India unInc: Management lessons from streets of India

what I'm going to share with you today is actually very different from everything that you've been hearing so far it's a different school of enterpreneurship and I think we should pay a little bit of attention to this school also I'll introduce you to this school of firm entrepreneurship which i think is one of the most vibrant schools and unfortunately probably one of the most ignored ones so let me take you to this school I'll show you a small video of the businesses which are happening all around us but unfortunately very often we don't think of them as businesses we don't think of them as enterpreneurs so let me walk you through this you what do you just saw this 30-second clipping is probably one of the biggest business environments in the world unfortunately the organized businesses the Sen sixes the SI champs the figis the various other bodies classify them as marginalized unorganized and informal sectors I want to take you through about 10 15 minutes and show you how much of injustice we do to this this entire business world and how much of Kufa we do in thinking that they are unorganized informal or marginalized let me take you step by step and show you that in every metric of business any metric of business you want to apply they are exponentially better than many of the businesses that are out there in Nasdaq or Sensex or the top blue chips let me walk you through each one of those metrics and I first begin with the pure necessity and what this business delivers to India 50 percent of India's GDP comes from the unorganized sector the unorganized sector provides employment to more than 90 percent of our workforce and most importantly in every metric they beat the organized so-called organized sector hands down and let me show you one metric at a time we begin with the return of investment per square feet if you actually calculate any pavement business that you see and compare it with the return of investment that comes from these big malls these shopping complexes and all that you will realize that at the payment the return of investment even after paying the fees to the Municipal Corporation or whatever their return of investment is exponentially higher you must have seen these book stalls in Bombay whenever you have been going around and you must have also seen some vendors who transport these books by hand you would have seen that now many of you who have studied marketing and and sales know that in the in the market joggin fight for shelf space to put your product and especially in the FMCG business to takes shelf space how much of design and strategy is done and how fiercely that space is fought I want you to equate that with this old man who has to design his product mix because he's carrying that three to four kilos of weight from morning till evening and when you carry two or three kilos for more than two to three hours it doesn't feel like two to three kilos so as I was telling Suri here in the afternoon that when your book reaches this stack then it's a bestseller because it is being testified by the sweat equity of that old man who has to carry it in his hand and he will only carry a book which he knows is a best-seller the second metric is equitable distribution of profits when you have a plate of Italy in a street where you pay 12 rupees or 15 rupees for it the owner the vendor gets to keep only 2 to 3 rupees the remaining 15 rupees or remaining 12 rupees goes to the entire supply chain the people who wash the utensils the people who grind it the auto rickshaw guy who brings it all of them get an equitable distribution but when you have the same plate of Italy in a five-star hotel where you pay a 400 rupees for it bulk of the money is kept by the establishment and only a small percentage of that money is given to the entire supply chain the third is the degree of empowerment of decision making this boy sells these roses for 10 rupees his cost his Caridi is 7 rupees which means 30% profit per rose and he can give you a 50% discount if you like surface to get a 5% discount from a large conglomerate and there many large conglomerates here and you will testify it sir to get that 5% discount that marketing head will have to take the decision all the way to the board and by the time the decision comes the opportunity would have been gone there is more fluidity in the street markets than any one of the businesses that you have seen you see the street vendor here any guesses what he is selling he's selling for a festival which festival is that holy so this person and millions of street vendors like him he can't sell holy products throughout the year he will sell it for about two to three weeks then he has to change to ganpathi then he has to change for Christmas then he has to change for some other festival he has to change his entire supply line he has to change his pitch he has to change his product mix he has to change every market segmentation each one of those things changes and it changes more than 15 to 16 times in one year you must have also heard big corporates trying to do change management typically I am given to understand by management gurus that it takes them anywhere between five to seven years to do a change management from one product line to another product there is more enterpreneurship per square feet in the unorganized market what you're seeing over here which