Leadership – Page 20

Can you name India’s biggest hotel chain?

This chain started in India, expanded to China and has now invested heavily in Indonesia. It is called OYO (On Your Own) and was started in 2011 by then 18-year old Ritesh Agarwal. It is like the “Uber” of hotels – acquiring and setting standards for previously struggling hotels.

The group now has more hotel rooms in India than Taj Hotels – of course, Taj is at the top end while OYO has been a big provider of budget rooms.

Within three months of its foray into Indonesia, the company has launched the first phase of expansion in 16 cities and witnessed a 5x growth. It aims to expand to 100 cities by the end of the year.

The company is adding on an average 70 hotels in Indonesia every month.

OYO created a uniquely Chinese identity for its local Chinese business and is localising in Indonesia.

OYO is in over 280 cities in China, with about 5,000 hotels, and over 260,000 rooms.

The company has already started operations in Malaysia and will enter Philippines soon.

It plans to have a pan-southeast Asian presence by the end of the year, before it starts making a move towards Europe.

Kerala – great tourism but also good for innovative business

India got its largest startup ecosystem Sunday when Kerala Chief Minister Pinarayi Vijayan inaugurated a facility housing incubation set-ups across a string of segments in modern technology.

The Integrated Startup Complex under the Kerala Startup Mission (KSUM) includes the ultra modern facilities of Maker Village that promotes hardware startups, the BioNest that promotes medical technologies, BRINC which is the country’s first international accelerator for hardware startups; BRIC which aids developing solutions for cancer diagnosis and care, and a Centre of Excellence set up by industry majors such as UNITY.

After the completion of three more projects, Kerala will have startup and incubation space of 5 lakh sq ft, which will be the largest of this type in the world.

No less than 30 applications for patent has gone from startups with the 13.5-acre TIZ, the CM noted, lauding it as a sign of the high-quality work in the zone. Simultaneously, Kerala was sensing increasing optimism in boosting software export from the state.

M Sivasankar, secretary, IT (Kerala), pointed out that the entire space at the TIZ facility has been sold out.

“This has never happened in our country, where it usually takes a couple of years for an incubator to get the whole area occupied,” he said. “The first three floors of the new complex have been furnished, while the rest of the floors have already got allotted to various startups.”

“The campus has another incubator complex coming up and it will be opened early next year,” Sivasankar said.

Besides the Maker Villager with its 30-odd startups, the facility has nascent firms working in fields such as biotechnology, computer-aided design, augmented/virtual reality and advanced communication.

So – Kerala is “gods own country” for tourism but also a magnet for innovative business. Worth a visit.

Climate Change – India turns away from coal as Australia and Adani still dream of selling them more coal

More evidence that the Australian and Adani dream of selling coal to India is just a fantasy.

India is increasingly shifting towards green energy

Simon Mundy of the Financial Times reports that Indian power companies spent much of the past decade rushing to build coal-fired power plants in anticipation of surging electricity demand as economic growth took off.

You can see the article at https://on.ft.com/2GShz3Q

Now, many of those projects are mired in deep financial distress and private investment in coal power has ground to a near halt – making the Australian and Adani dream of selling more coal to India look deluded.

Mundy writes that the biggest driver of long-term uncertainty for the industry is one that few anticipated 10 years ago: an explosive take-off in the renewable power sector, as India joins the global push to tackle climate change by shifting towards green energy.

Soon after taking power in 2014, Prime Minister Narendra Modi’s government set a target of increasing India’s renewable energy capacity by 2022 to 175 gigawatts, equivalent to 40 per cent of the country’s total power capacity at the time of the announcement.

Indian coal power producers are considering renewable projects when they build new capacity © Getty

Mr Modi’s ambitions were stoked by a dramatic fall in the price of solar panels after a huge expansion of production in China, which is seeking to capitalise on the international drive to cut emissions. This was steadily making the cost of electricity from solar plants — once far more expensive than coal power — more competitive with plants running on the dirtiest fossil fuel.

Making a mockery of Australia’s long hopes of selling more coal to India, in the 2017 financial year, newly added renewable energy capacity overtook new coal-fired capacity for the first time. The renewable push attracted major investors such as Japan’s SoftBank, whose consortium last year sealed a deal that stunned the industry.

Mundy goes further on coal – this shift in the industry’s economics means that coal power — once one of the hottest prospects for Indian industrialists — is now a space where most fear to tread.

“You’d have to be quite courageous to invest in coal at this point,” said Navroz Dubash of New Delhi’s Centre for Policy Research.

Does Australia realise that India has plentiful supplies of coal in its eastern region?

