The greatest evangelists of open markets are now trying to change the rules, again, focusing on their benefits. In the 80’s Regan and Thatcher promoted globally that all countries should open their markets, go for the privatisation of their public companies and services, let financial markets work freely worldwide, and so on.

The argument and the theory was that with more openness the gap between the rich and the poor will be mitigated, that the overall commerce will increment and every one will gain, directly and indirectly.

They had the support from International Monetary Fund and from World Bank to enforce their will. All countries that needed money from IMF were forced to follow the neo-liberalism policy if they wanted to get the money.

And it resulted in the Mexico, Russia, Asian, Argentina and Brazil crises.

Now with “Buy American”, what is exactly the message that they are trying to pass?

Should it be: We were wrong for decades, sorry but our experiment didn’t work in your countries and now, as you will not be able to buy our stuff, we need to protect our markets from your stuff?

Or is it: Well, we are changing the rules again, as we did in the 70’s with the “Nixon Shock”, when the United States unilaterally terminated the convertibility of the dollars to gold?

Or is it: We forgot the recent history and the consequences of closing markets as it happened in the end of the 30’s, when the Hawkey-Smoot Tariff Act increased all taxes of the foreign products and worsened the global crisis?

Or is it a little more profound and they want to re-evaluate the Chaos Theory, and to see if a one sentence “Buy American” may cause a tornado on the other side of the world?

–

Mario is a seasoned manager and entrepreneur with a broad technical background, coupled with multi-cultural experience and multi-lingual skills, co-founded two high tech start-ups, and now is developing a non-profit project to leverage globally the business development of small entrepreneurs.

A spokesman for BA, Mr Willie Walsh, said : “The combination of unprecedented oil prices, economic slowdown and weaker consumer confidence has led to substantially lower first quarter profits.” “But,” He said ”British Airways is well prepared and has adapted its plans in the event of further economic uncertainty.”

These reported performance figures for BA and their smooth denial of concern reminded me of the last time BA management hit the news.

It was several years ago and Rod Eddington, the then chairman of British Airways, was responding on TV to concerns about the profitability of British Airways.
He was having a moan about how the budget airlines were cutting into his market share,
but he was still being quite bullish about it.
He told the interviewer how, in the last three years, he had cut the operating costs of British Airways by 5% and that although the competition was tough they fully expected to maintain their market share.

What he didn’t say was that in the past three years, to make that 5% saving, he had made redundant 16,000 members of his workforce.

He must have had some idea of the consequences of those redundancies for the remaining workforce. How did he think they felt about it?

Did he think they still felt good about working for British Airways?
Did he think they still felt their jobs were secure?
Did he think they felt proud of what had happened.

At the time Rod Eddington seemed supremely unconcerned by any of the consequence of his actions other than the ability to boast about the financial savings he thought he had made.

The men and women who worked for BA had. in the main. been in  their dream jobs.
Pilots, who as schoolboys had pictured themselves wearing Raybans while they lounged around in the cockpits of big jets.
Cabin crew who used to dream of all the exotic destinations they would go to.
Baggage handlers and support staff who at the time could use BA to nip over to Paris for the weekend for the price of a cup of strong coffee.

And then, by making 16,000 redundancies, Rod Eddington had at a stroke completely changed the way that the remaining BA employees felt about what they did.

He had changed their attitudes and behaviours from those of a proud group of motivated people, dedicated to the service of their customers, to a bunch of disillusioned job hunters.
By making these redundancies British Airways changed the behaviour of their whole workforce from a powerful group of people who were proud of what they did, to an apathetic, untrusting workforce who were only interested in where they could send their next CV.

In the latest twist in the saga of the failure of BA we read of the appeal from the current management for the workforce of BA to give the company one months work without pay to try to save the company.

Since the days of Rod Eddington, management at BA have completely lost the loyalty of their staff by the way that they have behaved towards them, creating a morally bankrupt organisation,
Make no mistake, this moral bankruptcy was caused by BA management.
Now we see the current management attempting to cash a cheque against the BA account that they themselves have already emptied.

It is possible that the company will fail without these individual contributions from the workforce, The workforce must be aware that it is just as likely that the company will fail even after they have put themselves into personal debt to try to keep it afloat, the only difference being that when the company fails, even after the workforce have given their time for free, the workforce will be in an even worse position to support their families.
Either way, management have already broken the trust of the workforce and since none of the management team seem to have offered to work for nothing it seems even less likely that any of the workforce will be persuaded to stick their necks out.

Do BA management truly believe that the workforce, working for nothing, will save them or are they working a spin, which when the company goes to the wall will enable them to say
“It was not our fault, We were let down by the workforce who would not support us.”

In this ongoing crisis we have to be very careful about what we do to survive and how that changes the way that our remaining workforce feel about they are asked to do.

Ride roughshod over the workforce during the recession because you can, and like BA you will have a very hard time continuing to trade even when the rest of the world has resumed doing business, Or, take care of your people when they most need it and they will take care of you when you need it.

We can’t have it both ways.
What goes around comes around.

An expatriate who was working on a special project discovered a rather shocking cost cutting measure one day. The lack of tissue paper and toilet rolls in the toilets. He then started to carry his own toilet roll, which was placed on a corner of his desk. Was it a great thing to see during meetings?

The most hilarious example involves a person coordinating travel arrangements. The instructions were to look for and book the lowest fare in the time window indicated. One of my friends who was travelling overseas was awakened up at an odd hour by the travel coordinator who was calling to find out if my friend were willing to travel in a later flight because it ended up costing a few hundred rupees less than the the first flight. While relating this incident, my friend mentioned that he did not have the heart to tell the travel coordinator that he had spent far more in his international roaming call, simply because he was so serious and earnest. What can I say?

