Multi-level marketing or Multi-pain marketing?

There was a talk by the Amway MD on direct selling. Only one word could describe it- fabulous. It’s amazing how the industry interaction committee manages to bring in such speakers time after time. Hats off to you, folks!

The same couldn’t be said about the company. True, the direct-selling company has thrived for the past 46 years- no mean achievement. I believe it has done so because it has played on one unchanged aspect of humans- if there ever was one- greed.

I didn’t have an opportunity to see the Amway presentations that used to happen regularly in Chennai, but from whatever I heard; these people make such tall claims about compensation that you could drive only Merc and nothing else.

Is it that bad for a company to advertise itself to attract IBO- independent business agents? Not at all, and that’s not the aspect that I want to highlight anyway.

What else, then? Have you heard these hardcore investors talk? They somehow come to stock market the third minute of any conversation which will make you crawl for cover. Amway agents are worse. They start their propaganda first up, and won’t let you till they get an answer. They are the most hated people on earth; insurance agents come a distant second.

And how true are their claims? If you are aggressive, you may taste some success, but even if you do, what’s the point of making money on someone’s expense? And no profession unnerves such a lot of people to make a few bucks.

Amway products? My dad tried only one product- Amway car wash (a small bottle costs Rs.400). Dad was happy with the quality. But then Amway takes premium products to an extreme. My dad’s friend bought brand new Amway underwear with some special qualities which costs Rs.250. Without dwelling too much into the qualities, let me just add that his friend thought it was too costly to wear.

The concept is good- train some entrepreneurs who will be not just salespeople, but business partners who will get compensation based on not just their sales, but how many entrepreneurs they bring in. Unfortunately, it’s a perfect recipe for greed, generating multi-pain marketers.

What do you do in your free time?

Incredible, isn’t it? A fortnight ago, I would’ve never thought that I would get some free time. Thanks to mela for index, I’ve two days off. I’m not part of any team there, so there isn’t any task to do. I thought I’ll doze a couple of days off.

Ah, easier said than done. Why not write a short paper? There’s no point trying my hand at fin or mark one. I chose a strategy paper- its easier to fool around- I did. Strategies for the Indian pharma firms in the post-product patent regime. There’s no dearth of information- there’s FICCI, CII and Mckinsey reports. It took longer than I thought, 10 hours in all. It’s tough to do it single. I ended up with a headache and finger-burn.

The theme is simple. Indian firms can’t copy drugs anymore- euphemistically called applied research! They have to invest like hell in R&D in basic research- some of them already doing that. Cost arbitrage is a short term measure- there are opportunities. Pfizer and Merck are outsourcing manufacturing, part research and clinical trials to India. In future, when countries like China start developing their human capital, these opportunities will cease to exist.

The constraints for the Indian firms are the financial muscle of the big majors. Therefore the strategies like generics exports and others are but a means to achieve the end- put a new drug on the market, which no Indian firm has done till date. It is important not to lose sight of this long term goal.

I’ll be lucky to go to the next round- only five entries get through. But then, philosophically speaking, the effort can be as satisfying as the end.

Just another hit, or is it?

A manager of a distinguished petroleum company, the Indian oil corporation, blacklists a petrol pump for selling adulterated oil. The pump starts selling petrol on the sly, after a few days. When he tries to stop it, he gets five bullets on his chest. What if he happens to be my alumnus of 2003 batch? I’ve never heard of him, and, aren’t we used to murders?

The 27 year old Manjunathan happened to be one of the few bright spots of our country who dared fight our rotten system. A system controlled by corrupt officials-politicians-mafia nexus, a system which lacks transparency and accountability, a system which takes eons to punish offenders, a system people are so used to, that it fails to tickle them anymore than when Satyendra Dubey, an IIT engineer was killed by mafia when he whistle-blew the corruption in the national highway project an year ago. A system where there is no place for men of integrity, much less courage.

So what’s the purpose of more petitions or even a peace march which we are planning? Customary? Just to show that we are alive and kicking? I guess not.

There is only one alternative to this rotten system. We students, who will refuse to get brow-beaten by such acts, refuse to escape this by the time-immemorial-bushland offers, and strengthen our resolve to fight them. It’s no time for dejection, but action. Rest in peace, whoever you are.

What day comes after Saturday?

The mid term ends. After every paper I had said to myself ‘I’ll make up in the end term’. After all, I said a similar thing after my quizzes too, ‘I’ll make up in mid terms!’ Life goes on.