This year, state-run NTPC — by far the biggest thermal power producer in India — has cancelled several plans for large coal projects, including one for a giant 4GW plant in southern Andhra Pradesh state.

Increasingly, large private-sector coal power producers are looking at renewable projects when they build new capacity.

Even Adani, which is in big strife with plans to mine and export coal from Australia, has invested more than $600m in a solar plant in Tamil Nadu — a southern state with abundant sunshine.

There is no longer an economic case for the highest-cost coal plants in inland areas of the country’s south and west, which are forced to rely on coal expensively transported over long distances from the northeastern coalfields, said Tim Buckley at the Institute for Energy Economics and Financial Analysis.

Credit Suisse estimates that more than half the debt owed by power companies is now stressed — with interest payments exceeding profits — amounting to a total of more than Rs2.5tn ($35bn).

Several coal-focused power groups are being dealt with under India’s new bankruptcy code, which will force them into liquidation if a swift sale is not agreed. Indian authorities have an incentive to minimise the distress in the coal power sector. State-controlled banks, reeling from a surge in non-performing corporate loans, are heavily exposed to this industry.

But the Modi Government is clear in favouring renewables, leading to long-term self-sufficiency, lower costs, more competitive industry and better climate outcomes. Even though major corporates like Tata and Essar are struggling with the economics of coal power plants, the Government remains unwilling to shift from renewables.

Which makes the Australian/Adani dream of creating our biggest coal mine and shipping it all to India look like a case of sticking to an old fantasy while the target market has moved on. Can Australia move on too?

Because Australia is expected to commit about A$1 billion towards the scaled down A$5 billion mine project, the Australian Prime Minister and the Queensland Premier need to have some serious discussions with Adani Group – and possibly Indian Prime Minister Modi – to get answers to some disturbing questions:

If Adani is simply planning to supply coal to its own power stations in India, what tiny fraction of the Carmichael coal reserve does this represent?
Does Australia face the worst of all worlds with no royalties and vastly fewer jobs than expected?
Exactly how many jobs will Adani Group commit to long term?
What would be the environmental degradation costs of the project?

With these answers both governments can assess the risk of being left holding a distressed or potentially stranded asset of no value to anyone.

Right now our politicians seem to want to resist the future, rather than embrace it.

India retains world fastest growing economy, while Apple to boost manufacture in Tamil Nadu

As Apple struggles for impact in India, one of their key contract manufacturers, Foxconn, will invest in new production lines to manufacture certain iPhone models in its factory in Sriperumbudur near Chennai, Tamil Nadu, according to the Economic Times.

Apple refused to comment on the development while Foxconn India officials were unavailable for comment. Lack of local manufacture is holding back the traditional “single store” marketing push of Apple, so this move is a timely one.

The move certainly reinforces the status of Tamil Nadu as a specialist manufacturing state, with cars, phones and IT on the list.

It was also announced in January that India remained ahead of China to retain the tag world’s fastest growing large economy withstanding several ups and downs, spike in oil prices and global trade war like situation during 2018.

According to Niti Aayog (national economic planning body) Vice-Chairman Rajiv Kumar, the focus of the government in 2019 will be to expedite reforms with a view to accelerate growth.

“India will grow at around 7.8 per cent in the next calendar year and investment cycle that has already started picking-up will gather further strength and we will see more private investments,” Kumar said.

Looks like a good year to review your India engagement strategies, and put some energy into the Indian market.

The Jamnalal Bajaj Awards promote the values of the great Mahatma Gandhi

Many things amaze me in India and one that both amazes and inspires is the Jamnalal Bajaj Awards – for the “unsung heroes” who inspire many through selfless effort in the tradition of Gandhian values.

My good friend eminent scientist and regular visitor to Australia, Dr R A Mashelkar, is Chairman of the Selection Committee of the Award for Application of Science and Technology for Rural Development and a Member of the Council of Advisors for the whole scheme.

Dr Mashelkar said: “The fundamental issue is about Gandhian values and creating an inclusive society by dismantling inequalities.”

The Nobel Laureate Kailash Satyarthi is one of the trustees of the Jamnalal Bajaj Foundation and a jury member for the Awards: “Changemakers firstly need to understand the trend of the change and then change the direction to positivity, righteousness, justice, equality and humanity.”

My country – Australia – has seen a decline in the reputation of major institutions and corporate Australia is in the firing line as the Banking and Finance Commission finds unethical behaviour is rife. Beyond the so-called ethic of “building shareholder returns”, no Australian business leader has had anything constructive to say on corporate ethics. Very disappointing. We could learn much from this foundation and the great Mahatma Gandhi.

