Empower politicians to make a better India!

It is commonplace for us to complain about poor governance in India.  Projects are not completed in time, promises are not kept, benefits do not reach beneficiaries.

I believe the solution for improving this poor state of governance is in empowering our elected representatives and expanding their number.  I realize that this might be quite contrary to the prevailing (fashionable) mindset of disgust towards the incumbent politicians.


I believe that the key cause of inefficiency and ineffectiveness of governance is the fact that essentially nobody is responsible for good governance.  Let me elaborate why:

Our first reaction towards poor governance (failed projects, sustenance of corruption, etc.) is to hold our elected representatives responsible.  But the reality is that they hardly have any power.  Even Narendra Modi, with all his supposedly dictatorial mgmt style, cannot choose his team.  He must work with the same bunch of IAS, IFS, GAS, etc. officers that Gujarat has been bestowed with (by a body that reports neither to him nor to us the people).  He cannot fire them; he cannot hire them; he cannot penalize or reward them with real performance incentives - he just has the limited ability of transferring them and maybe threatening them with pathetic assignments or dummy cases.  He does not even have the ability to choose his ministers in charge of various departments - the finance minister must be an MLA popular in some constituency, while even a Nobel laureate in Economics is disbarred from being appointed!

The team given to ministers and the CM has lifetime job security.  They will not even face any penalty for performing badly - in fact, they can indirectly threaten the minister to lose his department (and constituency) by choosing to ignore his directives.  These "cadres" themselves form a power center, protecting each other from other layers, while within their layers, create a merit-less hierarchy.  Seniority and authority must be given through age and time spent in service, and not on basis of effectiveness or service delivered.

It is not that these cadres have any authority either.  Even the seemingly all-powerful IAS officers are forced to work with a team of much older and often motivation-less deputies, who are appointed entirely without his say, and also enjoy a lifelong job guarantee.  Very often, the best an officer can do is insult or humiliate his subordinates, hoping (in vain) that  maybe that the perceived fear might motivate his team, but his team is too smart to fall for that.

The ensuing result is that anyone in the chain can stop an initiative from succeeding, a project from completing.  So the best our helpless-yet-responsible politicians can do is make some money at it while hearing their constituents' curses.  We force them to make promises that they can't possibly keep, and them blame them when the inevitable happens.  We do not give them authority, we do not pay them decently, we despise them and blame them for things beyond their control, and then we expect them to be honest and magically effective - are we that unrealistic and stupid?


Another reason for poor governance is the way authority is distributed.  The city of Gandhinagar got a Municipal Corporation recently, but this corporation has hardly any authority to serve people - they cannot enact local laws, cannot spend for public welfare beyond a tight budget supported by meager taxes, cannot improve police security, cannot promote industries.  How can this body be considered the authority over Gandhinagar?  No wonder we never bother to remember who our councilor is!

In fact, given the deadlocked system, how can we even expect those councilors to do anything in our interest at all?  Think of it, what motivation can these people possibly have?


I feel particularly disappointed at this situation because it has a simple solution, which we fail to follow - a solution proven and sustained over centuries at other countries, like the US:

The solution expects us to recognize the fact that we are a democratic nation.  By definition, being a democracy implies that we must govern ourselves.  We (through our representatives) must have complete direct authority to define our policies and priorities.  We cannot be taken for a ride by a select few that passed a UPSC/GPSC examination.  In fact, we must have authority to elect all senior officers - in the US, not just lawmakers, but even judges, public attorneys, police chiefs, heads of several departments, etc. are directly elected.

Hence the first step is to increase the range of positions that require getting elected to.  Note that this need not be costly - these elections can easily be consolidated with others at fixed intervals by setting a chain of replacements.  The US, over the past 200+ years, has not once required an emergency election of Congress or the President.

Thereafter, we must focus all executive authority to one Chief Executive.  This CEO must be able to choose his/her team, ways of managing the team, ways of reporting, ways of managing projects and responsibilities, and so on.  We must ensure that the CEO gets all the necessary flexibility and authority required to successfully fulfill the role we entrusted him/her.  With this CEO in place, we are no longer victims of lack of accountability.

