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Managing Talent during Turbulent Times

Traditionally, HR function is viewed as one that fosters performance excellence, full participation, and personal and institutional growth. The HR function is required to be highly responsive and supportive to the needs of the institution as a whole as well as those of individual employees. HR personnel need to be flexible & creative problem-solvers, with collaborative and participatory work styles. A well trained, technically competent and knowledgeable HR team is a business imperative, and one that is accountable at the individual, managerial, and programmatic levels for being a strategic asset to any company. Typically, value in Human Resources should be defined by the receiver more than the giver, and HR professionals add value when their work helps someone reach his or her goals.

People, intellectual capital, and talent are ever more critical to organizational strategic success. This observation is so common today that it almost goes without saying. Digitization, labor shortages, growth through acquisitions, simultaneous downsizing and expansion, workforce demographic changes, and globalization are just a few of the trends that have made talent a top priority

However, the majority of today's HR practices, benchmarks, and measures still reflect a traditional paradigm – i.e. excellence defined as delivering high-quality services in response to client needs. HR helps the firm operate within a critical market - in this case, the market for talent. Organizational decision processes and tools employed in the talent market are far less mature when compared to other business functions such as operations, finance and marketing. Management of the talent resources is at an inflection point today.

HR can add the most value by starting a culture conversation at all levels of an organization. One way to accomplish this is to conduct a cultural assessment or audit of an organization through employee surveys, focus groups or interviews. An audit can be supplemented by a review of an organization’s history, leadership styles, HR programming and industry practices to determine what currently drives and reinforces the culture. Lastly, it is important to determine what customers are saying, what cultural elements are obvious to customers, and if the culture is aligned with business strategy. This can be the basis for healthy discussion at team meetings and employee chat sessions.

Acquire talent based on cultural fit by identifying characteristics of people who exhibit those behaviors that is identified as desirable. The people who fit and thrive in a particular culture will perpetuate that culture in everything they do. This could be achieved by redesigning the on-boarding process - making sure that every new hire knows what it will take to fit in, and understands the cultural imperatives. As an example, Southwest Airlines has a culture committee that facilitates this process. One can also try focus groups around topics; form cross functional teams; call random groups of employees together for monthly breakfast or lunch meetings; and engage the help and support of a group of passionate, committed people to identify cultural disconnects and recommend remedies.

With lifetime employment in one company not on the agenda of most employees, jobs are increasingly becoming short term. Today's high-tech employees desire a continuous up-gradation of skills, and want work to be exciting and entertaining - a trend that requires designing work systems that fulfill such expectations. As employees gain greater expertise and control over their careers, they would reinvest their gain back into their work. As strategists, HR professionals require to achieve integration and fit to an organization's business strategy. As interventionists, they need to adopt an all-embracing approach to understanding organizational issues, and their effect on people.

Maintaining and investing in talent programs even during an economic downturn will reinforce the message that ‘talent is everything’. Even if an organization needs to lay people off, it must be done surgically - focusing on the people, projects, and organizations which most need change. Yet, one must not forget to reward high performers even during a downturn. Continuing to search for great talent in a downturn potentially means hiring the best engineers, sales people, marketing people, managers, and executives. From a talent management perspective, rather than freezing all hiring, downturns must be used as an opportunity to upgrade the organization.

Most organizations display a natural tendency to spend a lot of time and energy on internal efficiencies during a downturn. While this is needed, organizations must make sure they spend even more time focusing on customers; products and services, and explore customers’ new needs.

According to a recent study conducted by Deloitte, CEOs are playing a greater role in talent management with two-thirds of the interviewed executives admitting they are connecting more with employees around the globe – particularly those with high potential. Even while companies are focused on reducing costs and headcount, they are making unexpected moves. For example, 52% of the executives surveyed by Deloitte report their company plans to restructure jobs to lower costs and increase efficiency. In addition, 40% of polled executives reported they will try to attract more critical talent with hard-to-find skills, while 30% report they are looking to bring on more critical leaders. In an environment where companies are continually rebalancing workforces to match difficult times, restructuring jobs to cut costs and increase efficiency, and redeploying employees to make the most of current talent, more than 25% of the executives shared that they will increase innovative work practices, such as the use of flexible work schedules through measures like telecommuting and reduced work weeks to engage and retain key talent.

Comeback Women

Various academic studies conducted across the world suggest that notwithstanding conventional dogmas such as discrimination and economic inequity at workplace; women do choose to take career breaks to take up parenting, or for pursuing their dreams. Empirical evidence suggests that such women who take career breaks face both penalties and costs, particularly if they have taken a career break in order to care for their young.

However, this general labor market failure that penalizes women for taking career breaks could be plausibly addressed by relevant measures from government and corporates on one side, and by judicious planning from women on the other. The key success factor will be to ensure the right mix of human needs including income, working hours and the type and status of employment on their reentry into employment.

Academicians and researchers have found three major trends. First, women who take career breaks interrupt their accumulation of human capital and pay a penalty in terms of lower earnings, unless the career break is for work-related reasons, such as gaining an advanced degree. Second, women who take child-related career breaks could pay a further penalty because, within the class of women who interrupt their careers, employers might discriminate against those who interrupt careers for family and/or personal-related reasons. Third, women who take child-related career breaks might not be able to return to the same type of job, and this could generate an income penalty.

At a macro level, this failure could be corrected by designing suitable labor market structures, policies by government and employers, work practices and culture. However, at an individual level, the subject must act wisely and plan meticulously to overcome patriarchal attitudes and gender bias in employment practices. According to Suzanne Venker, author of ‘7 Myths of Working Mothers‘, one way of doing it, is by planning their careers around their motherhood, rather than planning motherhood around their careers.

While this may sound simple, in an Indian context, most data points suggest this may be improbable. Research shows the proportion of women employees in Indian industry drop sharply as we move up the corporate ladder - from the entry level (50%) to the middle (30%) and senior management (8%), possibly indicating at a non-conducive workplace environment for women to balance career and life. Another issue is lack of representation of women at senior level. A Confederation of Indian Industry study in 2005 found that although women make up about half of the population in India, they only comprise 6% of the workforce, and at the senior management level at domestic Indian companies, women only constitute about 4% of the total workforce.

According to Carol Fishman Cohen, author of bestseller, ‘Back on the Career Track’, some of the workable strategies for women planning to reenter the workforce after a break may include going back to school to jump start a career relaunch the way Jill Biden did is an excellent back-to-work strategy that can be calibrated to a person's schedule and professional goals. One can also enrol into continuing and supplementary education such as a part-time MBA. Women on break from careers in scientific or technical fields could take up post-baccalaureate certificate programs

While there isn’t a panacea for women looking to restart their career after a break, there are plenty of examples, internationally and in India, on how some women have succeeded in their endeavor. Below I list some famous examples, which clearly prove that a woman can indeed carve out a successful corporate career after a break from work.

