MARCH 2017 VO L U M E 5 6 I S S U E 3 PAG E S 9 2 r60

DIGITAL
IMPACT
HOW TECHNOLOGY
IS DISRUPTING
BUSINESSES

M ED IA
FINA
NCIA
L SE
HE RVIC
ALT ES
HC
ED

AR
UC

E
AT
IO
N
 THE JOURNAL OF THE
ALL INDIA MANAGEMENT ASSOCIATION

VOLUME 56 ISSUE 3 MARCH 2017

THIS ISSUE

16
COVER STORY

question of trust 18 HR
Media houses running on bad business models should shut Nip it in the bud 44
down to make way for balanced journalism. Managers should provide a comprehensive
- ANANT GOENKA solution to conflicts before they escalate.
- Z ARIN B HAT HE NA
SEAMLESS TRANSACTIONS 22
Advancements in digital technology have led to the growth LEADERSHIP
of fintech companies. A new yardstick 48
- RISH AB PARAKH Leaders need to develop traits of conscience, in
addition to physcial and mental traits.
BREAKING FRONTIERS 30 - RAVI CHA U DHRY
Digital interface is disrupting the financial services sector.
- MOH IT GANG STRATEGY

Learning curve 34 A fresh lease of life 59

Technology is playing the role of a great equaliser in the Asset utilisation is the cornerstone of any
arena of education. turnaround strategy.
- RANJAN MUKERJEE - PRA DI P CHA NDA
TECHNOLOGY
Healthcare 2.0 38
Apps are revolutionising the way people tackle their ailments. Shaping the future 62
- NALINI RAMAC H ANDRAN Microservices is replacing traditional standalone
programmes.
- RAKE SH KHA NNA
 BETWEEN
THE
COVERS

SUMMARY
G LAKSHMANAN ON
PIVOT

EXTRACT
SMARTONOMICS

BOOKSHELF

CASE STUDY
BlackBerry, a screen shot 66
The rise, fall, and the eventual demise of the iconic
BlackBerry.
- RAN J AN S HO LLA, K R PILLAI, V JAGANNATH RAO
CORPORATE GOVERNANCE
STAKEHOLDER HARMONY 76
Relationships hold the key to successful leadership
transitions.
- RAJ ENDRA P BH ARTI
FINANCE
Rethinking accounting 82
Innovation accounting offers organisations a new
perspective on growth.
- NIBH RANT SH AH
HR
The right reward 87
Monetary benefits alone cannot build employee
loyalty.
- M ANOJ AGARWAL
 PRESIDENTS
MESSAGE
Digital supremacy
SUNIL KANT MUNJAL is President, AIMA and Chairman, Hero Corporate Service.
U
nlike the Industrial Revolution that
came in a single burst, the digital
revolution has come in periodic
waveseach bringing with it
paradigm shift. When the internet was first
invented through the TCP/IP protocol, connected
devices allowed traditional businesses to extend
their reach beyond their physical networks. Then,
the messenger revolution brought the customer
closer. Now, intermediaries are using digital
technologies to control user access and creating
new ways of consuming products and services.
Without doubt, it is the converts to the digital
religion who are more secure against technology
disruption, compared to traditional companies
who have been left behind the curve.
Revenues and profits are shifting towards those
who can straddle the digital and the physical
realms. Digital warriors are offering greater speed
and convenience at lower prices than traditional
competitors. This trend is visible across every
sector but particularly intensely in the banking
and finance, retail, media and entertainment,
transport, and healthcare sectors.
Digitisation is allowing companies to connect
and transact live with both the market and the
supply chain, even as traditional companies are
constrained by time and space. Digital interaction
and transaction are yielding access to important
data that is allowing more informed decision-
making and quicker adjustments in business
strategy, product design, and organisation
capability. Digital technologies are also enabling
unprecedented automation through artificial
intelligence. AI is allowing overcoming the
physical limitations of human work.
Of course, the most visible impact of
digitisation is on the banking and financial
services sector. Payment cards and internet
8 INDIAN MANAGEMENT MARCH 2017
banking have been around for a while, but
consumer databases and smartphones are
making it possible to radically cut documentation
as also the use of cash and cheques. Digital
wallets and payment banks are taking away
business from traditional banks.
Banks are hopping onto the digital bandwagon
to stop the leakage of business and to get hold of
rich consumer data. A number of them are also
willing to forgo transaction charges, as consumer
data can be monetised through targeted
marketing by bank and their partners.
Fintech is also getting strong official support,
as governments seek greater access to financial
information in order to increase tax collection.
Digital payments enable the linking of a citizens
identity with transactions, and facilitate real-time
tracking of business and financial conduct.
The emergence of blockchain technology could
create new paradigms in banking, investment
and even monetary governance. The wide
distribution of transaction authorisation and
financial information is being seen as a possible
replacement for individual ledger management
by each participant in the financial system.
Blockchain technology also has implications
for monetary management by central bankers,
since advanced users are able to issue private
cryptocurrencies for global payments.
News and entertainment is another industry
that faces digital disruption. Already, social media
has replaced TV and newspapers as the first
source of news and as the primary resource for
marketing and propaganda. As a result, eyeballs
are shifting, as is advertising. Yet, since digital
media today is fragmented, so some top TV
channels and newspapers still manage to corner
a substantial portion of advertising budgets.
However, this could change in the coming
 Biotechnology Industry Research Assistance Council
(A Govt. of India Enterprise)
Do you have the next innovative research idea
(Discovery to Pre-Commercialization)
BIRAC INVITES PROPOSALS for Biotechnological product development
Under
Small Business Innovation Research Initiative (SBIRI)
&
Biotechnology Industry Partnership Programme (BIPP)
Discovery High risk research
SBIRI Proof-of-concept and BIPP POC to Validation
supports Early stage innovations supports Pre-commercialization

WHO can apply HOW to apply

Single or consortia of Indian companies registered Proposals for both the Schemes are required
under The Indian Companies Act 2013 with to be submitted onlIne only. For scheme
minimum 51% Indian ownership, and DSIR details and submission of proposal, please log
recognized in-house R&D units are eligible to on to BIRAC website (www.birac.nic.in)
apply either alone, or in collaboration with a
partner from another Company/Institute/University
Last date for Submission of proposals:
For queries, please contact: Head-Investment, BIRAC Email: investment.birac@gov.in 31st March, 2017
INDIAN MANAGEMENT MARCH 2017 9
 months and years as consolidation takes place
across digital media platforms.
Digitisation is also changing content creation.
The democratisation of media is loosening
traditional media control over news and
propaganda. Increasingly, heads of government
and companies as well as others with a need
for public relations are reaching people directly
through social media. Even TV news channels and
newspapers are rehashing social media content.
The big negative to this is that unfiltered,
unverified, and even invented news is
overwhelming genuine newsa new lexicon
has entered the dictionary, and is
known as post-truth. Algorithms
Healthcare is another are increasingly being used to
area where digital write standardised reports and
analyses, and journalism jobs are
technologies are
being slashed all over the world.
forcing changes in both The entertainment industry
operations and the too is being transformed.
business model. Entertainment content and
distribution is being freed from
the control of the big studios
and recording companies. Tools for creating
and editing both audio and video are available
to anybody with a computer or smartphone.
There are also numerous online platforms for
distributing content. Content is also getting
monetised and digitised, while advertising
budgets are being allocated by algorithms
based on the mechanics of going viral, and not
by the source.
Digital technologies are widening and
diversifying the scope of retail as well.
Ecommerce has added a huge piece to the
consumption pie, as the convenience of
finding, evaluating and buying from anywhere,
anytime is pushing up casual consumption. It
10 INDIAN MANAGEMENT MARCH 2017
has also changed the way retail is organized
and designed.
Modern consumers want a mix of physical
and virtual shopping experience. More so, it is
no longer a race between brick-and-mortar and
click-and-ship stores. Physical stores must have
an online presence now, directly and through
online platforms, while digital stores require
physical delivery points and a few marquee
stores to build brand equity. Of course, the latest
trend is the emergence of app-enabled physical
stores where shoppers can find, buy, and carry
items by using only the store app.
Healthcare is another area where digital
technologies are forcing changes in both
operations and the business model. Wearable
sensors connected to phones and the internet are
allowing consumers to monitor and share data
about their fitness and post-treatment recoveries.
Digital intermediaries are directing patients to
doctors, hospitals, medicines, and insurers. Now,
hospitals are reaching out to patientsinstead of
just waiting for them to arrive.
Significantly, tech companies are taking control
of diagnostics, operations and medicines,
because data is becoming the new engine of all
expertise and innovation. Medical knowledge,
experience and expertise is being collected in
huge data systems and algorithms are identifying
diseases and recommending treatments. Sensors
and robotics are taking over operations and
organs are being printed by bio-printers.
Digital technologies are changing life and
business in radical ways. It is a substantial
transition as well as a management challenge.
Only those who make the switch quickly and
adequately will survive.
The opinion expressed is personal.
 EDITOR S
NOTE A SPENTA MULTIMEDIA PVT LTD PUBLICATION
M A R C H 2 0 1 7 VO L U M E 5 6 I S S U E 3