There are numerous other examples like regularly used cabs with negotiated and discounted rates being withdrawn and instead people having to use a call taxi or public cab and pay much more. There is the practice of switching off the air conditioner in certain stores in the afternoon as fewer customers are there. Unfortunately by evening the store is inundated with such a stale stench that no one wants to shop there.

This makes me wonder if there is a genuine intent to cut costs or if some manager is mindlessly following instructions from higher up so that he/she can report the change as “an action point” in review meetings. Do people view the sum total of all these control and cost cutting measures? Invariably steps in this direction involve multiple approvals, justifications, filling up forms and so on. Has anyone studied the time and effort wasted in this versus the actual savings made? Not to mention the additional expenses being incurred on the side while trying to do cost cutting!

Would it not be easier if every employee were told that the average cost per employee is “$X” much and as a team we all need to bring it down? Let individual initiative drive the effort. Instead, most such initiatives are implemented with little thought to ground level realities and the result – penny wise, pound foolish!

Common sense – where art thou? Has the downturn driven you into exile or has it killed you?

Beyond the trillion dollar bail outs and band aids that have gone to contain  the fallout and reboot the economy, some questions keep popping up again and again:
- Are we all too short term in our focus?
- Did we forget that we must  endure short term pain for a long term gain?
- Do we adopt difference yard sticks in our personal and professional lives?

In life, we postpone many immediate enjoyments for a bigger goal– like putting aside money for our retirement, education of child, etc. However in our professional lives we tend to look at a majority of things from a short-term perspective.  Is this because, we live in an age where companies go belly up on one quarter’s bad performance?

It is a classic “catch-22” situation.

While I believe that is preferable to replace short term with long term thinking, in today’s situation this appears utopian. Today, short term thinking is a prerequisite of survival –  not necessarily a sign of greed or impatience!

At times I wonder if this economic tide will turn but it is worth waiting to see the consequences in the months and years ahead. Or, perhaps we need to look at a new way where both these perspectives are simultaneously taken care of without a long span of uncertainty and anxiety.  It is probably time that we adopt a “right term” focus of long term sustainability, while still achieving short term results we need to survive.

What about the fallout from this downturn and how will it affect employers, employees and the overall economy in the coming years?

This recession has been a huge shock; emotionally, financially, in fact in every sense of the word. Painful enough for the young and old alike to resort to suicide as an extreme step.

From an individual’s perspective, this has been the time to accept uncertainty as a fact of life. But, this has been particularly difficult for those who have long-term goals and prefer the stability of lifetime commitments to one employer or institution. Within such a context, having to accept uncertainty and potential threats to their economic and social well-being is making them uncomfortable and anxious, particularly when the risks are not understood or are imposed by others. When faced with these variables, the ability to carefully analyse risks or develop creative coping strategies in a formal way can be undermined.

Taken positively, this downturn is an excellent life lesson which again reinforces that human relationships and spirituality are far stronger foundations on which to build our lives than materialism and money. However, how many practice positive thinking is a matter of conjecture.

My concern is that the main casualties of this downturn would be the loyalty and trust that people have traditionally placed in organizations where they are employed. Casual job changing or hopping is a fairly recent phenomenon, at least in India and that too is limited to a few industries. Even today there are many people who have spent their entire lives in an organization. How would this affect employee loyalty in organizations that have restructured with right sizing exercises?

This makes me wonder, who is priority in a downturn? The loyal, long serving employees or the stock market players who buy the share when it goes up and sells the same when the company faces any issue? In many cases the frantic cost cutting exercises within organizations is not an act of survival but a strategy to protect the financial forecasts made, with an eye on the price of the shares. In that context, is it prudent to please the stock market or ensure that employee loyalty and trust are rewarded?

Are we creating more stock market players instead of loyal, productive employees in the society?

What make me develop this article was to contradict the people that suggest the worst scenario for our future.

I will confine my comments to the Brazilian macroeconomic environment. I will also not get into the current stage of development of the business and social environment in Brazil, because to really understand it, one needs to come here, especially to Sao Paulo, to see, feel and negotiate.

With around 20 million people living here, Sao Paulo has one of the most sophisticated gastronomy worldwide, shopping centres, theatres, infrastructure and business centres with the same sophistication as in any top capital of Europe or USA. Obviously, it has also serious problems with security, identical to any large city, New York, London or Paris.

We have global companies like Vale do Rio Doce, a mining company, operating in five continents and with more then 100 thousand employees, we have Embraer that is one of the largest aircraft manufacturers with more than 20 thousand collaborators, and here we can also find almost all of the transnational companies and banks as Santander, HSBC, Citi, J. P. Morgan, UBS, Siemens, Bosch, Mercedes, Mittal, Telefonica, TIM, Telmex, IBM, Microsoft, HP, Dell, Google, Samsung, Motorola, and so on.

Despite the predictions of bad times for developing countries, and before give some important figures about Brazil, I would like to suggest, that before assuming as a truth any opinion or prediction, to check the source of information and if there isn’t any other interest of the writer. Example: If it isn’t connected with any investment fund.

So, the sources of information that I will use are from Brazilian government finance minister and central bank.

Brazil had, from 2004 to 2008, a sustainable average economic growth rate of 5%.

The Public Sector Net Debt is 38% of GDP.

It has around 200 billion dollars in international reserves.

The crisis impact on Brazilian car manufacturers’ production in January 2009, related to January 2008, was -8%, in USA -36%, Japan -19%, Germany -14%, Italy -32%, Mexico -28%.