Dr. Jill Biden, born on June 5, 1951- is an Academician, Educator, and the Second Lady of US as wife of Vice President, Joe Biden. Jill was born in Hammonton, New Jersey and grew up in Willow Grove, Pennsylvania. She graduated with a bachelor's degree from the University of Delaware. She married Joe Biden in 1977. They had a daughter together in. She taught English and reading in high schools for 13 years, and earned master's degrees from West Chester University and Villanova University. Jill stopped working for two years while raising her three children. She then returned to work, teaching English, acting as a reading specialist, and teaching history to emotionally disturbed students. Biden is the president of the Biden Breast Health Initiative, a non-profit organization begun in 1993 that provides educational breast health awareness programs free of charge to schools and other groups in the state of Delaware. She runs five miles, five times a week, and has run in the Marine Corps Marathon. In January 2007, at age 55, she received a Doctor of Education in educational leadership from the University of Delaware.

Kiran Carrie Chetry, born on August 26, 1974 in Kathmandu, Nepal is a Famous News Anchor at CNN. Kiran was born in Shanta Bhawan Hospital in Kathmandu, Nepal. Her father is Nepalese and her mother is 1/2 Ukrainian and a combination of Dutch and German. Her parents, Homa Chetry and Nancy (who met while serving in the Peace Corps in Nepal) moved their new family of three to America. Kiran grew up in Gaithersburg, Maryland, USA. Kiran is married to Chris Knowles, and the couple has two children – three-year old daughter, Maya; and two-year old son, Chris. Despite having an ethnic background, and a family, Kiran has successfully navigated the high-pressure world of television broadcasting, and has managed to carve a niche for herself. She has received numerous awards including ‘Best Enterprise Reporting Award’ from the Pennsylvania Associated Press Broadcasters Association. In 2006 Kiran made Maxim Magazine's top ten list of TV's Sexiest News Anchors, placing third on the list: Kiran was ranked as America's sexiest female anchor and the world's second sexiest female anchor.

Hema Malini, born on October 16, 1948 is an Actress and Bharatanatyam dancer-choreographer. Hema Malini R. Chakravarty was born in Ammankudi, Tiruchirapalli district, Tamil Nadu to, V.S.R. Chakravarty and Jaya, a film producer. Hema first tried to enter films in 1964, but was rejected; Tamil director Sridhar said she had no star appeal. She persisted and found her niche in Bollywood. After taking a back seat from films for a number of years in the 1990s and early 2000s, Hema has made a successful comeback with hit movies. Despite family and kids, she has successfully pursued her dreams – Dance, Politics and Movies.

Game Changers

In this post, i present three exciting and innovative companies that im associated with, in one way or the other. I believe these companies are real game changers in their respective sectors.

www.cyberadworld.com

Cyber Ad World is an Israel-based digital media company that has developed a unique product CYBERAD™,  to address the burgeoning needs of online video marketplace. CYBERAD™ is a web-based ad-server for inserting video ads into streaming video content. Sounds familiar! - wait till you read more. CYBERAD™ adopts a patent-pending Dual-Stream Technology (DST), wherein content and advertising video streams are transmitted separately. DST significantly reduces bandwidth needs, and thus lowers the costs associated with online video streaming. In addition to regular features available with conventional ad-servers such as targeting and measurability; CYBERAD™ provides additional flexibility for publishers to place ads at will at any time during a video stream content - thus an online video publisher can seamlessly port traditional broadcast-like content, and maximise revenue. Further, the low cost of video streaming enables the publisher to increase profitability.

www.accelegrow.com

Accelegrow is a US-based Agro-tech company that is revolutionising the agriculture industry. The company owns a patented product, which is essentially a 'Bio-Fertilizer Supplement'. This bio-fertilizer product utilizes a unique technology that delivers higher crop yield; is eco-friendly due to its ability to deliver higher carbon sequestering (and hence qualifies for carbon credits); and consumes significantly less water (ideal for water-starved areas). Accelegrow's wholly-owned subsidiary, Ecoverdance, is a carbon trading company that helps Accelegrow clients to monetize their accumulated carbon credits. Here's the best part - the product is distributed FREE to the farmers, and in return, accumulated carbon credits are traded (exchanged). Typically, the company shares part of its carbon revenue with farmers! Thus, all water-starved poor countries are huge target markets. Can anyone compete with a FREE product? Click on the link to watch an interview with the cofounder  http://video.google.com/videosearchq=ecoverdance&hl=en&emb=0&aq=f#q=ecoverdance&hl=en&emb=0&aq=f&start=20 

www.neutron-systems.com

Neutron Systems is a California-based company in the telecom-software space. The company has developed a path-breaking product that is likely to re-define digital convergence in a way never seen before. Neutron Domestic Data Gateway is a product aimed at the digital convergence home segment. The home service system is a secure access point device that will consolidate all existing services at a user level, and provides new generation multimedia services with carrier grade quality. For the first time, we can think about targeted advertising at a user level among multiple-media platforms. Neutron gateway integrates secure-internet access with Voip and traditional POT voice services, and standard or high-definition TV channels' video services. The product, in the form of a console, will allow tracking of consumer media consumption across the Internet-Mobile-TV-VOD. This will enable advertisers to target household consumers through integrated multi-media campaigns - truly game changing.

The Environmental Paradox of Economic Slowdown

While the effects of economic development on environmental degradation in the short-run are well established; the ongoing financial and economic crisis may actually hamper development and adoption of alternative energy that is so vital for sustainable economic development.

Deutsche Bank forecasted the economic slowdown will cause Europe's industrial CO2 emissions to fall by about 100 million tonnes next year compared with last year. Australian Climate Exchange, which operates a joint-venture trading platform for carbon offsets and abatement credits, said economic cycles were linked to emission trajectories. As a result of this economic slowdown, carbon emissions at major industrial nations are likely to remain inside their Kyoto cap.

Kuznets curve is the graphical representation of Simon Kuznets's theory that economic inequality increases over time while a country is developing, then after a critical average income is attained, begins to decrease.

Another situation where the Kuznets curve is alleged to appear is the environment. Many environmental health indicators, such as water and air pollution, show the inverted U-shaped curve. The argument for the environmental Kuznet's curve is based on the following argument. In a developing industrial economy, little weight is given to environmental concerns, raising environmental pollution byproducts. After attaining a certain standard of living from the industrial production system and when environmental pollution is at its greatest, the focus changes from self-interest to social interest. The interests give greater weight to a clean environment by reducing and reversing the environmental pollution trend from industrialization. This parabolic trend occurs in the level of many of the environmental pollutants, such as sulfur dioxide, nitrogen oxide, lead, DDT, chlorofluorocarbons, sewage, and other chemicals previously released directly into the air or water.