EDITORIAL ADVISORY BOARD

S L Rao
Sunil Kant Munjal
Dear Readers, Rekha Sethi
Prof. J K Mitra

T
Maneck Davar
N Radhakrishnan
he recent leadership crisis at two of Indias bellwether
institutionsTata Group and Infosyshas reopened the EDITOR & PUBLISHER I Maneck Davar
MANAGING EDITOR I Krishnaveni Subramanian
debate on corporate governance (or the lack of it) and ethics.
ASSOCIATE EDITOR I Anitha Moosath
Both these institutions are very dissimilar. Tata Group is a global EDITORIAL TEAM I Titash Roy Choudhury
enterprise headquartered in India, comprising over 100 independent
DESIGN
operating companies, founded by Jamsetji Tata in 1868. Infosys is a ART DIRECTOR I Parvez Shaikh
new-age enterprise founded by first-generation entrepreneurs in 1981. GRAPHIC DESIGNERS I Nikunj Parikh, Payal Sumaya
Despite these dissimilarities, both have been pioneers in establishing best- ILLUSTRATORS I Swapnil Redkar, Darshan Sompura
in-class corporate governance practices. Tata Groups trusteeship model ADVERTISEMENT MARKETING
enshrined the aspects of corporate governancefair and just treatment DIRECTOR Marketing & Sales I Geetu Rai
Tel: 9920023908/9844265885
of internal and external stakeholders, wealth sharing, and environmental
MUMBAI Niraj Singh
responsibilitymuch before the term gained popularity. And the story of Tel: +91 9930778393
Infosys ESOPs creating some of the countrys first salaried millionaires is Fax: (+91 22) 2481 1021
niraj@spentamultimedia.com
now a part of corporate folklore. DELHI Roger Wong
Both these institutions, despite a robust and transparent succession Tel: +91 9810927867
roger@spentamultimedia.com
planning process, witnessed tumultuous disagreements after the transfer
BENGALURU Sandeep Kumar
of leadership. In both cases, the successors were handheld and chosen by Tel: +91 9886870671
the previous leadership. How can such scenarios be avoided? Professor CHENNAI Shoba Rebecca
Tel:+91 9884055523
Rajendra Bharti (Page 76) offers implementable solutions. It is imperative chennai@spentamultimedia.com
that India Inc. learns from these incidents, especially as corporations KOLKATA Pulak Ghosh
around the world are seeking partners in emerging markets. Tel: (+91 33) 4073 5025
pulak.spenta@gmail.com
Digitise or die, is the new war cry. Experts predict that technology GUJARAT Sanjay Chawda
holds the key to industry leadership. In our cover story, we explore Tel: +91 9824043072
sanjaychawda@gmail.com
how technology is disrupting traditional industriesmedia, finance,
KERALA Sivasankaran T
education, and healthcare. While in some cases it has helped bridge Tel: +91 9947683001
sivakeral15@gmail.com
the last-mile gap, in others it has sounded the death knell for a number
SUBSCRIPTIONS
of jobs. However, it does not pay to adopt technology blindly or just
Robert Gomes
because your competitors are doing so. As Melvin Kranzbery (a Callaway Tel: 022-24811024 / 31
robert@spentamultimedia.com
professor of the history of technology at Georgia Tech and founding editor
of the journal Technology and Culture) said, Technology is neither good
nor bad, nor is it neutral. Companies need to analyse what complements
Indian Management, the monthly magazine of Spenta
their organisational culture and product before taking the plunge. Multimedia Private Limited, is printed and published by
Mr Maneck E Davar on behalf of Spenta Multimedia Private
Do write in with your feedback to imeditorial@ Limited. Editor Mr Maneck E Davar. Printed at Spenta
Multimedia Private Limited, Plot 15, 16 & 21/1, Village
spentamultimedia.com. Chikhloli, Morivali, MIDC, Ambernath (West), District-Thane.

The views and opinions expressed or implied in Indian

Management are those of the authors and do not necessarily
reflect those of Indian Management or Spenta Multimedia
Private Limited Unsolicited articles and transparencies are sent
in at the owners risk and the publisher accepts no liability
for loss or damage. Material in this publication may not be
reproduced, whether in part or in whole, without the consent
Maneck Davar of Indian Management or Spenta Multimedia Private Limited

12 INDIAN MANAGEMENT MARCH 2017


MODY UNIVERSITY
BUILDINGWOMENLEADERSOFTOMORROW
Under the aegis of Mody University (exclusively for
women), College of Business Management Economics
and Commerce is a premier bschool with Indian
ethos and values. It offers a unique inspired-learning
environment with a vision to inculcate and nurture
necessary managerial skills and acumen in future
women business leaders and proactive thinkers.
A contemporary curriculum, judiciously blended with
classroom learning and industry related exposure, is
the hallmark of this unique bschool. The application-
oriented pedagogy comprises interactive classroom
discussions, case studies, role plays, real-life projects
on contemporary business issues and challenges, and
in-depth situational analysis.
MBA (dual specialisation) is the flagship programme
of this bschool that bears testimony to the quality
and academic rigour, and offers budding managers
the opportunity to opt for specialisation in any two
tracks from marketing, finance, human resources,
systems and business analytics, entrepreneurship,
as well as international business. It also offers a five
year dual degree programme (BBA+MBA) and PhD in
management.
ADVERTORIAL
This bschool is headed by former Dean (Academics)
of IIM Shillong. Eminent people from industry and
academia serve on its Board of Studies as well as
Academic Council. Mody University has entered into
MoUs with many leading foreign universities like Ecole
Des Mines De Nantes, France, State University of North
Texas, Denton, USA, Florida International University,
Miami, USA, and University De Nantes, Nantes, France.
The MBA programme of the college has been ranked
among top 50 in India by Career Connect-2015, 4th
Best bschool in Rajasthan by The Week-2015, among
top 150 B-Schools of India by Times B-School-2015,
ranked as the top Women's University in India by
The Week-2014, featured among the top 10 private
universities of India by Career Connect-2015 as well
as among top 33 universities of Hall of Fame by India
Today-2015.
Mody University, with a world class campus and an
eco-friendly infrastructure, is spread over a sprawling
265 acres of greenery. It is an oasis in the Thar desert
providing an enjoyable campus life where budding
female managers live and acquire professional acumen
and knowledge in a safe and secure environment.
 EXECUTIVE SUMMARY
COVER STORY
SEAMLESS
TRANSACTIONS
We are observing a few
prominent shifts in the financial
sector; one among them is
the introduction of digital
technologies. Digitisation of
financial services has opened up
newer, easier, and better avenues
for both the customer and the
provider. This has also given rise
to a slew of fintech startups that
are way ahead of existing players
and are ready to experiment
to solve customer problems.
According to a KPMG report,
Fintech in India, the transaction
value for the Indian fintech sector
is estimated to be approximately
$33 bn in 2016 and is forecast to
reach $73 bn in 2020. Moving
forward, this sector with the
help of government support
and policies will redraw Indias
financial landscape.
PAGE 22
14 INDIAN MANAGEMENT MARCH 2017
LEADERSHIP
A NEW
YARDSTICK
In todays complex business
environment, the role of leaders
is being redefinedthey can no
longer sit in their C-suites without
connecting to the outer world.
More than ever, leaders today
need to be innovative, flexible, and
responsive to their surroundings.
And that is why there is an urgent
need for leaders to rediscover their
heart. Apart from the physical and
mind traits, todays leaders need
to develop a strong conscience
along with making profits, they
also need to understand the worth
of environmental and social causes.
The three pillars of exceptional
leadershipwholeness,
compassion, and transparency
will take leaders on a journey of
self-discovery.
PAGE 48
STRATEGY
A FRESH LEASE
OF LIFE
Organisations invariably go
through rough patches, and
there may be times when
legacy assets seem no longer
productivethey may no more
serve the purpose of building
competitive advantage and
drive growth. Business history
is replete with such situations
leading to closure of companies.
Winding up of operations
affects not only an organisations
shareholders and employees, but
also other stakeholders in their
ecosystem. So how to rebuild and
turn around underperforming
companies? Employing asset
utilisation strategies is the
obvious answer.
PAGE 59
TECHNOLOGY
SHAPING THE
FUTURE
In the context of technology,
when it comes to the traditional
versus innovative approach,
the latter wins most of the
time. The reason is: the security
factor offered by the traditional
approach is often overshadowed
by the experimental, disruptive,
and futuristic nature of the
innovative approach. Similar
is the case with monolithic
architecture and microservices.
The former has limited flexibility
as it is a standalone programme
that operates independently
from other applications. On the
contrary, microservices is a host
of several individual processes
that work in cohesion to
perform the tasks of monolithic
architecture in a more flexible
and efficient manner.
PAGE 62
CORPORATE GOVERNANCE
STAKEHOLDER
HARMONY
During the process of inception
of a company, vision plays a
dynamic role. From the goal of the
company to the ambitions of the
employees, and from rising above
the competition to creating a
sustainable growth plan, vision is a
deciding factor. One of the factors
a company should encompass in
its visionoften touted as the
foundation of its successis the
ability of its leaders to nurture
relationships with shareholders,
customers, and employees.
Leaders should pass on their
responsibilities to the next in the
hierarchy not with a feeling of
detachment but rather with trust
in their competency.
PAGE 76
INDIAN MANAGEMENT
FINANCE
RETHINKING
ACCOUNTING
Startups and established
market players are trying to
build sustainable businesses by
providing innovative products
and services. But organisations
also need a yardstick to assess the
effectiveness of the innovative
measures they have adopted. This
is where innovation accounting
plays an important role. It helps
companies to measure and
thereby communicate the true
progress of innovation through
concepts such as financial ratio
analysis, cash flow analysis,
budgeting, valuations, etc.
Effective innovation accounting
will help entrepreneurs decipher
the companys present scenario
and future prospects.
PAGE 82
MARCH 2017 15
Boon
or
bane?
How are traditional industries coping with
digital disruptions?