looks like a big mess do you remember when you are traveling in in Bombay especially and I'm sure in Nasik also suddenly you see in the streets in every street corner new product will come it may be a car cleaning pichkari it may be a head massager it may be a toy it will be Christmas hats before Christmas it will be that by the national flag which will come out in the next two or three weeks just before 26 Jan the amount of planning infrastructure supply chain bringing that equipment that the planning of when that particular product will be released and will be released simultaneously unsold stock has to be taken back cash flow has to be managed all of this is and certain slots are reserved so before Christmas you can't launch anything else before the 15th August and 26th January you can't launch anything else those slots are fixed for those products and all of this is happening without si P ERP Microsoft Outlook regulatory bodies planning divisions committees none of that and we call them unorganized sector we call the government organized we have to understand that how much of this service we do to this entire industry by not even looking at them from the metrics that they deliver literally on a daily basis from the time your day starts in the morning the newspaper coming Slava coming into your house coconut water each and every one of those things is being managed seamlessly and you do not have a single point of failure on a daily basis tell me how many of you have missed a newspaper in the morning or missed the flower in the morning and compare that with Tier one companies where your core drops your your signal drops all of this is being done by people who don't have MBAs haven't been to Harvard haven't been to or none of that places this market is an equal opportunity market let me show you the next slide where I will demonstrate this to you whether you're old young illiterate transfer site male/female that's the place where you get employment I would challenge people who work in corporates to raise their hands and say we employ more than Phi transverse i'ts anybody sitting over here all these marginalized people the only place where they can go to earn a living is the unorganized market if you want to see the synergy which happens look at the guy in the middle in the morning he sells this snacks in front of Shivaji Park catering to the joggers and walkers who go in the evening he sells the same snacks to the little bit of mixed change in front of liquor shops for a completely different demographic [Applause] [Music] this last man who is standing here he's from a shop in fashion Street in Bombay some of you may have heard about it yeah many of you may have seen it also do you realize that there are more than 300 shops in fashion Street who sell exactly the same product at the same price with no competitive differentiation between each other except the relationship he has with that customer who comes to him and remember one thing 90 percent of the customers who come to fashion Street will come there only once because most of them are people who are coming from out of town they will do their shopping and go so he can't even have the same customer coming again and again in that two minutes time he has to take out that product which will fit the person he will that he or she mostly she will give it one trial and in that one trial if it doesn't fit she'll move to the next shop he has to manage that customer in that 180 seconds and deliver the product otherwise he stops there is more management lessons per square feet in the streets and I'll tell you a very interesting story which illustrates this beautifully I mean there are millions of stories but this is very close to my heart and I'll tell you the reason why so some years ago I had I was working with the minder group and I had gone to Pragathi Madan in Delhi many of you may know raggedy Madan we had a lot of exhibitions held and I was invited to give a talk there very similar to this one so I'd gone there with a friend of mine who was a CEO of another company that company was called office smart India and since this CEO had come to Delhi he was using that opportunity to brief his team and we were standing outside Pragathi mother and we still had time for our sessions so we were standing out there and he was briefing his team there were about eight nine people whom he was talking to you know reviewing the performance and all of that and since it was none of my business I was standing a little to the side suddenly I noticed a small street kid a street urchin a beggar basically who came up to my friend and stood in front of him and started appealing to him so my friend was very busy so he was irritated by this chap he tried to shoo him away two or three times but the kid didn't go away he would go back a couple of stairs and then again come back so finally my friend got so irritated that he started looking in his pocket for some change and of course that was a cue for this entire team to find change they immediately took out training put out their hands 3/4 of those you know everyone tries to be 18 come out in front of the CEO Kim Kumar is also so the CEO picked out one coin from that and gave it to the kid and that happened to be a fire rupee coin in those days fire rupee coin was a big deal and for that kid which were very big deed so he looked at the coin he put it in his hand and he then and