A recent New York Times column argued that for all the support that the presidential candidates are expressing for renewable energy, alternative energies like wind and solar are facing big new challenges - because of the credit freeze and the plunge in oil and natural gas prices. The column states that advocates are concerned that if the prices for oil and gas keep falling, the incentive for utilities and consumers to buy expensive renewable energy will shrink. That is what happened in the 1980s when a decade of advances for alternative energy collapsed amid falling prices for conventional fuels.

Venture capital financing for some advanced solar projects and for experimental biofuels, like ethanol made from plant wastes, is drying up. Worldwide project financings for new construction of wind, solar, biofuels and other alternative energy projects this year fell to $17.8 billion in the third quarter, from $23.2 billion in the second quarter, according to New Energy Finance, a research firm in London.

Renewable energy now meets 7 percent of America’s energy needs. Renewable energy has become a big business worldwide, with total investment increasing to $148.4 billion last year, from $33.4 billion in 2004, according to Ethan Zindler, head of North American research at New Energy Finance.

The current financial and economic crisis is indeed a paradox for environmental sustainability. While it may slowdown the pace of environmental degradation in the short-run due to reduced demand – in the long run, an economic slowdown will undoubtedly prove to be a disincentive for development and adoption of clean energy. 

Theory of Fear and Greed

In a recent New York Times article, Thomas L. Friedman opines that at their core, markets are propelled by fear and greed. “They’re just the balance at any given moment of those two impulses. Over the long run, you cannot spin the market. You cannot sweet talk it into going up or beg it not to go down. It’s going to do whatever it’s going to do — whichever way greed and fear tug it” says Friedman.

Despite active Government interventions around the world, including the G7, the European Union, Asia, Middle-East and Africa, capital markets around the world remain bearish, and as many experts believe, will continue to be bearish. Ofcourse, the collapse of the old financial order on the back of US-mortgage crisis exacerbated the global economic situation, which was already reeling under tremendous pressure. But equally important is the contribution of greed and reckless spending by everyone, and specifically the Western world led by the United States. Ergo, no amount of sweet talk is likely to allay the fear factor that has become deeply embedded in the minds and hearts of people – post the collapse of the old financial order.  

Consider the following - The Finance Minister of India is a cabinet position in the Government of India. He drafts the general budget of the country, and is in charge of the national economy. The current India’s Finance Minister, P Chidambaram came out openly to persuade investors to stay tight! I quote Chidambaram’s statement in a recent press briefing - “Before you sell, you must remember that for every seller there is a buyer. You must ask yourself why the buyer is buying in these times of perceived uncertainty and, therefore, ask yourself the further question whether there is a need to act in haste or in panic. In my view, there is no reason at all to act in haste or to give room for panic”. What was he thinking, and what was he trying to accomplish?

What mankind needs today is not just some piece-meal measure or sweet-talk, but a new financial order – one which will not only compel the rich economies to curtail reckless spending; but also encourages the developing countries to use their hoard of forex reserves in a much more prudent fashion. There must be an immediate end to developing countries’ financing the consumption binge of rich nations. Indeed, the perpetrator of the current financial crisis, the United States, must be brought under the supervision and oversight of the IMF- not just to ensure economic stability, but also to ensure confidence and morality around the world.

India Story Looks Ever So Strong - Really?

According to Indian central bank, Reserve Bank of India (RBI), foreign direct investments for the period April-July 2008 stood at $12.32 billion. This compares with foreign direct investments of just $5.70 billion recorded for the same period last year. Clearly, structural reforms undertaken by the incumbent government, coupled with increased confidence in the India Story has contributed to this incredible y-o-y growth of over 100% in foreign direct investments. If the run-rate sustains, we may well end up experiencing the highest inflow of foreign direct investments ever. Last year was a record $32.43 billion. However, the more volatile foreign portfolio investments have been a sadly negative $4.67 billion for the period April-July 2008. This compares with a record year set last year, when foreign portfolio investments were $14.3 billion for the period April-July 2008. RBI records indicate that while fiscal deficit has improved, revenue deficit has slightly worsened, when compared to last year. The data also indicates that trade deficit may well widen this year, and this may potentially cause weaker balance of payments position.

Ofcourse, oil is a major import item for India, and the continuing high price of oil is a major reason for the widening trade deficit. This is interesting, because since the reforms undertaken in the early 1990's, India's road to economic prosperity has been built around the central theme of 'devalue and export' mantra. The current prime minister was then at the helm of affairs, when that reform theory was designed. Is it time for India to revisit this core economic policy? - If we go by Dani Rodrik, professor of political economy at Harvard University, the answer may well be to rely less on exports to achieve economic prosperity. He points out to an imminent threat of slowdown in advanced economies, and the almost certain unwinding of global current-account imbalances, as a clear threat to export-dependent economies. Dani argues that the economics and politics of protectionism in the West is likely to cause a slow-down in exports. If exporting does become a tough business, then economies like India will be forced to rely on domestic demand to sustain economic growth.

But domestic demand fueled only by easy money has its own problems. M3 data, the broader indicator of money supply, indicates that money supply growth in India has far exceeded the GDP growth since 2005 - due to the central bank's active intervention in the currency markets. While this 'sterilization' process was successful in containing currency appreciation that was to be caused due to strong forex inflows - and thus help exports; the process did very little to help solve the trade imbalance, particularly in light of high oil prices. In addition, weaker domestic currency also meant higher input costs (oil being a significant input constituent), and this helped the already fueling inflation, partly led by easy money, and partly by high food and commodity prices. The net result of a high-inflation expensive credit economy is a potential slowdown in growth.

Is it time for the Indian central bank to stop excessive intervention in the forex market, and let the domestic currency on a more free float? I would argue on the affirmative, especially because (direct) investments continue to be buoyant. The challenge is for the government to push the pedal on structural reforms in such a way that it fosters not only investments, but also creates a healthy competition.

Capitalism in Crisis?

At a time when financial markets globally appear nervous, and people increasingly look at the capitalist economic ideals with suspicion; I want to share some expert perspectives from the masters and proponents of capitalism, who had clearly forewarned us about the pitfalls that have caused the ongoing mess.

Authors Raghuram R. Rajan and Luigi Zingales, in their seminal work, 'Saving Capitalism from the Capitalists' conclude that “Politics—for better or worse—lays the foundations for markets, and thus for prosperity. For creative destruction, sustained by free markets, is the elixir that has let the free enterprise system flourish for so many years. Yet the disruptions that creative destruction spawns sometimes prove too big for a free society to survive without a safety net. Markets need to be preserved against their biggest enemy: Themselves. Markets need a heart for their own good.”