MEDIA
ANANT GOENKA, THE EXPRESS GROUP
FINANCIAL SERVICES
RISHABH PARAKH, INTELLECAP ADVISORY
MOHIT GANG, www.moneyfront.in
HEALTHCARE
NALINI RAMACHANDRAN
EDUCATION
RANJAN MUKERJEE
Question of trust
Loss-making news organisations are being run on vanity and ego.

ANANT GOENKA, THE EXPRESS GROUP

18 INDIAN MANAGEMENT MARCH 2017


E
ditors of newspapers around
the world would sit in the
evening with a list of news
items filed by their reporters
from across the country and
decide which stories readers
should read. The underlying
idea behind any editors selection of stories
is balance.
For instance, in the Donald Trump versus
Hillary Clinton election,an editors attempt
would be to provide you with arguments for
and against both Trump and Clintonthis
COVER
STORY
would ensure balance in reportage, and a reader
would be better equipped to vote. Today, that
scenario has changed.
Now, as we read our content on two
algorithmically controlled platforms, Facebook
and Google, editors no longer can give you that
balance; in fact the opposite happens. So if you
read a pro-Trump piece, an editors instinct
would be to suggest you read a pro-Clinton
story next. But an algorithm would suggest one
pro-Trump story after the other. It increases
your time spent on their platform based on
their understanding of your worldview and
feeding content that agrees most with you.
In my view, this is why many countries around
the world are getting frighteningly polarised.
We are not putting ourselves in the shoes of
those we disagree with. We have lost that ability
to listen to each other which is the mandate
of good journalism: to provide all the sides
to a story. To make you a well-informed and
therefore a more responsible citizen.
At the Indian Express, we are seeing this clearly
as we straddle both media ourselves. Today,
despite a growing print circulation base, The
Indian Expresslike many other newspapers
around the worldreaches more readers in
digital form than in print. Over the last five
years, the group has grown from 4 million
uniques to 50 million unique visitors a month.
Barack Obama put it best in his farewell
address when he said we are increasingly
becoming secure in our bubbles that we start
accepting only information, whether its true
or not, that fits our opinions, instead of basing
our opinions on the evidence that is out there.
The former US president added, Without some
common baseline of facts, without a willingness
to admit new information, and concede that
your opponent might be making a fair point...
were going to keep talking past each other,
and well make common ground and
compromise impossible.
Over the years, liberalism in mainstream
INDIAN MANAGEMENT MARCH 2017 19
 MEDIA

with the clear objective of pushing an ideology.

And the third type is the standalone news
media business that is essentially neutralas
is the traditionreporting first and opining
later. Of these, I would imagine, many will be
publicly traded or private equity-backed and
run as business-first organisations. Their content
offering will go beyond traditional definitions
of news to include food, health, gossip,
architecture, design, entertainment, education,
science, and technology and be present in

Shutterstock.com
The future of the news media and its ever-growing
business will be one of reach has left a large portion
of the right wing without a
credibility rather than voice and they have spoken
of news. loud and clear in elections
in many countries, including
ours, the Philippines, Turkey, the US, England,
and even the most liberal France. The success
of Fox News in the US and of Arnab Goswami
in India shows the existence of this right-wing
audience that news media has not catered to for
many years.
And here lies the challenge for us publishers
to ensure that we give our readers an accurate
representation of reality rather than an
opinionated one. The onus also lies on the
readers to make responsible choices not only
with the brands they want to consume, but also
the stories they should consume.
In future, I see three distinct types of news
media emerging in India. The first is similar
to some of the 405 news channels in our
country: players that are in the business for
ABOUT THE AUTHOR the clout, their ultimate motivation being in
Anant Goenka is businesses like real estate, infrastructure, or
Executive Director, natural resources. The second will be highly
The Express Group.
opinionated news media aligned to a party and
multiple languages. Some of these will be run as
fast-buck, new kid-on-the-clock outfits, playing
fast and lose with the tenets of journalism if that
is what it takes to improve their P&L statement.
And the other half of these will ensure that
their investors do not touch their newsrooms to
assure their readers that the business interests
do not affect the veracity or credibility of
their journalism.
Because ultimately, maintaining public trust
is the most important challenge. The future
of the news business will be one of credibility
rather than of news. A few bad eggs have played
with the publics trust and faith in journalism
in India, as is the case in other countries as
well. This is unfortunate because journalism
has only become more professional, balanced,
transparent, and cleaner over time.
The future of any industry lies within the
business models. What I foresee is that many
players will consolidate as they are losing loads
of money and are just in the market to protect
their egos. An industry only thrives when bad
business models fail fast.
It bodes well for our industry if ego-funded
journalism shuts down soon.
Growing editorial introspection among long-
term players makes me confident that readers
will distinguish between news brands, like they
distinguish between a gourmet store and a fast-
food joint. With 1.2 billion potential readers
to reach, the Indian news media can only
grow bigger.

20 INDIAN MANAGEMENT MARCH 2017

Seamless
transactions
Digital technology is redrawing Indias financial landscape.

RISHABH PARAKH, INTELLECAP ADVISORY

22 INDIAN MANAGEMENT MARCH 2017

 COVER
STORY

of new digital payment instruments, ecommerce

and big data analytics. Consumers are increasingly
using digital tools for commerce, and at the same
time, expecting an omni-channel journeya
seamless experience across different platforms.
The 2008 financial crisis created a gap wherein
consumer expectations evolved but the financial
sector failed to keep pace. Millennials, spoiled by
the comfort of on-demand services, no longer
want to visit a branch for their financial needs but
at the same time, want instant gratification. This
behavioural transition, along with cutting-edge
technological innovations, has given birth to a new
paradigm called financial technology (fintech).
Fintech refers to the innovative use of
technology in the design and delivery of financial

A
services. Fintech startups have certain advantages
over traditional financial institutions:
lot has changed in the last Needs-focused: They are far ahead of their

decade, thanks to significant bank counterparts when it comes to user

advancements in digital
technology. Industries
such as retail, media, and
healthcare have undergone
significant disruption with
experience and ease of use. They specialise
in a financial niche and approach it from a
different perspective that solves an existing
customer problem.
Culture of experimentation: Unlike

the emergence of digital interfaces. Shifts such
as those from desktops to mobile devices, paper
documents to digital data, and human interface
to mobile apps have redefined the way consumers
transact. The global landscape for B2C commerce
banks, fintech startups are free of legacy
systems and are able to pivot their value
proposition as customer understanding gets
more refined.
Less regulatory burden: Fintech startups,

too is witnessing a disruption with the emergence by the virtue of being non-banks, are not under

INDIAN MANAGEMENT MARCH 2017 23

 A MIX OF SIX TECHNOLOGICAL INVENTIONS FORMS THE SECRET SAUCE FOR FINTECH INNOVATIONS:
Big Data
The growth of digital data of individuals
and businesses is enabling better credit
scoring, customer acquisition, and risk
Blockchain
The distributed ledger technol-
ogy has given rise to real-time Key Technologies Shaping
banking processes and crypto-
currencies (eg. bitcoin), and is
The Fintech Industry
slated to be the next big wave
in finance
Biometrics
Biometric systems for authentication via iris,
voice and fingerprints is enabling quick KYC
and also merchant payments
the constant limelight of regulatory constraints
and compliance pressures.
Fintech companies harness machine learning
and artificial intelligence to make better
decisions and offer improved solutions. They
make use of predictive analytics to break down
big data and analyse large volumes of consumer
information. APIs allow for seamless integration
and partnerships between established banks
and fintech startups. This creates an enhanced
user experience, with more intuitive interfaces,
assisted customer interactions, and robo-advice.
India is undergoing the fintech revolution too.
The Indian fintech sector, comprising 200+
startups, has attracted an investment of almost
$2 billion since 2014, with the average deal size
around $10 million. The gross transaction value
for the sector is estimated to be approximately
$33 billion in 2016, estimated to reach $73
billion in 2020, growing at a CAGR of 22%. As
per NASSCOM, the Indian fintech industry in
2020 will be twice its current market size of $1.2
billion. As the fintech landscape in India unravels,
five key trends clearly emerge:
24 INDIAN MANAGEMENT MARCH 2017
Cloud technology
Cloud-based services help fintech
startups achieve scalability, flexibility
and cost benefits in their IT infrastructure
APIs
The incorporation of applica-
tion programme interfaces
(APIs) enables fintechs to
develop value-added solutions
and features that can easily be
integrated with bank platforms
Machine learning
The explosion of data availability and
lowering data storage costs has led to better
customer behaviour models built utilising
machine learning and artificial intelligence
1. Cashless is the new king in merchant
payments
India has been a highly cash-driven economy.
A report by McKinsey Global Institute says
that Indians lose more than $2 billion a year as
opportunity cost for the time it takes travelling
to and from a bank. It adds that digital payments
services in India can add $700 billion to GDP by
2025 and create 21 million new jobs. Clearly, the
scope for cashless India is huge.
In the last couple of years, there has been a
strong push from the government and the RBI
to encourage digital merchant payments for
both supply-side and demand-side adoption.
The turbocharger kicked in when last year
the government demonetised 87% of Indian
currency. As cash was scarce, many merchants
started accepting payments through cards and
wallets. People, probably most for the first time,
switched to digital modes of payment (wallets,
cards, IMPS/NEFT) and started discussing the
benefits of a cashless society.
As part of a slew of less-cash initiatives
launched by the government, Bharat QRa
 FINANCIAL
SERVICES