I don’t remember when I last had a Sunday. Last week it was placements, last to that was an extra classes, plus the mid terms eve, the only way I know its Sunday is when I get the appropriate newspaper supplement.

The mid term papers weren’t so bad; if it is; it’s bad for everyone, so relatively I’m not that bad off. (Whoa! The last line will qualify for PhD in verbosity! Blame my marketing and organizational design papers for that)

From this year CAT exam is going to get tougher. And number of seats in IIMs is being raised to 1400- which means still less than 1% of the 150000 entrants make it here. Hmmm... Sometimes life moves too fast to look back at your own achievements.

It’s been a while since I read anything worthwhile. Slow down your pace, life! Let me catch up.

Summer internship process

It’s finally over. What you see is a few IIMs getting placed in slot 0 with hefty packages. What you don’t is a majority who has to slog for 3 days flat out not knowing when it will get over, if it does. And a bunch of seniors who ran around satisfying weird needs of the obstinate HRs. Or for that matter, tons and tons of RG docs (resource generating documents) about the company. The last 3 days have taken a toll on everyone.

I screwed up a few interviews- one interviewer asked me what my group discussion topic was. I’d done close to 10 GDs that day, and had no clue what the topic was, and said as much. Another interviewer asked me, are you tired? It was 12 in the night, and I hadn’t slept for 18 hours, what do you think? I managed an artificial smile and asked him, aren’t you? You bet he was. He started telling me about how hard it was to shortlist 80 from 250 applications and do two rounds of interviews. Stop whining and get on. I managed to nod sympathetically.  How many process have you gone through till now?  I said around 8. He asked the name of the companies- I could recall around 4 or 5, but he pressed for all names, so I just took out the checklist I had from my coat pocket and read out. An embarrassed interviewer didn’t ask me, why our company!!!

Though around 70-80 companies came, only a small fraction shortlisted me, and I went through all the rounds of even smaller fraction. For three days I woke up at around 6 and went to bed as late as 1 in the night, only to wake up at 6 again. Damn it, I had no time to wash my socks. I thought, if worse came to worst, I would just take off my shoes in the GD and put everyone in a trance, and it would have been the elusive chemical weapon that Bush couldn’t find in Iraq!

Sounak was no better. The poor guy had calls right from day 0, and still managed to drag on the whole thing to day 4, and was even more tired and sick of the whole thing. He was sleeping before he was dragged to a couple of interview rooms, and I couldn’t imagine what he did there.

A few guys just broke down on the third day, after getting kicked out by one company after other. Some people tried to show that they didn’t care and went on watching Tom and Jerry shows, others porn, oblivious to the crowd there. I believe it’s another form, denial.

I managed to hang on to a company called DCM Shriram, an unglamorous fertilizer company for a rural marketing project. I’m glad it’s over; it may even be more interesting than I imagine, what the hell.

Get your dream company!

Some of us have been shortlisted, some waiting to be one. Here are some suggested answers to some clichéd questions…

Q. Why our company?

     Some of us are desperately waiting for a shortlist, and this one assumes the contrary. Don’t take slight at that. We can say something like ‘your company is 3 blocks away from my home in chennai’ or ‘you shortlisted me’, but that wouldn’t sound too smart, will it? Try something like, ‘I went through the vision and mission statements of a million companies, and tried to match with mine. You proved lucky!’

Q. Where do you like to be seen five years from now?

     Ah, if only I knew where I would be few days from now! You can say something like, ‘Be your boss’, but it wouldn’t get you anywhere. Try ‘I want to be the receptacle of ideas, paradigm of probity, and engine of growth, the piston of change, steering the people along’. It will make you sound smart, and if the company makes cars, who knows?

Q. What are your strengths and weaknesses?

     ‘I am a hopeless workaholic’ is one that’s been tried for years. But I tried this in my XLRI interview ‘I dream that I am the PM of this country and change its fortune’ for both my strength and weakness. Strength, as you dream big, weakness- you are disconnected with reality. Find something like this which will leave the interviewer confused.

Who cast shadow on the festival of lights?

Three days since three blasts in the heart of Delhi, the images fail to vanish. Imagine two families fighting over the charred remains of what they think is their kid. This festival of lights is surely darker than the rest.

Things move on. Let’s salute the resilience of this great nation. (I may be wrong. It’s more resilience than thick skin). Happy Diwali.

This is not fair!

We had an Operations Management surprise quiz today. Remember that old spiritual Sahay? That prof’s quiz. People wrote ‘OM’ (a spiritual symbol) at the top of the answer sheet (some wrote it on all sheets!). I first thought it was the abbreviation of Operations Management!