Next, we must set up systems to ensure that the CEO doesn't take us for a ride, say like Indira Gandhi did, or Narendra Modi might as some fear.  We must maintain a set of basic guidelines and principles that our CEO cannot violate, and cannot modify without our direct and wholehearted consent.  This set is what the "constitution" is supposed to offer.  We must also set up checks to ensure that our CEO chooses appropriate people as senior colleagues - the way the board may have a say in appointing CFOs and EVPs and Presidents, an independently elected board (aka "legislature") (and not a politically appointed governor) must approve the CEO's appointments.

And finally, let us keep it our own business to determine the laws and objectives that the CEO should enforce and attain - the way shareholders elect a board to set the direction for the CEO, we should appoint this independent legislature.

At lower and more local levels, let us again set up similar structures, like say a council of directly-elected representatives that decide priorities for the city, and a CEO mayor that executes those priorities.  Let us hold the board responsible if it charts bad priorities, and let us hold the CEO responsible if he/she fails to achieve the targets.

At the top few levels, we can maintain a decent critical body, like the shadow cabinet in the UK, or simply the opposition in the legislature, to continually monitor the role of the CEO and point out flaws that might go unnoticed.  In today's age of information technology, the media can play that role even better than the opposition.


The system I have proposed has been proven to work and sustain.  It will increase our faith in our representatives, because now they will be empowered to actually represent us.  It will help our executives do their jobs, because they will not remain bound by rules (or appointees) that nobody really wanted in place.

Those of you who have bothered to read this write-up entirely: I ask you why we cannot or should not switch to the model I have suggested, and if you agree with me, suggest how we can manage this transition.

Hope to have your inputs!

Success in detachment

I believe that an important measure of the success of an entrepreneur is in detaching himself/herself from the business organization he/she created.

I mentioned in my previous blog that an organization must have its own objective(s), independent of those of the entrepreneur(s) who founded it.  That objective must be on the lines of providing some service, adding some value, to a set of customers, through information, labour, or goods.  The organization must keep growing till it successfully serves all the target customers, by which stage, it may have already evolved its objectives.

In this life cycle of the organization, the founder/entrepreneur has only one special role, and that is, to guide the organization through its infancy.  He may play other roles, but doing so simply means replacing an employee with himself, i.e., serving as that employee.  Let me elaborate further on that.

When an entrepreneur sets up his company, he is typically the only person working for it.  He then adds people to his organization, as he realizes that he cannot do everything.  Like in a software company, he hires a peon, a receptionist, an accountant, developers, team leaders, etc. as necessary and as cashflow permits.  He handles all unassigned work himself.  Another way of looking at it is - he defines a hierarchy, starts filling people into the slots of roles, and puts his name into the remaining slots.

Now this is where a small entrepreneur generally messes up.  He becomes possessive of the slots that he has put his name on.  Alternately, he subconsciously believes that if he puts others in every slot, his presence in the organization will not be justified.  So even if he can afford it, and even if he finds people more qualified than himself, he avoids replacing himself in some positions.  I have also observed that most hierarchies are filled bottom-up, and the entrepreneur avoids appointing senior people till it becomes absolutely necessary.

This mistake inevitably hurts the growth of the company.  The entrepreneur actually acts against the interest of the company by not choosing people better qualified for the jobs that he has been handling.  This happens most for management roles - the entrepreneur is the most possessive of these, and refuses to let managers and CEOs handle the company he set up.  As a result of this, many profitable companies fail to grow beyond a basic size that the entrepreneur can directly handle.

 

The entrepreneur's key strengths are generally focused - they could be innovation, or technical expertise, or superior management skills.  Unless it is the third (and it rarely is), he should try hard to restrict his involvement to the area of his expertise, as soon as he possibly can.

He should appoint managers to handle each functional area, such as administration, development, production, marketing, HR, etc. as applicable.  He should choose a CEO to supervise the overall operations and ensure growth of the company as per defined plans.  He should define the objectives and value systems and plans of the company, and then appoint a board (it can be informal) of directors to ensure alignment of the company with those.  Those directors may be able to do this job better than himself.  He should himself be on the board, but not necessarily as the CEO or chairman.