a couple of other kids tried to snatch it away from him but he prevented them and then he went to a corner and I was noticing that in the corner he was sitting with another kid who was most likely his younger brother and he told that kid he edged him and told him you go to these people and you will get now one share for management management lessons with you here the first lesson is persistent space this kid knew that even if he was shooed away he had to stand over there until he got the money the second very important lesson he knew intuitively he knew talk to the decision-maker [Music] even if it is not the decision-maker who actually gave the money money came from someone else but he knew intuitively to talk to the decision-maker once he got the deal he did not talk about it he did not announce it in the market he did not say party chai America Guam and none of that stuff he went back to that corner and what better example of customer relationship management do you want where he tells a younger brother there is more money to be taken from them go back and take it takes us in corporates roughly about three to four years to pitch this to management graduate trainee some bigot because they will go to some fancy title vice-president photocopier whose capacity laga that guy will tell him we don't have a budget right now come back next year he will come back and report so no budget this year but next year he is called us the same management lessons which these kids have to learn and they have to learn you know why because if they don't learn it they'll sleep hungry that night that's the luxury that our education gives us which they don't have they have no margin of there is no margin that this quarter we have lost some you know market share we'll make it up in the next quarter doesn't work in their world if this day they didn't make a deal they will go to hungry they will go to bed hungry that night and I think they teach us a very very important lesson and I want you to pay a very particular attention to this one slide this gentleman his name is Sandeep Kota ray and he sits he sees he puts up his stall how many of you been to early-bird Lisi face in Bombay so if you go in the morning some of you may have been going in the evening also evening is a different set of activity in the morning when you go you will find a lot of people running and jogging and walking around this person sits right at the corner where the burly ceiling the ceiling turns left and he sells wheatgrass juice now if you ask him for a wheatgrass a cup of wheatgrass he'll grind it he'll give it to you he charges 20 rupees for it and if you ask you notice there is another stainless steel you know sort of patella next to it if you ask him what is in it he same cajuste if you ask him what is it for he will tell you it purifies the blood cleans your blood and all of those stories he'll give you and if you ask him for a cup he'll give you a cup you ask for another one he'll give you that then if you ask him how much does this cost he says this is free they asked him why do you give this free he says how a wheatgrass mucukunda but I have to by that name capita tomato hadith um and for me there is no cost to it so I give this free he's a CEO who does 50% CSR not the 2% mandated by the government actually 50% CSR and the most important lesson you can learn from the CEO is the lesson of having enough the only way you can define your appetite for enough is to have another source of revenue and not choosing to exercise it that is the definition of enough now you might be wondering as a former soldier and somebody who has been the security field and you know supposedly looking at security at a national level and more now at a corporate level why am I telling you these stories I'll tell you why I am telling you the stories this is India's biggest strategic risk we are pumping out close to a million young people into the job market every month they are coming in they are not finding the jobs they are not finding the aspirational jobs and this is not going to come from India Inc let me assure you that India Inc is actually cutting jobs they are growing but with all these terms that you spoke about artificial intelligence robotics automation they are reducing jobs they may be growing your Sensex but jobs are not being created the only Avenue for job creation now in the scale that is required is India an Inc it is only they who can provide these jobs and if we don't create that if we don't pay attention to them in a formalized way this youth dividend that we talked about will start becoming a youth nightmare as indeed in many many areas you are seeing these starting signs of that happening so this is not anecdotal story I'm telling you which you clap about and go back and tell it to people at home this is a existential reality for India for a population which is young a population that is aspirational and by aspirational let me tell you today you know that you know that your driver's son doesn't want to be a driver of a bigger car he wants to own a car and rightfully so now if we do not create those job opportunities for them we can't keep building these ghettos we can't build these gated colonies with fences and and and and smart cities and and hope to keep the other side out I think it's high time that we don't just start looking at building cities that are smart I think we have to start building