Sep
30
Posted on 30-09-2012
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Mails flooding my inbox on "Poverty is a passive religion” all agreed that charity isn’t the solution for dearth. Some readers however felt the samosa seller and my early poverty examples in last fortnight’s article cannot cover the massive scale of deprivation our country suffers from. I’m not theorizing with poor people, I take responsibility for my message. To chuck poverty out you don’t need brilliance or high intellectual capability, you just need to be demerdard. This regularly used French colloquialism refers to a person drowned in merde (shit) who gets rid of it by his own effort. It’s the first word I learnt in France. Conversely, there’s l’emmerdeur, the person who enjoys troubling others and makes them merde.

Examples are signposts, small in number, but they show the way. Civilization didn’t happen overnight; but cumulatively over time. A thousand examples can change a million people’s lives. That million can inspire 10 million more, and they another 100 million. Somehow the poor in India are not generating enough momentum to become demerdard. Let me narrate a childhood recollection of my father distributing milk and blankets in our refugee colony when Bengal was flooded in 1960. As a mass leader, the Sarbohara Mukti Parishad (freedom for people who’ve lost everything) he’d formed was given charge of distributing foreign donations for flood relief. After 2-3 days he discovered recipients were selling off the items, not consuming them. He became furious because nutrition was very low amongst colony children for which milk was necessary. So he liquefied the milk powder, obliged people to bring containers, and removed the blankets’ plastic covers so they didn’t look new. A little revolt erupted, but they convinced the poor. This small experience of abusing charity is also an example of both sides being l’emmerdeur to each other, my father for not allowing them to sell and the poor people for depriving their children of milk.

Self-urge is what it takes to be demerdard, even the poorest can exit poverty. A 2-acre farmer’s son told me he works 10 kms outside his village to earn money, so he wanted to hire farm labour to relieve his old father. But daily wages have sky-rocketed so he can’t afford it. Even in metros it’s risen from Rs 50 to Rs 250, sometimes Rs 500. The wage hike and labour scarcity in different pockets of the country opens up scope for anyone who takes initiative to be demerdard. Housemaids in cities have become wise. With an hourly rate they earn well working in several homes. Politicians haven’t ever taken initiative to teach poor people how to jettison poverty. Gandhiji changed his dress to look like a poor Indian; was that the right direction he gave, inspiring people to reduce their needs and live poorly?

FDI circus: Instead of unnecessarily politicizing FDI, shouldn’t Indian politicians help eradicate the country’s complacency and improve execution excellence of both the working and executive classes? FDI investment is invaluable for the global expertise and experience it brings to enhance people’s capability and competency. On-the-spot benchmarking can happen easily to meet the know-how challenges of globally reputed companies. India should respect, welcome and deploy the gains from FDI rather than politicians being l’emmerdeur by ensuring poor people become poorer, remain with outdated skills and don’t ever protest. Politicians love this situation to retain their vote banks.  As productivity excellence from manual work of the working class, if the poor receive skills training they can become competent workers. That’s a big scope to kill poverty.

India’s political divide has no relevance to FDI: Manifestoes of all parties, whether extreme left, left, centrist democrats, conservative right, extreme right, independents or religious political organizations, have a common theme, that they represent India’s 80% poor, no other significant political stance. Of course this is just to win an election. So the masses vote for individual leaders who become powerful. This situation will never change until poor people’s political illiteracy vanishes and they chase their rights. Today we see jumbled arguments on TV about how politicians are siding with the poor by opposing FDI, a few intellectuals enjoy that, but do the poor understand or care?

