Chennai Journal: November 2006

Chennai Journal

Sunday, November 26, 2006

Thanksgiving
In recent years, Thanksgiving has been a holiday I've been content to pretty much ignore. In the States, it's a long holiday weekend and good for travel or just catching up, and following on Rosh Hashanah only a few weeks earlier, I'm not usually hungry for another turkey. But this year I felt pretty blue about being here, probably because I was alone. It was just another work day, and on Friday morning in India, when the phone was passed around at Marty's cousins as people were finishing up dessert (three kinds of pumpkin pie and whiskey cake to boot!!), I felt really homesick. Dad, of course, had no idea what day it was---but even he seemed sad. For a couple of days before Thanksgiving, he announced at the dinner table that he was "less than 100%" because "I lost my mate." He rarely speaks of my mother, and sometimes thinks it's been 20 years since she died (it's just 3 years next month), so I wonder if his internal clock wasn't also registering the holiday.

Growing up, Thanksgiving was really a big deal in our family. We always got together with my mother's sister and her family, and there were certain traditions that my cousins and I still talk about. By popular acclaim, my aunt always made the gravy and my cousins and I got to sample the turkey in advance of the meal---but only the wings (and a bit of stuffing if no one was looking). One year, the cousin closest to me in age (now deceased) and I invented a radio show using my dad's portable tape recorder (in the early 1960s, a very new and state-of-the art device.) Call letters for radio stations in the eastern U.S. start with the letter W---so we called it WHAM radio, and used a nearby block of wood to make the "wham" sound on the table that accompanied the call letters. How many years later it is, and I can still recall the excitement we felt hearing our voices played back on the tape recorder. Not to mention the taste of Aunt Leora's gravy!

Later this week I'm heading up to Darjeeling, in the far northeast, for a long weekend. It's one of the famous British "hill stations" as well as the home of Darjeeling tea, and the views of the Himalayas are supposed to be fantastic---you are even supposed to be able to see Mt. Everest on a clear day. I'll post when I'm back, and hope the weather cooperates this time.

- posted by nred @ 11:00 AM 0 comments

Sunday, November 19, 2006

No Shows
It's common knowledge that there's a shortage of skilled talent in India, especially in the IT industry. Companies like Infosys, Satyam and Wipro, not to mention hundreds of smaller companies, add thousands of jobs each year, but at the other end, the supply is drying up. Every year, Indian universities graduate only about 200,000 employable engineers. According to some estimates, the IT industry hires over 80% of these graduates, with not much left over for other sectors. Those already in the workforce have their pick of jobs, and can "trade up" for assignments that will ensure a U.S. "on site" experience or other perqs. Sometimes, people come in with other job offers, and are obviously just "shopping" to get the best deal.

With the supply and demand situation so skewed, recruiting does sometimes resemble sales more than traditional hiring. Whether done internally or outsourced, recruiters use terms like "prospecting", "warm and hot leads" and "closing". Increasingly, even "closing" (the person accepts and signs an offer letter, agreeing to join an organization) is no longer a guarantee that he or she will actually show up on Day One. Just like airlines and hotels, IT employers may have to "overbook" to ensure enough acceptances to fill their job openings. Of late, this means not only accounting for offer turndowns, but also for a certain percentage of people who accept offers and then just never turn up for work.

I don't know if this happens in other countries with a hot job market. (I'm told that it DOESN'T happen in China-- turnover and attraction are challenges there, as well, but once a person commits to work for an organization, they show up.) The other day we had a guy who failed to show, and when the HR team went to contact him, his cell phone was disconnected as was his house phone. He did respond to an e-mail however--it turned out that he had moved to the U.S. and was starting work for another leading multinational.

But some employers are starting to rebel, as this story illustrates: a candidate came in for an interview. After a while, he laid two other job offers on the table and told the hiring manager that if he could offer 2,000 RS per month more than the best of his offers, he would be willing to join The hiring manager concluded the interview, and then told the the guy that he wasn't selected---the manager was looking for someone who would work for him, not the other way around.

- posted by nred @ 4:13 AM 0 comments

Sunday, November 12, 2006

Arrival of the Big Boxes
Well, it was bound to happen. Earlier this month, Reliance Industries announced that it will open up large convenience stores in Hyderabad, which is another large IT and business process outsourcing hub about one hour's flight from Chennai. Reliance, a big conglomerate here, also plans to open a superstore in the western part of the country.

So far, there aren't many large stores in the country, at least not by western standards. Today, I went to a new bookstore in town, Crosswords, which advertises itself as huge at 6,000 square feet. It is a nice store and it is well laid out with lots of browsing cushions and chairs.....but Borders or Kinokuniya (one of, if not the, largest bookstore in the world, in Singapore) it ain't. Most places, even grocery stores, don't get much bigger than this. And of course, the tiny little holes in the wall where you can buy everything from bootleg wine to daily necessities abound. As in Japan, the economy is built on small, several times weekly purchases instead of the once a week marathon where you come home with (as I have accused Marty) your own small warehouse of toilet paper and the like.

With this new foray by Reliance, the mom and pop stores are up in arms, and the foreign superchains are champing at the bit to get their oar in the water, too. So far, the Indian government has resisted Wal-martization (if that's a word), by pretty much blocking foreign direct investment in the retail industry. The few chains that have entered have done so in franchise arrangements, which is permitted under the current laws.

