My Article Published: 'Wal-Mart in Banking?'

My Article titled “Walmart in Banking?” has been published today on MBASkool.com. You can read it here:

http://www.mbaskool.com/business-articles/finance/187-walmart-in-banking-and-financial-sector.html

The article analyses Wal-Mart’s interests in the banking and financial sector and tries to see the business rationale in those. It also analyses whether such a move is beneficial for the stakeholders.

Do read and if possible comment/discuss, like, or recommend.

- Rahul

AlumniNM Blog - New posts

Monday, May 18, 2009
B-School Rankings 2009

Sunday, May 3, 2009
Convocation address by Vice Chancellor - 2009

Wednesday, February 25, 2009
Euphoria 2009

The Tata Finance episode

The American financial sector is in the turmoil. From Bear Sterns to developments with Fannie Mae and Freddie Mac, the crisis unfolded and took companies like AIG and Lehman Brothers in the grip. Coveted institutions which took generations to reach the enviable positions were down in some months. It is all in the newspapers these days. Somewhere somehow someone made mistakes which reached the US to these conditions.

Do you think Tatas did a mistake by deciding to set up the Nano plant in West Bengal? Do you hold the CEO of the bankrupt US finance major Lehman Brothers guilty? Did George W. Bush do a mistake by invading Iraq? Any question, that can be answered in ‘yes’ or ‘no’ need not be asked. Bad decisions and mistakes happen; so do frauds. One person’s gain may be the whole system’s loss.

Every event has far reaching repercussions, both positive and negative. The only thing that matters is – how you deal with them and how you let the event affect you. This small case is a very important one, because such cases set examples for years to come.

Frauds happen – deal with them

What does a corporate house do when the managing director of one of its companies commits a fraud? Does it try to put a lid on the affairs or does it make an all out effort to ensure that the stakeholders suffer no losses? When Tata Finance was engulfed in a financial mess, the Tata Group took the latter approach. Before the fraud could be detected by the regulators, it was the Tata Group’s self disclosure that opened the matter up.

Rather than sweep the issue under the carpet, Tatas decided on a two-pronged course of action. First, the interests of the small depositors who had placed their trust in the Tata name had to be protected. Second, an open and objective enquiry would be conducted to bring the culprits to book.

Tata Sons and Tata Industries made available to Tata Finance cash and corporate guarantees amounting to Rs 615 crores. Not many industries would have put hundreds of crores into a company that was sinking and that too without being sure that any of it could be recovered.

Despite the promptness with which the Tatas moved, the public perception of the Group and the Tata brand was affected initially. But it was the right thing to do, and the Tatas did what was required to be done.

Ref.: Tata Review

The Parampara

How times change and how roles reverse. This time, we were on the other side of the stage – we were the seniors and they were the juniors. Parampara 2008 was celebrated on 21st of July, in the same spirit as of yesteryears…

The thing that shocked me last year about Parampara was its ruthlessness. Performances / items get interrupted at the fall of a voice, seniors come on stage and hang the dancer if one move goes mediocre, audience hoots your head off if one line of the song gets linear… this is so ruthless but so our beloved Parampara…

Parampara is not about your stage and arts skills – and in real world, we hardly get a chance to ‘play’ the manager. You never get a second chance to see to a customer if you make one silly mistake. You never get a chance to renegotiate if you make one initial offer that the other side is ready to refuse. You don’t get to speak out your CV achievements when you are on the field. All that matters is – your guts and how headstrong you are – this is Parampara. The most brutal judgement! Just like the market! Anyone can perform when conditions are right – can you when the audience is NM seniors? The ultimate nirvana of a stage performer is here…

Remember – a customer can shoot you off, by signing on a competitor. And hence, seniors can hoot you down, by calling off the curtains.

This year too, there were some brilliant performances from the juniors. Sometimes, we the second year guys didn’t boost the morale by clapping, but it was not because we were nasty. There were guys, who, despite all the hooting, performed very well – that dancer and that singer with his band. I clapped for them with my hands raised – and believe me – those were the guys who will count – and will not need a change management class.

Parampara was the weirdest thing I saw when I was in first year and I cursed it. Now that I know the truth and am able to see the silver lining, I am loving it! Thank God, my one year of MBA eduction didn’t get waste! :)

Long live the Parampara!

CEO Series Lecture

As part of our CEO Series lectures, last evening we had Mr. Keki Mistry, MD, HDFC on our campus. He spoke for about one and half hours on the requested topic “Roles of a CFO”.