Brazil is not a very open market so the exportation represents only around 14% of the GDP and the universe of customers are not only in developed countries.

The currency is stable, despite recent events, it sustains its value and the inflation is estimated at level of 4.5% in 2009.

The internal market maintains a good level of consumer confidence and the demand did not diminish to the extent it did in the developed countries. Industrial activity in January 2009 already reflects improvement in some sectors.

The Brazilian Central Bank is still working with a prospective GDP growth rate of 3% in 2009 and the private banking system is working with a 1.5% growth rate.

According to the Basel rules about security assets’ level of the banking system, the suggested level is 11%, in Brazil the average is 14%.

We could continue with more figures, to demonstrate that in Brazil the economic environment is controlled, but the already exposed figures give a perspective of a balanced situation. Obviously the crisis has arrived here, but the shock wave is mitigated and the consequence will be far from dramatic as in developed countries or in economies structured to supply services, commodities or products that don’t have a strong internal market.

 Women must be decisive, have self-pride (vanity is good), be independent, give high priority to their needs, and network.

 GOAL can be an acronym and the expansion is Guts, Ownership, Ambition, and Learning.

 First identify your core capability. Then you need to augment, package, and position yourself. Learn to play chess with your career and life moves. Think three or six steps ahead.

 Seek out difficult or highly visible assignments.

 Look the part and act the part, before you get the part.

 Develop a style that male managers will be comfortable with. The right packaging and communication style plays a great role in collaborative working environments.

 Instead of breaking the glass ceiling, try and break the wooden table at a meeting.

 Quickly identify “Passes n Misses” and make your stand clear. Have a bunch of rakhis in your handbag and when you tie the rakhi, tell the men you really mean to be their sisters.

 Leave emotional baggage back at home. Identify support groups for sharing and mentoring.

 Be mentored and be a mentee too. But make sure that counselling does not turn into nagging. The mentor and prodigy must change their styles and get feedback from each other.

 Entrepreneurs need to be thrifty and measure using metrics.

 Do not expect support at all times. Pray to God and remain positive.

Case Study of Lijjat Pappad: The case study of Lijjat Pappad was discussed by Chandra Prabakar , VP  of Ramco. Gujarati housewives from Mumbai started Lijjat Pappad with a base fund of Rs 80. The annual sales for the first year was Rs 6196. They started a series of other businesses with hits and misses. Today, the annual sales are over Rs. 300 crore. Lijjat Pappad was featured in the Economic Times as the Business Woman of the Year in the year 2002.

Case Study of Wrong Perceptions: A women manager once called office reporting dizziness. When she returned to work in a few days she found a lateral hire taking on few of her responsibilities. When she attended a board meeting in a couple of months they asked her if she was in the family way. She was a bit surprised and put-off. Later, she came to know that a new hire was in place to take her seat when she went on maternity leave. So, the company had wasted money on hiring and training a new person when there was no need. Thus assumptions and perceptions had hit the bottomline.

The cicada, shallow and shopaholic, jigging about through hot and shiny summers, wouldn’t bother with savings and other $ issues. Whatever, she’d hum, strolling back into her condo hideout, skinny arms full of nothing but joy.

Then the seed crisis came. A windy, stormy, unpredictable tragedy, whose effects no one was able to imagine.

The ant, who had spent years accumulating all her goods into a private storage, smartly located just a few blocks from her tiny, modest studio, rushed to collect her things back.

“Sorry, we are closed. No withdraw today,” said a note on the storage’s main entrance.

She didn’t lose control and went back the day after.

“Sorry, we are still closed. No withdraw today. Nor tomorrow,” another note informed.

The ant felt a little weird discomfort tapping at the bottom of her stomach.

The fourth day, she literally ran to finally get all her thingy things back.

“Sorry, we are officially closed. For good.”

She was surrounded by a wide crowd of nervous ants, knocking with arms and legs at the door of the storage… And we all know that ants do have power. Eventually, they managed to dismantle the reinforced concrete door. Once inside, they couldn’t repress their shock at the view of the inescapable emptiness of the space.

This is a scam! It’s all gone. Oh my god. How are we going to survive? Please call an ambulance, I am fainting… The drama lasted for hours and the media couldn’t help reporting the breaking news.

“Ants’ lifetime savings are gone, for good.” 

And what about the cicada? You might wonder…

The cicada is out, having dinner with her friends, dressed up with her newest shopping-spree acquisition. Her fridge is empty today and she thought it’d be a good idea to have a bite out. She just got back from a weekend with her boyfriend, which was great “in spite of the new hotel we chose. You know, not that great. But we need to be a little careful, with this crisis!”

Nothing changed in her life and nothing will, as long as she has a job and she keeps buying and eating her seeds. She won’t stop spending, wasting, shopping, consuming. She loves it and that’s all that matters.

The crisis taught all of us a great lesson. The cicada and the ant were both right, doing what they were doing and behaving like they did. But…a few details have to be kept in mind.

It’s OK to save…although you’d better be sure where you store your goods.

It’s OK to live. Why cut out from our lives the few pleasures we have?

It’s even better to save while living. The crisis is made of people and we need to help each other.

If you still have a job, enjoy your free time and keep paying for certain services… (Women: manicure, pedicure, hairdresser, basic clothing needs, the yoga course, a special present from time to time, a dinner out with friends…c’mon! Men: vitamins and proteins for the muscles, clothes for the office/sport, the gym membership, a drink with mates, the latest videogame, that fancy watch strap you saw in the jewellery store, I saw you staring at it!)

