Reliance shuts petrol stations

Reliance Industries (RIL) has decided to close all its 1432 petrol pumps. It is because the subsidies given to the public sector oil retailing companies were making its business economically unviable. The company hasn’t sold off its stations – but is waiting for any favourable move by the government to extend the subsidies to the private players also. There are some other private players like Shell and Essar who are also fighting the losing battle.

When Reliance had entered the oil retailing business, it was the same time when I had cleared a written exam of HPCL and was to be interviewed by them. I made many visits to the petrol stations and offices in Bilaspur, to get to know the trade and issues. I also met many drivers. People preferred the oil from Reliance stores, because they were pure, when compared to the adulterated oil from the public stores. And not to be surprised that RIL got a market share of over 14% in no time. Most of its stores were running just nearby the public stores, and we could see long queues in front of them. RIL also brought in some innovations like printed receipts, latest meters and machinery, tie ups to run food courts in the campus and many more were yet to come. But, in the end, like many sectors in which public limited companies have got undue advantages, this also seems to be one another.

What makes me wonder is – is it really that Reliance made such a big mistake? The company is known for some very shrewd moves, and many of its manoeuvres have been possible because of governments’ supports. When the company decided to get into the oil retailing business, it knew very well that oil was one thing whose price needed to have a ceiling. And its demand for government subsidies is also misplaced: as government is already running petrol stations, why should it subsidies some other party which competes with its own stations? The conclusion is: let us wait and watch.

News Ref: ET

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.

Group polarisation

Group polarisation is a phenomenon relating to our tendencies to make decisions which are more ‘extreme’, when in groups, rather than when individually. It is also called ‘risky shift’ (earlier term) and ‘incestuous amplification’ (military).

After group discussions, attitudes such as racial and sexual prejudices are seen to be reduced for already low prejudiced individuals and increased for already highly prejudiced individuals.

The mechanism of group polarisation is said to be based on two phenomena: Social comparison (drive of individuals to appear socially desirable) and informational influence (individuals weighing ‘remembered’ pros and cons).

A host of people and organisations will make use of this phenomenon – from people groups, religious organisations, political parties, or even the terrorist groups.

But I wonder why group composition or peer type has no effect here? I am trying to reason this out from my own experience. If I am inclined heavily towards an issue and am discussing that within a group, if others think like me, definitely I would become more confident of myself and would go for harsher conclusions… And on the other hand, if others have predominantly opposite view from me, I would tend to get back into my shell, reinforce my arguments, and in an effort to defend my views, I will become harsher! Also, in a way, this is like negotiation, to show the other person that you have compromised from your position in order to accommodate the other person’s views; I will tend to demand more and then later pull back a little. But in effect, I have become harsher than I was before!

Another interesting aspect is that the ‘online’ or ‘virtual’ groups behave in almost the same manner except that members feel freer in sharing their views because of the associated anonymity. They will still behave in the same manner – becoming milder if they were mild and harsher if they were harshly prejudiced before the discussion. You must have observed this phenomenon among bloggers. The more the readers counter you on the comments page, the more you get reinforced in the strength of your own arguments. Very few of us are able to break this tendency and are truly receptive.

This phenomenon again raises the question: when and how much discussion we should have and on what issues? Also, this phenomenon makes us think about can we get some desired results by any manipulations: if I know that Mahesh is highly prejudiced on an issue, will I make him more or less prejudiced by involving him in a group discussion? Also, the question comes: what about rationality? Am I too bounded by such psychological theories? How can I break the clutter? From my own experiences, I understand that this phenomenon is true and real. But I would prefer not to confirm to this.

Pages referred: Wikipedia article [http://en.wikipedia.org/w/index.php?title=Group_polarization&oldid=179775673], Sharon Bender [http://www.sharonbender.com/polarization.html]

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.

PGJMC

I just completed my PGJMC course.

Course code: PGJMC
Course name: Post Graduate Diploma in Journalism and Mass Communication
Offered by: Ignou (www.ignou.ac.in)
Duration: 1 year
Papers: 4
Work experience: Minimum 2 years in press or media

I did this course out of my extra-curricular interest; though many people initially laughed at the idea. What has journalism got to do with chemical engineering? But I did it; though I took two years instead of one to appear for the exams.