This is a deliberate attempt to create a perception bias in the mind of the professor. This is a grossly unfair means to get a few more marks.

WHY DIDN’T I GET THIS IDEA? THIS IS NOT FAIR!!!!

Don’t mistake thick-skin with resilience

Another day, another blast. What if that happens to be three timed blasts, in the busiest areas of New Delhi, paharganj and Sarojini nagar, (thankfully one averted in chandni chowk). The government as usual condemns the incident, there are meetings and press conferences, office and institute chat, and it will all be forgotten in a few days. After all, aren’t we resilient?


The terrorists may be nabbed, put to trial, may not be convicted thanks to brilliant lawyers like Ram Jethmalani who are bent on satiating their ego by appearing in such high profile cases. Even if they are convicted, there are always the ubiquitous human rights groups who will plead for less punishment, and there is our President who is so considerate to pardon hardened terrorists.

The feeling of helplessness and apathy has penetrated our collective conscience that we have even ceased to react to such acts. I have doubts if we are resilient. It’s just that the random terror happens all the time that we have become indifferent to it. The Delhi-ites who saw their fellow residents torn into pieces would probably say, thank god it wasn’t me.

The human rights activists require special mention. After all, they were the ones who condemned the encounter killing of veerappan, the sandalwood smuggler who killed more than 100 constables in duty, destroyed sandalwood ecosystem, and killed hundreds of elephants for their tusks, all with the backing of political class of course; the activists who don’t see the human rights violations of terrorists and smugglers.

What should be done? Army is not supposed to go after terrorists. It’s the jurisdiction of police. Khalistan terror in Punjab in the 1980s was even worse than Kashmir one. All it took was one bold chief minister Beant singh, (who had the backing of then Prime Minister Rajiv Gandhi), and one super cop KPS Gill who didn’t care about human rights of terrorists, to root out terrorism from the face of Punjab.

We don’t need condemnation, Mr. PM; unleash state-sponsored terrorism against terrorists.          

World 2150 - part II

First we will see how the India and China become the twin powerhouses.

Reason 1: Countries found lesser need to manage currency.
The manufacturing boom in china and service one in India started with the low end work in the early 90’s. To sustain the low cost advantage for their software and manufacturing exports (weaker the currency, cheaper the exports), the Governments in these two countries managed their respective currencies.

But as these industries grew bigger, they moved away from cost competition. China’s spending in their universities were starting to bear fruit, as the R&D boomed in the early 2010s, while Indian software firms moved away from back office operations to complex data mining and analytics. As this started to happen one curious phenomenon occurred- Bangalore got bangalored!

The software companies started outsourcing their low end back office operations to first tier-2 cities, then to smaller towns like Meruts and Gobichettipalayams, which had low cost advantage. This was the result of the massive investment in human capital in small towns a decade back. This resulted in growth permeating in every corner of the country.

Companies now competed on quality, not cost as they did earlier. Exports needn’t be cheaper, the forex reserves which previously had bloated on account of weak yuan/rupee, suddenly evaporated, and US was found wanting. Why?

The biggest blunder of Dubya wasn’t stem cell research or even Iraq war, but TAX CUTs!

A series of mistakes snowballs into a catastrophe. Bush tax cuts encouraged the US customers to buy like hell. This is how the US business cycle which would otherwise in the recession phase went into the biggest growth phase ever. But it was built on weak foundation, credit.

When lender lends a million, he is the boss. But if he lends a trillion, you know who the boss is. Asian countries amassed a huge forex reserves unleashed by the bush dollar tsunami, and the reserves ploughed their way through to US by way of T-bills. This was the source of consumer credit.

By 2005, there were already enough things to escalate oil prices, iraq war again, hurricanes Evan, Charlie, rita, and the biggie Katrina. These became a regular feature in the coming years, and the oil prices hit the roof. How did it bring the downfall?

Asian nations dependent on oil found the import bill too hot, their forex reserves declined. Less forex, less credit.

Even the tax increase couldn’t salvage the situation, as the economy fell into a debt trap. Company after company filed for bankruptcy or takeovers, which saw Tata motors, mount a successful takeover bid for Ford, CNOOC gobbling up Conaco Philips and a host of big ticket takeovers.

Note: Some of them are a bit exaggerated; but you can’t prove/disprove me, can you?
End of part 2

World 2150 – part I

Ladies and Gentlemen: Welcome to the Annual global conference on ‘How the businesses evolved in the last 150 years’. Let me present you a chronological order of how we have progressed.
2000:     The national boundaries were fast disappearing. To quote Nanadan Nilekani, the great Indian entrepreuneur, ‘The global field is being increasingly levelled’. How nostradamic that statement is!