The introduction of GST universal quick response
may also augur well for code developed by NPCI in
association with MasterCard,
merchants looking to Visa, and AmExwas
adopt cashless payments. introduced as the worlds
first interoperable payment
acceptance solution. It works by transferring
money directly from the customers bank to
the merchants bank by scanning the QR code
(static or dynamic) at the merchant outlet, thus
eliminating the need to carry cards or recharge
mobile wallets.
Similarly, the government is also in the process
of coming up with an Aadhaar Payment app
that will just use the customers fingerprint for
authentication. This will be useful in situations
where customers do not have a smartphone.
Once all Aadhaar accounts are linked to bank
accounts, the process of digital payment
at merchant locations will be much more
seamless. Merchants will incur much less cost
of installing and maintaining a digital payment
system, and customers would not have to carry
cards and remember PINs. This will also help
in overcoming the merchant discount rate
(MDR) barrier that inhibits merchants from
going cashless.
The introduction of GST may also augur well
for merchants looking to adopt cashless payments.
Presently, the margin hit for a merchant to accept
cashless payments is almost 2.6% due to MDR
and sales tax levied by the merchants bank.
However, with the introduction of a unified GST,
merchants can offset the sales tax (levied by the
bank towards facilitating cashless payments)
against VAT, thus reducing the margin hit by at
least 30 basis points. Figure 1 shows the potential
merchant savings:
2. The economics of financial transactions is
evolving to scale-driven profitability
Mobile phones are making micro-payments fast,
convenient, and cost-effective. The trend started
in 2010 with the launch of payment architecture
IMPS that has made possible 24X7 remittance of
any money denomination. Mobile wallets have
made this even more effortless. One now uses
Paytm to pay as low as R1 to shopkeepers or
do a wallet-to-wallet transfer free of cost. With
the launch of Unified Payment Interface and
BHIM app riding on it, interoperability among
bank accounts has been further enhanced and
consumers can now transfer small amounts of
money with higher frequency, greater ease, and
less friction.
The most apt case in point of this trend is
the recent introduction of payments banks.
It aims at penetrating digital payments and
savings to the last mile by piggybacking on the
network of mobile phones and airtime shops

FIGURE 1 Present scenario

VAT @ MDR @ S.T. @
Purchase of 14% 2% R22.80 charged by 14% R3.20 charged Total margin hit of
Card swipe of
item for Acquiring Bank by Acquiring Bank R26 for the
R1,140
R1,000 to Merchant to Merchant merchant

Post-GST scenario

VAT @ MDR @
R22.80 No S.T.
Purchase of 14% 2% R3.20 S.T. Total margin hit
Card swipe charged by
item for offset against of R22.8 for the
of R1,140 Acquiring Bank
R 1,000 VAT merchant
to Merchant

INDIAN MANAGEMENT MARCH 2017 25


High value High margin Low value Low margin
Before Now
Low volume High cost High volume Low cost
Telecoms such as Airtel, as the alternative banking
Vodafone, Reliance Jio, infrastructure. Payments banks
will literally place a branch in
and Idea, which have our palms, empowering us to
obtained payments bank perform basic banking activities
licence, can leverage whenever and wherever. This
certain core competencies niche bank will be transaction-
led rather than deposit-led.
for their payments
The business model hinges on
bank business. economies of scalerevenues
will come from wafer-thin
margins on withdrawals and bill payments,
interest on investments, and cross-selling of
third-party traditional banking products such as
insurance and loans. Payment business will be
a volume game going forward, and the winner
will be the one with maximum frequency of
transactions and largest customer base.
Telecoms such as Airtel, Vodafone, Reliance
Jio, and Idea, which have obtained payments bank
licence, can leverage certain core competencies
for their payments bank business. They can use
the 15 lakh airtime retailers in India as customer
service points for cash deposits, withdrawals,
and eKYC. Recharge (airtime) can be used as
currency by partner merchants (agents) to
manage daily float and facilitate cash in/out for
account holders.
3. Lending is increasingly being done against
soft collateral
The lending function within financial services
has perhaps undergone the maximum
transformation, after payments. Traditionally,
lending was purely a function of the borrowers
ability to furnish property or tangible assets
as collateral. However, this mindset impedes
institutional capital to almost 93% of MSMEs in
India. We are at an opportune time when India
is becoming highly data-rich. Digital lenders
such as Capital Float, Indifi, and Lendingkart are
extracting information from thousands of non-
traditional sources where these small businesses
are leaving their digital footprint. Data from bill
payments, social media, ecommerce sales, IT
returns, financial statements, customer ratings,
psychometric tests, etc., serve as soft collateral
in the absence of hard collateral like property, for
risk mitigation. These data-points are run through
complex algorithms to arrive at a credit score
that helps the lender to take the loan decision and
price the risk efficiently.
As India is also turning more and more into a
service-based economy, most new businesses lack
PP&E to be given as collateral. In this scenario,
cash-flow based lending makes more sense than
asset-based lending. Also, there is a growing
need of instant short-term and small ticket-size
working capital loans by small merchants and
ecommerce sellers. These factors has given rise
to merchant cash advance as a lending product by
companies such as NeoGrowth and IntelleCash,
which sanction loans based on the stability of
historical cash flows.
Startups such as Credit Mantri, CashCare, and
Finomena have proprietary big data analytics
software that they use to build credit scores
of individuals and enable financial institutions
to lend confidently without collateral.
Crowdfunding (P2P) models such as Faircent,
Lendbox, and i2iFunding connect retail
investors to small business borrowers through a
marketplace model, thus addressing the $2.93
billion debt financing gap that exists in the
MSME sector.
Banks can gain at every stage of the lending
cycle by implementing fintech solutions that can
provide automated real-time credit decisions to
aid them in channelling funds to under-served
MSMEs.

26 INDIAN MANAGEMENT MARCH 2017

 FINANCIAL
SERVICES

A billion Indians can now 4. Fintech holds the key to difficult a few years ago. For example, Ezetap
be identified digitally unlock greater financial and Novopay have created mobile POS devices
inclusion that act as mini bank branches at thousands
through Aadhaar and The explosion of innovation, of kirana stores in rural areas, making bank
connected through driven by the burgeoning account opening, withdrawal, and deposit
mobile phones. startup ecosystem and enabled convenient for the local population. Similarly,
by the so-called JAM Trinity Eko Financial Services is piloting its product,
(Jan Dhan-Aadhaar-Mobiles) has created a Fundu, that creates a network of human
fertile ground in India for inclusive finance. ATMs. Integrating with the UPI framework,
This movement is dramatically expanding the Fundu matches a user who needs cash with
penetration of financial products and aligning another user who can give cash, and seamlessly
market forces (customer acquisition) with social ensure there is an electronic flow of funds to
purpose (financial inclusion). offset the physical flow of cash. This solves
Proactive public policy is encouraging the a critical cash-in/cash-out problem in India
private sector to find a market. A billion Indians where ATM penetration is one-tenth of that in
can now be identified digitally through Aadhaar developed countries.
and connected through mobile phones. This In lending too, fintech is being adopted by the
paves the road for fintech companies to reach MFI industry to reduce OpEx and improve per
the base-of-pyramid population, with almost all customer metrics. NPCI has started a pilot to
types of financial services, something extremely digitalise transactions for Svatantra Microfinance,

Using big data analytics, fintech

The technology focus and
solutions can leverage alternative Fintech solutions can facilitate
agility from fintech can enable
data points and surrogates (prox- digital collections, create APIs
innovative lending products (eg.
ies) for credit assessment. This for online interaction and extract
MCA, P2P lending) and service
can enable them to employ risk- behavioural insights of customers
features (UI, application form,
based pricing and substantially for upselling / cross-selling.
KYC process etc.)
relax collateral requirement.

Product / Under-
Sourcing Disbursal Serving Monitoring
Service design writing

Fintech solutions can help

Fintech solutions leverage Fintech solutions can enhance
reduce turnaround time in
non-traditional origination portfolio risk management
lending and facilitate the
means such as social media, and instill automatic triggers in
disbursal of short-term and
3rd party apps and ecommerce case of anomalies in payment
small ticket-size working capital
to generate leads and acquire or default, reducing the credit
loans with minimal manual
customers. administration overhead.
intervention/documentation.