I found the course content satisfactory. The target junta for this course are those already working in the media industry, and haven’t got a formal education in the field of journalism and mass communication. As you can see, there is a mandatory requirement of two years of work-ex. (I managed it J; some things are fair in love, right?)

In case some of you want the study material, and can collect from me in Mumbai, contact me soon. Otherwise I will donate that to the nearest Ignou study centre.

Now I have plans to do at least three more courses:

o A course in disaster management
o MA in English
o MA in Political Science

Can you suggest, from where to do the last two courses? I am already doing MBA, and that is not a joke doing that from here. But I believe I can still manage to do these, if not in 2 years, then in 4. But everything is possible.

'Legal' Quotes - to make this immemorial

As we all know, our Law classes this trimester were happening – in their own sense. I thought to share some ‘dialogues’ from the classes here. The objective is just a few chuckles by recollecting these :)

When I asked whether definition of criminal offense etc in different countries may be different, reply was: “How dare you say that?”

This was when some one asked whether the fixed deadline of 3 months for appeal may be extended: “If you have to marry or your wife is pregnant, you may apply for extension of the period of appeal. The appellate body will study your case and give verdict”.

This one was in the penultimate class, targeted at Rohit: “If you become too bulky, the court may cut you into pieces, and make you slim.”

His favorite: "... No one can poke his nose into the matter or any part of his body...."

(PS: posted in a future date)

Propaganda of Retail

A government ‘study’ has come up, proving that organised big retail is harming the unorganised small retail shops’ business. [Link] This survey (and they call it a study) was started on the directive of UPA chairperson. The survey involved around 1000 small retailers in four Indian cities, including 800 who were within a 2.5 km radius of new organised retailers. The methodology of the survey involved asking small unorganised retailers whether their sales have been affected by the emergence of big retailers or not. The result? 50% of small retailers reported lower sales, and 61% of surveyed retailers pointed to competition from organised retail for their declining financial health.

In my small town, my neighbourhood kirana store gave me some discount even over the maximum retail price (MRP), at lease for some items like Chyavanpras, Horlicks, and some local made products. Here in Mumbai, the neighbour mom-n-pop store takes not a penny less than whatever is printed over the packet, even if the item is an agarbatti. On the other hand, they will keep complaining of the Big Bazars and the big malls. The point is, in absence of an option, I will have to buy from the small shop, at higher price and some times bad service. But if I get an option and go to a Big Bazar or Hyper City, the small store wallahs would complain.

I don’t understand why either the government or the industry should take note of this survey. This is common psychology that a small shop owner would always complain of losses due to the presence of a big retail outlet. If we had to remain small, whole India would remain nothing but a Sabji Mandi! I believe organised retail is a thing whose time has come.

How many small unorganised retailers give you proper receipts and pay income taxes to government? How many of them cover their employees with insurance? How many of them give dignity to the employees they take help of? How many never employ child labour? It is sad that while the governments worldwide would like the unorganised sectors to migrate into organised ones, the politics of numbers would make the governments in India try to keep up the status quo. India should remain a nation of snake charmers, you know. Pappu paas kab hoga?

Mass-customization: the Ice-cream wallah way

There is a small but big word in marketing: “Mass-customization”. This means that the products being offered are customised for the masses, not only for some selected few customers. Examples? The Dell laptops; you can visit the Dell website; configure your laptop as per your requirements and then order. You will be able to decide on the price based on exactly what you want. Some level of mass customization are also offered by the automobile firms where you can chose what colour, accessories, and components to get your car with. But for me, the biggest business doing the mass customization is my neighbourhood Mewad Ice-cream wallah.

You want a cone for Rs 5, or 6, or 10? You want fruit salad or faluda of Rs 5, 10, or 15? Do you love a particular flavour? The boy won’t ask any question, he will give you exactly what you want and for how much. This is unlike the ice creams from big firms and dairies where you get fixed stuff and pay fix amount…

Inspired by my operations professor who always give indigenous examples instead of straight-from-the-books stuff...

Book Review: The Goal by Edi Goldratt

I read the book "The Goal" by Edi Goldratt some days back. It was made compulsory for our operations management class. If you haven't read the book yet, I would recommend it to you. It is a novel which is called "Love story of manufacturing" and is based on the theme of Theory of Constraints (TOC). 