More information about this wonderful foundation and the awards is at http://www.jamnalalbajajfoundation.org/

Modi Government to do more on “ease of doing business”

Watch out for more improvements in India on “ease of doing business”. India’s rise in the World Bank “Doing Business” rankings from 142 to 77, over the last four years, was stunning – but the government wants more.

The Prime Minister, Shri Narendra Modi, recently chaired a high-level meeting to review progress with regard to “Ease of Doing Business.”

The meeting was attended by senior Union Ministers related to economic matters; Maharashtra Chief Minister Shri Devendra Fadnavis; Lieutenant Governor of Delhi Shri Anil Baijal; and senior officials from the Union Government, Maharashtra Government and Delhi Government.

Subjects such as construction permits, enforcement of contracts, registering property, starting a business, getting electricity, getting credit, and resolving insolvency came up for discussion.

The Prime Minister stressed the need to improve last mile delivery, and focus on streamlining procedures, which would improve not just the “Doing Business” rankings, but also increase the “Ease of Living” for small businesses and the common man.

He said this is extremely important for India, as an emerging and vibrant economy. He also spoke of the tremendous global interest about the rise in India’s “Doing Business” rankings.

So – in 2019 there should be more news on ease in doing business with India.

India attracting major MNC research and technology centres

Today, multinational companies (MNCs) from the USA, Europe as well as the Asia Pacific region are setting up their research and technology centers in India. These centers are mainly focused on research & development (R&D), Business Process Management (BPM) and information technology (IT).

These centers are commonly known as Global In-house Centers (GICs). The primary reason for moving their core operations to India are no longer just cost. “It is digital technology that is bringing companies here”, opines K S Viswanathan, Vice President, Industry Initiatives at India’s leading IT industry association NASSCOM.

India has clearly moved away from cheap outsourcing work to digital-technology areas such as big data, analytics, mobility, artificial intelligence, machine learning, IoT (Internet of Things), blockchain as well as robotics.

India today has more than 1500 GICs, being operated by MNCs like Target, JCPenney, AB (Anheuser-Busch) Inbev, Saks Fifth Avenue, Grant Thornton, Adobe, Fiat Chrysler, GM, Volkswagen, Hyundai, Texas Instruments, GE, Honeywell, Airbus, Boeing, Shell, AON Hewitt, Intel, Qualcomm, Tesco, Petrofac, Novartis and Mercedes Benz.

6 trends to watch for India in 2019

1. Politics to dominate

Internal politics will dominate India with a general election due in May 2019. The Modi Government won in 2014 with a slogan of “good days are coming” but higher inflation, declining rural incomes and lack of jobs are all hitting government prospects, while the big unknown is the huge number of “first time” voters – India has 20 million young people turning 18 each year which means there will be around 100 million first time voters.

Modi has so far appealed strongly to young voters. However, state elections show that the Indian voter is now harder to predict. Most predict Modi will be returned but with a reduced majority. But when the world’s biggest democracy votes, politics becomes the theme of the year.

2. Trade deals point to stronger region

India has a growing number of trade deals that place it at a point of influence in the Indo-Pacific Region and there is a growing prospect of countries such as India, Indonesia and Australia leading a stronger Indian Ocean grouping. Of significance is the Regional Comprehensive Economic Partnership or RCEP (a trade alliance currently in negotiation among 16 countries in Asia and Oceania) which India could join in 2019 – perhaps a long shot but one to watch.

3. Fashion, weddings and pride

National pride has been growing (some call it Hindu pride, but it seems broader) and so we can expect Indian fashion, traditions and weddings to be bigger than ever – the wedding planning industry will be booming but fashion and festivals not far behind. The trend in India is to combine modernity with preservation of the past – a great balancing act. Another result is that well placed local brands – if marketed well – will attract huge consumer interest. And any year now the west will become very interested in “all things Indian” which is good news for Indian fashion, music, films and dance.

4. Economy and shares to grow

Despite trade and currency wars slowing global growth, Moody’s and others predict continuing Indian economic growth and shares to remain buoyant for 2019. However, keep in mind shares have been booming – the Nifty 50 Index (the largest 50 stocks in India) rose from 7000 points at the end of 2015 to 11,750 points in September 2018. That is a growth of 57% in the market in just three years. It seems the psychological touch point is 10,500 for the Nifty – above that and shareholders will have a good year. Below that and watch out.

5. Business opportunities abound

Healthcare for India has got to be one of the world’s biggest business opportunities with massive growth prospects for healthcare clinics and online service delivery. When you consider 60% of the people are rural but 80% of healthcare is urban (and not meeting demand there) so there will be a big rural boost. Agribusiness is strong with specific areas to watch – dairy, butter/ghee, strawberries, button mushrooms, salad supplies and alternative production such as hydroponics on urban fringes. But really, growth opportunities are everywhere as domestic demand soars – tourism (domestic and global) and education (including western immersion tours for Indian uni students) are top growth areas.