cities that I have it's a very big frankly I believe India doesn't need unicorns we don't need two or three five thousand crore companies what we need is five thousand two or three crore companies that's an complete difference in the way of thinking and how can we make this difference how can we sitting over here make this difference we can do that by creating a VC fund now what do I mean by that VC fund this is a different kind of a VC fund it is V see then I see that I can make a difference I start making a difference their difference doesn't have to be just with money it can be sweat equity it can be a bit passion it can be with ideas it can just be by giving a leg up to somebody and create an orbit shift I will give you four or five examples which demonstrate how it can be done and this is actually happening so these are actual experiments which are succeeding brilliantly let me start with this example which is very close you've got a one of the architects of that example sitting over here this is a aura lady who sells chakra and Manish is sitting here who will testify she is on the way to third Oba when you go to this Taba forest reserve she has this tall over there and Manish Pandey was spoke in the morning to you social media evangelist he on one of his travels there tasted this khakhra and he told the lady she was selling it for 15 rupees a plate sheet oh he told the lady that you can sell this for 30 rupees easily people will pay happily this is one of the best cars that I have eaten and people who come from Bombay on the way to Taba they'll pay 50 100 rupees for it you can easily charge them twice the money and he said also you should put up a board otherwise how do people know that this track sells khakhra so she said what is the board I don't know what abode is so he drew that on a piece of paper and the next time when he went over there he found that there was a board that was put up not only did they find this board over there with the mobile number what he also found was a long line of cars and her income had the revenue top line had increased and obviously because of doubling of the price the bottom line had also increased there's a very interesting anecdote to it and that anecdote is he also suggested to her car a casa up take away duplicity why don't you sell tea also and then that poor woman pointed to a tea stall next door and said Pierre woo kegerator what le he said it is not that predatory you know let me take this also let me occupy a brand extension laterally horizon-- they know that to co-exist you need to fill everybody's plate you don't need to pile everyone's food on your plate this is another experiment which I don't know why we cannot do why can't we get our young kids who are in their adolescent ages and give them a VC fund and tell them go to the local history wallah give him a capex of twenty thousand rupees let him get a good iron let him get a steam and teach him how to press silk sarees tell him train him so that he has a fighting chance against this laundromats which are coming in and killing these industries they're just exterminating them all of these small shops mom and dad shops who existed for 60 years 70 years not all of them are able to make the break like we saw some of the enterpreneur most of them are dying they're being eaten away by these organised sectors and they are turning into daily wage labourers and that job is also now reducing similarly they I live in property in Bombay and I I have this too you know two worlds right in front of me one is a world of a Tier one multinational which sells sandwiches and there their tagline is we bake our own bread Sulaiman Kaka has been doing it for 48 years why can't we send our kids over there do up the hygiene of that place teach him how to make this whole-grain bread and of course he can make it he can make it in half a day he's been doing it for 48 years why can't we teach and how to make those special cakes why can't we have our kids acting as marketing consultants sales consultants ownership and actually give these people a fighting chance it will also teach our kids a lot of things it will teach them how to handle a P&L it will teach them how to trust people with money once in a while they lose money they will learn also that they will learn that you can't always keep winning sometimes you will lose and the most important lesson they will learn is how people can survive with even ten thousand rupees a month and live happily and frankly I believe there are more miracles per square feet in India an Inc than in India Inc and let me give you this story it's a amazing story and those of you want to learn more about it you should go to Welling Kerr college which is where this experiment happened you see this kid over there his name is prathamesh 10 years ago we did a very bold experiment in velinkar we decided that we are going to take two of his voice regular office boys who serve you tea coffee bring your you know newspapers move files around in the office both of the kids were twelfth class pass from a night school and we put them in well incur college along with other MBA students we assigned 14 mentors to them and the tasks given to these 14 mentors was that you have to train these kids in everything that they need to know to be able to pass the MBA with you no subsidy will be given no punches will be pulled back there marking will be done exactly the same