I have worked in the manufacturing industry. Though the process described in the book is different from that industry in terms of (batch) manufacturing, still there are methods and insights which can be replicated. Immediate recall would be like importance of and how to reduce inventories, how to handle bottlenecks and exploit them, and culture change by promoting ideas from workers.

I remember when our works manager asked them to prepare a make-shift bridge to reach the inside of the kiln, one which could be removed and inserted much faster, he was actually practicing the right way to treat the "bottleneck". Kiln is our bottleneck most of the time. As the book says, an hour lost on the "bottleneck" is an hour lost for the entire system.

I came to know that many companies overseas which have made reading "The Goal" compulsory for their entire staff. I recommend this book to all in the manufacturing sector.

Title: The Goal

Author: Edi Goldratt

Publisher: Productivity and Quality Publishing, Chennai

Rs: 395

ISBN: 81-85984-13-1

Book Review: 11 Minutes by Paulo Coelho

I have read Paulo Coelho, through three of his other masterpieces: The Alchemist, The Pilgrimage, and Like the flowing river. How was 11 minutes? At times frightening, at times shocking, at times interesting and most of the time daring. It is the story of Maria, a young Brazilian girl who doesn't believe in any boundaries, bindings, standards or societal norms. She believes in going to the extreme, and taking all her decisions herself. A boy she liked in her school tried to talk to her and she refused. And then she never saw her love again. Life taught and she commanded her life, her personal diary was a witness to all. She loved each slice of adventure, and then she chose to become a prostitute in a country far from her own, and gets to understand the psyche of men, women, sex, suffering and the truths of life. In the end, a painter falls in her love and she makes a decision to go with him. I love the happy ending stories. The book covers her moments of truth very well. The book has gone lengths on the how-to stuff, but that is not something that we would remember about it minutes after we finish it.

Some parts that I underlined:

On women:

Beauty, my dear, doesn't last.

Original sin was not the apple that Eve ate, it was her belief that Adam needed to share precisely the thing she tasted.

On men:

The most important experiences a man can have are those that take him to the very limit; that is the only way we learn, because it requires all our courage.

She began to put clients into three categories: the Examiners, the Pretty Women type, and the Godfathers.

On relations:

I made my first mistake when I was eleven years old, when that boy asked me if I could lend him a pencil; since then, I have realised that some times you get no second chance and that it's best to accept the gifts that world offers you.

If I must be faithful to someone or something, then I have, first of all, to be faithful to myself.

Now, though, I am convinced that no one loses anyone, because no one owns anyone. That is the true experience of freedom: having the most important thing in the world without owning it.

On her profession:

She discovered, to her surprise that one in every five clients didn't want her in order to have sex, but simply to talk a little.

When she realised that releasing tension in the soul could be as lucrative as releasing tension in the body, if not more lucrative, she started going to the library again.

For a prostitute, the kiss was sacred. Nyah (her colleague) had taught her to keep her kisses for the love of her life, just like the story of sleeping beauty.

On history of prostitution:

Prostitutes appear in classical texts, in Egyptian hieroglyphs, in Sumerian writings, in the Old and New Testament. But the profession only started to become organised in the sixth century BC, when a Greek legislator, Solon, set up state controlled brothels and began imposing taxes on the skin trade.

The Greek historian, Herodotus, wrote of Babylonia: "They have a strange custom here, by which every woman born in Sumaria is obliged, at least once in her lifetime, to go to the temple of the goddess Ishtar and give her body to a stranger, as a symbol of hospitality and for a symbolic price."

On loneliness:

Human beings can withstand a week without water, two weeks without food, many years of homelessness, but not loneliness. It is the worst of all tortures, the worst of all sufferings. Like her, these men, and the many others who sought her company, were all tormented by the same destructive feeling, the sense that no one else on the planet cared about them.

Art of gift giving:

She placed the pen gently in his hand. Instead of buying something that you would like to have, I am giving you something that is mine, a gift. A sign of respect for the person before me, asking him to understand how important it is to be by his side. Now he has a small part of me with him, which I gave him with my free, spontaneous will.

When she decides to leave her profession:

I don't care whether it was once sacred or not, I HATE WHAT I DO. Its destroying my soul, making me lose touch with myself, teaching me that pain is a reward, that money buys everything and justifies everything.