How small retail entrepreneurs will benefit from FDI: Let me reiterate how FDI in retail can benefit entrepreneurs (reference my article http://www.indianexpress.com/news/why-should-the-consumer-sacrifice/894283/0) who know no book-keeping. Most Indian kirana stores are run unprofessionally with no system to manage inventory or track sales, revenue and profit. Suppose monthly revenue is Rs. 4-5 Lakhs, they make Rs. 25–35,000 with 6-7% net profit. Money is made on loose items like rice, pulses, oil and fresh vegetables, not on packaged products with MRP price stamped. Manufacturers that give better margins are accommodated, but there’s no telling when that stock will sell. Manual accounting is done annually based on estimates, not actuals. Within a small space they block money stocking 300-400 types of inventory, making the store a veritable stockyard that loses freshness, so rats and cockroaches easily infest them.

Take Asian examples: when global multi-brand retails entered China, local retailers quickly learnt from them about supply chain discipline and sourcing processes, grew from 1.9 to 2.5+ million in less than ten years and still dominate the market. Consumers too have benefited from choice and quality. In ten years of Indonesia allowing 100% FDI, small traders continue to retain 90% of business. Foreign fast food chains have entered India, haven’t our local food outlets since improved in hygiene and service? Similarly, our kirana retailers will professionalize once they’re exposed to new ways.

The poor cannot be helped with strikes and political fights. Train them to acquire competence and capability at their working level. That’ll change their working style, make them demerdard. Then they may even produce outstanding India-made products that can travel anywhere in the world. Join me in the advocacy for demerdard for the poor, there’s a different life out there for them to chase. The formula is to teach how to become demerdard, nothing else.

To download above article in PDF Démerdard vs L’emmerdeur

Financial Express link:http://www.indianexpress.com/news/d-merdard-vs-l-emmerdeur/1009794/0

(0) Comments    Read More   
Sep
23
Posted on 23-09-2012
Filed Under (PARADOX) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Freedom to manipulate = fear + disasters: The Internet’s invention springs up questions about its borderline of freedom. When individuals are free to stage-manage whatever they want in the frontier-less Internet, we live every moment in fear of what could hit us. Through agents like YouTube, Facebook, Twitter, Orkut and all TV channel websites, life is becoming as vulnerable as it is exciting. The Internet’s power to cause destruction is immeasurable. A single American made an abhorrent video maligning a religion. The moment he uploaded it on YouTube, American consulates were attacked, one after another, in several countries, innocent American ambassador and diplomats killed, as were protesters. It’s sent fear ripping through everyone on what will happen next. The liberty of expression of art and science can never be questioned, but did the filmmaker reckon the death of innocent people when uploading his film on YouTube?

Learnings from a dangerous weapon invention prevents its future usage: Atomic bombing of Hiroshima and Nagasaki ended World War II where an estimated 72 million people died, 61 million among Allied powers, 11 million on the Axis side. To bring global peace, the Allies were bereft of choice against Japanese refusal to surrender, but simultaneously the atom bomb showcased how mankind can be destroyed. The atom bomb today defines the borderline of all wars. Countries develop nuke power to avoid being attacked and gain superpower status. But they are controlled by international bodies not to abuse its usage for harming people.

Two sides of freedom: Freedom has both a negative and positive side. According to 20th century German philosopher Erich Fromm, the positive “freedom to” and negative “freedom from” have evolved with human beings, distinguishing them from other species. British socio-political theorist Sir Isaiah Berlin proposes in the last century a frontier between areas of private life and public authority. He said, “The liberty of some must depend on the restraint of others.” Indeed, what right do inconsiderate individuals have to disturb peace in the world? You’d answer “no right” but who’s going to control them and how? Let’s look at how unlimited freedom leads to excesses that are irreversible.

Political excesses = being tyrannized: From being wild hunter gatherers, human beings opted for civilization. This means living in society with an accepted set of regulations. It’s human nature to want to rebel, but to handle that freedom requires discipline within a pre-determined boundary. Communism swept a large part of the globe to abolish feudalism in the name of freedom. According to The Black Book of Communism authored by many European academics, edited by Stéphane Courtois, the excesses under Communist regimes have taken 94 million lives. Democracy is a great liberating step from other forms of subjugation like dictatorships, but to what extent can democracy operate without controls?

