Friday, February 12, 2016

3 key observations from #WEF2016 that Indian businesses must take note of

The theme for this year’s annual meeting of the World Economic Forum which was ‘Mastering the Fourth Industrial Revolution’ was rather brave! Brave considering the backdrop of China’s economic slowdown, rock-bottom oil prices, fear of an impending economic recession and growing threat of terror groups. The most critical word in the theme seems to be ‘mastering’. For a business to sustain till the fourth industrial revolution it needs to be master the art of managing risks.

I would like to draw your attention to 5 key observations that Indian businesses need to take note of:

The Inequality Challenge
Oxfam launched a report just before the Davos meeting showing the alarming levels of economic inequality in the world. A recent IMF report states that income inequality impacts growth and its sustainability. The report also suggests that the poor and middle-class matter the most for growth. The Global Risk Report launched by the World Economic Forum shows that ‘Profound Social Instability’ is one of the most interconnected risk for the world. The report also shows that the trend of rising income and wealth disparity is a key factor for profound social instability.

As part of the Global Risk Report businesses worldwide ranked unemployment and underemployment as the top risk and profound social instability as the fifth highest. This suggests that businesses worldwide acknowledge the inequality challenge. However, Indian businesses feel that profound social instability is the 3rd least important risk while unemployment and underemployment rank 18th. This could mean two things – either Indian businesses are better prepared to mitigate these risks in comparison to their global counterparts or they feel that the Indian economy is immune to these risks.

The Health Risk
Two sessions at Davos discussed the global health challenge and our preparedness to face the next epidemic. The world had barely recovered from the Ebola crisis when the Zika virus outbreak has hit. These epidemics challenge the preparedness of health systems globally. Ebola outbreak exposed the fragile health-care systems in Africa.  In addition to the tragic loss of human lives the Ebola epidemic knocked off an estimated $805 million from the GDP of 3 most affected countries. Businesses having exposure in the Western Africa region (especially travel related) faced business and market losses.

Surprisingly businesses globally and in India do not think that the spread of infectious diseases is a major risk. This risk is associated with trends like climate change and urbanisation which are evidently very high in economies like India. As per WHO data infectious diseases (including HIV, TB and Malaria) are among the highest causes of disease burden in India. The probability of prospering Indian businesses is contingent to the well-being of its future workforce, consumers and suppliers.

The Gender Gap
There seems to fair consensus on the economic significance of plugging this gap but with little action. As per the Global Gender Gap Report 2015, at current pace of change the world would close the economic gender gap by the year 2133. Of the 2,500 participants at Davos this year only 17.8 were women as reported in an article.

India ranks 108 of 145 countries on the Gender Gap Index. Its rank falls down to 139 in the economic category. Indian businesses have a lot of catch to do to close the economic opportunity gap between men and women. A leading business newspaper in India recently hosted its annual corporate excellence awards which failed to find even one woman worthy of an award.

The fourth industrial era will be a different place and would need a different business paradigm. Pierre Nanterme, CEO of Accenture said at Davos “Digital is the main reason just over half of the companies on the Fortune 500 have disappeared since the year 2000.” Ability to convert risks into opportunities could perhaps define businesses of the new era.

Originally published here -

Saturday, November 7, 2015

Four Sustainable Development Goals Defining the Role of Private Sector

Leaders from around the world recently committed to 17 ambitious development goals for the next 15 years. These 17 goals, known as the Sustainable Development Goals (SDGs) replace the Millennium Development Goals which the United Nations committed to in the year 2000.
While there are many questions about whether the more ambitious SDGs will be able to achieve what MDGs could not, there are signs of better preparedness. This time around, there has been proactive engagement with various stakeholders. The SDGs focus on collaboration between governments, civil society and private sector, which in itself is unique. The emphasis on the role of private sector in realising these goals is evident from the fact that the UN has actively engaged with business leaders on SDGs.
The SDGs are set in a socio-economic environment of rapidly growing economies in Asia and Africa, rising inequality and the impact of climate change. In this post, I will focus on four specific goals which address these issues in the Indian context.
SDG 8 - Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
Targets under this goal talk about sustained economic growth, labour intensive sectors, decent work, entrepreneurship, labour rights and equal job opportunities.The Indian economy is challenged by a very high employable population, disparity in employment opportunities based on caste and gender, and widespread disregard for the rights of workers.For India’sequitable growth, the private sector needs to commit itself to providing equal opportunities in the workspace. It also needs to the respect rights of workers across its supply chain.
SDG 9 - Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.
This goal has targets covering human well-being, equitable access, affordable credit and integration of small enterprises in value chains and markets. This goal cuts across national initiatives like Make in India, Smart Cities, Digital India and Jan DhanYojana. This goal intends to push for an ecosystem approach where industrial growth aspirations respect people and the planet.
SDG 12 - Sustainable consumption and production patterns.
Targets under this goal talk about reduction of waste across supply chain, reduced emissions, supporting sustainable consumption lifestyles and promoting local procurement. The private sector in many cases supports unsustainable consumption patterns under the pretext of market demand. While environmentalists across the world are pushing companies to go green, consumers are also slowly becoming conscious of their environmental footprint.
SDG 17 - Strengthen the means of implementation and revitalize the global partnership for sustainable development
One of the most significant targets under this goal is the call to support multi-stakeholder initiatives (MSIs). It’s crucial for diverse business stakeholders to come together and agree on industry specific common sustainable agenda. MSIs for sustainable palm oil, cotton, cocoa, tea and coffee have been quite successful in some countries.
It’s also interesting to note that many of the 17 goals are aligned to India’s National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business launched in 2011. It reiterates the fact that social well-being and economic growth have to go hand in hand.
Originally published on India Responsible Business Forum