There is no point in modifying our habits dramatically, altering our mood and the ones of those around us… All in all, we still have our greatest presents with us: Ourselves living life on earth.

This short story was inspired by a great article written by Ms. Vera Montanari (Director) on the Italian magazine Grazia (http://grazia.blog.it/2009/02/24/la-favola-della-cicala-e-della-formica-ma-con-un-nuovo-finale/).

Sustainability is his mantra! Not because he is pitching for clean energy via wind turbines, solar panels only but also, for asking the corporate to be responsible towards the society and environment as well. Making them spend the dollars they have raked in over the last 100 years!

His speech at the Jt. Session of Congress evoked a flurry of responses in all the news channels and business newspapers. All the capitalists of new India cloaked in the disguise of “entrepreneurs” crying foul! US capitalists dwarfed us Indians by getting their own Bobby in Washington DC to lead the clarion call within minutes of the president’s speech!

Capitalists fear him and I too am fearful. There is a difference though. I am afraid that the one sensible guy whom we have found after almost a century to champion the cause of common man might be “silenced”! I wish and pray for the well being of Obama and his family.

This article is an unconventional didactic exegesis! So, it’s going to be a long one. And also, let me warn you, if you are not an Obama fan, you might just want to drop off here or dig in and comment your rebuttal!

“The fact is, our economy did not fall into decline overnight. Nor did all of our problems begin when the housing market collapsed or the stock market sank…we import more oil today than ever before…The cost of health care eats up more and more of our savings each year…and though all of these challenges went unsolved, we still managed to spend more money and pile up more debt… .We have lived through an era where too often short-term gains were prized over long-term prosperity, where we failed to look beyond the next payment, the next quarter, or the next election.”

How true? Didn’t we all know that Americans lived their life by the day? Is he wrong in coming out in public and admitting it? He just ripped off the band-aid buddy, nothing more!

“A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future… .Regulations  were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway.”

Have you heard this from any of the banks who lent irresponsibly or the people who took them? No! Instead we were immersed in a usual US media blitz on “subprime mortgage crisis”. After all what can we expect from a country that calls its jails “correction facilities” and killing innocent civilians as “collateral damage”. The common American was all along kept away from harsh realities by flooding him with such jargons which anyway the high school dropout wouldn’t understand. Their life was watched the world over as the biggest “True man show” ever! The Americans also were so gullible and at times I should say were high on grass!

“…they will be held accountable by me and the American people for every dollar they spend… I’ve appointed a proven and aggressive inspector general to ferret out any and all cases of waste and fraud…” Which means nobody and nothing was ever held responsible in US. Some one said, “Nothing is guaranteed in the US but everybody gets a chance, but, not all get a chance in the UK, but once they do, it is guaranteed!” So typical of the American lifestyle, which by the way they take pride in calling it “our way of life” – what the heck! Here is a man who has never used this phrase! A man who criticizes with an open heart, the same “way of life” which has brought them to where they are today!

Read on, do you now wonder if Robin Hood is back?

“…It’s a plan that won’t help speculators or that neighbour down the street who bought a house he could never hope to afford, this time, CEOs won’t be able to use taxpayer money to pad their paychecks, or buy fancy drapes, or disappear on a private jet. Those days are over…”

“…It is time to put in place tough, new common-sense rules of the road so that our financial market rewards drive and innovation and punishes shortcuts and abuse…”

“…In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2 percent of Americans…”

And here comes the clincher!

“…I do not accept a future where the jobs and industries of tomorrow take root beyond our borders…”

I say, Robin Hood is Barack!

There are two things which I want to talk about, especially on the clincher. Obama is not against outsourcing. He suggests that any new technology / innovation done BY an American company, needs to happen in the US. This is fairly simple. He is willing to provide tax benefits for such firms and encourage them to utilize the resources of his country. In fact he is pitching to the big businesses to do work in the US and get rewarded as well for that.

Secondly, did you know that US business conglomerates are so big that their value is more than that of GDP of some of the nations put together and in certain cases equal to the GDP of some of the biggest developing nations? These businesses have moved from the US to cheaper cost of production locations and are charging a bomb from the other US businesses located in US. On top of that every year, these big companies, gross 300$ billion from their “offshore” locations and take that money back into the US by paying a paltry 5% tax to the US Government. In such scenarios, all he is suggesting is that he will not provide a tax haven anymore and just pay the 35% corporate you are supposed to pay!

OK, in case you are the ‘Joe the plumber’, let me simplify it for you.

1. US companies (IBM, Accenture, Mc D, Pepsi, PWC, Mc Kinsey etc.) had reached a saturation point in the US market.
2. The US Gov told the businesses, “You go out and start off your business in offshore locations, get more revenues and when you bring the money back into US, instead of paying 35% corporate tax, pay me just 5% tax. I will allow you to do this for a long, long time and you bring back wealth into America.”
3. These companies utilized the opportunities and ventured out.
4. When they realized the potential of countries like India (services) and China (manufacturing), they started shipping jobs to India and got a cost arbitrage and also utilized the tax haven in their country.
5. Double whammy as they call it in US, Joe!

Now, for Indian “Ramu the IT guy”…I am sure you would have been immersed in offshore/onsite model, travels, free trade, global market, share market stories by now. Also, I am pretty confident that you would have wanted to multiply your money and invested heavily in share markets! Suppose you had the shares of HLL (Hindustan Lever Ltd.) which is a subsidiary of Unilever (UK). You would be glad that you invested in a multi-national company and since you are receiving dividends you would have become an advocate of free trade. If you carefully examine what the Unilevers of the world are doing, you will realize that they are swindling money from your country (read India) mate!