Controlling nature = global warming: Ever since scientific inventions started tampering with nature for delivering a better life, surely scientists knew the repercussions of this freedom to live well? Using fossil fuels for power generation, running vehicles, CFCs for refrigerants have led to unwarranted emission of green house gases like carbon dioxide and methane. The ill effect of freedom we’re suffering is from deforestation, over-population, rising temperatures melting glaciers and polar ice caps. The domino effect is decreased fresh water availability, destroyed animal habitats, rise of sea levels, greater atmospheric moisture leading to flooding of rivers and marshlands, hurricanes, typhoons and risk of tsunamis. OXFAM examined over 6,000 climate-related disasters, and found about 252 million people affected in the last 20 years by natural disasters, not including non-weather emergencies like earthquakes and volcanic eruptions. They predict 54% increase by 2015, to 375 million every year. So people misusing liberty is depleting the earth’s ozone layer.

Overeating = Obesity: When you can’t resist tasty, affordable food that’s at arm’s length, enjoy huge quantities of processed food and fizzy drinks, what’s the ricochet we can expect? Obesity. Because the US has the world largest economy with GDP $14.59 trillion, should Americans eat without restraint? According to Centers for Disease Control and Prevention’s 2010 finding, 35.7% American adults and 17% American children are obese. In 2000, obesity’s direct medical cost was $61 billion, and estimated indirect economic loss $117 billion. That’s the cost of freedom of overindulgence.

Spending beyond means = Americans become homeless: In a housing market frenzy, US banks loaned money to people without verifying if they can repay the loans. When the economy nose-dived, homeowners started foreclosing their loans, leading to panic among banks, bankruptcies. The recessionary impact from crossing the borderline of affordability continues. Freedom in spending has resulted in people becoming homeless and jobless. But control over such liberty is possible as Germany has demonstrated with a better economy in the global recession situation.

Today’s Germany knows how to control freedom: Many cars can rev upto 250 km speed, but apart from Germany, the world’s only country with no speed limit in the highway, can you drive at 250 kms anywhere else? Being disciplined, Germans maintain highway rules without abusing the freedom to speed. In fact Germany’s road fatalities in 2010 decreased by 70%, from 1470 to 430 in 20 years. Per 100,000 inhabitants, Germany has 7.2 fatalities while Bangladesh has 6,300, Ethiopia 11,000, India 350, and China 36. This shows that when rights are exercised responsibly, people enjoy positive freedom.

Individual countries create law and order as per their own requirement. That could be good or bad. But the freedom of virtual communication which is touching all countries requires new global laws and rights to arrest disasters without hampering the freedom of science and creativity. Everybody’s psychological mindframe or conscience is not the same. Undoubtedly, digital technology has endowed us oceanic virtual communication liberty, but unfortunately the nuisance creator will always abuse this freedom. Like cars, perhaps the Internet world really needs a governor as freedom’s borderline to save people’s lives.

To download above article in PDF Freedom’s borderline

Financial Express link:http://www.financialexpress.com/news/freedoms-borderline/1006562/0

(0) Comments    Read More   
Sep
16
Posted on 16-09-2012
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Every individual, poor or rich, has freedom to enjoy the sun, moon, nature and sex. Being born poor doesn’t mean you’ve to submit to poverty as an inherited religion. Getting people’s sympathy is drowning in a tsunami of self pity that sucks you inside out. I hated the poverty I was born into because of its power to contaminate you towards lethargy and idleness.  I travel throughout the country for my work today, and often get demoralized with conditions of helplessness people find themselves in.

Returning from a remote village one day, the driver wanted some rest, and stopped the car near a brickfield. Looking at bricks from a design perspective brought back memories of our refugee colony brickfield. I can’t explain why artistic features thrilled me at childhood, like bricks being designed, ingeniously arranged in rows so they wouldn’t stick together, then going for firing. So much mud was consumed in brick-making that 3 ponds got created around the brickfield. During monsoon, water would flood across the ponds leaving us no pathway to the outside. Supported by our entire refugee colony, my father managed the socio-political altercation of getting the brick-making license cancelled. I remember the brick manufacturer came with a bagful of bribe-money, but my father threw him out.