And there's some good news in all this.....according to a couple of reports, Starbucks is finally coming to India. Although I know that to some people, Starbucks has taken on the "big box" image itself, I'm still a fan (especially when compared to South Indian coffee, which can, without warning, come laced with chicory.) I still have fond memories of Starbucks from the old days in Pike Place Market in Seattle, before it expanded nation, and then worldwide. Back in those days, the mermaid lady logo was a little more risque. Now she's globally PC ---and I'm happy that she's about to put on her first sari.

Not much interesting reaction to the news of the U.S. elections here. There was a celebration of the Democrats in India, but I had a conflict and wasn't able to attend. Meanwhile, my Bush countdown clock wound down to 799 days this morning....

- posted by nred @ 4:53 AM 0 comments

Sunday, November 05, 2006

Deja Vu all over again.....
I'm sure some Indian astrologist could find this in my chart, but I have been quite fortunate, as Dean Rusk once put it, to be ''present at the creation" of some remarkable transformations in the world business shift of power. As some of my readers know, I spent over four years in Japan at the time when Japanese companies were coming on the world scene as major competitors--the book, "Japan as Number One: Lessons for America " was published while I was living there. Though a pop rather than an academic book, some of Ezra Vogel's lessons still apply---and have been ignored at our peril.

Now living in India, it sometimes feels, in the immortal words of Yogi Berra, like "deja vu all over again." Today's Hindu carries a story of the visit of Prime Minister Manmohan Singh to Chennai, who declares that "we will make India the manufacturing workshop of the world."

This is, of course, in addition to India as the IT and back office processing center of the world.
Americans are complaining about losing jobs to India the way they used to (and still do) complain about losing them to Japan. Is manufacturing next to be "Bangalored" ? (That's about to become Bengaluru, by the way, as Bangalore goes the way of Bombay, Madras, and Calcutta in Indian-izing its name)

The jury is out, but there are some echoes of the situation 30 years ago. First, everyone points to labor costs. Japanese workers were cheaper back then, just as Indians are today. There are numerous import restrictions and high tariffs, preventing western countries from selling imported products here (though fewer restrictions doing business as a multinational). Legacy costs are also lower, and the workforce much younger. So---if you want to find excuses for not being competitive, the only thing that's really changed is that these excuses have moved southwest.

There are large differences between India and the Japan of 30 years ago. Infrastructure is of course the big one. Though when I first went to Japan the city I lived in had only 40% flush toilets and no skyscrapers, it took only a few short years for this to change, and of course surface transportation including the Shinkansen or bullet train were already world class. As a small, homogeneous country, Japan was able to rapidly mobilize itself to meet external conditions and share the benefits with its own people. India has a long way to go in this area, and it is a major constraint to growth. If you fly into Delhi, the airport hasn't changed much from what it was 20 years ago (other than that baggage claim was on dirt instead of tile floors). You've seen my pictures of flooded roads and poor drainage. Manufacturing requires a strong and stable infrastructure, and that is where India has a lot of catching up to do.

On the cultural side, the Japanese commitment to quality and follow through is legendary, and India also has work to do here. Although even in Japan the bloom may be off the rose, in part due to changing attitudes of young Japanese who no longer wish to die with their suits on, the Japanese attention to detail and quality is still world class, and individuals will honor any commitment at great personal sacrifice. I learned this the hard way when I worked for a Japanese company. If you say you are going to do something by a particular time, your Japanese counterpart expects that you will do it---and they will follow up in dismay if they don't hear from you. In India, things can be a lot looser, especially in the service industry. The intention to get back is often just that---an intention that may go astray. This cultural tendency can create issues for Indian companies trying to expand to the west ---not to mention multinational companies who want to service global clients here. The IT and BPO companies have had to find ways to overcome this and train a more rigorous attitude into people. High attrition--a problem the Japanese lacked---doesn't help.

On the flip side, many Indians find it easier to mix globally than Japanese do, and this is a great help in advancing global business. Part of this is the lack of homogeneity here which is a kind of microcosm of the world, as well as the effect of the Indian diaspora--not to mention the key ingredient of English language ability. You see more and more Indians as heads of global companies, as thought leaders, as entrepreneurs. Skills and sensitivity to deal with diversity, conflict, and ambiguity are main ingredients to being successful globally. There is a strong entrepreneurial bent--and willingness to take risks. The main problem is that there aren't enough of these people and the demand for them is very high. But their quality is world class.

The differences between the two scenarios are many, and the list could go on. What interests me equally are the similarities.

Probably the biggest thing is the desire to learn and grow--and to achieve. When I lived in Japan I was continually amazed by not only the work ethic, but also the lengths to which people would go to get a job done. Here, I would say that the work ethic is not only as strong (albeit more uneven--as in the U.S., there are a fair number of people who just slide by), but the conceptual skills and ability to deal with ambiguity tend to be better. Taken with the hunger to do well and prove oneself, this is a powerful combination. People highly value learning and training, and like the Japanese, the focus on education--especially math and science-- is very strong. As the world changes more rapidly, this desire and ability to learn new things is a true competitive advantage.

Whether this translates into India becoming a manufacturing powerhouse, surpassing the U.S. and even Japan, is yet to be seen. But I remember the advice someone once gave me about hiring: take a chance on the person who is eager and engaged, but inexperienced, over someone who is skilled and can do the job, but has less energy. These words also apply to nations.

- posted by nred @ 9:15 PM 0 comments

Some interesting links