He began with the traditional role of a CFO (Chief Financial Officer) in an Indian company, and then followed it with the changing business environment after the economic reforms of 1990s. The roles of the CFO have changed with the changing nature of industrial environment and global competition.

What I liked about his speech was perfectly balanced oratory, and that he didn’t use any fillers in his speech e.g. like, actually, I mean, what I want to say is that: I personally don’t like such fillers while speaking in public but have seen many of even the senior people take help of fillers like these. Also, almost everywhere, he went on explaining point wise, as if he had everything well prepared from before, when actually he was not. To top it all, the day was marked with the news about HDFC taking over Centurial Bank of Punjab, and when asked about it, he said: “We have neither denied not accepted the news. You will come to know about it tomorrow.” This made the audience chuckle.

According to him, Indians don’t have the ‘credit’ culture! Around 8-9% of the borrowers repay their loans to HDFC before the last date! This is in direct contrast to the credit culture that prevails in the West. While this was not a new realisation, I have always wished that we Indians remain in this way: our culture terms credit as bad thing, and that protects us from financial vulnerabilities in the long run.

HBS Vs Our BSchool

The title may be a bit provocative, but if you believe what the students of Harvard Business School say, we are not that different from them. Here, some comments of HBS students are presented on their academics and life (taken from PaGalGuy’s Buzz book). Also, there is a brave attempt to compare those with our life @ Our B School. Please bear with me, you will find many an eye opener: “First year, all students take the same classes in a section of 90 people. Each section spends the entire year in one classroom with professors coming to them. It may sound a little bit like elementary school, but it creates an amazing experience.” Yes, we understand what is meant by amazing; we are going through the same. “You’ll probably only hang with HBS students, a majority of whom will be from your section (90 people). Events, dating, social everything seems to revolve around HBS… Sounds a bit cultish but, by the end of the year, you’ll be fully brainwashed and happy.” OK, so we should stop complaining about our divisional divides! “Each section of 90 students creates familial bonds, and each section takes on a personality of its own.” We too are witnessing it here. “Typically, study groups form in the first week or two of first year consisting of three or four students, optimally from different sections.” We don’t have any study groups from different sections. Therefore, we are almost isolated from what is happening in other sections. “The three cases a night are divvied up so that each member just has to “crack” only one case and prepare one executive summary for the study group members; this prepares each of them for the “cold-call” where the professor comes into the classroom and randomly calls on a student to present his/her analysis.” From second trimester onwards, many of us have adopted this method. Nice to see that HBS guys also do this. “Second year gets much easier.” Yes, brothers; same here. “On average, in the first year, three out of five professors in each semester are excellent, and two out of five are more junior, and therefore more variable.” We understand your condition dudes. “As an international student, I had some reservations about class participation but it went really well. HBS is not competitive in classes! Shark comments are appropriately chastised (!) right away to make sure they won’t happen again.” Many a times, even we tried to silent the shark comments! And that too by clapping! “All classes are taught using the case method. It’s hard to understand until you’ve experienced it, but it’s a fantastic way to learn.” OK. We are a bit more inclusive to adopt best of the all worlds J “The accessibility of faculty at HBS is also fantastic. Most faculty host lunches to get to know everyone outside of the classroom.” OK, hope some faculty reads this. We all love free lunches J “Grade nondisclosure is great. If you receive honors, you can put that on your résumé, but other than that, you can’t disclose grades. The grading system is the following: top [10 to 20] percent receive a one, middle 80 percent receive a two, and the bottom 10 percent receive a three.” Nice idea! Let us have it here also! “About two-thirds of students live on campus in dorms or apartments. I enjoy the residential aspect of the campus. It does sometimes create a little bit of a bubble from the real world, but the interaction between students is great.” So they also have some resident and some day scholars; though % may vary. “Dorm rooms can be painfully small and outdated but on-campus apartments are a good (if pricey) alternative.” OK, you too! “HBS is run as a business and students are informed that the MBA program is a loss-leader for the separately run executive management programs.” I think HBS learnt this from here! “Shad, the HBS gym, is like a country club facility. It’s only $60 per semester for a student and is well worth the price of admission.” HBS gym is cheaper than ours! “On average, every week there is one CEO from a Fortune 500 who speaks on campus.” We are following up, just remove the F500 criteria.

To my teacher Mrs. Seema Khanvilkar

Dear Madam,

That our last class in business communications is over, the Mondays without your classes would be strange. Today, while going through the newspaper, I got to read an article which made me remember you. Asked if he found captaining Indian cricket team a burden in such a scenario, Rahul Dravid said, “Burden is too strong a word and people say that because of how I look. I’m not naturally a cheery-looking soul on the field.”