Louis O. Kelso and Mortimer J. Adler in their book 'The New Capitalists' describe the functions of an investment banker under a financed capitalist plan as the following:

- “The investment-banker function in the present mixed economy has been aptly described by Professor Merwin H. Waterman as that of a “transporter” of funds from the “savers” to those who would use the funds in capital formation.”

- “Far more important than the mere selling to corporations of their influence with or access to the owners of concentrated savings would be the functioning of the investment banker as the “attending physician” at the birth of new productive capital instruments and of new firms employing them. In this capacity, the investment banker would be charged with qualifying the stocks of new enterprises, or of existing enterprises seeking new capital, for financing through the financed-capitalist program. This function of investment bankers we might call their “entrepreneurial service” function. Thus their functions in this capacity would involve the articulation of the work of engineers, accountants, lawyers, marketing experts and all others whose services are required so to plan, design, and establish either a new enterprise or additions to existing enterprises that the newly formed capital will in fact “throw off” or produce the wealth that is expected of it. No service in the economy would be in greater demand or have greater importance than this function of the investment banker.”

The authors had forewarned us about the moral hazards of speculation and vested interests:

- “Speculation in stocks is both tolerated and encouraged today because of the lack of understanding of the nature of a capitalist economy. It is neither more necessary nor more justifiable to encourage speculation in securities representative of the means of production than it would be to gamble with the labor power of workers—the other active factor of production. The principles of economic justice, which are central to a capitalist economy, assert that wealth should be distributed to those who produce it. They also imply that the acquisition of wealth, other than through voluntary gifts, or genuine changes in value through changes in supply or demand, by those who contribute nothing to its production, is the height of injustice. The common justification for secondary-market speculation, aside from the necessity for orienting business transactions to ill-conceived tax laws, is that an active secondary market is necessary to “season” the securities of various corporations so that issuers can thereafter more easily obtain new capital when they seek it. This defense of the speculative stock market is almost groundless, since only a minute portion of new capital formation is derived from the issuance of stock to investors in the market.”

- “However, the enticement to finance the acquisition of new capital estates would far more than offset the tendency to suppress speculation, in terms of the volume of securities handled by investment houses or brokerage houses and stock exchanges. One of the goals of a capitalist economy is the financing of new capital formation entirely through the issuance of equity stocks directly to individual investors. The extent to which this would increase the volume of securities outstanding is incalculably great. Nor can there be any doubt of the desirability of a sound and active secondary market, in which market value would reflect, predominantly if not exclusively, the wealth-producing history and prospects—in the opinion of buyers and sellers—of the capital represented by such stocks”.

Martin Wolf in a January 2008 article in FT explained that “the world has witnessed well over 100 significant banking crises over the past three decades. The authorities have even had to rescue important parts of the US financial system - on most counts, the world's most sophisticated - four times during the same period: from the developing country debt and "savings and loan" crises of the 1980s to the commercial property crisis of the early 1990s and now the subprime and securitized-credit crisis of 2007-08. No industry has a comparable talent for privatising gains and socialising losses. Participants in no other industry get as self-righteously angry when public officials - particularly, central bankers - fail to come at once to their rescue when they get into (well-deserved) trouble. Yet they are right to expect rescue. They know that as long as they make the same mistakes together - as "sound bankers" do - the official sector must ride to the rescue. Bankers are able to take the economy and so the voting public hostage. Governments have no choice but to respond.”

Thanks Raghuram R. Rajan and Luigi Zingales; Martin Wolf of FT; and Louis O. Kelso and Mortimer J. Adler

A Lesson or Two in Customer Service

While working on one of my most recent assignment, I had the delightful opportunity to interact with top-notch professionals at Toshiba/Westinghouse, who thought me a lesson or two in customer service. This pleasant experience is in stark contrast to what I had heard from a dear friend in London about her experience with my erstwhile employers. Incidentally, the lady’s husband is one of my best friend, and a former colleague at the company. Story goes, the lady, representing a big buy-side company as marketing head, approached my former employer with a budget, but the inside sales team out-rightly refused to even entertain the prospective client, simply because the incentives associated with the ‘small deal’ was not attractive enough. I found it quite bizarre to learn that employees could actually act against the interest of their own employers on trivial issues, even in today’s day and age. Maybe their morale was low, or maybe the organizational systems and processes were inefficient. Whatever the reason for the poor customer service, the lady swears never to work again with my former employer, and the company has, in the process, lost out on a big-budget client.

Coming back to my Toshiba/Westinghouse experience, I had less than 48 hours to gather critical information on a breakthrough product the company was developing. I had my deadline to deliver a preliminary assessment, and I was desperately searching for answers. Since the product in question is still under development, the company has obviously not made a lot of information available to general public. However, I had a job to do, and I relied on the government agency, NRC, to gather the names and contact details of key people involved with the project. The tactic worked! Little did I realize that I had actually mass-mailed about twenty people asking for information about the product - to my utter surprise, and great delight, I received an overwhelming response from everyone at Toshiba/Westinghouse. Remember, I’m not even a customer. I’m just a representative of a prospective customer.

I must admit that i now have the pleasure of working with great professionals who are not only masters in their respective fields, but who have also mastered the art of customer service. What is even more interesting here is that the set of twenty people that I had mass-mailed belonged to different business units. I am impressed with Toshiba/Westinghouse organizational efficiency and collaboration, which seamlessly facilitated the agile responsiveness.

As we approach the Gandhi Jayanti, a national holiday celebrated in India on 2nd of October, to mark the occasion of the birthday of great Mahatma Gandhi, I recall the Mahatma’s famous words “A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.”

Clearly, folks at Toshiba/Westinghouse have indeed lived upto Gandhi’s philosophy, and have delighted me as a customer. I want to take this opportunity to say a BIG THANK YOU to - Brad Maurer, John Goossen, Richard Wright and Tony Grenci

We Need Nuke - But for the Right Reasons

According the International Atomic Energy Agency (IAEA), Nuclear power plants provide about 17% of the world's electricity, about 75% of the electricity in France is generated from nuclear power, and in the United States, nuclear power supplies about 15% of the electricity overall. There are more than 400 nuclear power plants around the world, with more than 100 in the United States. Uranium, Plutonium and Thorium are the common fuels used in producing nuclear energy. However, there are problems with nuclear as an energy source. Mining and purifying uranium is still not a very clean process. Improperly functioning nuclear power plants can create havoc – ‘Chernobyl’ the infamous example. Spent fuel from nuclear power plants is toxic for centuries, and there is no safe, permanent storage facility for it. Transporting nuclear fuel to and from plants also poses some risk.