INDIAN MANAGEMENT MARCH 2017 27

 FINANCIAL
SERVICES

ABOUT THE AUTHOR
Rishabh Parakh is
a senior consultant,
Intellecap Advisory.
wherein the customers Aadhaar numbers are
sent to RBL Bank (disbursing bank) for onward
direct credit using Aadhaar Payment Bridge
System and customers can make repayments
to HDFC Bank (receiving bank) via the *99#
USSD system by entering the UPI PIN of
the MFI.
5. Incumbent banks are collaborating with
fintech startups to stay relevant
Banks in India have been notorious for their
inertia and red tape. However, the monopoly
of banks in financial services has been broken
by technology startups that have a customer-
centric and agile model, driven by innovation.
These startups have disintermediated the
banking value chain by offering specialised
services for various domains such as payments,
lending, and investments. Fintech is rapidly
transforming the dynamics of the banking
industry and forcing banks to sit up and take
serious notice. Banks are beginning to realise
that technology is no longer peripheral; it is
pervasive. Recently, RBI Deputy Governor, S S
Mundra, urged banks to up their technological
capability by collaborating with fintech firms,
in order to avoid the risk of turning obsolete.
Banks and fintech startups both stand to gain
from each other through combined offerings
and benefit from synergies.
Financial institutions are fast adopting a
digital-first model. The unbanked represent a
vast opportunity for banks to reach out to and
offer bespoke service to. Banks such as Bank of
Baroda, RBL Bank, HDFC Bank, IDFC, and Yes
Bank are leading in collaboration with fintech
startups across payments, lending, financial
inclusion, and wealth management.

What a bank has to offer What a fintech startup has to offer

Banks can respond to the Innovative ideas to adopt

emerging fintech disruptions Public trust Banks can respond Fresh out-of- a differentiated product
by collaborating with fintech and brand to the emerging the-box thinking strategy and capture higher
startups fintech disruptions share of wallet
by collaborating with
fintech startups Simplified and agile delivery
Understanding of various
Robust risk Lean, efficient, processes and cloud-based
market and operational risks
management system and flexible setup infrastructure to optimise
and ability to mitigate them
operating costs

Deep pockets that provide Strong technology focus

Access to large amounts Technology-led
capacity to invest in in product development
of resources and capital solutions and
sophisticated infrastructure, and technically-proficient
analytical capability personnel
both physical and digital

Comprehensive offerings Complete suite of Financial services adapted

Mobile-first to digital delivery channels
and access to wide financial financial products Improve internal

approach and mobile applications for
portfolio of customers and services efficiency ease of use
Partnerships with various
Build technological

Existing capability
stakeholders, banking User-friendly product design
relationships Customer centricity
history with customers and Tap new revenue
and personalised offerings
well-established sales force and clientele
streams

28 INDIAN MANAGEMENT MARCH 2017

Breaking frontiers
Customer should remain the core even as financial institutions embrace innovation and
leverage technology.

MOHIT GANG, WWW.MONEYFRONT.IN

30 INDIAN MANAGEMENT MARCH 2017

 COVER
STORY

pulse of the vastly changing consumer behaviour.

The root cause of this can be traced to three
major factors:
Post the 2008 global financial crisis, banks were
so busy tightening their compliance nut-bolts
that they forgot what simplification meant.
Everything was filtered through a prism of risk
and more often than not simplified consumer-
friendly technology was put on the back
burner, citing security and compliance reasons.
It will not be an exaggeration to say that
while banks were busy catering to profitable
corporates and UHNWIs, the retail segment
was vastly ignored. Sheer volume was not
enough for mammoth financial institutions
who were predominantly in search of lucrative
value. Consumer banking became hold and
manage, as banks spurned huge profits from
corporates and merchant banking arms.
Financial institutions were not interested in
being a specialised store for a particular financial
need; they rather chose the easy way of being a
department store for all needs. In turn, being
jack of all trades and perfectionists in none.

Visible gap
A combination of the above three reasons left a
huge chasm in the banking pyramid. SMEs and
retail clients were often neglected or offered just

H
the basic services cloaked in layers of disclaimers
and documentation. None of the services were
enry Ford was not far offered with cutting-edge precision; rather, a
from reality when he plethora of them were offered through a single
said, it is well enough window. The gap was visible, the gap was stark.
that people of the nation It did not take long for the evolving technology
do not understand our to recognise this deficiency and plug the
banking and monetary holes smartly. There was a latent demand for
system, for if they did, sophistication in services, competitive offering,
I believe there would be a revolution before and specialised services which were tailormade
tomorrow morning. to individual preferences.

Traditional barriers Rise of fintech

In the race to lend more and raise more deposits, This ushered a revolution in all the traditional
the global banking system somewhere lost the domains of financial institutions viz. retail loans,

INDIAN MANAGEMENT MARCH 2017 31

 touch away. Again, banks were hesitant to
invest money in technology and continued with
traditional cheque books and wire transfers.
Transfers simply based on mobile numbers
swept the payments arena and took everyone
by surprise.
Wallets changed the way we handle cash and
pay our bills and all banks are now rushing to
grab a piece of this market. Personal finance was
a highly customised service and required a lot
of individual attention. In came robo-advisors
and changed the rules of the game. With
sophisticated algorithms to drive investment
patterns, who would now want to wait for a
financial advisor to come and share copious
caveats with costly advice! Times are not far,
Shutterstock.com

when this will all be driven by bots working on

artificial intelligence, significantly eliminating
human interface.

Wallets changed the way payment mechanisms, wallets,
we handle cash and pay remittances, personal finance,
insurance, wealth management,
our bills and all banks etc. These are all age-old
are now rushing to grab a bastions of banks which are
piece of this market. falling like nine pins.
New-age consumers not
just want loans; they would like comparisons
to be available on their fingertips across
multiple lenders; they are looking for zero
documentation, approval based on social
profiles, and prompt disbursals. Platforms are
matching lenders to borrowers, doing credit
checks based on social media profiles, and
disbursing loans in flash clicks.
Needless to say, traditional financial
institutions have been loath to reform and recast
to this reality. Call it the uber moment of
bankingall these services are now available
to consumers at their doorsteps within the
confines of their mobile phones. Then came
the wallet revolutionfrom micro payments
to huge transfers, everything was merely a
Customer is king
And while all this is happening, customers
are not just lapping it up because it is cool to
be one with technology but because all this is
driven on core tenets of simplification, zero
documentation, paperless processes, quick
solutions, and cost-effective products.
Customer is the king, both in letter and spirit.
Rules of the game are changing and age-old
bastions of the financial industry are getting
challenged. From bitcoins to micro-payments,
every aspect is under the minute scrutiny of
fintech disruptors. Agile and nimble-footed
fintechs are taking the battle to remotest
geographical areas by providing last-mile
connectivity and customising solutions for the
end customer.
Millennials have been early adopters of
fintech solutions, swiftly moving out traditional
banking tasks to bot-based applications. One
of the major reasons for their resounding
success is unswerving commitment to enriching
user experience. No wonder that a report of
Citigroup in early 2016 predicted 30% job cuts

32 INDIAN MANAGEMENT MARCH 2017

 FINANCIAL
SERVICES

Financial institutions will in the US and European banks financial realm now houses 27 unicorns in the
have to move away from by 2025 owing to disruption fintech space, out of which seven are from China
by new-age fintech companies. and only one is from India. Surely, these two
the one-size-fits-all model countries, contributing to almost 40% of the
and go for specialisation Crystal gazing world population, will offer much more in this
in certain domains and The immediate future can see space in future.
deploy cutting-edge. banks investing fresh monies Only time will tell if this wave of fintech
to fortify their core business disruption will lead to collaboration or collusion.
models. Digital payments and A mix of both will possibly pave the way for a
wallets are two such low-hanging fruits, where all digitally connected global financial network.
the banks are making their first leap. In medium Financial institutions will have to move away
term, however, we can see a lot of collaboration from the one-size-fits-all model and go for
and partnerships. Sooner or later, banks will have specialisation in certain domains and deploy
to partner with smart, new-age fintech players cutting-edge technology in those verticals to
to quick-fix changing customer preferences. This deliver superior customer value. Unequivocally,
could lead to a lot of consolidation in the fintech the road from being a Jack of all trades to being
space and we cannot rule out the possibility of a master of some will have to traverse the
big institutes gobbling up younger players, to terrain of technology.
move with the times.
In the longer term, this could lead to Conclusion
changed business models, new service delivery Industrial revolution paved the way for
mechanisms, and massive changes in the financial centralisation of money business from
ABOUT THE AUTHOR ecosystem. Green shoots are already showing individuals to institutions. And the new wave
Mohit Gang is CEO up globally, as private equity investments in the of technological revolution is decentralising
and co-founder, fintech space grew from $2billion to almost the money business back to individuals from
www.moneyfront.in
$20billion from 2010 to 2016. The global institutions. Will the needle move whole hog
to individualistic solutions or will the financial
world decipher a new equilibrium? Surely
and certainly, banks will have to rethink their
digital strategy and get back to drawing boards,
embracing innovation, and simplification like
never before. Amidst this tectonic technological
shift, the customer has to be at the core of
everything. Customer wins! As Scott D Cook,
founder of Intuit, puts it, Be dramatically willing
to focus on the customer at all costs, even at the
cost of obsoleting your own stuff.
To conclude with an observation from a recent
Accenture report on fintech disruption,The
current wave of disruptive innovation will be
Shutterstock.com

seen in five years time as having delivered

safer, more transparent, efficient and responsive
banking services to retail consumers, businesses
and market participants alike.