Curiosity made me get off the car to check out brick-making today. I found many children and women working here, their faces darkened. Suddenly my driver was running behind me. He forced me to leave quickly. A friend later informed me that women workers in many such brickfields and other low-paying manual jobs are virtually bonded laborers; men who come to dump mud or take delivery of bricks often have abusive sex with them. It was really painful when she revealed they were perhaps compelled to give their bodies to protect their livelihoods. Unless the poor avoid passive, submissive poverty, and claim their own rights by pressing for modernizing the brick-making process that respects their dignity, protects their health and gives them a decent salary, no brickfield owner will change this situation.

This hurts me; if I could eject myself from a penniless past, why not others? Of course millions have also exited childhood poverty by their own initiative. You cannot ignore that poor persons will have certain knowledge deficiencies, but they need not feel inferior. To illustrate, selling the only marriage gold bangle she possessed, my mother bought me Air India’s Rs.2700 return “Youth Fare” from Delhi to Paris via Mumbai. In the aircraft, the airhostess said something in English. I looked at her stupidly. A foreigner seated next to me figured out I didn’t understand. He took the two portions of the seatbelt, put them in both my hands and said something. As the plane took off my two hands were still holding the two seat belt portions separately. The airhostess came around again. She shouted at me, but I had no language to express myself. My neighbor saw me, took my hands and closed the seat belt. That’s how I learned, “Fasten your seatbelt.” We landed in Mumbai to change to the Paris flight. I unmindfully tried standing up, the seatbelt was still fastened but I didn’t know how to remove it. The foreigner came to my rescue again. He sat me down, showed me how to lift one part so the other came off. When next I came aboard for the Paris journey, I immediately fastened the seatbelt before another airhostess could shout at me. Being quick on the uptake was important; I was venturing into a new life with mental courage and determination only. Beyond $8 my mother could afford for me, I had no inkling of where I’d stay or what I’d do once I reached Paris.

I love this story Haren Barua recounts of a samosa vendor who also lives off his wits. A traveller who journeys home by train from work in Paranur to Chennai, once had a samosa vendor plonk next to him with an empty basket at Guduvanchery station. In a sympathetic, “time-pass” mood, he empathized about his tiresome day-long samosa-selling job. The vendor replied, “What to do, sir? Only by selling samosas like this every day do we get a commission of 75 paise for each samosa we sell.” The traveller queried about his daily sales. “On peak days, about 3,500, on dull days can’t even move 1,000; on average, about 2,000 samosas a day.” Quick arithmetic for average sales amounted to Rs 1,500 rupees daily, or Rs 45,000 per month. The traveller’s business instincts awoke; how does he make the samosas? “Our proprietor gets them made by a samosa manufacturer.”

The vendor continued to chatter away, saying his earnings go for living expenses, only with marginal savings can he take care of his other business. “What other business?” The vendor replied he bought 1.5 acres for Rs 3 lakhs in Urupakkam in 2007, and sold it a few months ago for Rs 15 lakhs. Now he’s bought land in Uthiramerur for Rs 5 lakh. “Of the balance, I’ve set Rs 6 lakhs aside for my daughter’s wedding and deposited Rs 4 lakhs in the bank.” He further revealed he’s studied upto third standard; can read and write. Before disembarking at Chromepet station, the vendor very politely said, “Sir, there are many people like yourself, who dress well, wear a tie, shoes, speak English fluently and work in air-conditioned rooms. But I don’t think you earn as much as we do wearing dirty clothes and selling samosas.” Isn’t this a great example of personal initiative, courage, genuine entrepreneurship and killing poverty?

Sympathizing with poverty is promoting a passive religion, it earns people no money. My message won’t reach the poor or non-English readers. Politicians professing to be their torchbearers don’t teach or inspire them to exit poverty without charity and begging, they merely tap them for votes.  The main point is how to instill a desperate urge in poor people to oust poverty with their own initiative.