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Recent advancement in technology has enabled mankind to reconsider this controversial energy source, especially in the light of surge in prices of coal and oil, and ofcourse, the environmental implication associated with power plants using conventional energy sources. Some of the cutting-edge fission reactors that are available today are much safer than ever, need very little maintenance through their life-cycle, and are extremely eco-friendly and cost-effective. Examples include - Hitachi RBWR (Resource Renewable Boiling Water Reactor); AREVA EPR; and Toshiba 4S (Super Safe, Small and Simple).

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Consider the case of Galena in Central Alaska – this is an area around the river Yukon, with small, isolated population centers, limited infrastructure and harsh conditions. According to Galena’s council budget, the power produced had to be less than $0.20 / KWH O&M costs; and less than $1.5 million in annual fuel costs. In addition, the power generator had to be of zero-to-low emissions, with modular/factory construction and yet, reliable & safe. Galena short-listed Toshiba to commission a solution that would be truly pioneering. Toshiba, in collaboration with CRIEPI, developed 4S, which simply stands for Super Safe, Small, & Simple. 4S is a compact Sodium-cooled, metallic-fueled reactor that uses enriched uranium (<20%) alloyed with zirconium. 4S comes in two variants – a 10 MW that is being commissioned in Galena, and a 50 MW that is still under development. 4S is factory built and delivered by barge to Galena, and the reactor is housed underground. 4S requires no refueling during its entire economic life of 30 years, and hence operationally hassle-free. Capital costs for 4S works out to $2.5 million per MW, and the electric power from 4S is estimated to be available at 5-7 cents per KWH. 4S reactor generates zero air or water emissions, and the reactor is returned to Japan at the end of its useful lifetime of 30 years (thereby eliminating nuclear issues), and Toshiba bears all (or most) of the licensing costs. If successful, 4S could just be the solution for countries that desperately need an alternative safe and economic solution to meet their growing energy needs. However, Toshiba has not yet indicated the time associated with commercialization and mass-production of 4S.
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Coming from a nation that is riddled with power outages due to an acute shortage, I believe nuclear could provide a viable alternative for our ever-growing appetite for energy. Having been outside the Nuclear non-Proliferation Treaty (NPT), India has been largely excluded from trade in nuclear plants or materials in the past. The country is at the cornerstone of a new era, having signed the historic nuclear deal with the US, and this should pave the way for India to be on the same footing as China in respect to responsibilities and trade opportunities in nuclear industry.

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Currently, The Atomic Energy Act 1962 permits only Government-owned enterprises in India to be involved in nuclear power. I sincerely hope the Government revisits this law and amends it to accommodate private players who could play a vital role in plugging the nation’s energy gap. Interestingly, India is home to about 30% of global Thorium reserves, and this could potentially make the country a net exporter of nuclear fuel. Only time will tell if this is achievable, and thus counter the challenges surrounding our dependence on fossil fuels. Watch this space.

McKinsey on Talent Management

According to McKinsey Consultants, Matt Guthridge, Emily Lawson and Asmus Komm, most companies are unprepared for the challenge of finding, motivating, and retaining talent. The experts draw their conclusion after revisiting a McKinsey study conducted about a decade ago titled the War for Talent in 1997 - the study that drew attention to an imminent shortage of executives. The consultants conclude that even today, the problem remains acute, and if anything, has become worse.

The demographic landscape of global workforce is dominated by the looming retirement of baby boomers in the developed world and by a dearth of young people entering the workforce in Western Europe. Meanwhile, there are question marks over the appropriateness of the talent in many emerging markets. Lofty ideas and investments to address the talent problem have largely failed, compounding the frustration of many senior executives. In recent past, organizations have invested heavily to implement human-resources (HR) systems and processes, and talent issues have unquestionably moved up the boardroom agenda. Although these moves are laudable and necessary, they have been insufficient at best, superficial and wasteful at worst. Too many organizations still dismiss talent management as a short-term, tactical problem rather than an integral part of a long-term business strategy, requiring the attention of top-level management and substantial resources. To manage talent successfully, executives must recognize that their talent strategies cannot focus solely on the top performers; that different things make people of different genders, ages, and nationalities want to work for (and remain at) a company; and that HR requires additional capabilities and encouragement to develop effective solutions. Only in this way will talent management establish itself at the heart of business strategy.

The experts point at three external factors — demographic change, globalization, and the rise of the knowledge worker – as the reasons forcing organizations to take talent more seriously. But the threats don’t come solely from the outside; companies themselves have made matters worse.

While the developed world wrestles with falling birthrates and rising rates of retirement, emerging markets are producing a surplus of young talent; in fact, they graduate more than twice as many university-educated professionals as the developed world does. Many organizations have been eyeing this source of talent enthusiastically, but riding the new demographic tide won’t be straightforward. HR professionals at multinational companies in emerging markets such as China, Hungary, India, and Malaysia have told McKinsey researchers that candidates for engineering and general-management positions exhibit wide variations in suitability. Poor English skills, dubious educational qualifications, and cultural issues—such as a lack of experience on teams and a reluctance to take initiative or assume leadership roles—were among the problems most frequently cited.

A particular demographic challenge comes from Generation Y—people born after 1980—whose outlook has been shaped by, among other things, the Internet, information overload, and overzealous parents. HR professionals say that these workers demand more flexibility, meaningful jobs, professional freedom, higher rewards, and a better work–life balance than older employees do. Another challenge, as companies expand into new international markets, comes from globalization. To succeed in countries such as Brazil, China, India, and Russia, organizations must have executives willing and able to work abroad. They also require talented local people, with an international mind-set, who understand local ways of doing business and local consumers—notably, the needs of an expanding middle class. Finally, knowledge workers, the fastest-growing talent pool in most organizations, have their own demands and peculiarities. By one estimate, 48 million of the 137 million workers in the United States alone can be classified in this group; a single company can employ upward of 100,000. Knowledge workers are different because they create more profit than other employees do—up to three times more, according to McKinsey research—and because their work requires minimal oversight. Yet McKinsey research suggests that some of companies struggle to extract value from this newly enlarged type of workforce. Further, the technology supporting its work has created faster and better ways to share information, and that further drives the demand for such workers and their potential impact.

The expert state that emphasizing the recruitment and retention strategies for only the top-performing 20% or so is unlikely to yield significant long-term benefits. The impact of top talent on corporate performance hasn’t diminished, but as a result of the expansion of knowledge work — organizations can’t afford to neglect the contributions of other employees. A more inclusive approach is the need of the hour that involves thinking of the workforce as a collection of talent segments that actively create or apply knowledge.