Again, let me simplify it for you. It is day time robbery my friend! When HLL announces dividends, being the largest shareholder, Unilever (UK) gets money. It goes back to UK or if it were a US company it goes back to US. Poor Governments of the UK/US, in a move to encourage their so called entrepreneurs in a free trade practice, had announced that they can bring back the capital at 5% interest rate. Finally, the money lands in the company coffers and the CEOs and top brass burp it away over champagne in a private jet somewhere in the south of Europe in a Mediterranean island with their girl friends! The point to note is that they are not investing enough money back into the country where they are consuming their resources from and also not paying appropriate taxes to their motherland as well! Double Whammy buddy!!

This guy Barack Obama, the US President, a sensible guy, finally, is not sticking up to his capitalist friends. He is talking about common sense and common people.

Look at the people whom he got inspiration from. Leonard Abess, a bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him, Greensburg, Kansas, a town that was completely destroyed by a tornado and its story of reconstruction, Ty’Sheoma Bethea, the young girl from that school he visited in Dillon, South Carolina who wrote a letter to his administration that she wants her school restored back!

He is trying hard to bring in the “change” he promised. Unlike our Indian government he is not throwing “spare change” to the common man like farm loan waiver, fuel price cuts, some petty tax cuts, in the garb of stimulus plans. Our CEOs and financial analysts need to wake up to the fact that he is the President of United States of America and not this planet!

I have confidence after listening to his speech that he will bring back the American economy on track! In this very same speech, he says he will restore faith in G 20 nations regarding American economy. “…for the world depends on us having a strong economy, just as our economy depends on the strength of the world’s!”

Let’s say “We want change!”  Hail Barack – Robin Hood of our times and the true sustainability champion!

A correspondent for the Financial Times of London wrote about the movie and how it had brought India into the limelight with heightened interest among Americans in particular and the west in general. People in remote US cities—remote from Hollywood that is—are asking how they can know more about India and visit the country. Americans are learning about the frenetic economic development in India.

Dharavi itself can show us the way to a development model.

Traditionally India has followed a top down model of development in which government and administrators decide what is good for the people. This has not been very effective. I have more than once written about the weakness in this approach. Governments, advised by administrators, tend to think in an urban way. In a discussion about developments in Singrur, Nandigram and parts of Orissa, I pointed out that the urban psyche is different from that of farmers and rural poor. Thus an urban dweller might consider it a lucrative deal if he is given financial compensation for his property taken over for a project. In addition if he or his son is offered a job he will jump with joy. But such an approach has not worked in places in West Bengal and Orissa for example. I have suggested that anthropologists, psychologists and NGO’s working among the rural poor are involved in helping rural poor to cope with a modern world. I am a mere observer of human thinking but I can hypothesize that our approach to rural poor is flawed in the sense that their psychological needs, have not been addressed, their fears about losing their moorings have not been looked at, their sense of sacred places have been ignored their sense of bonding with a community and a place have not even been understood. It is easy and true to say that in West Bengal politicians have deliberately played a negative role. My response is that had the factors I have enumerated been addressed these politicians might not have been able to play as much mischief as they have done.

You may not know that HIV, war, riots, terrorism are not as critical to the poor as you may imagine—these are typical urban myths. Here is what a UN report says, “No act of terrorism generates economic devastation on the scale of the crisis in water and sanitation.” To my mind the scene in which the slumboy dives into a tank of human refuse was probably conceived with this insight in mind.

Slumdog Millionaire draws our attention to the down-up model I talk about. How residents of Dharavi have picked themselves up NOT by state handouts but by taking advantage of accessibility to the market and tapping their own entrepreneur zeal. I surmise that if the state facilitates earning of income then development will take off.

Development experts who have worked at grassroots level in many countries especially India say that the main request of the poor is a means to earn a better income. Dharavi provides that. With the higher income a demand for education, medicines, etc will take off and will facilitate viable delivery of these services. In short empowering the poor to help themselves and to devolve decision making to them may hold the key to development. Bangladesh has done better than India in this respect. 

If Slumdog Millionaire serves to stir up discussion on how to tap the entrepreneurial energies of Indians it will serve a higher purpose.
By the way, some tour operators in the US have come up with tour packages for American tourists to travel to India. The highlight of the tour—a visit to Dharavi. I spoke to one such operator. He told me that he was approached by a resident of Dharavi who has agreed to take tourists around the shanty town for a fee.

‘You guys are smart’ he added.

–

K.R. Ravi is South Asia’s first Dr.Edward De Bono certified public trainer in lateral thinking, and a pioneer in spreading lateral thinking in the Indian corporate sector. For more details, visit http://www.krravi.com or contact him at createravi@hotmail.com.

Since the end of last century we are seeing global changes never seen in recent or old history. The iron wall collapsing and the Soviet Union breaking in pieces are unique events in history because never a large empire disappeared so smoothly. Coupled with what we saw in China, moving from communism to capitalism. Never thought!

Now, with the global warming we are also seeing the burning of trillions of dollars!

Without doubt we are in a special moment of humankind.

What can we learn?

First, nothing is for ever.

Second, we need to have a longer vision and prospective scenarios without greed and special interests, and thinking global and acting global or our children will not have a world to live.

Third, the markets need control without any possible doubt even though many “easy money factories and agents” do not agree.

Fourth, remember a basic strategy: Never keep all your eggs in the same basket, referring to the investment of all your reserves in one economy or market.

Fifth, balanced global power (economical, political and military) is fundamental to a democratic world and the mitigation of inequalities.

Sixth, we are in a changing world, nothing is static, no one is the owner of the truth of the right way of doing thinks, team work and uncompromised actions are more than ever necessary to get things on path again.