To download above article in PDF Poverty is a passive religion

Financial Express link:http://www.financialexpress.com/news/poverty-is-a-passive-religion/1003098/0

(0) Comments    Read More   
Sep
09
Posted on 09-09-2012
Filed Under (POLITICS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

“Histoire drôle?” (“Funny story?”) wrote Emmanuel Tournes, who’d worked as strategy planner in my company in Paris, when forwarding a Le Monde article on an Ahmedabad fashion store called Hitler that opened on 18 August12. Emmanuel knows my standpoint on Jews because of his wife’s case in our office. Joelle Samama, an outstanding business principal, was his colleague, they later married. In fact with their 3 lovely children they came to spend time with us in India last year.

Very efficiently and with passion, Joelle was handling one of our large European pharmaceutical clients. Suddenly one day our client company’s CEO discovered Joelle was Jewish. She confided in me her utter dislike for Jews and asked me to remove Joelle from the project. I was shocked. This disgraceful demand posed me no “Joelle or client” dilemma. I said goodbye to the client’s project.

Should any brand carry in it the death of 6 million Jews and 5 million non-Jews? Did the promoters of Hitler store, complete with the dangerous devil’s 45-degree-angled Swastika adorning the dot of the “I” understand it represented extermination based on race? Adolf Hitler’s agenda from 1920 to 1945 was to build a Master Race of pure-blooded Aryan Germans to control Europe, eventually the world. So he crafted his National Socialist (Nazi) party’s genocide program to obliterate “Life unworthy of life.” This meant systematically annihilating, with no chance of regeneration, Jews, gypsies, homosexuals, the disabled, mullatos of mixed colour, and all opponents in countries Nazis attacked and occupied like Poland, Hungary, Czechoslovakia, Ukraine, Russia, Holland and France. Even in Germany, those who criticized his Third Reich were guillotined, as Sophie Scholl was.

Twenty two-year-old student Sophie believed in every human being’s essential dignity. Through non-violent resistance group White Rose she actively defied Nazi ideology. Hitler’s Third Reich convicted her, her brother Hans and Christoph Probst for treason for distributing anti-war leaflets in Munich University 1943. Within hours they were beheaded.

My empathy for Jews is obvious as I’ve lived 35+ years in France with its half million Jews. From Jewish friends in his Paris school my son became aware of Holocaust atrocities in Auschwitz-Birkenau concentration camps, and insisted we witness this dark history in Poland. Since that first 1994 visit, I’ve gone there several times to pay homage to innocent souls gassed to death. Walking alongside 83-year-old Bernard Offen, an extermination camp survivor I’d met 2 years ago, I’ve even relived their torture and horrors. Offen revealed to me how, as a child then, he, his father and hundreds of Jews were stuffed into a closed cattle cart; they couldn’t move an inch for 4 days, had no food, no water, no toilet facilities. Many died of suffocation. On reaching Birkenau camp, the bedraggled, sick and smelly Jews were individually selected for two lines, about 30% in one; 70% in the other. The latter that included his father was marched towards what he later discovered were gas chambers.

Nazi SS selector Dr Josef Mengele killed Jews not only through prussic acid in gas chambers, but with injections of phenol, petrol, chloroform, air into the heart, or by firing squads. Mengele’s real assignment was human genetics research to eradicate inferior gene strands for creating that German super-race. His experiments included dissecting live infants; castrating men without anesthesia, parading naked women and administering high-voltage electric shocks to test their endurance. Once, ten dump-trucks full of children were brought near a large pit of fire. On orders from Mengele and Auschwitz commandant Rudolf Hoess, the trucks backed up and threw the children into the raging flames. They screamed; those who managed to crawl out were pushed back by officers using sticks.