Businessmen had increasingly moved away from competition to collaboration, the divide between the fat and small corporations were increasingly thinning. In fact the logic of economies of scale was increasingly being questioned. The fat corporations like Microsoft or GM weren’t revered anymore, with the exception of corporations like Toyota or Google which continued to innovate. They were instead seen as dinosaurs, whose might suddenly became its weakness. In its place were corporations like Tata motors, Acer or Hyndai or LG, those nimble footed Asian organizations who were suddenly growing bigger and started spreading their control. In fact the first signs were felt when Chinese hardware major Lennovo acquired IBM.

2020:     India and China had truly emerged by then. It had to be, considering how the once mighty US imperialism as now the historians call it, had fallen, just like the British imperialism of the 19th century! One empire succeeds other, now the Asian one. Let us see how.

For long, US dollar remained stable and was the backbone of world economy. Research and innovation sustained the US economy till 2000. But the fall can be attributed to one person- George W. Bush (Muhammad-bin-Tughlaq incarnate!).

He started one scheme after other- tax cuts which only made rich richer, flawed social security scheme that tried to wash the government’s hand off its responsibility, and the biggest mis-adventure of all time- Iraq war, and the then popular term bodybags.

But the US economy was resilient all through this, primarily because the Asians fed them with dollars by way of huge forex reserves. The interest rates remained benign, and the American consumers were borrowing like there is no tomorrow. But all through this US managed to grow at a great rate of 4-4.5% year after year. So when did this bubble burst?

We will see this in next issue.

Things I didn’t write in my summers form…

How do you interact with people whose backgrounds and value systems are different from your own?
As if their value systems were like my own.

How do you interact with people whose backgrounds and value systems are like your own?
As if their value systems were different.

How do you interact with people whose backgrounds and value systems are like your own and different from your own?
The same way.

Why do i feel an empty space?

Statutory warning: Don’t read it. It’s a sure depressant.

Most of the term I marks have come. I’ve done okay in some, not so okay in others, brilliant in none. What the hell, aren’t all IIMs get placed? Still makes me a bit sad.

Summers are round the corner. The more I hear the alumni talk, the more the PPTs I attend, the more humble I feel. (To quote Churchill, I’m a humble person who has a lot to feel humble about)

The summers forms are eating a lot of time, and I never seem to have any for the reading a thing, completing an assignment, or doing a host of things I get advice about, be it research companies or increase business awareness (it’s funny I crib when a lot of people do even more in their 24/7/365).

I’m cursed with an expressive face and a whimsical temper, so it’s clear to those close to me that I’m not my usual self (And it makes me sick every time they say that!).

I’m a laidback person, and I’m not used to this, damn it! (Whatever ‘it’ is). Give me a break. May be I’ll.

Things I didn’t write in the summers form...

Qn. Tell me an instance where you did a seemingly impossible task. What was the outcome?
Ans .Filling up your form. You have to tell the outcome
Qn. Have you ever be tried in a civil/criminal court? If yes why?
Ans. Yes. Once a poor chap asked me this question and got me a 10 year suspended jail sentence for attempt to murder
Qn. Please detail any achievement/experiences that is special to you?
Ans. Once my sister and I had a big fight over who will get the last special masala dosa. I suggested to my sister to let mom arbitrate it, and I’d successfully eaten it, while she was gone to complain, after overcoming all obstacles.

GD capsule 7

Theme: Textiles
To what extent will the end of quota regime really benefit India?
Background: The Multi fiber agreement came to an end this January 2005. Prior to that, west sourced more than half of their textile imports from Latin-American and Caribbean countries, though they didn’t offer cost advantages like Asian counterparts. (End of MFA had been one of the principal demands of Asian countries at the WTO for a long time)

According to a Goldman Sachs report, China is set to capture 50% of world textile market in 2015, while India’s share will triple to 16%. But the road is not without hiccups.

Though the decision to end MFA was taken at WTO as early as 2001, the Indian companies had woken up to reality and went for capacity expansion of their plants only when the deadline was nearing. This is in sharp contrast to the well oiled Chinese machine, which employs whole towns to produce just one product, to reap in economies of scale.

Also, it looks increasingly difficult to china in mass production, which not only has low cost of labor (prices of Chinese goods is less than the cost of producing them in India) but gives subsidized power (cost of power Indian equivalent of 2 paisa/unit!) and host of concessions to its industries. But India can compete in different turf- home textiles.

