Thursday, 22 October 2020

Amul Brand - The true Indian

 Few brands command recollect and respect like Amul. 

Interview of R S Sodhi (Managing Director of Gujarat Co-operative Milk Marketing Federation and owner of the Amul brand) to WARC is worth reading. I enjoyed reading it and learned new things about Amul which i will share here by reproducing some sections of the interview:

  • HORECA -
    • HORECA is Hotel / Resturant / Cafe industry
  • Smart advertising - 
    • Because of increased adspend during lockdown, they struck lottery in Ramayana and Mahabharat serials. Sodhi stated that We got 10 times more viewership than the Indian Premier League (IPL) finals match, at one tenth of the cost – we never anticipated such a response.
  • Freedom given to brand building partners
    • About Amul Girl - 
      • This campaign was created by our brand building partner daCunha Communications, who have been doing this for 50 years. It started with Sylvester daCunha and now his son Rahul runs it. They conceive it, create it and put it on social media or the press.
      • We see the topical ads when the world sees it – that creative doesn’t come to us for approval, we just pay the bill.
      • For what purpose do you hire a creative agency? You hire for their competence. So why would you hire them if you don’t have confidence in them?
  • On Digintal footprint -
    • As of mid-September, we have reached 870 million accounts on Facebook with an average daily reach of almost 7-8 million Facebook users. The total viewership of our content on Facebook has been 124 million minutes over the last 150 days. So, on an average 1 million minutes of Amul recipe content is being viewed on Facebook daily. At an average duration of 45-50 minutes per recipe, we have created more than 60,000 minutes of original content.
  • On Brand image projection - 
    • So, we are trying to project that image of a local brand, we have communications that showcase that. If you’re buying milk in Calcutta, you’re getting it from local farmers and it has been processed and sold in Calcutta – they should not think that the milk is coming from the other side of India. It’s fresh.
    • Nobody wants to have imported food products these days. I remember when I joined the industry 30 years ago, all the attention and demand was for imported brands. Then the preference for national brands came and now it’s local – local to your city or state.
  • On importance of use of local language in advertisements -
    • We’re trying to project this in all our communications, down to our website being available in all the local languages of every state – that’s the first point of contact and that it extends to commercials as well. For example, for Tamil Nadu in South India, the work must be conceived by our office there and not in Mumbai in the West, because they know what the local preferences are. And we use local partners, actors, language and music for creatives. That’s what needs to be done, for every state, and India has 28 states and 8 territories.
The interview is worth reading. The questions in the interview was very simple and clean.

Interview reference: Radhika Gupta

Wednesday, 21 October 2020

The Oath by a Lawyer

 In India , The Oath Act, 1969 states:

(1) Oaths or

affirmations shall be made by the following persons, namely:—

(a) all witnesses, that is to say, all persons who may lawfully be examined, or give, or be required

to give, evidence by or before any court or person having by law or consent of parties authority to

examine such persons or to receive evidence;

(b) interpreters of questions put to, and evidence given by, witnesses; and

(c) jurors: 

The Oath Act beleives that Lawyers who represent their clients are honest and speak un manipulated truth.

In a interview Late Ram Jethmalani stated about defending guilty clients"

..........why does a lawyer have to defend the person who tells him that I am guilty the reason that a lawyer can very legitimately advance is that it is society which has made a rule that nobody should be convicted or punished without adequate convincing evidence that you argue a case for a person who has told you in private that he has committed the offense what you are telling the court is not your you are not swearing on oath that I know that my client is innocent you don't have to do anything of any that .....professional mis conduct what you are telling the court is that the evidence on what my client is being convicted does not satisfy the standards what you have laid down for everybody you point out the defects in the evidence and leave it to the judge to decide....

  • Is not the lawyer delaying the process of judgement by:
    • Not disclosing the truth to Judge
    • Wasting courts time in delivering Justice to the person filing suit
    • Wating time of witnessess and harassing them in the name of questioning them
    • Unnecessary cost to Government and others
  • Why Lawyers are not on oath for:
    • Divulging the truth about cofession by the guilty and not waste courts time
Has there been a single instance where a top lawyer is fined for hiding / manipulating the truth. Or they are talented enough to safeguard themselves from such pitfalls.