“It is a perverse abuse of Holocaust history to name a business after one of the world’s most notorious mass murderers and anti-Semites,” said Abraham Foxman, national director and Holocaust survivor, in a New York-based Anti-Defamation League press release. Since Hitler opened in Ahmedabad, international and local media have heavily criticized its owners. Jewish communities appealed for a name change. Israel’s Consul General in Mumbai, Orna Sagiv, met Gujarat government officials about the shop’s name being “unacceptable and insulting” to Jews across the world.

Initially resisting change, Rajesh Shah, the store’s co-owner had earlier explained to media that this name was to honour his partner’s grandfather who’d acted as Hitler in a school play, is a “very strict” man, so the Hitler nick-name stuck with him. Now Shah is quoted as saying he receives hundreds of calls from India and abroad every day, “It’s becoming a headache.” Even local officials told them the shop’s license would be revoked unless it’s renamed. It’s creditable that co-owner Manish Chandani disclosed to AFP that they hadn’t expected such international protest, and never intended to glorify the German dictator, "I plan to change the store’s name very soon. There is tremendous pressure from the government and Jewish community. This time I will choose a non-controversial name."

In 1942, French police arrested 13,152 Jews, collected them in a bicycle velodrome for delivery to Auschwitz death camp. In 1995 President Jacques Chirac had to apologize for the French administration’s complicit role in Vel’ d’Hiv Roundup. Today in Germany and many European countries, laws prevent people from hurting, debasing, belittling sentiments of national, race, religious or ethnic groups, victimizing by assaulting human dignity of others, invoking events and people associated with Nazis. Holocaust denial is illegal, and symbols like Swastika and SS runes outlawed. But till today India hasn’t revolted that Hitler transformed the Hindu peace symbol to a horrible murder symbol, dismissing Hitler’s Swastika as being slanted. But graphically and namewise, doesn’t it remain the same? Imagine if any other religion’s symbol is similarly misused, wouldn’t there be a riot?

My objective here is to sensitize readers about Hitler’s atrocities; and to appreciate Shah and Chandani for seeing the logic of why their store’s name and logo have to be changed. This dangerous devil’s dust should never again be used.

To download above article in PDF Dangerous devil’s dust

Financial Express link:http://www.financialexpress.com/news/dangerous-devils-dust/999870/0

(0) Comments    Read More   
Sep
02
Posted on 02-09-2012
Filed Under (BUSINESS) by Shombit

From Discomfort Zone column by Shombit Sengupta in Financial Express and Indian Express

Dominating Indian headlines in the last 22 years were large businesses on acquisition sprees of big ticket/big banner international businesses, joint ventures, tie-ups, break-ups with global companies, mergers and foreign listings. Stories abound of start-up businesses with a gang of friends, angel investors, IT barons making exceptional growth and profit while issuing horse blinkers to ensure their engineer-employees follow the repetitive software programming path. But without any hullaballoo, as per SME Chamber of India statistics, India’s small and medium enterprises (SME) have contributed 45% of industrial output, 40% of exports and employed 60 million people. SMEs annually create 1.3 million jobs and produce over 8000 marketable products. If SMEs are consciously strengthened, a permanent smiley would represent a robust Indian economy. 

SME excellence has made Germany into Europe’s industrial powerhouse today. According to Prof. Bernd Venohr of Institute of Management, Berlin School of Economics, about 3200 high-end SMEs within Euros 50-100 million annual sales “are responsible for some 30% of Germany’s total exports.” Of these, 1300 are ranked Top Three in their market sector worldwide. “Companies such as door technology supplier Dorma, cooking system manufacturer Rational, packaging machinery producer Krones may not be household names, but each boasts a global market share of 50%+ in its market sector,” he said.

My German business associate Harald Helm of reputed consultancy, Helm & Company, corroborates that German SMEs define their markets narrowly, create and operate in market niches. “Their specialization is combined with global marketing, the focal point is customers, the key factor is highest quality. Innovation is their foundation for market leadership. Many SMEs have pioneered unique products, defined their own market, and retained their front-runner positions.” Harald emphasizes that SMEs, which are primarily family-owned, don’t tolerate idlers. They hire highly qualified, performance-oriented team-players to sustain business in case the next generation is not interested or has no requisite skills. “SMEs believe high vertical integration of core competencies is better than outsourcing; so core know-how is protected. They prize healthy growth over share value. The average director’s tenure is over 20 years,” he said.