The consultants feel that UK retailers are among the most enlightened employers in attracting young and old alike. Tesco explicitly divides its potential frontline recruits into those joining the workforce straight from school, students looking for part-time work, and graduates. Tesco’s competitor ASDA is the UK's biggest employer of over-50s—a population segment that ASDA equates with better customer service, improved team morale, and reduced labor turnover. In China, multinational companies such as Citigroup, GE, and HSBC, which must compete fiercely against local businesses for talent, tailor their employee value propositions to highlight opportunities for real decision making, career development, housing, and educational benefits and learning. The oil services group Schlumberger, introduced a path that proved to be a strong motivator in the technical community: performers at junior level were rewarded with promotions, status, and compensation comparable to what senior managers enjoy, as well as opportunities to shape research and product-development agendas. Senior technical peers rather than line managers review the performance of these specialists. Furthermore, Schlumberger has become one of the exploration and production industry’s leading recruiters of women engineers by introducing flexible work practices to accommodate mobility and other life cycle needs.

The experts conclude that only HR can translate a business strategy into a detailed talent strategy: for instance, how many people does the company need in order to execute its business strategy, where does it need them, and what skills should they have? For this to become a reality, HR directors should acquire deeper business knowledge. At Procter & Gamble, an aspiring HR manager is expected either to take a job in a plant or to work alongside a key-account executive to learn about a business unit and win the confidence of its managers. Coca-Cola Enterprises rotates top-performing line managers into HR positions for two or three years to build the business skills of its HR professionals and to make the function more credible to the business units.

Clear & Present Danger for India (IT) Inc.

According to our friend Karl Keirstead at Kaufman Bros, in the IT services and consulting space, client demand is shifting beyond tactical IT projects to more strategic and complex cost-saving and transformational projects requiring greater innovation, deeper industry expertise, greater intimacy with the client's business and the need to sell beyond the CIO to other parts of the organization.

Most Indian vendors, however, have the seemingly dubious reputation for being project-based, less strategic and without deep industry expertise. This image has been further exacerbated by actions taken by the Indian vendors in the recent past. In an effort to cut costs and hold margins in the face of wage inflation and (until recently) the rupee appreciation, many Indian firms shifted the offshore/onsite mix to even more (higher-margin) offshore work, and shifted the employee base to even more (higher-margin) young college graduates. This has reached the point whereby the average number of years that software programmers at some of the large Indian outsourcing firms have been in the industry is now just two years or so. Many years ago, Accenture was mocked by its competitors as employing a delivery model of one senior partner and a "school bus" of inexperienced consultants fresh out of college. It now seems as if the Indian firms have deliberately shifted toward this model in an effort to hold margins steady and it may ultimately make any transition more difficult. Moreover, recent efforts to cut travel costs may help margins in the short term, but they end up further limiting client interaction at a time when the Indian vendors need to strengthen their client relationships and learn more about their client's businesses.

Looks like lack of proximity to on-the-ground client issues; coupled with lack of vertical expertise and weak client relationships are being responsible for Indian IT vendors’ increasing difficulty to engage the c-suite. This has resulted in Indian IT vendors being left out by the client while making strategic and transformational choices.

India (IT) Inc’s strategy of positioned herself as a ‘Thought Partner’ contributing to higher value solutions, rather than just an ‘Implementation Partner’ providing lower cost services, is definitely not working. It requires urgent and immediate actions on the part of Indian IT players to ensure sustenance.

Strategy & Some Basic Formulation Models

The word ‘Strategy’ derives from the Greek word stratēgos, which derives from two words: stratos (army) and ago (ancient Greek for leading). Stratēgos referred to a 'military commander' during the age of Athenian Democracy. A Strategy is a long term plan of action designed to achieve a particular goal, most often "winning." Strategy is differentiated from tactics or immediate actions with resources at hand by its nature of being extensively premeditated, and often practically rehearsed. Strategies are used to make the problem easier to understand and solve.

In India, documented evidence on concept of Strategy dates back to 4th century BC through ‘The Arthashastra’ (Arthaśāstra), which is a treatise on statecraft, economic policy and military strategy; written by Chāṇakya, a professor at Taxila University and later the prime minister of the Maurya Empire.

According to Nick Obolensky, professor of Leadership and Strategy, the concept of strategy being applied to contemporary business first emerged after the Second World War through people such as Bob McNamara, then President of Ford and later Secretary of Defense under Kennedy. ‘Theory of Games and Economic Behavior’ by Von Newmann & Morgenetern formulated methods of resolving conflicts in politics, war and business. Moving beyond the traditional assumption that a market is a Zero-Sum Game, ex CEO of Intel, Andy Groves, coined a new word ‘Co-Opetition’ – a merger of cooperation and competition. Adam Brandenburger of Harvard Business School and Garry Nalebuff of Yale School of Management elaborated on the subject in their seminal work ‘Co-Opetition’ using the Value Net, which is a schematic map that helps visualize the game of markets.

Any successful business strategy, according to professor Obolensky, will need to ensure it has the following three building blocks: 1) fast & efficient processes and systems (IT strategy); 2) a structure & culture that supports the overall strategy (HR strategy); and 3) a shrewd financing strategy.

Any of the below three basic models can be employed to formulate a strategy: 1) matrix-based formulation model – with independent and dependent variables plotted on scale along ‘x’ and ‘y’ axes; 2) mnemonic letter-based formulation model such as SWOT; and 3) issues/theme-based models such as Porter’s Five Forces model.

An effective strategist must use her experience and instinct and apply the right type of model that is best suited in the unique situation of a company in question, and the context within which the company operates.

Google on Cloud & Enterprise Computing

Below is the summary of opening remarks by Dave Girouard - Google Inc. - President, Google Enterprise at a recently held Technology Leadership Forum. Clearly, Dave’s remarks suggest to me that while MSFT may have won the desktop battle, its Google to watch out for in the online battlefield. One thing is for sure - with the envelope of efficiency being pushed further and further, it’s the consumers who will be the ultimate gainers.

On Cloud Computing
It's definitely gotten to a hype level in the press, and it can mean a lot of things. Generally speaking, it means accessing technology through a browser and having nothing to install on the client, nothing to install in your data centers. It can be used probably to describe consumer markets as well, and in some way probably describe all of Google. But I think a lot of the context for cloud computing is around business computing and enterprise computing. I tend to break it into two related but different segments. One really is applications, sometimes referred to as Software-as-a-Service. And then platform, or infrastructure, or Platform-as-a-Service or Infrastructure-as-a-Service--call it what you will--where basically you allow the developers or companies or third parties to build applications on top of infrastructure. So I think--and there's many, many flavors of that. So it covers a lot of ground, and that's a lot, I think a lot of people are using it conveniently to describe almost anything they do these days, which is probably the sign of ultimate hype in a term.

On what’s most attractive to Google?