If this is the base on which lawyers take cases and defend guilty persons then the Oath Acts needs to be re-looked into as a lawyer states that it is the society which has provided him a way.

As a part of the society it is necessary we should close that way for the Lawyers.

An unfortunate truth.

Saturday, 26 September 2020

Government of India 's Smart Move

The verdict on Vodafone Group, regarding retrospective tax, is a indirect life saver for telecom industry in India. The stakes involved was Rs.22,000 crores.

Verdict in favor of India could have reduced Indian Telecom Industry into Duopoly with clear winning position for Reliance. 

It seems Indian Government did not accept that stance as it will give a very high upper hand for Reliance Industry over Indian economy.

In AGR case, Supreme Court of India, already gave its verdict that Vodafone and other parties can't escape the AGR dues. Efforts by Government of India to save the sector was rejected by the Supreme court.

It seems to protect or give reprieve to Vodafone Idea in the Indian Telecom sector, it was a must for Vodafone to win.

Confirming the ruling in favour of the company, Vodafone Plc in a statement to FE said, “Vodafone confirms that the investment treaty tribunal found in Vodafone’s favour. This was a unanimous decision, including India’s appointed arbitrator Rodrigo Oreamuno. The tribunal held that any attempt by India to enforce the tax demand would be a violation of India’s international law obligations.”.

The unanimous decision with Indian appointed arbitrator Rodrigo Oreamuno, is a indicator that Government of India wanted Vodafone to be a winner in this case.

This is a win win situation for all  ‐

  1. Retrospective tax ghost is buried
  2. Vodafone group and other foreign investors got a positive message
  3. Indian Government indirectly protected telecom sector from reducing it to Duopoly
  4. Reliance Industry will not complain that Indian Government protected Vodafone Idea

Friday, 18 September 2020

Must Read on Bullshit Jobs

 I was introduced to David Graeber vide an editorial in Indian Express newspaper on his passing away on 02 September 2020.

What took me by horns was the article On the Phenomenon of Bullshit Jobs: A Work Rant by David Graeber.

This article falls in the category of Must Reads. Some of the sections is reproduced below to stimulate the readers to read the article:

On what Technology has done or achieved

Instead, technology has been marshaled, if anything, to figure out ways to make us all work more. In order to achieve this, jobs have had to be created that are, effectively, pointless. Huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed. The moral and spiritual damage that comes from this situation is profound. It is a scar across our collective soul. Yet virtually no one talks about it.

On what we human beings have selected

Given the choice between less hours and more toys and pleasures, we've collectively chosen the latter.

The Mystery

It's as if someone were out there making up pointless jobs just for the sake of keeping us all working. And here, precisely, lies the mystery. In capitalism, this is precisely what is not supposed to happen. 

On False belief

The answer clearly isn't economic: it's moral and political. The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger (think of what started to happen when this even began to be approximated in the '60s). And, on the other hand, the feeling that work is a moral value in itself, and that anyone not willing to submit themselves to some kind of intense work discipline for most of their waking hours deserves nothing, is extraordinarily convenient for them.

On what is hell

Once, when contemplating the apparently endless growth of administrative responsibilities in British academic departments, I came up with one possible vision of hell. Hell is a collection of individuals who are spending the bulk of their time working on a task they don't like and are not especially good at.

On frustration

This is a profound psychological violence here. How can one even begin to speak of dignity in labour when one secretly feels one's job should not exist? How can it not create a sense of deep rage and resentment. 

The Truth

It's not entirely clear how humanity would suffer were all private equity CEOs, lobbyists, PR researchers, actuaries, telemarketers, bailiffs or legal consultants to similarly vanish. (Many suspect it might markedly improve.) Yet apart from a handful of well-touted exceptions (doctors), the rule holds surprisingly well.