INDIAN MANAGEMENT MARCH 2017 33

Learning curve
Democratising access to education is a must for empowerment, and technology has been a major
game-changer in this regard.

RANJAN MUKERJEE

34 INDIAN MANAGEMENT MARCH 2017


T
he great Swiss clinical
psychologist Jean Piaget once
remarked that the principal
goal of education should be
to create people who are
capable of doing new things,
people who are creative,
inventive, and discoverers, and not simply
repeating what other generations have done.1
This approach has permeated various societies
through the ages, and is finally also shaping the
argument for Indian education moving away
from rote learning.
COVER
STORY
Technology has played a massive role in
allowing education to focus on systems of
learning that place a greater emphasis on
knowledge than mundane instruction. We
are already in an era where having laptops in
classrooms is slowly becoming the norm, and
e-learning is on the brink of establishing itself
as a prime companion to traditional forms
of education. At the heart of it all is one key
element that education technology has managed
to redefine: access.
Access is everything
It is commonly accepted that knowledge is
power. This is because the knowledge one has
access to frames ones education, achievements,
as well as life choices. Technology has thrown
open the doors to knowledge that were
previously closed for a variety of reasons
financial, geographic, social, etc. In many ways,
education technology is playing the role of a great
equaliser, levelling the playing field by ensuring
that knowledge-based education can be delivered
to everyones fingertips.
Ahead of the curve
Technology has not only had an effect on the
way education is delivered but also on the need
for continuous education. In a world that is
rapidly changing, staying up-to-date with the
latest developments can often be the difference
between getting a promotion or losing out to
someone less experienced but more in the know.
A number of online providers have pivoted
from mere knowledge dissemination to career
and prospect enhancement. Consider the path
taken by Coursera. Initially, it was a free online
course provider that had professors teach a
few fun classes in their spare time. Now, it
has ballooned to an e-learning behemoth that
INDIAN MANAGEMENT MARCH 2017 35
We are not quite at provides free and paid courses an e-learning portal that is open to everyone,
a juncture where covering almost every topic including those who are not ICAI members and
imaginable under the sun, from students. The Indian School of Business (ISB)
distance learning astronomy and philosophy has tied up with Coursera to offer numerous
can be considered a to advanced calculus and courses, ranging from trading basics to advanced
sound replacement for engineering fundamentals. business technology management. Even ISROs
classroom teaching. Many of these coursesusually Indian Institute of Remote Sensing (IIRS) has
the paid onesalso provide a dedicated e-learning programme for further
a certificate of completion developing trained professionals. These Indian
from the university/college offering the course. institutions stand to benefit greatly from
With many prestigious institutions on board, e-learning, not just financially but also thanks to
successfully completing these courses can add the boost to their online profile.
sheen to anyones resume or portfolio; one that
can help them get an edge in the competition. Beyond the horizon
Indian institutions too have also started One of the biggest benefits of e-learning has
catering to this growing segment. The Institute been the elimination of distance as an influencing
of Chartered Accountants of India (ICAI) has factor on peoples education decisions. Imagine
sitting in New Delhi and managing to complete
a post-graduate diploma from Stanford. What
if you would like to do a certificate course in
strategic innovation management, but none of the
universities in your town are offering it? Moving
base simply for the sake of completing a course
like that is, without saying, quite impractical.
Thankfully, technology has turned the distance
involved into a trivial gripe.
We are not quite at a juncture where distance
learning can be considered a sound replacement
for classroom teaching. However, leaps in
technology are rapidly taking us closer to that
inevitable reality. Already, there are classrooms in
far-flung remote areas where chidren are taught
by volunteer teachers from around the world.
Students in Chinese villages are already learning
English, French, German, and other languages
over live sessions by teachers in Cambridge,
Toulouse, Hamburg, and other cities around
the world.
As public infrastructure improves, we can
expect greater swathes of society to benefit
Shutterstock.com

from education technology, regardless of where

they are geographically. Consider the efforts of
The Sampark Foundation, which is dedicated to
helping children access quality education. They

36 INDIAN MANAGEMENT MARCH 2017


are using audio technology in their interactive kit,
Sampark Didi, to turn the art of storytelling into
teaching opportunities. Similarly, eVidyaloka is a
not-for-profit organisation that wants to change
education in rural India via digital classrooms.
Companies such as L&T, Infosys, and KPMG
contribute funding to eVidyalokas efforts,
thereby highlighting the importance of their work
and the technology that enables them to do it.
Keeping the adults updated
When it comes to education, India faces a
monumental challenge: adult illiteracy. The
focus may be on Indias future demographic
dividend and making the most of it, but one
cannot overlook the problems that the lack
of adult literacy is causing to Indian society
and the economy. The low adult literacy rate,
under 60%, among females is a particularly
disturbing statistic.2 The Indian government has
seen its efforts in the field of adult education
pay off over the last decade, but the progress
has plateaued, forcing educators to look for
solutions beyond traditional teaching methods.
This is where technology has come to the
rescue. Although the adult literacy rate remains
far from ideal, the rate of technology adoption
in India continues to be quite high. It provides
a readymade pathway for
educators to capitalise on, and
Receiving quality
grows the reach of any literacy
education is one of the programme exponentially.
primary rights of every Research shows that
individual. Technology has learning not only encourages
self-improvement in adults
enabled us to ensure that
but also helps maintain their
this right is not violated. mental health. The Alzheimers
Society maintains that adults
that stay mentally active through learning are
less prone to suffering from dementia later on.
Technology has allowed learning to become
an integral part of games targeted towards
adults, helping literacy efforts as well as mental
health advocacy.
EDUCATION
Empowering special needs students
One cannot overemphasise the role technology
has played in helping students with special
needs. Personalised teaching is the key to
letting special needs students learn at a pace and
using methods that they are most comfortable
with. The technology involved is not even
specialisedeveryday technology and software,
such as tablets, Google Classroom, and Kami
PDF annotator, are re-purposed and utilised
to deliver learning solutions. In India, IIT
Kharagpur is at the forefront of developing
technological aids that help with the pedagogical
requirements of children with special needs.
The role of education technology extends
beyond simply ensuring that the students are all
caught up with their lessons. It allows them to
develop real-world skills, create and enhance
their portfolios, and places them as close to
an even footing as possible when entering the
job market.
Receiving quality education is one of the
primary rights of every individual. Technology
has enabled us to ensure that this right is not
violated and that every person can pursue
their quest for knowledge without hindrance.
As education technology continues to grow,
we can also expect the nature of work and the
workplace to change accordingly.
References:
1 Duckworth, Eleanor. Piaget Rediscovered. The Arithmetic
Teacher, Nov. 1964.
2 Educational Statistics at a Glance 2016, Ministry of Human
Resource Development, Government of India.
NOTABLE E-LEARNING PROVIDERS OFFERING
BUSINESS AND MANAGEMENT COURSES:
Alison www.alison.com
Coursera www.coursera.org
edX www.edx.org
Future Learn www.futurelearn.com
Great Learning www.greatlearning.in
INDIAN MANAGEMENT MARCH 2017 37
Healthcare 2.0
From doctor interactions and diagnostics to hospice and insurance, nothing is what it used to be.
For, disruptive technologies are giving India a smarter healthcare industry.

BY NALINI RAMACHANDRAN

38 INDIAN MANAGEMENT MARCH 2017


T
he second most-populated
country in the world, India,
is riding on a technology-
enabled healthcare
innovation wave. The
governments e-health
initiatives, under the
larger Digital India campaign, and disruptive
technologiesdiscovered and practised
by well-known healthcare institutions and
startupsare focussed on catering to the rising
demand for services.
COVER
STORY
The India Brand Equity Foundation states,
The overall Indian healthcare market is worth
around US$ 100 billion and is expected to
grow to US$ 280 billion by 2020, a Compound
Annual Growth Rate (CAGR) of 22.9 per cent.
Healthcare delivery, which includes hospitals,
nursing homes and diagnostics centres, and
pharmaceuticals, constitutes 65 per cent of the
overall market. The Healthcare Information
Technology (HIT) market which is valued at
US$ 1 billion currently is expected to grow 1.5
times by 2020. Although the time taken to scale
up and create a sustainable monetisation model
may be longeraround 300 start-ups entered
the healthcare scene in 20151healthcare is
transforming steadily.
An app a day
promises to hold sway. Digital disruptions
literally hand over healthcare into the hands
of the people. The recent health app boom has
made diagnoses easier, increased scope for real-
time monitoring and data collection, and acted
as a cost-efficient option for patients across
social strata; it is a scalable business model,
considering smartphone penetration throughout
the country. A good example is the open-source
mobile platform, CommCare (a product of
Dimagi) which allows anyone to build an app
on its platform. Used in fifty plus countries by
organisations such as UNICEF, World Bank,
Bill & Melinda Gates Foundation, and Public
Health Foundation of India, CommCare
aids healthcare field managers in monitoring
patients, providing counselling, follow-up
reminders, and more.
Cloud computing allows organisations to
offer business processes and software for
data collection and analytics as a service, thus
ensuring that timely and quality treatment
reaches people in need. iKure Techsofts
cloud-based platform, WHIMS, gathers patient
information, while its hub-and-spoke clinic
set-up and a good network of health workers
INDIAN MANAGEMENT MARCH 2017 39
HEALTH TECHNOLOGY AREAS WITH HIGHEST FUNDING, MOST FUNDED HEALTH TECHNOLOGIES, 2010-15
2015 (USD MILLION) (USD MILLION)