German SMEs have created intangibles with unique craftsmanship and embellishment to uplift their delivery to a heightened quality platform that’s elusive but implicit.  Unlike Germany, most Western European countries lost their SMEs in early 1990s with the opening of the European community and globalization. Germany benefited from the Euro’s introduction as Deutschmark was the stronger currency. Culturally, Germans are against borrowing they call schulden, the same word means guilt. Other Europeans started taking cheap credit when inflation moved real rates down; this triggered the recessionary crisis. With stimuli packages, Germany has bailed out many European countries who continue to criticize German trade relations for being mutually beneficial with China, India and Russia. “The range offered by German SMEs ideally matches the demand profile in these countries, – quality products for developing the infrastructure,” said Prof. Venohr. He attributes SME success to high R&D spends, meticulous persistence for setting up worldwide sales/service networks, and favouring direct customer contact. Another SME success factor is Germany’s almost-free education system with thrust on vocational training where students go to industries as on-the-job apprentices.

I’ve always worked with large global and domestic companies, but working for a few French SMEs I’ve discovered a hallucinating dimension of their innovative and sustaining power even under global threat. Among them is Mieuxa I’ve worked with since late 1980s on business strategy including corporate image, branding, product development. Based in Nimes, South of France, visionary President Michel Vindry would regularly travel 700 kms to Paris to consult with me on his business of anytime need products for doing odd jobs at home. These included small home repair kits like plaster, paint and implements for minor wall touch-ups, or liquid that easily cleans sticky wall-paint brushes. Another is de-mineralized water for ironing clothes. When poured into the electric vapour iron, the water does not damage the iron, nor do water sprays leave stains on pressed clothes. Today his innovative power has upgraded the de-mineralized water with soft fragrance for home linen. As no international company or retail private label is likely to enter this area, Mieuxa took the advantage of finding newer solutions to relieve the customer’s small home woes. We created very unconventional branding at that time which totally transformed the boring odd jobs look. Mr. Vindry had the guts to accept the bold branding, saying, “It will look strong and different on retail shelves.”  Till today, using the same branding, his odd jobs products stand out in thousands of stores. Mieuxa, the category benchmark, has sustainably grown by also acquiring complementing companies. 

Looking at India from this perspective, I can see basic to high-end SMEs mesmerize markets if they imbibe the German essence of creating intangibles. India’s micro, small, medium enterprises (MSME) would definitely be higher than officially recorded figures. They could be agile, creative hotshops with astonishing innovation; at the other extreme, small shops penetrating underprivileged areas. SMEs need not depend on family continuity. Professionals with delivery capability, not street-smart MBAs, can run father’s business if the next generation prefers not to. SME mentality is often backend supplier driven. SMEs have to better understand customer needs and work with an objective (what you are going to do) and purpose (why you are going to do it and what problem it can solve). Eg. An SME making kitchen stove chimneys has to solve the customer’s end-to-end smoke problem 3-5 years on. That means impeccable after sales installation, flawlessly fixing wiring and switches aesthetically in all sizes of kitchens.  These brand intangibles touch customer hearts to increase business through word-of-mouth.

Maintaining self-defined discipline within a boundary according to every SME’s capability is vital. I’ve defined a five-fold disciplined boundary comprising of a purpose, uniqueness, sale-ability, expandability and being aspirational. This discipline is different from authoritative military discipline because it drives creativity and sustains business. For a bright future at the tunnel’s end, Indian SMEs can take a leaf from Germany’s SME model.

To download above article in PDF Intangibles make SMEs prosper

Financial Express link:http://www.financialexpress.com/news/intangibles-make-smes-prosper/996450/0

(0) Comments    Read More