These actions will free the founder from doing things that he is not good at.  And they will free the company to grow beyond the limitations of abilities or vision of the founder.  With capable executives at the helm and a mature board to direct it, the company will progress faster towards its objectives.  The entrepreneur will stand to gain financial returns as an investor, satisfaction of accomplishment as the founder, and the pleasure of doing only what he enjoys as a professional.

Purpose of a business - how I see it

I believe that the way I look at organizations & companies is kinda atypical, and frequently renews a philosophical debate with Papa and some of my friends.  I felt like sharing my thoughts here; maybe some of you readers might feel like joining the debate.

Nature of the purpose

I find it absurd when someone claims that the objective of a company is to make money.  To say so is like saying that the objective of our life is blood circulation or breathing.  More on that later.

In my opinion, the objective of a business is to achieve a mission or to play a role.  Its objective is to serve customers in one or more specified ways, and to add value to their lives.  When people form a company, they specify how it will serve its customers, and who those customers will be.  GE was probably built to give us light bulbs.  Tata Motors might aim to offer cars and trucks.  Peach aims to help organizations become efficient through information systems.  The objective of a business may evolve over time, but at any time, a business must have a clear objective, for without it, the business ceases to have meaning, and will flounder and die.  I do not see much difference in the objectives of businesses and non-profits actually - for non-profits also seek to play a role and serve a specific market - IAC trying to drive out corruption in India, Red Cross to alleviate the suffering of the wounded, St. Xavier's Gandhinagar to educate & groom citizens of tomorrow, and Gandhinagar Municipal Corporation to maintain & enhance civic services.

Why businesses must expand

Businesses, like any organization, must strive to increase their effectiveness towards their objectives.  For a company to succeed in its objectives, it cannot stop at serving a few customers in its neighbourhood or town or country.  It must strive to expand the reach of its service to Africa and the Americas.  So long as there is an unattended customer, the company must continue making efforts to expand its reach.  When that is done, the company may simply close down - what does IAC need to do after India becomes corruption-free?  But generally, by then, the company would have already upgraded its objective by widening the range of its services or by upgrading the quality of its offerings.

The role of money

Money is blood and air for a business.  Businesses depend on several entities in order to succeed in their mission.  They need physical resources to house their operations.  They need materials and machinery to build their products and offer their services.  They need to avail services of external entities, such as transport, utilities, etc.  And they need a team to drive their operations - and they need to satisfy the roti-kapda-makaan needs of that team - and even do a bit more to attract good people to their team - cuz only motivated people can help a business cater to its objectives - of delivering the specified services.

But all through what I said, it is clear that businesses require money to maintain resources to offer its services, and expand its reach in doing so.  Money itself is not the purpose in any way.  It is like blood, because we cease to live without blood, but we do not live in order to make blood.

Frankly, I see no difference with non-profits even here.  Money is equally vital to achieving their objectives.

Money, more specifically profits, also serve another crucial purpose - they validate the meaningfulness of the purpose of the business.  If a business is not profitable, we must understand that either customers do not care enough for its offerings, or it does not have the resources required to serve them.  If it is the latter, it is inevitable that some other business will come up to cater to the needs that the first one failed to address - customers will not remain unserviced forever.

Likewise, in case of non-profits, if they do not generate money from their operations, they must generate money from donations - but generating that money is proof of validity of their objective - if they do not get enough to survive, it means that their mission is not something that people truly care for.

The role & attitude of the entrepreneur

When it is formed, a typical business is essentially just an extension of the entrepreneur(s) who formed it.  He/she forms it while declaring its purpose.  His own purpose may be to generate money to satisfy his basic needs or even materialistic luxuries, but that cannot be the purpose of his creation, the business.  If he does not realize that, the business will never grow into a mature organization.  People working therein will always face confused value systems, thus leading to bad quality of service, eventually driving the business down.