Appointment booking 790

mHealth apps
mHealth apps 750 Appointment booking 1100
Telemedicine 439 Wearables 1000
Telemedicine 929
Wellness 386
Data analytics 810
Data analytics 294 Practice management... 691
Wearables 277 Wellness 670
Clinical decision... 232
Comparison shopping 232

Indias telemedicine facilitate consultation and
market which has been treatment for those in remote
regions of the country, where
growing at a CAGR of over even electricity and internet
20% holds the potential are rare.
to cross $32mn mark With growing per capita
by 2020. healthcare expenditure both
in developed and advanced
developing countries, the
mobile healthcare market is further projected
to reach $58.8bn by 2020, at a CAGR of
32.3% from 2013 to 2020, according to Allied
Market Research report2. The acceptance of
Indias mHealth resolution at the World Health
Organisation in May 2016, by 30 countries, has
strengthened its resolve to emerge as a global
leader in digital health.
Between home and hospital
There was a time when the smallest of tests
required a visit to the doctors clinic, but easy-
to-use devices, which are flooding the market,
are making diagnostics a process that can be
handled by patients themselves. Swasthya Slate,
a breakthrough product, uses design technology
to combine functions of multiple medical
tools to conduct as many as 33 tests, from
haemoglobin and blood sugar and a battery of
urine tests to dengue and malaria. A welcome
trend, since estimates suggest that the doctor-
patient ratio in urban areas is 1:1,800, while in
rural regions, it drastically widens to 1:60,0003.
Another life-saving innovation, telemedicine,
enables doctors to diagnose ailments and treat
patients remotely, using ICT. Revenue models
primarily comprise fees for consultations and
management of patient records. The non-profit
arm of Apollo Hospitals, Apollo Telemedicine
Network Foundation, was among the first to
promote clinical telemedicine in South Asia.
The sector has seen focussed specialisations
too through organisations such as Welcome
Cure for online homeopathy treatment,
SkyHealth Centres for women and children,
and Aravind Teleophthalmology Network for
eye care. As per an ASSOCHAM 2016 study,
Indias telemedicine market which has been
growing at a CAGR of over 20% holds the
potential to cross $32mn mark by 20204.The
National eHealth Authority hopes to leverage
telemedicine by bringing the internet/WiFi to
all rural areas, as its most important benefit is
that it eases out the issue of non-availability of
hospital beds.
Equipped to heal
Hospitals are undergoing transformation as
well, with the adoption of progressive methods
such as robotic surgery, a method where small
tools attached to a robotic armcontrolled by

40 INDIAN MANAGEMENT MARCH 2017


the surgeon through a computerare used for
procedures. In essence, the robot is the surgeon.
Global Robotic Surgery Market 20162020 by
Technavio forecasts that this sector will grow at
a CAGR of 11% in this period5. Top institutions
such as All India Institute of Medical Sciences,
Narayana Health, Apollo Hospitals, and others
are already using the da Vinci Surgical
Systems, benefits of which include minimal
invasion, lesser pain, reduced possibility of
infection or loss of blood, and faster recovery.
With world-class healthcare facilities being
available for far lesser prices, India has become a
popular medical tourism destination.
A major change in the healthcare industry
is the shifting of treatment space from clinics
and hospitals to the comfort of patients
homes, without the quality of services being
compromised. A 2016 report by CyberMedia
Research states, The current market for home
healthcare in India is US$ 3.2 billion, and this is
expected to grow at a CAGR of 18% to reach
US$ 6.2 billion by 2020. A leading name in
this business is Portea, which sends doctors,
nurses, and physiotherapists on home visits as
well as rents out medical equipment for a range
of problemsrespiratory, geriatric, and cardiac
care, sleep therapy, etc.
Shutterstock.com
HEALTHCARE
In sure hands
Medical technology industry in India: Riding the
growth curve, a July 2010 report by Deloitte,
states, Growth in health insurance in the
country has led to increased coverage of high-
cost medical procedures, enabling a larger part
of the population to demand quality healthcare.
This, in turn, has driven up demand for medical
technology. While this is true, ironically, the
most agonising part of treatment is the manual
filling of health insurance claims.
Understanding this problem, Remedinet
Technologies has taken the entire process
online. Electronic claims result in faster
completion of procedures, availability of
information in a few clicks, quicker claims
settlement, hassle-free discharge from hospitals,
and a stress-free experience for patients.
Technological disruptions seem to have already
pervaded every sector of the healthcare industry,
yet there is much to look forward to.The use of
3D printing is slowly developing in the country:
once it develops, implants, dental restorations,
prosthetics, study models, and even surgical
and medical equipment can be printed out.
Meanwhile, digestible sensors and smart pills will
provide insights about the human body, paving the
path for more pioneering innovations in healthcare.
As Indias tech opportunity: Transforming work,
empowering people, a December 2014 report by
McKinsey Global Institute , states, A dozen
disruptive technologies can add up to $1 trillion in
GDP by 2025 and help bring millions of Indians up
the MGI Empowerment Line. Healthcare version
2.0 then is only the beginning.
References
1 https://assets.kpmg.com/content/dam/kpmg/in/pdf/2016/09/
FICCI-Heal.pdf
2 https://www.alliedmarketresearch.com/press-release/mhealth-
market-is-expected-to-reach-588-billion-globally-by-2020.
html
3 http://www.aci-institute.com/wp-content/uploads/2016/08/
The_Smart_Doctor.pdf
4 http://www.assocham.org/newsdetail.php?id=5728
5 http://www.technavio.com/report/global-orthopedics-
and-general-medical-devices-global-robotic-surgery-
market-2016-2020
INDIAN MANAGEMENT MARCH 2017 41
 HEALTHCARE
CASE STUDY
Dignity on wheels
EzyMov, a wheelchair-accessible transportation service is leveraging hydraulic technology to lift people with
limited mobility out of awkwardness and hold them safe and with respect.
On 4th December 2016, the countrys first woman
Paralympics medallist Deepa Malik visited Mumbais PD
Hinduja Hospital. For someone who had spent a large part
of her life in and out of hospitals, this visit was a pleasant
change. Malik launched Hindujas new wheelchair-friendly
patient transportation service, behind which was a first-
of-its-kind wheelchair-accessible vehicle rental company
EzyMov.
Of 1.2 billion people in India, 17% are mobility-
challenged. Yet, not a single, customised, mobility-
convenient commercial transport was available, says
Bennet Dcunha, who co-founded EzyMov along with
Rrajesh Patil and Romeo Ravva, after perceiving this lacuna
in the market.
Not only are the physically challenged in the country
largely underserved, but, as Malik recounted at the launch,
they often oscillate between danger and discomfort, when
strangers lift and shift them from a wheelchair into a vehicle.
EzyMov had made a conscious decision that went on to
become its USP: Zero per cent manual intervention,
Dcunha says. EzyMovs design technology comprises a
hydraulic lift that automatically raises a physically challenged,
elderly, or obese person, seated within a wheelchair, into the
vehicle. The lifts are equipped with a safety interlock that
sounds an alarm to prevent operation in unsafe situations
for example, if the vehicle attempts to move, while the lift is
42 INDIAN MANAGEMENT MARCH 2017
deployed. Once the wheelchair is moved into the vehicle by
the lift, a ratchet restraint system locks it into position.
One of the biggest challenges that EzyMov faces is
that the country has no manufacturers to custom-make
the physically challenged-friendly vehicles yet; the lifts are
imported, after which modifications are made to each
vehicle. With such existent cost concerns, finding funding
has been difficult too. Although its a brilliant idea, funders
are not convinced about the revenue model, Dcunha
explains. A new line of business, funders have no reference
in the form of accomplished business trends.
EzyMovs assistive technology is an important cog in the
healthcare wheel. Our product innovation will ensure that
20% of the ambulance market, primarily non-emergency
services, shifts to EzyMov, Dcunha says. As a wheelchair-
accessible cab service, EzyMov can play a significant role
in Indias medical tourism sector: it has already tied up with
Indian Railways, MERU, and travel firms such as Cox &
Kings, Mercury Travels, etc.
Techshare India conference (March 2016) had forecast
that the market for building disabled-friendly technologies
and products in India stood at R4,500 cr. But, until this
market evolves and new roads open up, EzyMov will
continue to do what it does bestprovide dignified travel
solutions for those with limited mobility.
44 INDIAN MANAGEMENT MARCH 2017
Companies should provide long-term solutions, not quick fixes, to conflicts arising
at the workplace.
ZARIN BHATHENA, WORLDLINE
Nip it
in the bud
A
cordial and healthy
ambience in the workplace
does not always come
naturally. Often, it is the
result of continuous efforts
towards developing one.
Every organisation goes
through the crests and troughs of successes
and failures during its life cycle. Many good
decisions emerge from discussions and
arguments, but sometimes these seemingly
mild antagonisms can lead to conflict situations
that need timely attention. Given below are a
few tips that will help HR manage and resolve
conflicts effectively:
Identifying conflicts and acting immediately
One must remember that conflicts need to
be handled and not swept under the carpet.
If one avoids recognising them, they could
snowball and get more difficult to resolve.
Organisational conflicts are of different
types, mainly categorised into interpersonal,
intragroup, and intergroup. Interpersonal
conflict can be managed by directly involving
HR
a person of authority acknowledged by both
the conflicting persons. When it comes to
groups, conflict resolution might need a more
formal intervention by a senior manager or
HR, depending on the gravity of the situation.
Often managers react knee jerk, resulting in
mere short-term firefighting. However, not
identifying the root cause merely defuses the
present situation and might cause it to recur
in a bigger and uglier form. It is beneficial
for the companys growth if both the parties
understand the problems and how they can
be tackled. When the workforce is a mix of
professionals and freshers, maintaining balance
is key.Younger employees may tend to overreact
at times, making the situation more difficult
to handle.
Handling conflicts
An organisation should provide both formal
and informal channels to highlight and handle
conflicts. So how does one deal with it? A
simple way is to involve the managers of the
concerned teams/employees. Bringing in a
senior manager or a person experienced in
INDIAN MANAGEMENT MARCH 2017 45