Friday, July 10, 2015

Changing the Change Process

In the State of Civil Society Report 2015 Darren Walker (President, Ford Foundation) wrote about the need for a stronger civil society. He also stressed on the need for the civil society to redefine its way of working. What I liked most about the essay was his emphasis on the need to change donor behavior.

Bringing about social change can be anything but simple. But the basis of and belief in bringing about change has to simple. When I read about India’s freedom movement one thing that strikes out is Mahatma Gandhi’s simplicity.  It also shows that if people believe in change even ubiquitous items like a lathi (stick) and a charkha (spinning wheel) can do the job. Imagine if Gandhi had to focus his energies on showing his efficiency, developing monitoring and evaluation reports and ensuring budget utilization. People believed in the idea of change and trusted their leader that’s it.

“In order to better resource civil society - and in order to be better resources for civil society - we all need to change our behaviors. Large development agencies need to rethink how they invest, and in whom they invest,” he writes. For the civil society to be able to focus on large scale systemic change they need their donors to trust them. If change could be brought about simply by following an action plan and monitoring framework machines would be doing it for us. Supporters and support systems need to be agile and fairly flexible.

I somewhat agree with his point that philanthropists can learn from venture capitalists who invest in leaders and ideas. This however is not always true and entrepreneurs too face similar issues with their investors. When most donors start believing in an idea, the leader and helping the leaders realize their ideas by providing flexible resources change will come. I wonder if any logframe or M&E framework predict this change!

Thursday, November 27, 2014

Markets Also Discriminate

Originally published on - Oxfam India Blog
The unfortunate fact about market based gender discrimination is that it exists across borders and across socio-economic strata. In my blog, I focus on two of the many functions that markets perform - selling and employment. Although markets represent people (and their mindsets) it tends to take an overarching role as an institution in influencing all others who engage with it. In a paternalistic society markets become an amplified representation of a mindset that discriminates against women.
For most of us our first engagement with the market is as a buyer of a product/ service or as a viewer of advertised messages. Market actors keep innovating new ways to sell more. Deep rooted paternalistic mindset pushes marketers to find creative ways to promote gender stereotypes through product design and/ or promotions. It’s the market which defines that a girl should play with dolls and kitchen sets while boys should play with cars and action figures. Designated ‘boys’ and ‘girls’ sections in a toy store reinforce gender stereotypes among adults and children.
A popular kids’ confectionery brand recently introduced separate boy and girl variant of its product. While the blue coloured box meant for boys contained car figures as surprise toys, the pink one meant for girls contained dolls. Advertisements take this a step further by portraying women as weak and men as the ones taking all-important decisions. A major shampoo brand had recently launched a controversial media campaign for its men’s shampoo range asking men to stop doing ‘womanly’ things and reclaim their lives as ‘men’.
Some argue that product classifications exist because of consumer demand and advertisements merely portray consumer mindsets. What they forget is the influence it has on people and that brands also have a responsibility towards the society. Some brands have now started recognising this and are bringing in some level of gender sensitivity in their advertisements. For instance a Pril (dish washing detergent brand) TV commercial showed its okay for a husband to wash dishes. It will certainly take more than just a few brands realising this. What’s promising is that consumers are slowly becoming more aware and are expressing their views on social media against such insensitivity.
One of the most commonly used justification for investing in market growth is increased employment opportunities. While that’s true in most cases, what it most often leads to is unequal employment opportunities for men and women. As per the Global Gender Gap Index 2014 India has a 60% gap between men and women in economic participation. This wide gap keeps most women away from economic growth and therefore financially dependent on others. Women in the formal sector largely face issues like lack of employment opportunities, unequal pay, workplace safety, sexual harassment, lack of growth opportunities and inflexibility. A newspaper article recently highlighted hiring practices that discriminate against women and promote stereotypes. A search on a popular recruitment website show that most ‘female only’ ads are for sales executive, receptionist and telecaller positions. One ad also specified that the female candidate should be ‘presentable’ and ‘married’!
In the informal sector issues like exploitation, abuse and violation of basic rights are more rampant. A report on women workers in garment factories states that ‘approximately 60% of the factory workers have experienced some type of harassment at work, verbal/ physical abuse.’ A forbidden bonded labour practice in Tamil Nadu garment and textile industry, Sumangali, is still prevalent. Under this scheme, Dalit girls and women are employed as bonded labourers in garment factories against a promise of a lumpsum amount to be paid to their families for dowry. Until recently, major apparel brands and factory owners ignored this issue.
Discrimination has a cost and it’s unfair that the ones being discriminated against are paying for it. How long will this last? Perhaps not very long. As people become more aware and reject this discrimination, markets will listen and change!