A mature entrepreneur must learn to detach the purpose of her creation from her expectations from the creation.  She has two roles - one as the soul of the business, and the other as a resource-provider.  She may provide some essential resources to the company - be it loans, management, technical expertise, whatever.  And as the soul/brain of her business, she should ensure that she - as the resource provider - remains satisfied and motivated, like all other resource providers in the business.  As the company grows beyond her personality, she may be replaced by a board of directors (probably including herself), who will serve as the direction-providing, strategist brain of the company.  And she may, independently, also remain as a resource - as an investor, as an engineer/worker, as an executive, or as an adviser.

So that concludes my sermon for today.  I hope you might have found my perspective here to be worth considering.

Finally, I must give credit to Peter Drucker, who I love to read, and obviously influences my thoughts on business, including what I've written above.

Raising the minimum wage

I have taken an interesting decision at Peach recently.  I have decided to establish my own level of minimum wage, set at more than twice the prevailing rate.

I have done so for a variety of reasons:

First, I have done so to protect my company.  I feel that India is experiencing an unreasonable degree of inflation.  And this inflation does not affect us all equally.  We can see several of us, at least a huge portion of the people who can manage to read this blog, earning decent five-figure salaries.  For such people, inflation works both ways, as their salaries also rise, and therefore they do not get really affected.  In fact, they are able to afford even more, even though they may grumble about inflation.  But for the rest, the vast majority constituting poor people to whom we rarely even give a thought, this inflation has cut into their lifestyles.  They can no longer afford even milk.  They cannot even dream of owning their home some day.  They can no longer manage their expensive social traditions and even basic needs for survival from their income.  Therefore, like many people I've seen around me, they are forced to sell their assets.  Next, they borrow.

This is not going to sustain.  Some day these guys are going to stand up, and vent out their frustration on us, like they've done in Mid-Eastern countries, as we grow more and more insensitive to their troubles.  I do not want to see this happening.  At least, I do not want to be part of its cause.  Therefore, I must set a salary level at which they can manage to live respectable lives.

Second, I have taken this step to build a loyal and satisfied team.  If I pay 20K to a developer, he will find an option of 30K elsewhere.  But if I pay 8K instead of 5K to my driver, I am assured that he is not going anywhere, cuz by far nobody will pay this.  I am buying his loyalty.  And believe me, I've found these people - administrative staff, driver, peons, etc. - to be far less replaceable than my developers.  One may find a typical ASP.NET programmer anywhere, but it's tough to find and train a driver with our specific preferences, familiarize him with our frequent destinations, and build a trust so that we can send him with our guests.  Yet we manage to exploit him cuz he does not know his importance to us well enough.  Or maybe market forces setting rates exploit him.

Next, I have raised the level of wages to raise the level of intelligent output at my company.  I do not have a cash-rich company with vast operations.  Instead, quite to the contrary, I cannot afford the luxuries of such initiatives.  However, I firmly believe that the intelligence of most people is not widely varying.  It is their training, and luck that forced them into a particular profession, that determines who gets how much.  I always have the option to train people, and I cannot penalize them for bad luck!  Therefore, I have decided that the salary band in my company will range from 10K to 50K.  People seeking more than 50K can earn it through performance incentives and profit-sharing - I will not give security (without performance) to such highly-paid people.  But the lower limit is more relevant to this topic.  The employee and I have to work out ways to ensure that he delivers worth this amount.  I have to train him, and he has to work as hard as it takes.  I have to identify the gaps, and add to his roles.  This is a management challenge, which I cannot shy away from by insulting people's intelligence.  I have observed that several people, who had given up on ever needing to use their brains at work, have reactivated their IQ, and are making wonderful contributions to Peach.

Even Peter Drucker (aka Guruji) has been a strong proponent of narrowing the gap between the wage of the janitor and that of the CEO, to ensure stability in the company. I think it is simply common sense, and an all-win option.


I will share more as I experience the fruits of this initiative.  I am confident that this should work out well, but I'll update you even if I find gaps in my approach.  Feel free to share your thoughts on the applicability of this system, or whether you find this worth implementing at your workplace.

Realizing my power over my people

I had an important realization today, while I was driving to work. I realized my powerful influence in the lives of people who work for me at Peach.