With our products, stuff that we refer to as Google Apps, which is essentially a set of applications that we build for, not just for consumers, where they started, but now for businesses of all sizes and flavors. We refer to that suite as Google Apps. That's our application play, and there's a lot we expect to do with that to expand on it, build on it, more functions, more features, occasionally more applications on the application side. And then the infrastructure side, we're actually doing very little today. We're getting started. We have what we call App Engine, which is in essence a way for developers to build applications on top of Google infrastructure. And it's only a very simple preview release. It's not really a commercially offered application or platform today. But generally speaking, we want to offer over time more and more ways for companies and developers to take advantage of the computer infrastructure that Google has. And eventually we would envision a day where software developers would have the same access to our infrastructure like Google engineers do. And that has a lot of great potential, and it's going to take a lot of work to get from here to there. So we have interest in both. We're a lot further along in applications than we are in infrastructure today.

How to enter into a Client’s thought process?

The best way to get around the attitude of the busy leader of a SME and deliver something that is highly valued; and one that makes profound difference to their business performance is – to begin one step back i.e. working first on whatever problem or issue is real and pressing today. According to management consultants, Rosemary Harris Loxley of Harris Consulting & Tony Page of Page Consulting, this means doing essential work rather than nice to have and fancy work. The experts opine that a consultant must use a lot of ‘Questioning’ and ‘Listening’ to enter the client’s way of thinking, and follow a process that produces learning, insight and lasting impact on the client. This way, the authors say, a consultant can lead on to ‘Implementing the Solutions’ and help clients see their world differently. This approach was famously proposed by Reg Ravens in ‘Action Learning’. The approach recognizes that consultants who ask their clients questions generally tend to trigger more active, and hence profound, learning in clients, than those consultants who merely solve the problem for their clients and serve pre-formed solutions.

The authors make reference to the tool that is derived from ‘Kolb Learning Cycle’, which uses a simple sequence of questions to identify and understand the client’s problem, and to help implement the solution. The questionnaire should ideally start with probing the current issue i.e. the problem that is occupying the client right now, and must slowly move into probing the shared pool of knowledge between the client and consultant. The questionnaire must make the client reflect, gain insight, and help explore alternative ways forward to ultimately help think towards implementing a solution. It is also useful to build a loop back process, to explore new alternatives after piloting or implementing a solution.

In the process, the consultant should bring the client’s deep experience and tacit unarticulated know-how to the surface. This must then be challenged, tested and amended, in conversation with the client. Lastly, the consultant must help the client internalize and embed the new know-how in revised operating practices.

A Sneak Peek Into WATER WORLD

The water market is one of the world's five largest markets, amounting to $400 billion, and growing at 7% annually. In comparison, the $600 billion energy market is growing 1% a year. The semiconductor market is only half the size of the water market. In the U.S. alone, the water industry is expected to grow 7% a year to $150 billion. One factor driving this growth is that America's water systems—some of which were built during the Lincoln administration-- are crumbling. As a result, there are more than 200,000 water main breaks per year and as much as 80% of the water intended for delivery to consumers is lost en route. The nation's infrastructure for water delivery is in dire need of investment: the EPA suggests that $15 to $20 billion per year needs to be spent to address these issues versus current spending of around $3 billion per year.

The worldwide demand for water and water treatment is torrential. For instance, China plans to build 375 wastewater treatment facilities by 2009. The World Bank has estimated that in 2007 investments of between $400-$600 billion were made to meet the demand for fresh water.

Costs for treated wastewater in North America are usually between $1 and $39 per 1,000 gallons treated, while costs for USP purified water average $20-$60 per 1,000 gallons.

Industry

According to Stanford Washington Research Group, The global water market is widely estimated to be between $350-500 billion in annual revenues, with the U.S. market in the range of $95-150 billion. By any measure, the majority – about 60% of the total both in the U.S. and globally– comes from water and sewer utility revenues, most of which remain in the hands of local governments around the world.

The breakdown of the global industry is as follows: Municipal water & sewer revenues ($200-220 billion); Equipment & services ($75-80 billion); Contract services ($32- 40 billion); Transmission, delivery ($16-20 billion); and Chemicals ($13-20 billion).

The breakdown of the US market is as follows: Water and sewer utility revenues ($63 bil); Infrastructure construction ($19 bil); Treatment equipment ($8 bil); Treatment chemicals ($4 bil); Contract operations & maintenance ($4 bil); Consulting ($3 bil); Residential commercial POU/POE ($2 bil); and Analytical instrumentation ($1 bil).

Key Challenges

The outlook for growth in private sector participation in the municipal water and sewer markets that currently dominate the overall sector remains less clear. “Privatization” or “public-private partnership” in owning or managing water and sewer utilities remains highly controversial. Some environmental activists, along with many local government officials, remain vocally opposed to the private sector gaining a profit from bringing direct capital investment into the sector. However, private sector investment in government-controlled water systems, via taxes and tax-subsidized financing, or even charity, is fine.

The United Nations’ “Millenium Development Goals” state that 1.2 billion people already lack access to clean drinking water and 2.4 billion lack access to adequate sanitation, with these numbers continuing to rise. The UN set a goal in 2002 of reducing these numbers by half by 2015. However, Water is still largely taken for granted by consumers, governments, and even by industries that heavily depend on it. Corporations around the globe are at risk, since many industrial users – including agriculture, power, pharmaceuticals, food and beverage, microelectronics, and petrochemical – are dependent on a clean water supply to make their products.

According to the EPA in the US, 53,000 community water systems will need an estimated $277 billion over 20 years to upgrade their infrastructure in order to provide safe drinking water, with medium and large systems (those serving 50,000 people or more) comprising about 80% of the total. These include – transmission & distribution ($184b); treatment ($53b); storage ($25b); and source/supplies ($15b).

The second largest category of needs is treatment systems, which represent about $53 billion in total needs over 20 years and about $24 billion of current needs. This includes projects to install filtration, disinfection, corrosion control, and aeration, as well as associated chemical treatment, testing and automated monitoring and control devices.

According to the Census Bureau, In FY03, government entities collected about $63 billion in water and sewer revenues, but spent nearly $76 billion on their water supply and sewer systems.

Consolidation

Despite a flurry of M&A deals in 2004 and 2005, the industry is still heavily fragmented. The key industry players can be segmented into the following categories: · Water utilities, · Filtration and UV, · Diversified industrial companies with a water flavor, · Infrastructure services, and · Wholesale water rights.

Some of the key players are: French water companies, Suez and Veolia
Environnement; Siemens Water Technologies; GE Water and Process Technologies; Aqua America; American States Water; California Water Service Group; Southwest
Water; German major - RWE AG; UK based Kelda Plc; Danaher; ITT Industries; Pentair; Calgon Carbon; Pall Corp; Zenon; Millipore; Asahi Kasei; Nalco
Holdings; Watts Water; Walter Industries; PICO Holdings; Cadiz Inc; and PureCycle

According to Bill Burmeister, co-founder of Global Safe Water, the industry is likely to see further consolidation with big players mopping up smaller operators. Some notable transactions in the past include: GE acquiring Ionics Inc for $1.1b; Siemens acquiring US Filter division of Veolia for $993m; Pentair, Inc. acquiring WICOR, Division of Wisconsin Energy for $850m; and Blackstone Group & Goldman Sachs Capital Partners acquiring Ondeo Nalco, div of Suez S.A. for $4.2b.