Friday, 28 August 2020

Rafale - Talk by Abhijit Iyer Mitra

Thanks Abhijit Iyer Mitra for explaining in plain simple terms about intricacies of Rafale deal. 

If anyone interested in knowing about defense purchase and its challenges below talk is very important.


Saturday, 25 July 2020

Strange and Interesting Coincidences

An article appeared in news on July 02, 2020 in Financial Express newspaper:

SBI seeks external consultants for risk management division  article stated:

State Bank of India (SBI) is looking for consultants for its risk management division to incorporate external inputs in its risk-modelling function in areas ranging from stress testing to climate change. The country’s largest lender floated a request for proposal (RFP) for empanelment of consultants in June for a five-year period.

The plan to engage external consultants is understood to have been in the works for a few months now. “The thinking within the bank has been that when certain new and unprecedented developments happen, you need inputs from external experts. For example, the Covid outbreak may render the bank’s entire database ineffective and an entire remodelling has to be done. That’s when external inputs become important,” said a person close to the development.

Interestingly McKinsey Quarterly July 2020 issue has the following:

How the State Bank of India is learning from crisis (July 24,2020) interview with State Bank of India Chairman Mr. Rajnish Kumar. Interview starts with:

How should a leader approach a challenge as unprecedented, volatile, and globally disruptive as the COVID-19 pandemic? As a learning experience. That’s the attitude of Rajnish Kumar, chairman of the State Bank of India (SBI). The veteran banker, who joined SBI in an entry-level role four decades ago, is now tasked with leading India’s largest financial institution through an uncertainty that no organization had anticipated.

Interview covers other aspects about leadership required by SBI Chairman during these testing times and other aspects.

The interview was conducted by:

Akash Lal , Senion Partner , Mumbai
Expert in Financial Services

Joydeep Sengupta , Senior Partner , Singapore
Joydeep leads the Asia–Pacific Banking Practice and has served leading financial institutions across multiple markets in Asia and Europe. Joydeep has deep expertise in architecting and executing multiyear business transformations. His experience in digital, strategy, organization, risk, and change management allows him to counsel and work with CEOs on capturing value.

His recent work includes supporting the transformation of leading banks and insurers in Asia, with a focus on innovation and changes in business models and culture driven by the new digital economy. He is also actively involved in serving regulators and policy makers across several markets in Asia on topics related to banking-sector blueprints, digital infrastructure, payment systems, and regulations.

Rewind Year 2009 / 2010

McKinsey Quarterly April 01, 2009 under Insights section.

Remaking a government-owned giant: An interview with the chairman of the State Bank of India interview starts in the following way:

Om Prakash Bhatt discusses the transformation of one of India’s oldest banks and reveals how he managed to bring the company’s 200,000 employees on board.

Om Prakash Bhatt is intensely loyal to the State Bank of India (SBI). “This was a great bank, and it was seeing relatively bad days,” says Bhatt, who joined the bank in 1972 as a probationary officer and was named chairman in 2006. “They put me in the chairman’s seat, and it was up to me to do something. If not me, who would?” SBI—the country’s largest bank by assets—had fallen on tough times when Bhatt took charge of the state-owned institution. With roots stretching back to 1806, this stalwart of the Indian economy was losing market share to up-and-coming private banks and a growing list of foreign players reaching customers with new products and new technologies. State Bank, in which the government has a 60 percent interest, was languishing in inertia.

O P Bhatt  - from wikipedia

Om Prakash Bhatt (born 7 March 1951) is an Indian banker and was the Chairman of State Bank of India from June 2006 until 31 March 2011.

From Economic Times archives March 04, 2010 (last updated).

Extracts from the Economic Times archives:

State Bank of India (SBI) has now engaged McKinsey & Co to advise it for building bank's rural business and has paid a total of Rs 62.8 crore to the global consultancy firm since 2007 for various advisory services. 

The bank had paid a consultancy fee of Rs 9.99 crore to the US-based McKinsey & Co in 2006-07, the Minister said, adding, the company was engaged in 2007-08, 2008-09 and 2009-10 and was paid a total of Rs 62.71 crore. 