No one around me is happy; the clients know they are paying for something that should be free, and that is depressing. The women know that they have to they have to sell something they would like to give out of pleasure and affection, and that is destructive.

Pain for pleasure or peace..

You experienced pain yesterday and you discovered that it led to pleasure. You experienced it today and found peace. That's why I am feeling you get used to it, because it is very easy to become habituated: it is very powerful drug. Pain is frightening when it shows its real face, but it is seductive when it comes disguised as sacrifice or self denial. Or cowardice. However we may reject it, we human beings always fid a way of being with pain, of flirting with it and making it part of our lives.

Does a soldier go to war in order to kill the enemy? No, he goes in order to die for his country. Does a wife want to show her husband how she is? No, she wants him to see how devoted she is, how she suffers in order to make him happy. Does the husband go to work thinking he will find personal fulfilment there? No, he is giving his sweet and tears for the good of the family. And so it goes on: sons give up their dreams to please their parents, parents give up their lives in order to please their children; pain and suffering are used to justify the one thing that should bring only joy: love.

Innovative Indian Companies - HCL Technologies:

1. ‘Employee first, customer second’: Because of its shock value, this initiative invited world wide interest.

2. ‘U’and ‘I’ approach: Employees could directly approach and query President Mr. Vineet Nayar.

3. Trust Pay: 85% of the salary of employees were made fixed, including bonus, along with a trust in them to deliver results.

4. 360o feedback: This was made compulsory, and open for all to see. The President of HCL was the first one to put his own form on the intranet for all to review. Others followed suit.

As a result, HCL Technologies saw its attrition rates dropping, employees better engaged in delivering, and deals getting better and multi-functional.

Ref: When corporates change track, J. Mulraj, HT, Mumbai, 18 Oct. 07

Movies: Ram Gopal Verma ki Aag

I watched Ram Gopal Verma ki Aag two weeks after it was released. I wanted to understand why did the movie failed to make a mark. I got to realise a very wrong trend among the present directors like Ram Gopal Verma: 

This is an adaptation of Sholey. In order not to avoid the blame that RGV has copied an idea, he just went on to ‘reverse’ almost all the scenes. This results in failure of the "effect".

I think RGV thinks he has perfectly decoded the formula of making a hit Bollywood movie. Following is his checklist:

a. Take most popular actors

b. Mix several irrelevant song and dance sequences.

c. Decorate with one or two hot item numbers. Here also the offering is standardised. There are some standard poses and moves by actresses, which are very typical of RGV’s productions.

d. Make use of camera angles well, very often scenes are taken from looking upwards.

e. Very often some very uncommon sounds like chair moving, water dropping, etc are mixed to create an effect.

After watching the movie, I am not surprised that it failed. Because:

- The ultimate realisation should be that we can copy the moves but can’t recreate the "magic".

- The movie has excellent performances by Susmita Sen in the roleof the widow daughter in law. But the movie lacks equal performance from others, except Ajay Devgan who tired his best. 

- One very popular character in Sholey was Dharmendra and everyone just loved him for his role. In Aag, the role is acted by a new face, a model looking guy, who fails to create the magic, and is just average.

- The chemistry between the characters of Sholey, e.g. Jay and Veeru, Gabbar and Thakur, Veeru and Basanti, etc have not been developed enough.

In a nutshell, this movie is another example of the situation when talented people think they have perfected the "art" of being successful, while in reality there is no such art. Movies have been successful not only it has been acted and directed well but because ‘public’ or ‘viewers’ have liked them. Recreating the older movies creates a very different impression in the minds of the viewers, and there is always a fear that the viewer will recall the old movie’s scenes corresponding to each of the new one’s scenes. I have seen Umrao Jaan, and I liked it perhaps only because I have not watched the original one; otherwise the movie failed on the box office. Though I liked Don, it was because the charisma of Shahrukh Khan is of comparable standard to that of Amitabh. And in the Bollywood's formula or masala movies, it is the charisma that pulls the movie through. Producers wanting to recreate old movies should select the ones whom the present generation has not watched or with whom the present generation has not been able to connect with. Otherwise I can say that the probability of failure of recreated movies is >80%.