way as everyone else's marking is done they had to learn English they are to learn ms word excel there to learn Michael Potter's five four what about language they had to understand that and they did it in two years time and I kid you not when they passed out in that 16 students 14 mentors and these two kids they came 11th and 13th in merit they beat their own mentors and a lot of you might be thinking that this kids other ones who learned from the Mentos the answer couldn't be further from the truth when I was studying in Delhi I study in a government aided school and as part of government aid even those days you had certain quota which was kept for the underprivileged children poor children and one of my best friends actually my best friend he came from a very very poor family he was if a so poor that even in the Delhi winter he didn't have a sweater and he pretended that he was not cold he never brought lunch and he pretended he was not hungry of course he would take from other people because he was hungry this boy once we had gone like good school kids should do we bunked school and we went to watch a movie so when we went to watch a movie by the time we reached the theater the theater was houseful those days theaters used to go houseful so when we reached there and some of the older generation here will know that when movies go houseful that tickets are sold in black so there was this fire rupee ticket being sold at 10 rupees and by the time we reach that I saw a houseful I have buddy he'll be able to miss the movie I started when he caught my hand wait one minute let the movie begin the movie began now this 10 rupee to get started getting sold for 8 rupees then for 5 rupees now when the movie is started it was being sold for 3 rupees 2 rupees finally the guys were getting rid of the ticket for 1 rupee H my friend taught me some incredible lessons firstly he taught me the value of perishable item second he taught me when it says houseful there are always tickets when it says no vacancy there is always we can say when it says no budget there is always a budget [Music] so these two office boys thought the remaining MBA graduates they taught them a very very valuable lesson so suppose these remaining MBA graduates wanted to meet those days mr. Anand mind they would get a calendar date maybe two years in advance but these boys knew that if you talk to the Secretary of Anand Mahindra and convince her if you need five minutes with Anand minder he also has to travel from ground floor to the 19th floor she can put you in the lift with him if you need five minutes ten minutes of pace time with him she can organize that if you need 45 minutes with him then mr. Anand mind there also has to travel from his house to the airport it takes him 45 minutes if she puts you in the car with him you will get that 45 minutes you need to be nice to the secretary and that's a lesson that these kids learnt because in the corporate world nobody teaches them that nobody they'll send a nice meal to mr. miner and they'll get a date in 2015 and they'll be happy with that there is a reason why I'm telling you this story the reason I'm telling you this story is if you go to the US so UK any one of these developed countries and you go to McDonald's the person serving you behind the McDonald's could be doing her PhD in India a person who is behind that tray serving you tea coffee or whatever will continue to be behind that train that tray size may keep increasing they may go from the tray to a five-star hotel but they'll be on the train the biggest leap most difficult leap in India is from that side of the trade to this side of the train and that leap was made by these two kids the kids who used to serve coffee to mr. Anand Mahindra had coffee with an invader and that is the greatest achievement [Music] and the miracle doesn't finish there because when these two kids came up for their passing out they were selected from the campus by ICICI Bank before when they were office boys their monthly salary was five thousand rupees at per annum salary of 60,000 rupees they were not a customer for ICICI HDFC automotive loans no but the moment they started getting six lakhs they became customers for HDFC housing loan they became customers for automotive loans they actually became customers you actually created a customer base and what was the cost of doing that the cost was zero because though the college paid them 5000 rupees stipend because they had to give the money at home the home survived on that five thousand apiece salary that they would get as soon as they got their first job not only did they return that money but they gave another 60 thousand so that another kid could be funded and brought in over those of you who are in connect should visit one of the bank branches there I will tell you the name of the branch offline and you will see pretty much sitting over there he manages a close to 200 crore business today in that branch he's a branch manager of that bank and he was so office boy on whom you took a punt and if you take a punt on them you will see that their delivery will be exponentially higher not incrementally higher exponentially higher you create true value yeah you should tell be schools also most of these tier 1b schools they have a filtration process which gets the people over 98th percentile life to them 95 to 98% times that's the cutoff these days right after two