the larger metros have had their share of organised retail investments, the upcountry geographies are still potential markets. Take a city like Agra, for instance. There would be a large mall somewhere on the outskirts, where every modern retail brand would want to be present. But the credo of retail is last mile availability. Why can’t modern brands ride some natural rhythms that exist in our socio-economic fabric? Why can’t the contemporary ride the conventional? Inventive retailing
At Max New York Life, we too have embarked on an innovation, the most significant aspect of which is the distribution channel — retail. Marrying insights from the so-called mid-belly of India with a product proposition, we developed an entirely new product platform called Max Vijay in the low-ticket savings and insurance space. We created an industry-first initiative in operational backend and marketing. We packaged insurance in a box, offered subsequent premium payment options through scratch cards and parked it in the nearby retail shop. This is a classical three-way symbiosis: Adding value to an existing distribution channel, creating accessibility and freedom for the consumer, and developing an all-new, low-cost distribution model. We are still on the journey of proofing this model in a few markets before a national launch can take place.

Take now the example of your green grocer (sabzi wallah). With unerring regularity, day after day, the man makes the trip from the wholesaler to do the rounds of your locality. He is the ultimate front end of a successful customer relationship management programme. He knows what you like and what you bought yesterday, and he remembers to get what you asked for! Marry the current craze for CDs and DVDs on rents and there is a business model lurking somewhere there. He can deliver one day and collect the next — without any extra investment in distribution! Smarten the cart. Make provision for a water-proof compartment (remember the tendency of the man to splash water on the veggies to make them look fresh), and you have a good thing going.

One often wonders why the barber has not been used frequently by marketers. After all, the man holds a razor to your throat ever so often. Imagine the persuasive power that he wields! Jokes apart, a barber’s shop is ideal for receiving messages. The audience is captive, waits patiently for its turn and has nothing much to do except leaf through some magazines or watch a small TV placed high in the corner. The radio is the substitute. Let us not forget the power of the hajjam of old as a carrier of messages. These hidden persuaders have the potential for non-disruptive, subliminal delivery of a brand or a social message. They are relevant for sectors where a concept sale necessarily precedes the product sale. Polio awareness in areas that have not opened their minds to this programme yet could be an example. They could be a dissemination window for simple steps to aid the financial inclusion agenda of the government or for the savvy marketer. Could this be a new window for insurance?

What about the three other people who have access to your house everyday: The newspaper boy, milkman and the washman. The door opens to them willingly. Sure, they are critical to our appearance in a manner of speaking. One ensures that we look right. The other ensures that we talk right and are well informed. Can they be distribution extensions for fabric care products and detergents? The milkman is the last piece of a cold-chain and distributes his merchandise in a fixed time. Can cold-chain products look at this man? Other milk products can be the first natural extension. Products packed in PET bottles and soft-drink concentrates can join the bandwagon. Flexible thinking
Then there is the favourite haunt of the young — the chai-wallah! Ideological and heated exchanges aside, the tea-stall remains the place where they sit and exchange views on life and the world in general. There one sees evidence of evolution. The chai-wallah becomes the first outpost of retail and vending expansion. The counter, across which money changes hands, holds a variety of packaged products from edibles to personal care products to tobacco. More often than not, the stove has a pan on top, on which eggs and paranthas are fried. Thus is born instant food. This may hold interest to the many ready-to-eat, heat-and-eat and instant food preparations.

Now, marry this favourite haunt of the youth with their favourite hunt — jobs. What stops a job portal from upgrading the top 50 haunts in a town like Bareilly to a brick and mortar lead generation system for resume services, job search et al? The man on the counter is suave and smart. Give him the right script and support him with the right backend and you have access to an entirely new database to market your services.

This Jugaad spirit can find a role in the supply chain of many a business. But to do that, businesses will need to think true to the meanings of this word: Improvisation, inventiveness, ingenuity and cleverness. And taking it literally, it seems a leading soft drink company has started using the Jugaad, the rural transport solution, to spread its distribution to rural areas!

Why have these not been exploited or explored in adequate measure? To be fair, some brands have tried this. Some of us will not forget the return of Coca-Cola to India splashed on the cover of business magazines with Jaydev Raja standing proudly beside a push-cart in the streets of Agra. Was that an idea before its time? Perhaps, it was. Now, to promote on-the-go opportunities, soft drink brands have taken to the streets, in a manner of speaking. The wheel does come full circle. Closer home, the Samaan Foundation seems to have taken a step in this direction. It has given rickshaw pullers an opportunity to increase their income by carrying advertisements on the vehicles, stocking bottled water, fruit juices, mobile phone top-ups, newspapers and magazines that they vend as value-added services to their fares. The rickshaw puller gets a certain commission on the sale of every item!

It’s only a matter of time when some enterprising mind will come along and amaze us with the simplicity of his quintessential Indian Jugaad tactic and show us a business model that always existed, right here in front of our own eyes.

(The author, Anisha Motwani, is the chief marketing officer of Max New York Life)