Seventh, we are on daily basis learning!

Eighth, this is an endless list.

Now, let’s talk about market control and threats, and put on practice the third lesson. I am highlighting this matter because I just read some news of the World Economic Forum, where an executive made a statement that governments should help the market now and then quit because they aren’t efficient market managers.

I am not so sure that the market works as it should do.

To be clearer it does not work!

Despite all theories and free market evangelists. It needs to have strong regulations! As kids need to know their limits when educating them, the greed and unlimited need to create value to the shareholders and bonus to the board need to be controlled.

And the sixth lesson induces us that more than ever we need to work as a team. 

Small and medium businesses (SMB) have, and always had, a special role in regional economies and employment. To accelerate the turnaround of this international crisis, it is a key issue to leverage globalization and entrepreneurship of small businesses and start-ups.

It is the same strategy of the internet beginning with the military application. Do not depend on one spot only. Divide the intelligence on several servers and geographically separated. So, if one spot blows up the net will continue working perfectly.

Making an analogy with small businesses, if we have a network of small entrepreneurs working and trading globally, the effects of local and global crisis will be mitigated in their businesses, because the connections and relationships worldwide will facilitate new opportunities, the research and discovery of new places where the crisis didn’t have large impact or had less effect.

That’s why I endorse and believe in initiatives that leverage entrepreneurship and support small and medium businesses, and the possible impacts of it’s’ success on people’s life.

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Mario is a seasoned manager and entrepreneur with a broad technical background, coupled with multi-cultural experience and multi-lingual skills, co-founded two high tech start-ups, and now is developing a non-profit project to leverage globally the business development of small entrepreneurs.

I am a recessionista who cares about food as much as fashion. I don’t think food and fashion are mutually exclusive. You are what you eat, and what you are determines what you wear. Do I make sense? If not then read on, I will explain. Some people become recessionistas by circumstances but I have to say I was always one when it came to clothes, but only recently I have become a food recessionista.

If you are a wannabe recessionista, you might identify with these:

1.    You dream of clothes and shoes.
2.    You love to go out for nice dinners with shaved truffle on your entrée.
3.    The only way someone could make you eat french fries was if it was fried in truffle oil with lemon zest.
4.    You do not eat food from a factory!
5.    You have never had Prozac. Clothes, shoes and accessories are your antidepressants.
6.    Your idea of dessert is not a big piece of grocery store bought cake.
7.    The word “organic” lingers in your vocabulary all the time.
8.    Your fashion and food budget has diminished.

So come on ladies (and men who care for style) we aren’t going to let a thing like a poor economy stand in the way of fashionable dressing and gourmet eating. Here I am sharing my deepest secrets with you. I hope you will share yours with me as well.

You have this silky halter neck top but too bad it is winter and too risqué for work. You are thinking of getting rid of it. Please don’t, just throw a nice sweater on top of it and it is your new addition to your work wardrobe. The silk will show through the sweater but not your skin, just perfect for work.

I have got to give it to the first lady Michelle Obama for being the ultimate recessionista. I have to admit I never thought brooches were “cool” and mostly old ladies wore them during the holidays. But she has definitely made me realize that a brooch can add a zing to your old plain colored dress or clothing.

Broad belts are a great come back. You have this long dress; one size too big but you love the fabric. You bough it because it was on sale or somebody gifted it to you. Whatever the reason may be, no need to throw it away. Just get a broad belt in a contrast color and voila you have a new trendy belted look.

Shoes can make or break a deal. It is okay to skimp on brand names but invest in a good pair of shoes. I am compelled to share this shoe story. I found these wonderful boots on sale, they were a really good deal. I was lucky enough to find my size but not the color. The shoes were available only in red and I was looking for a black pair of boots that would go with everything. I bought those shoes, came home and used black shoes polish on them. They are as black as they can be nobody would ever guess they were red shoes on sale.

The wait time for dinner reservations at the top restaurants might be less but your budget to eating out has become less as well. Don’t fret!  My husband and I still go out at night once in a while after our child is tucked in bed. However, instead of dinner we choose to go out for dessert. So the amount you have to spend on the babysitter for a date night is cut into half and so is your eating out bill. You can still feel that you are fun and trendy but at half the cost.

During a recession, alcohol is an absolute killer. You may feel the initial high but is a depressant (ask me, I am a social worker by training). It will bring down your spirits and your bank balance. Try sparkling water, wonderfully brewed gourmet coffee and aromatic herb teas.

Becoming a recessionista will require a little bit of time, effort and creativity but believe me it is not impossible. I just have one disclaimer: Whatever you do don’t compromise on quality. For a true recessionista, quality trumps quantity.

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Arpita has a master’s degree in Health Communication and Social Work. She works for Hudson Perinatal Consortium, a non-profit that addresses maternal child health issues in Jersey City, New Jersey. Contact her at erysiphe@hotmail.com.