6. Energy up

India is a global leader in investment in alternative energy and this will gain ground with solar, wind and biomass to surge ahead. All of which makes the proposed and controversial Adani coal mine in Australia more of a mystery.

To know culture deeply you need to ask the right questions – not just “how are we different?”

To do business we need to have some idea how people will behave. That is why operating globally and across borders requires a high level of cultural awareness.

But if all we do is gain a general idea of the culture and how they differ from us, we are likely to be unprepared.

We are amazed when the person we are dealing with does not fit the culture picture. The American we are trying to impress is in fact quiet and retiring, not brash and out there as we thought. Or the Indian we expected to be incredibly polite and reticent turns out to be brash and in your face.

Why do we get this wrong?

We have only asked one question instead of digging deeper. We have asked “What culture do they have and how does it differ from ours” – it is an important question but this is only the beginning of being prepared.

What questions should we ask in addition to the big “culture difference” one? For this I turn to a global leader in understanding culture, Andy Molinsky, a Professor of Organizational Behavior at the Brandeis International Business School. He’s the author of Global Dexterity and Reach. Here are his three questions:

Question 1: What do you know about the region? Just as it is useful to learn something about culture norms when diagnosing your situation, it is good to learn something about region norms. For example, if you were doing business in the United States and assumed that people from the Northeast would be quite similar to people from the South or from the Midwest, you might find yourself surprised. Similarly, you’d be misguided if you assumed that Southern and Northern Italy are identical or that people from rural and urban areas of China tend to act in similar ways.

For India, there are at least four major regional differences (north, south, east and west) but a country with 26 major languages has multiple regional differences.

Question 2: What do you know about the company or industry? Like countries and regions, companies and industries also have distinctive cultures. How you would interact with a boss at Google is quite different from how you would interact with a boss at Microsoft or Intel.

In India, the boss of an established company like Tata Sons is going to be very different from the CEO of the latest startup or the new telco.

Norms for behavior in the advertising industry are quite different from norms for behavior in the agricultural industry, and so on.

Question 3: What do you know about the people? Finally, ask yourself what you know, or what you might be able to find out, about the people you are interacting with. Are you communicating with a 60-year-old senior executive or a 20-something manager?

In India age differences matter enormously – there is a real generation chasm between the under 40’s and the over 40’s. People who are older are often more likely to reflect the norms of the overall society.

It would also be useful to know if the people you are interacting with are locals, born and raised in that particular setting and without extensive travel experience, or if they are cosmopolitans, with extensive travel background. Locals are much more likely to reflect the norms of the immediate region you are in, whereas cosmopolitans are likely to be open to a wider range of potential behaviors.

In many East Asian and Southeast Asian cultures, such as India, China, and Korea, relatively indirect forms of communication are used, especially from a subordinate to a superior — whereas superiors in these cultures are often quite direct with their subordinates.

Finding the answers to these questions before you cross cultures can be tricky, but it is possible. Books and articles will often give you some insight into these nuances, but one of the best ways to anticipate what you’ll encounter is by talking with expats: people similar to you who have studied, lived, or worked in the country in question.

Doing your homework before entering a new culture is one of the keys for success. But unless you ask the right questions, you might end up mistakenly overlooking the real differences that matter.

For India – keep digging, asking, researching – and persevere.

Adapting to India’s combination of “direct and indirect” culture

Most cross-cultural trainers will tell you India is an “indirect” culture, meaning it does not say things bluntly, goes around the topic rather than directly to the heart of the matter.

This is one of those generalisations that is only partly right – and if you rely on it you will be in for surprises in India.

The reality is that India combines direct and indirect communication.

At the point of meeting you, Indians can be very direct – “are you married, why is your husband/wife not here with you, what do you earn, can you find me a job, will you distribute my product”. For most westerners this is confronting, because our style of meeting and networking is very gradual.

But at the point of issues arising, this is where Indians can be very indirect.

If there is a problem with what you are wanting or what India promised for you, the communication becomes more obscure. India’s indirect communication can be hard to spot, even for India trade veterans. Some tell-tale signs are when the India side says “we will try to meet your deadline” – this generally is leading to the heart of the problem which is that they cannot deliver.

This indirect communication is not motivated to deceive or make your life difficult. in fact, it is based on the value India places on its relationship with you and a desire to keep that relation intact. This is why Indians rarely use the word “no” – the relationship is more important than the truth.