I do not recall having looked at this relation, in past, very differently than a standard give-and-take model, wherein I pay salary to each employee who made himself available to pursue my tasks for eight-odd hours. I used to feel once in a while that I do wield a somewhat higher position than their payer, but I never cared to think deeper. But thinking further today, I sense that my role is much deeper than that of the buyer of their time. I realize that I happen to wield enormous power not only on what they do during these work hours, but even on their life beyond Peach.


I must clarify, at the onset, that a vast majority of the employees that I am talking about are fresh graduates, who have never experienced another job in their life. Things may be a lot more different for people employing mainly experienced professionals. But to these just-released professionals, I define what a “job” is. I define who an “employer” is, what a “supervisor” is supposed to be. The policies I enact and the opportunities I offer develop their impression about how one grows at work. The way I encourage or praise their work, or the way I may turn it down, sets the level of their confidence about their own abilities. This confidence, and their impression about opportunities, makes an impact on their dreams – they figure whether they deserve to dream of big successes, or be content with stability. Indeed, they also gain some impressions from their friends and college mates, who possibly face different scenarios at their workplaces, but I must accept that my actions remain the primary cause of these thoughts nonetheless.


I have managed, like most other employers, to ignore this critical reality, as these fresh employees do not expect much. While they may come with high hopes and dreams, they are generally trained in college, at school, and at home, to be submissive to the so-called “higher authorities”, and accept their behaviour as their fate (unless there is a situation so repulsive as to require a rebellious change). The typical employer gets away with shirking his responsibility of being more than a payer by unknowingly imposing a routine on his recruits, which makes them too busy to introspect.


But I am not sure if getting away with this is what employers should prefer. I rather think that this is a wonderful opportunity that employers must grab. While people crave for power or importance in every community they are in, this is a situation where we get to wield enormous power to change lives. I feel that I have the power to impact 50 people and their families. I feel that I am, possibly unknown to them, among the most important people in their lives, for I get to influence their dreams, their culture, and even their day-to-day schedule. I must check myself here if I am bordering on being royally arrogant or overestimating my role, but introspection tells me that I indeed am this important to my people, so long as they work for me. Fortunately, I do not have enough power to act negatively beyond certain limit, as people always have the choice to stop tolerating my antics. But I have lots of scope to use this importance for good.


Let me now consider how I can use this power. First, I have the ability to define and execute policies. By taking interest in the lives of people, and accommodating their genuine needs, I can make my policies more effective by not victimizing such needs through robotic execution. Next, I can, directly and through my organization & policies, inculcate the appropriate culture in people. That is, I can inculcate perfectionism, care for people, respect for every human, result-oriented management, objectivity, good health practices; I can shun unethical behaviour, tobacco, idle gossip, etc. Now this is naturally restricted to my definition of “appropriate”, but let’s go with that for a while. Further on, I also have the opportunity to teach people. In the name of “training”, my flock is at least forced to listen to what I want them to hear. That way, I can formally groom them in technical and management matters, enriching them as professionals and persons. I can even pursue initiatives related to health, ethics, and similar life-sensitive topics, and expect their attendance, with good chance that they’ll absorb some stuff.


Beyond inculcating knowledge and culture, I have the power to create situations and environments. I can create an atmosphere of trust and friendship in the company. I can welcome frankness and honesty, which will percolate even in their personal lives. I can identify the strength of each employee and work out win-win solutions for her growth and progress of the company. I can learn about her dreams and figure how we can realize those at Peach, so long as she plays her part in the plan. None of these are against the interest of the company. Rather, such initiatives will develop a strongly bonded and self-motivated workforce, and every minute spent in enriching this strength will be earned back by their productivity.


I admit that I’ve written this note in tone that some might find self-flattering. But my intention is not that; when I speak of myself, I actually imply every one of the thousands of entrepreneurs in the world; and when I speak of my “power”, I only imply the ability to make a positive difference to people. We all have such power in reality – that power may be as simple as the power to smile at someone and sparkle her day, or the power to respond and not react to a slight provocation (I refer to Stephen Covey here) – here I only refer to a similar, but additional, power that entrepreneurs wield, and seem to be mainly unaware of. I want these entrepreneurs, myself included, to realize this power, and enjoy playing an important role in the lives of their colleagues.