Rahul Dravid's self awareness made me recall what you always say: "You should feel comfortable in your own skin. No matter how you are, this is most important." And you prickle the skin of one of your hands with the other, while you say so! Incidentally Rahul Dravid is credited of being one of the most cool-headed guys in Indian cricket team, again making me recall your saying: "Thinking on your feet is very important. Not everyone is able to do that." This episode connects with me very well also because I always get a similar feedback - of carrying a serious face most of the time!

Our classes started from you making us speak on "love", and after the speech, you and the class gave us the feedback. The classes afterwards included lectures on non-verbal communication and body language, a class-feedback on one-another, knowing yourself self-evaluation exercise, telephone etiquette, interview basics, dining etiquette, etc. You were so nice to take us to a restaurant and teach us how to handle a continental cuisine. And in the last class, you showed us an English movie in the class, and we had to analyse the oral and non-verbal communication in the movie.

Despite being a corporate trainer in the field of communications, you take pain to take classes in our university. You boast of the fact that you enjoy teaching, and it shows in your attitude And what a greater testimony than the words of your own students? Listening, giving feedbacks, and correcting others seem easier than what it really is. Coping up with some boring students, some freak ones; listening to the non-sense of some others is too much of a job at the end of the day. But you seem to be made for your job.

You remember, in the final extempore, some of the students didn't do well. In fact, some turned red faced and stopped midway. I was really ashamed that we fared so poorly in your final class. What would have been a better gift from us to you than a brilliant performance in front of you? There is one area in my opinion where you can do better. The fact remains that the guys and girls that fumbled were predictable. In the class exercises, they saved themselves from the trouble, while the strongest ones outsmarted and outshined in front of all. And remember the guys who volunteered themselves for taking the interviews; they were all with above average communication skills. I think in future, you should make an extra effort in raising the level of the bottom of the pyramid!

Personally, I didn't have the opportunity of having met many sensible and perfectionist teachers as you are. You are the one who taught me how to pronounce "righteous". From deepest of my heart, I wish to thank you for your efforts put in for the benefit of ours. May you have very happy fruitful days ahead. May you always enjoy a sound health and great successes in your professional life.

With best regards,

Yours truly,

Rahul

Book - Open-Book Experience

‘The Open-Book Experience - Lessons from over 100 companies who successfully transformed themselves’
John Case
Perseus Books; Amazon [A]

Open-Book management is a new approach to management – the term being coined by the author John Case who is an author of 4 business books including Open-Book Management: the coming business revolution. The author is executive editor at Harvard Business School Publishing where he edits the monthly newsletter Harvard Management Update.

Open book management starts with this basic assumption: A company performs best when its people see themselves as partners in the business, rather than as hired hands. And the building blocks of an open-book system are:

1. Transparent company: You have to create a transparent company.
2. A company of businesspeople: You need a system of joint-accountability – a system where everyone is responsible for his or her part in the company’s performance.
3. A stake in success: You give a stake in success as well as pay them for their time.

The book presents examples from across industries to describe what open-book management is, how it is useful for top and bottom lines and how it is implemented in both the small or big companies. An interesting read, but readers should go deep only if they are really interested in the nitty-gritty, otherwise a quick scan will be of great help.

Book - Case of the Bonsai Manager

‘The Case of the Bonsai Manager – Lessons from nature on growing’
R. Gopalakrishnan, Executive Director, Tata Sons
Penguin Books; Amazon [A], Rediff Books [R]

Recently one of our marketing professors made a very good point: that Western authors in management haven’t and can’t know the pulse of India and hence we can’t learn marketing by reading Kotlar and other Western authors alone. In the same arena, a question arises: how much valuable contribution Indian authors have made in the management writing? This book is also a part of the answer.

The author loves and watches nature and uses his experiences to pill off the intricacies of business leadership in a manner not found quite often. By giving examples of animals and creatures from snails to elephants, and then from the plant life, this book tries to reach out at the biggest problem from a different angle – what causes managers to get their growth restricted or shunted and hence they are reduced to being a Bonsai Manager….

The book has a slow pace and examples, though all Indians, are at places personal and couldn’t be seen without creating a good/bad impression about the organisations they deal with. Overall, here is a great book for managers and managers-would-be, and also is a brilliant book for nature lovers who want to see how their knowledge and experience can be converted (read marketed) into such a beautiful read.