The challenges thrown at the entrepreneur are merely tests to ascertain the level to which s/he is capable of understanding his/her business: “Do your homework.”
If it’s a partnership you’re involved in, the VC needs to know if you can gel. The VC needs two areas covered in such a situation – “someone who can build and someone who can sell.”
On the flipside, the entrepreneur needs a number of things of his/her VC. Number one on an entrepreneur’s list of priorities is chemistry. The question must be asked: “Is this someone you can disagree with.” The VC must be the first person you are willing and able to call when you are struggling with a problem. You must be able to ask of the VC if future rounds of financing are safe. Are your operating values soon going to be seen by the VC as operating problems?  These and many other questions relating to compatibility or chemistry must first be answered before jumping to conclusions about how the relationship is going to work.
Secondly, what do you need? The stage in which your enterprise is in and the ability of the VC to understand future variations in revenues depending on the timeline of the business are vital.
There was plenty of debate regarding valuation and liquidation references, but the simple core of their advice was this:  create demand for the product, get people excited in it and you are in the driver’s seat, with the VC riding shotgun.
Of course businesses have different gestation periods depending on the models they use, but as long as you have found a VC who understands the machinations of the industry, there shouldn’t be a problem.
Questions were soon raised about the general fear of ideas being stolen. The panel was quick to retort that the only way to protect an idea is to run with it. Ideas are meaningless without execution. The cost of making and executing the idea must be less than what the customer is willing to pay. And naturally the scalability of the idea depends on the market for it.

Some VCs saw the coming year in an optimistic light drawing attention to the fact that this downturn will result in a lot of experimentation with new business models and constant innovation.
Essentially however the tone was Darwinian at best. “The bar is being raised”, “Survival of the fittest” and other such phrases were designed to assure entrepreneurs that funding would be available to those who adapted to changing situations.

Chairing the special panel discussion titled ‘From Adversity to Advantage: Opportunities for Growth & Investment’, Sonjoy Chatterjee, Executive Director, ICICI Bank suggested that the entrepreneurial ecosystem in India was finding sustenance despite the economic downturns. Atul Punj mentioned that this could also be opportunities for companies to make good acquisitions/investments as the price point of some of the companies would provide attractive upsides in the times to come. Hari Bhartia on the contrary mentioned that cash is king and companies must be conservative in spending cash and use Lean and Six Sigma techniques for process improvements.

In a session titled, “Are you ready for venture capital”, a star panel with varying expertise addressed issues relating both to the availability of capital and whether or not acquisition of that capital is a good idea.
Sudhir Sethi of IMD-IDG ventures that deals primarily with early stage enterprises, spoke about the question being how to expect the funding market to change. Sudhir Sethi is Founder, Chairman and Managing Director of IDG Ventures India, a US$150 million early-stage technology venture capital fund backed by IDG, the world’s largest IT-focused media company. He founded IDG Ventures in 2006 after 26 years in the technology and venture industry.

He classified this impact of uncertain capital markets under the following:

Fund-raising and general partner/team quality

Limited partners, he said, would become very selective as regards the quality of teams they bet on. Few general partners in India, he believes, possess a “full cycle GP experience of deal flow generation, investment, monitoring, exits, and fund raising”. In effect, first-time funds with teams that do not have much chemistry will hit road blocks raising capital. On the other hand, second time funds with a well-planned investment strategy and a “full cycle venture experience”, will find it easier (in terms of adaptability to the market) to gain funds.

Deal flow

Panellists expected a slowdown in deal flow. Start-up venture funding saw a decline, as the number of newer start-ups fell. There appears to be a slowdown in entrepreneurial movement from corporate to start-ups. Expectations abound, in an optimistic VC atmosphere, for the quality of deals to grow.
Tier-two cities such as Pune, Coimbatore & Mysore may also see a piece of  the action in terms of deal flow.

Valuations

Sethi also mentioned having seen falling valuations in deals with early stage ventures. This trend will probably continue.

Exits

Dependence on IPOs will continue to fall as companies are being constructed increasingly to exit by acquisition. Founding teams may be pushed to build significantly tech differentiated models so as to harness greater valuations at exit.

Co-investments

Yet another impact of unstable capital markets discussed at the summit was the increase in co-investments. Sethi quoted the example of his own IMD-IDG ventures where out of 7 investments, 4 are together with co-investors.

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Some challenges that the industry may face in the near future were addressed. The Venture industry will be seen in the next 4 years to be one where opportunity management is vital.

The industry is however currently strong and flexible enough to support more funds. This was evidenced by fact that IMD-IDG met numerous limited partners who communicated the intention for IMD to continue to focus on venture investments. The difference between first time and second time funds in the near future would be the latter’s ability to raise funds easier and faster.
There appears also to be a healthy trend in terms of greater numbers of disruptive product ventures.
Another big challenge however is that of maintaining the teams they have gathered while private equity firms are cropping up.

Venture funds will face a challenge of retaining their teams with more private
equity funds being formed.

Clearly, there is much to be considered in the coming year. Funding will be scarcer than ever and survival of the fittest will function in its bluntest form.
That is not to say that VCs are now a completely excluding mechanism. If you’ve got the idea, the passion and the vision, coupled with effective execution, funding should not be a problem.

A grand event at the Hotel Lalit Ashok in Bangalore, the TiE Summit brought together leaders in business and budding men and women entrepreneurs eager to switch cards with the big guns.
The speakers covered numerous topics bringing forward solid, practical advice to all present.
Basic questions were asked leading to much discussion that revealed to a great extent, the bare fundamentals of business, and the secrets to success in the field.
Speakers were flown in from all over the corporate world to share their insights with an enthusiastic congregation.

Most points were however prefaced by the doom & gloom of the world economy.
Although there was some talk about this not being the “ideal” time to enterprise, this was quickly followed up by a core fundamental: If you’ve got a great idea, great enthusiasm and great persistence, the struggle for funding will be insignificant.