The most interesting part of the archived article was very very strange:

"SBI had engaged McKinsey & Co as consultants in January, 2007, for a period of four months for building bank's rural banking business. However, the engagement was temporarily put in abeyance after some time due to operational reasons," Minister of State for Finance Namo Narian Meena said in a written reply in the Rajya Sabha today. 

The bank has engaged McKinsey & Co in March 2010 for a period of 4 months to resume the engagement of 2007, he said. 

McKinsey was asked to resume a work in the year 2010 (for four months) the work which was started in the year January 2007 and temporarily halted around April 2007/May 2007. 

In short McKinsey advised then State Bank of India under Chairman O P Bhatt in the year 2007 and got paid in the year 2010. 

In other words old outstanding for the year 2007 was recovered by McKinsey from State Bank of India in the year 2010.

SBI  Chairman O P Bhatt was featured in the McKinsey Quarterly for an interview in the year 2009.

Strange Coincidences.

Back to 2020:

SBI Writes Off Rs1.23 Lakh Crore of Bad Debt, Recovers Paltry Rs8,969 Crore in 8 Years!

Source: Moneylife magazine

The article in Moneylife magazine is worth reading as it displays the recovery ratio of old outstanding of State Bank of India a Public Sector Bank.

And McKinsey recovered an outstanding after four years, it displays the recovery ratio of a private enterprise.

Monday, 8 June 2020

Learning - The Click Moment

An interesting section on ROI (Return on Investments) and how it is difficult to use as measurement tool was discussed in the book "The Click Moment: Seizing Opportunity in an Unpredictable World" by Frans Johansson.

I will reproduce section from the book:

All this really tells us is that calculating a reliable future return is a tricky thing to do. And it is becoming increasingly difficult in our hyperadaptive world.
Yet, over the past couple of decades, return on investment has become a divining rod for individuals and organizations. Many decision makers ask for an ROI analysis as a prerequisite for almost any action. It indicates that you’ve done the basic legwork to establish what an idea might be worth. And logically the metric does make quite a bit of sense. If you are going to spend a certain amount of money, you want to be sure that it is put to good use. If we still lived in a world of rules that change slowly and with well-entrenched main players, that principle of predictable returns would make sense. But it does not hold up in a world where the nature of the game changes randomly, unpredictably, and very quickly. In this world, ROI loses all value as a tool for prediction.

The bold / underlined part is directly connected to Indian company Reliance Industries Ltd.

In the last 2 months Reliance Industries have raised capital to reduce debt by issuing partial stake in Reliance Jio.

6 deals in 6 weeks: Mukesh Ambani gets Rs 87,655 cr in Reliance Jio stake sale.

Main revenue segment for Reliance Industries as per 2016 report:

Refining          : 66%
Petrochemical : 23%

In other words 89% of revenue as on 2016 was from industry which was well-entrenched, where world of rules changed slowly and principle of predictable returns can be imagined, Running Reliance Industries was easy as it was a business with one time investment and managing the company with professional managers.

What Mukesh Ambani wants?

“Our consumer businesses will contribute nearly as much to the overall earnings of the company as our energy and petrochemical businesses," he added.

The move by Asia’s richest man is the latest sign of the oil-to-petrochemicals group’s pivot toward data and digital services for future growth, as it builds an online platform to take on the likes of Inc. and Walmart Inc’s Flipkart Online Services Pvt. in India. Ambani, 62, told shareholders in August that the new businesses, including retail, are likely to contribute half of Reliance’s earnings in a few years, versus about 32% now.

My concern as an observer of this great company started by Mr. Dhirubhai Ambani is, Reliance is entering into a territory /  business segment where the nature of the game changes randomly, unpredictably, and very quickly.

Also, in this territory of e-commerce / technology driven segments are run by Owner Technocrats. Reliance will find it extremely difficult to run these segments in future.

What Mukesh Ambani has done to Reliance Industries till now is phenomenal but it appears this half decade will be the maximum height Reliance will reach. Post this heights, Reliance Industries will find it very difficult to reach that height / glory in coming decades.