I reiterate this point once more- If China has cheap manpower, India has cheap brainpower (see outsourcing). Home textiles are one area which requires less manpower and more designs. This is why US textile industry has managed stay afloat in this segment. The government has provided the industry with cheap 3% loans for capacity expansion, so it’s possible to compete in this capital intensive segment.

Siva's dictionary

Pain: What you feel when you have to fill summers form
Scarce resource: synonym of CV point
Spin a yarn: What you do when you get incomprehensible questions
Pun: When you spin-a-yarn around man-made fiber project!
Blood Pressure: indicator of closeness to submission deadline
Ecstasy: What you get when deadline is extended at the very last minute

Just a thought….

I had a question in financial management quiz. Your grandpa is 60 years old. He is investing a sum in the bank at so and so rate compounded. What amount should you take every year such that there is no balance left after 10 years? If grandpa is 60 years old, would I be that old to solve this problem? Or, would the bank allow me to take his money?

GD capsule 6

Theme: Agriculture
News: This quarter, GDP grew at 8.1%-manufacturing-8.9%, services 11.3%, agriculture-2% making India the second fastest growing economy, next only to china. Agriculture once again proved a drag on GDP growth
Background:
Agriculture employs around 60% of the workforce but contributes only a fifth to the GDP (Indian GDP figure is around 600 billion dollars) whereas the corresponding contribution from services is more than 50%. The successive governments have largely ignored agriculture after the green revolution of 60s. More than investment, the country needs focus.

For example, we have one of the worst storage and transportation facilities in the world. We lose almost 40% of the produce in godowns. Plus lack of storage means farmers are forced to sell their produce at lower than market rates. Let commodity markets and e-choupal expand!

Also, the perverse government subsidies on wheat and rice have caused a glut in foodgrains. The policy dates back to 60s when there was a shortage, but it has outlived its usefulness. The government can continue subsidies, if it changes the crops to cash crops suitable for exports. Any one responds to incentives.

Agriculture needs a new focus because, not only a slow growth drags down GDP, but also a sufficient growth in agriculture means increased demand for other products as well. For example, FMCG and durables industry does well whenever there is a good monsoon.

How (not) to answer in an interview?

I had a mock interview (2 mentors) 12 at night today. We were told to mail our CV and a functional area along with two preferred companies so that they can do a focused interview. I wish I could be choosy about the functional area for now. I’d put marketing anyway (because most companies are marketing)

Mentor: Why is marketing important?
I: Organization exists for creating value for customer. So marketing is very important.

M: So you say finance is not important?
I: Do a volte-face. Finance is the backbone of any firm as firm exists to create value for shareholder!

I’d toned down my deep voice just to show (off) that I’m Mr.Humble.
M: Are you not meek for a marketing manager?’
I: No. The old management paradigm is that companies try to sell aggressively the products the firm produces but the new paradigm (I like that word. Makes me sound smarter than I actually am!) is whatever….

M: What’s the difference between customer and consumer?
I: Hmmm… I don’t know
M: Try
I: Okay. Consumer is the one who consumes one’s goods and services and customer is an all encompassing term that includes all the stakeholders of the company
M: Who is a stakeholder?
I: One who has a stake in the company.

The two mentors look at each other and think the time is up.

PS: I met a senior Jassi who was supposed to interview 10 people, but only three turned up. A couple of them even dared call him up and give him a silly excuse like preparing for P&G case. One fellow who had acknowledged Jassi’s mail at 8 pm called him up at 12 and said he didn’t see the mail.  It seems I’m living in a utopian world and in reality the legacy is not that rich after all.

Why the students here leave a rich legacy...

Summers are fast approaching. For us lesser mortals who don’t have either a good academic background or any work experience, filling two pages of resume is daunting, to say the least. Or for that matter, being interviewed by sharp eyed HRs.

This is where the seniors come. I’ve done my schooling and undergrad, but nowhere have I seen this level of mentor-protégé relationship. May be B-school is a different ball game, or that this happens everywhere, so why not here? Whatever it is, it’s great!

It’s not just the formal placement committee that’s taking up all the initiative, but seniors go out of the way, just to make sure that we don’t mess things at the D-day. Like my tam seniors who hold mock GD/PI sessions with ruthless feedback, or sigfi forums (must see it sometime). Some may feel that too much of such things may prove redundant, but I see the noble intention of these seniors who have nothing to get in return.

This is a rich legacy, which we will give to our juniors next year, and it’s something we can be proud of.