Saturday, November 9, 2013

Wide gap between 2% and 100%

So finally we have a legislation in place that mandates 2% spending on CSR. Consulting firms and NGOs are gearing up their strategies to leverage this opportunity to meet their respective (and perhaps contrasting) goals. Companies are trying to put in place systems to meet this new compliance. All good so far.

What’s concerning me is the fact that corporate responsibility is now compliance driven and not value driven. In essence the mandate implies that a company needs to be responsible only when it is profitable. It may also imply that the 2% compliance will become a yardstick for the balance 98%.

Responsibility is value driven and cannot be determined on the basis of profits. It’s also flawed to disconnect corporate responsibility from the core business. This legislation has perhaps pushed us back by a few years from what was achieved with the National Voluntary Guidelines (NVG). Companies voluntarily complying with the NVGs would have been a much yardstick of corporate responsibility.

Friday, August 9, 2013

The Great Indian CSR Bill

On Thursday Rajya Sabha (Upper house of Indian Parliament) passed the much awaited Companies Bill which mandates for-profit companies to spend on corporate social responsibility.

Companies with a net worth of more than Rs 500 crore or a turnover of more than Rs 1,000 crore or a net profit of more than Rs 5 crore during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. The Board of every company shall ensure that the company spends, in every financial year, at least 2% of the average net profits of the company made during the three immediately preceding financial years, in pursuance of
its Corporate Social Responsibility Policy.

The CSR activities should preferably be near the area which the companies operate. The law also states states that if a company fails to spend such amount, the Board shall specify the reasons for not spending the amount in its report.

India Inc is being widely quoted in the media for being 'happy' with the new bill and the CSR mandate. While speaking to the India head of a US multi-national corporation recently it was quite clear that some companies are not quite happy with this mandate. There certainly needs to be more clarity on mandate which will be clear as the fine print is available.

While there are several projections on the total CSR budget with a 2% mandate ranging from $3 billion to $6 billion. Only time will tell if charities in India have an appetite for this sumptuous pie and the capacity to create some impact. There's also an increasing  trend among companies to start their our corporate foundations which they say will help to 'better manage' fund allocation.

Some companies apparently are spending more than 2% of their profits already and are concerned about the impact of this Bill on their CSR strategy. There also isn't much clarity yet on whether CSR contributions made by headquarters of foreign multinationals to NGO partners would be eligible or not.

India now becomes the first country to have mandated a CSR spend for companies. Development and CSR professionals around the world have their eyes set on the bill and are curious to see how it translates into action. While it is not yet certain if the total CSR budget available will significantly increase it is quite certain that there will be much more active players aiming for it.

Sunday, May 19, 2013

Istanbul - a cultural and ethnic melting pot

Istanbul is a city that shows a unique blend. A blend of continents, culture, tradition, architecture, people and religion. Istanbul is a city with a big heart and there's enough room for everyone and everything.

It has the right reputation of being a cultural and ethnic melting pot.

Blending continents
As most of you know Istanbul is spread across the two continents of Europe and Asia. The two continents are culturally so different yet in Istanbul the cultural differences blend.

The two sides are separated by the beautiful Bosphorus strait. A 10 minute ferry ride takes you from Europe to Asia. Perhaps, the best view of the European side of Istanbul is from the Asian side.

Blending cultures
The history of Turkey spans across the Byzantium, The Roman Empire, The Byzantine Empire, The Latin Empire, The Ottoman Empire, Republic of Turkey and the Turkey of today. The cultural mix is most visible in the city's architecture.

The Walls of Constantinople from 5th century BC share space with  Byzantine, Genoese, Ottoman, and modern Turkish architecture. This makes Istanbul's city skyline very interesting where one sees a magnificent  mosque between modern skyscrapers.

The historical streets of Sultanahmet are connected by a modern tram. For me that's another unique blend and its amazing as the the view outside changes as the tram reaches Eminonu. Interestingly there are two versions of the tram running - historic and modern.

Walking down in any street one will see women dressed in hijabs and burkhas while others dressed in significantly shorter dresses. However, the men almost dress alike.

Blending religion
The Hagia Sofia museum is the best example of two religion visible inside the same institution. Hagia Sofia was an Orthodox patriarchal basilica which was converted into a mosque and now its a museum. I've never heard of an institution that served two religion. Interestingly, today you can see mosaics of Jesus and Mary between Islamic religious structures and symbols.

Blending Cuisine
Although food habits and cuisine around the world today have a mix of old and new. Istanbul is no exception and one sees kebabs, shwarmah and traditional Turkish cuisine served as combo with fizzy cola.

People from atleast 12 different countries are staying at the hostel where I am putting up. Istanbul's geographical location is so strategic that international travelers prefer to extend their layover while travelling between East and West. The Sultanahmet area in particular is a tourist hotspot and the city embraces people of all nationalities.

I certainly am in love with this city like most others.