Besides Diaspora - Domestic confidence also matters

The Indian Diaspora is the largest in the world to-day after China and has roots in every country in the globe. According to Sunil Prasad, Economist with International Confederation of Free Trade Unions (ICFTU) and President of GOPIO-Belgium, the Chinese Diaspora numbers about 55 million and contributes almost 60 per cent of China’s total foreign direct investment, while Indians with 20 million contribute less than 10 per cent.

According to Sadananda Sahoo, Dept of Sociology University of Hyderabad, the Chinese Diaspora is dispersed in 136 other countries; but of all the Overseas Chinese, over half live in Southeast Asia. The Indian Diaspora is dispersed in 110 countries without concentrating on any particular region. Chinese emigrants fall into three distinct patterns i.e. indentured labour, free artisans and traders. They are a very diverse group of people, representing over 150 cultural and linguistic groups. These Chinese are largely Buddhist and Taoist, but represent the Christian, Islamic, and Jewish faiths as well. A majority of Indian immigrants belong to the class of the educated and professional elite such as engineers, scientists and college teachers as well as accountants and businessmen. However, recent emigration of the Indians to the West Asian countries is basically oriented to labor and servicing occupations on a contract basis. Indian immigrants are also a very diverse group of people representing different religion, ethnic, occupational and caste groups.

Chinese Diaspora's role in rural development in China is significant. The China Foundation, Inc. is a unique non-profit and charitable organization established in 1997. The mission of the Foundation is to raise funds for improving basic health services and elementary education programs in underdeveloped rural areas in China. In India, the Diaspora’s participation to rural development is confined to Punjab, Gujrat, Tamil Nadu, Andhra Pradesh, and Kerala.

Although the Indian Diaspora has miles to go to match their Chinese counterparts in fostering the economic development of their native country; India cannot just blame its Diaspora for showing lack of confidence. This is because, we have evidence to suggest that domestic Chinese population is doing a lot more than domestic Indian population to accelerate economic growth.

Consider the example of Chinese corporations who have listed their stocks in domestic capital markets and in Hong Kong stock exchange. All most all of these stocks enjoy premium valuation in domestic exchanges compared to multiples on the Hong Kong exchange – suggesting higher confidence and exuberance on the part of domestic Chinese investors, when compared to foreign investors who invest in Hong Kong. The magnitude of valuation differential was so high that Chinese regulators had to eventually intervene and allow for arbitrage trades between the exchanges in the hope of achieving price equilibrium. Despite the regulatory intervention; the valuation differential still persists – fueled by ever increasing appetite of domestic Chinese investors.

The opposite is true of Indian companies who have listed their stocks in domestic exchanges and in the US (via ADRs) and global capital markets (vis GDRs). All most all of these stocks trade at a discount in domestic exchanges compared to multiples attributed to their respective ADRs/GDRs – possibly suggesting lower confidence on the part of domestic Indian investors, when compared to foreign investors who invest in ADRs/GDRs of India Inc.

The higher confidence levels among domestic Chinese investors, relative to domestic Indian investors, could be another significant factor that will determine the difference in growth profiles of the two economies.

Fostering the Spirit of Entrepreneurship

While on a recent pleasure trip to my home country, India, I visited the new R&D centre of Google. What a facility – wow! This sprawling research centre houses about 150 of the brightest minds from across the world to further Google’s engineering capabilities. I met Phd’s who apply their expertise to launch consumer-relevant products and services. Most people I interacted with are geography-agnostic. All they care about is a place where they can work with like-minded thought leaders. Google has built a unique culture with its 80:20 philosophy to achieve effective human resource management. The engineers work independently – donning the hat of an entrepreneur; and each one of them is mandated to devote atleast 20% of project time on special/personal projects that are eventually brought to the market through Google’s global work-force collaboration. A classic example of the success of this amazing entrepreneurial culture is the launch of Google Finance. What started off as one of the 20’s project for three bright engineers at Google has become a case study for lean production in digital media. In the process, Google has dismissed the age old theory that mega corporations are less likely to be nimble and fleet footed, when it comes to breaking the shackles of organizational hierarchy and the associated bureaucracy. The company has successfully designed an organization structure that fosters innovation and the spirit of entrepreneurship. In addition, Google has overlaid efficient systems and process that ensure maximum yield and employee productivity. This visit to the Google campus has reinforced the thought that entrepreneurial instincts don’t just come by birth. It is not a genetic phenomenon. Rather, the spirit of entrepreneurship can be fostered by intelligent management practices – through an organization structure; systems & processes; and culture that is deliberately designed to achieve desired outcome – in this case, developing market leading products and services to sustain the competitive advantage. No wonder - not only leading head hunters are making cold calls to the Google R&D campus; but leading VCs (from around the world) are trying to lure these Google entrepreneurs in ‘Search’ of the next big thing!

Product Placement - Lost Opportunity for UK TV

Product placement, or embedded marketing, is a type of advertising, in which promotional advertisements are placed by marketers using real commercial products and services in media, where the presence of a particular brand is the result of an economic exchange. The most common form is movie and television placements and more recently computer and video games. Web publishers are also experimenting with in-site product placement as a revenue model.

According to research conducted by PQ Media, global paid product placement market size was $3.36 billion in 2006, and $4.38 billion in 2007. While the United States remains the largest global market for product placement, accounting for two-thirds of spending, growth is expected to decelerate over the next four years, although remaining in the double-digits. Meanwhile, growth in the European and Asian placement markets is expected to accelerate going forward, as legal restraints are loosened and global brand marketers move to capitalize on emerging opportunities in these regions, claims PQ Media. Countries with significant market opportunities include The United States, Brazil, Mexico, Australia, Japan, China, the EU, India and Canada.

However, despite the global phenomena, the UK seems determined to buck the trend, when Culture Secretary Andy Burnham declared that the UK Government would not accept the EU Directive allowing product placement on TV. The Government’s surprise opposition to product placement represents a lost opportunity for UK broadcasters, particularly for ITV. Ofcom estimates that product placement would contribute £25m a year to UK broadcasters. However, some media buyers suggest that this number could be significantly higher. Assuming a similar growth rate to the US product placement market, the estimated benefit to UK broadcasters could rise to as high as £150m in 3-4 years. Growth in the market has been driven by the increasing use of personal video recorders (PVRs), which has encouraged the use of ad skipping between advertising breaks.