Innovation was a topic of much discussion. Martin Kleem, the keynote speaker of the second day of the summit, gave his path to innovative success. He introduced the one greatest source of invention as the violation of “Unquestioned Mindsets”. The unquestioned mindsets of the accounting software industry in 1991 were that more features were always better than fewer and that double entry accounting (credits and debits) was the sole supreme market need.
Quickbooks, Scott Cook’s  product had half the features of its competitors, was twice the price, was an unknown brand, had bugs in the software and within 1 month of its launch had 70% of market share.
This shocking success was a result of a change in mindset or rather a challenge to the established mindset.
As Prof. Theresa Amabile put it, “Entrepreneurship is finding and seizing opportunities that others miss.”
Quickbooks saw a large untapped opportunity in marketing simple uncomplicated accounting software. They noticed that many small businesses functioned much like a family where one of the partners took care of the finances without any real accounting qualifications. They needed a simple mechanism to maintain accounts.

How did Scott Cook notice this market and keep it? He “went there and saw”. Scott and his team went to the offices of local businesses, met with the “accountants” to figure out what they were missing. He solved “big customer problems”. And the “delight” that it brought customers was Quicbook’s marketing.

Operating values were a major theme at the summit that almost every speaker addressed. It starts with the employees. Give them a great place to work. They are the driving force of business, the one factor you can count on to give you more, if you give them more. Then come the customers. Give them better ways to live, making life simpler. Both these operating values need a quality that many expounded on: Empathy.
An old Indian proverb was quoted: “Empathy is not just about walking in someone else’s shoes. First you must remove your own.”
The key to being an entrepreneur is the ability to adapt. This was intricately tied in with empathy. The skill to change
Another key operating value that was noted by Mr. Raj Jaswa, President TiE Silicon Valley, was the fact that as an entrepreneur you can write your own rules. You don’t need to follow any rules, not even the values that seemed to have worked for these entrepreneurs. Only when you develop your own values will success follow, says Mr. Jaswa. Mr.Jaswa also recommends that budding entrepreneurs or those who are planning to upscale their businesses must first position themselves in such a manner as to first scale themselves and their skills up to size.
Top class management material available online was suggested. For example, the Million Dollar Club of Insurance Salespeople is said to be chock full of valuable information available online. Remember says Mr. Jaswa, “The company grows after you do.”
K. Ganesh, IIM graduate who founded and heads TutorVista spoke about his own operating values as well. The most inspiring story I heard at the summit as far as garnering venture capital is concerned was Mr.Ganesh’s value creation from $500,000 to $65 Million with no venture capital.
He prescribed a few questions that must be asked before starting to enterprise –
1.    To start or not to start – ask yourself “Why do it at all?”
2.    External capital or bootstrapping
Base this decision on
•    Capital needed to break even
•    Your own risk appetite
•    Non-financial benefits of VC Capital specific to your sector
3.    Profitability vs. scalability
4.    Built to last vs. built to flip
5.    Identify/ealuate greenfield opportunities

Innovation is key, says Mr.Ganesh. Be a pioneer and look for opportunities for a scalable business. Do not try and have a head on conflict with the big players.  His golden advice: Be prepared. Plan for every event.

Will Basil, CEO and founder of FabIndia spoke about the importance of the team.
He expounded on the theory of the “third dimension” in decision making.
“Future business books will be written about the third dimension”, he said.
When building a team, Basil says, it is important to include people with diametrically opposite means of thinking. When this happens and a conflict is seen between the two dimensions, a third dimension, one of a combination of ideas, arises. Again the primary operating value of FabIndia was, “Never bullshit the customer because sooner or later, you know, they can smell the bullshit”.

The retail sector was also a topic of much discussion. The sector was said to be young and the media was blamed for creating a perceptive lull in consumer spending. Mr. Arvind Singhal, Chairman Technopark Advisers, was clear about his thoughts stating that there was “no indication”, that consumer spending had fallen or that consumption was stressed. In absolute terms, he said, consumption would grow at 15%.
The main takeaway from this session was this: A retailer at this stage must not compromise on spending on the customer, because when we come out of this “perceptive” slump, you will have a large and loyal market share. While your competitors were cutting costs with the customer, you stood your ground.
Another important point for retailers – short-circuit the supply chain because cutting supply chain costs reduces the risk of losing customers.
A counterpoint to this suggestion was the fact that this required investment and that this is not necessarily economical at this point in time. It was argued that it would be easier to bring in discipline.
During the growth phase that we enjoyed, retail became prosperous and in effect inefficient. It “gathered flab”. In that regard, the slowdown was well-timed for this sector. There also appears to be a lot of opportunity at the lower end of the retail market with new formats, models, systems and markets.
In conclusion, do not make changes in consumer propositions – keep with it. Do not short-change the customer.

The BPO sector was another topic of great focus. After a barrage of statistics, Mr. Raman Roy concluded that there was still a massive market to be outsourced in the form of companies that were beyond Fortune 1000. Small & medium enterprises represent a large chunk of business that can be outsourced. He called it, “Moving away from dozens of companies worth millions to millions of companies worth dozens.”
Where is the industry? We are still growing at 7% which is a tremendous figure given the state of Europe and the US. Our industry is deep in terms of the number of companies. And our industry is tremendously flexible having gone through numerous downturns in the past and having come out much stronger.
We will see an experimentation with new business models and constant innovation as the industry manoeuvres itself into a revival.
The future however, appears harder to predict. The panel did predict though that the industry for the most part would have a bright future, given its depth.          Getting together at TiE to discuss the future of entrepreneurship provided 1700 budding and experienced entrepreneurs with an opportunity to share ideas, create opportunities and network.

There was a lot of disagreement among panelists at the summit, but there was one sole point that all could agree on.
We are in a remarkable period of economic history with very low visibility where finding funding will be difficult, but if you have the model and the passion, never let the entrepreneurial spirit die.
Those who succeed now, will be judged by history as true “economic warriors” of the 21st century, who fought with the weapons of prosperity.