years 100% so after two years they pass out value-add is two percent the value-add of that huge institution which is funded by the government subsidized by you charge arm and a leg for an MBA the value add is two percent but when you take a kid who is down below and bring him up the value add is eighty percent and more importantly more importantly the 14 kids who were mentors nine of them went on to head NGOs because they realize that this is where real value lay they did not go to become some you know management trainee in a big MNC they actually decided that if I can do this we taught them that with any troops you give them they can turn them into stars they did not look for CBS which had Ivy League colleges or experience they said give me anybody and I'll turn a rough stone into a diamond actually we can be so we have choices we have choices there many young kids here and we all have young kids and we have choices of telling them to go and join the MNC these famous brands and they'll go there and I'm sure as management trainees they will work there they'll get a good salary or whatever but what is their contribution in in in that entire ecosystem so we are working for a software company let's say you're working for Microsoft and and you can proudly tell your parents you see this Microsoft Word you see this icon here this icons image I made that's my contribution there is another way to work and that way to work is to work with these these small companies where you'll be interacting directly with the CEO the CFO the chief technology officer the chief marketing is the same guy by the way right and you will have to sell him your idea because that idea costs money you will have to convince that person and if your idea succeeds you will see an orbit shift happening right there in front of you in a matter of weeks you don't have to wait for seven years deployment cycle to see the result of your work so I think increasingly we have to start training our next generation to look at these jobs as dignified jobs as learning jobs as learning schools right now they all keep looking towards the upside and that upside is crowded there is only two to three percent of India which can go over there the remaining 98 percent has to be absorbed somewhere else and if we don't start teaching our young generation their it is not about increasing wealth it's about existing shell crisis last slide I want to share with you and that is I owe everything I am I believe to my to my alma mater which is the Armed Forces and I genuinely believe that this is one of the most under leveraged talent pools in India you may not know this but close to 40 to 50,000 ex-servicemen come out from the Armed Forces every year I'm not that concerned about the officers the officers managed to do well but think about a Japan who joins the army at the age of 19 and for 22 22 years 25 years in some cases serves in some of the most harsh places let's forget about that that's part of what they signed up for but let me tell you another dimension of their life if an army German is lucky he will get two months of annual leave per year if he is lucky usually they don't get it because of off deployment but he'll get two months of leave every year do the math for 20 years he will see his family two months into 20 and for 10 months of the he doesn't even have the privacy of a room he'll be in a barrack and he will do that until the age of 40 and at 40 the government of India will chuck him out into the civvy Street and the only job we give them is opening doors closing doors checking the bottom of the car that's the job we get but these are the same soldiers who build bridges for you when engineering companies can't build it who build communication networks when communication networks have failed they are the ones who reach out there and in every disaster in every place they operate foreign equipment I was part of a mechanised infantry battalion and our entire equipment was in Russian labels were in Russian the manuals were in Russian and 10th class pass Jevons can operate third generation missiles they can fire third generation missiles and and our country a country trusts them during national disasters we trust them when we send them to United Nations to represent us in peacekeeping we trust them to rehabilitate entire communities which have been flattened by earthquakes in litter or floods in Punjab or landslides in Himachal Pradesh but somehow our corporate India doesn't seem to be able to trust them with even a small business role or a small enterpreneurship role I think it's one of the most stupid things that we do that we take this extremely highly trained and by the way you have to remember that our defense budget if you calculate the entire you know the training the the manpower the all of that is an Academy for which you pay it comes from your taxpayer money and these alumini of the Academy you are under leveraging them by just making them guards out there we need to exploit their capability and leverage them as well thank you very much thank you you

Channel: Reliance GCS

Views: 2,561,706

Rating: 4.9050608 out of 5

Keywords: management lessons, management talks, management topics, entreprenuer, entreprenuer talks, startup, management motivational talks, management tips, top management lesson, start up, raghu raman

Id: yQGaoj9Iwro

Length: 35min 45sec (2145 seconds)

Published: Wed May 16 2018