Conflicts must not be handling similar situations can
help settle matters quickly.
avoided, resolution should A more formal approach is
not be procrastinated, and to become a company that is
just decisions must be friendly towards constructive
taken. conflict and communicating
it constantly.
Assure employees that
conflicts will be addressed and resolved
on priority
Employees should know that their issues will
be heard and addressed. The organisations
attitude towards conflict resolution should
be clearly communicated to employees of all
levels. When dealing with an issue, all parties
must be given equal importance irrespective
of position, seniority, gender, etc. Also to
reiterate, instead of finding only an immediate
quick fix, one must look for the more deep-
rooted cause to ensure that such a situation
does not arise again. Certain ground rules
need to be set and proper roles established.
In some organisations, people in authoritative
positions can also work as mediators in
conflict situations.
46 INDIAN MANAGEMENT MARCH 2017
Shutterstock.com
Establish and clearly communicate
behavioural guidelines
There are certain ways in which organisations
can be proactive and effective in handling
potential conflicts. Behaviour guidelines can
be defined as those that provide a framework
of what will and will not be tolerated by
the company. This helps in keeping extreme
scenarios at bay, as employees themselves
will know when to pull the plug on tense
situations. It should also provide clarity
on the redressal framework and people/
positions that can be approached. It is
important to keep in mind that conflicts
must not be avoided, resolution should not
be procrastinated, and just decisions must be
taken. These four ruleslook beneath, look
at the facts, look at oneself, and looking at the
otheralone will not make peace, but they
will help focus on the real issues and reduce
the emotional content. At times, it is seen
that certain employees are not comfortable to
speak to higher authorities or their managers
to resolve the problems. In this situation,
an HR manager, often seen as friendly

Though the word has a and approachable, is an apt
negative connotation, person to speak to and get the
problem resolved.
conflicts can be healthy. Conflict can lead to
opportunities when it
involves a team of people
and can help improve
productivity
Not all conflict is bad and problematic. Many
a time, discomfiting situations could lead
to productive results and innovative team
functioning. Irrespective of who brings the
situation to the fore, it is important that due
importance is given to a conflict when one
takes cognizance of it. A lot of conflicts can
also be handled deftly and with ease. For
instance, there are always some employees in
an organisation who want to create an issue
where there is none. With such employees tact
and discretion go a long way in healthy conflict
resolution. However, all situations where there
ABOUT THE AUTHOR is disagreement, having a discussion and even
Zarin Bhathena,
an argument are potential opportunities for
is Senior Vice learning for the whole company. Conflicts can
President and be leveraged to bring about effective team
Head-HR, Worldline.
building and leadership. Different viewpoints
HR
can lead to new ways of working better and
result in refreshing innovation. Maintaining a
stable and peaceful workplace environment
involves appreciating that conflict is normal
and recognising that it can lead to many
opportunities. There are some disputes which
will continue to arise, which need certain
impartial rules to be set.
Conflict can be energising when it forces
people out of their comfort zones
Though the word has a negative connotation,
conflicts can be healthy. It is important to have
a certain amount of healthy conflict among
individuals, groups, and teams. Very often, when
the employees are pushed out of their comfort
zones, it results in what is best for the company.
Harnessing negative situations and producing
positive results from them is the challenge that
HR and leadership must take upon themselves
today. Recognising the severity is required to
understand why and how to resolve conflicts,
violence, and war to keep the peace. Rewarding
is a practice which will make sure that ground
rules will not be disobeyed and will be followed
because they are right and sensible.
Shutterstock.com
INDIAN MANAGEMENT MARCH 2017 47
Base camp traits are not enough for leaders to steer businesses in the 21st century.
RAVI CHAUDHRY, CENEXT CONSULTING AND INVESTMENT
A new
yardstick
I
n every period in history, there is one
dominant institution that needs to
take responsibility for the whole of
society. In the days of the Holy Roman
Empire, the church fulfilled that role.
In the Middle Ages, it was the kings and
rulers of kingdoms and states. Since the
second half of the twentieth century, businesses
have become the most powerful institution on
the planet. As a result, businesses have to accept
a new roleone it has never acknowledged
throughout the history of capitalismto share
the responsibility for the whole.
Collectively, the business communities
actions and governments implicit complicity
have given firm credence to a commonly held
perception that business objectives and societys
needs tend to be like the two tracks of a railway
line. Looking ahead from any point, they appear
to converge in the distance, but in reality, they
never do. It is a mirage.
While we do have some of the worlds best
examples of corporate governance in India, but
on a broader canvas, the corporate sector today
faces a loss of confidence. There is a disconnect
between the world inhabited by CEOs and
LEADERSHIP
board directors on the one hand and the society
at large. This systemic difficulty stems from a
refusal to accept that we will not be going back
to the world we knew.
Five phases of human enterprise
We are entering a new phase of human
enterprise that is redefining the criteria of
success as well as re-contouring the routes to
success. There have been four phases till now:
Phase one was dominated by the concept
of strong fish eating weak fish. This was the
law of preservation for most of recorded
history till the early days of industrialisation.
Alexander the Great, the Romans, the
Turks, the French, and the British believed
in ruthless domination. The majority of the
human race helplessly accepted the rule of the
mighty as the privilege of living.
Phase two was the era of big fish eating
small fish. It started with the concept of
joint stock company. The British East India
Company was set up in 1600 and the Virginia
Company in 1606, creating an ingenious
financing model while lowering risk, and
ushering in the age of business-politics
INDIAN MANAGEMENT MARCH 2017 49
 Shutterstock.com
The defining moment in nexus. It got so bad that
the commencement of US President Rutherford B
Hayes declared in 1876 that
each new phase is the This is a government of the
inevitable need to people, by the people, and for
imbibe the new trait. the people no longer. It is a
government of corporations,
by corporations, and for corporations. Since
then things have been much worse all over
the world.
Phase three is thefast fish eating slow
fish phase. Death of distance and birth of
internet gave rise to phase three. Apple was
incorporated in 1977, Microsoft in 1981,
Amazon in 1995, and Google in 1998. They
created more wealth for their shareholders
every year than the old enterprises did
in decades.
Phase four is about intelligent fish eating
dumb fish. Early 21st century, we witnessed
the dominance of a new kind of corporation.
Indian trio of TCS, Infosys, and Wipro,
Embraer in Brazil, Haier in China, Samsung
in South Korea, and many others discovered a
new era.
ABOUT THE AUTHOR For companies that failed, the change of a
Ravi Chaudhry phase was often the trigger. But those that
is author, Quest
for Exceptional
prevailed have an eclectic mix of all these
Leadership: Mirage traits. They are strong, big (in substance), fast
to Reality, and (in responses), and invariably intelligent. The
Chairman, CeNext
Consulting and defining moment in the commencement of each
Investment Private new phase is the inevitable need to imbibe the
Limited.
new trait.
50 INDIAN MANAGEMENT MARCH 2017
Shutterstock.com
We can discern today the emergence of a
new Phase five which is realistic fish eating
unrealistic fish, driven by an increased demand
for social consciousness, and the need to
function in sync with society and environment.
Corporations that are realistic enough to
acknowledge this new realism will emerge as
winners in the 21st century. A company that
makes only money will be considered a poor
company hereafter.
Five allies to catalyse change
Five potent forces are speeding up the
emergence of this phase, based on the premise
that another world is possible.
Knowledge-based civil societydriven by
enlightened citizens.
Predominance of youthin demographics,
supported by the internet and social media.
Enlightened stakeholderscustomers,
investors, employees, and alternative media.
Womentaking on a larger pro-active role in
society, and
Educatorsgearing up to face two key tasks.
First is de-corrupting the minds of todays
leaders followed by making the minds of
coming generations incorruptible.
I believe these forces of transformation will
prevail over forces of status quo.
The biggest risk today is that CEOs are not
taking cognizance of the new realities. For
sustained and sustainable performance, CEOs
need to transform themselves. They need a new

Shutterstock.com
set of leadership traits that would make a CEO
an exceptional leader.
Traits of exceptional leadership
The prerequisites for anyone who is already a
CEO, or aspires to become one are base camp
leadership traits that fall under two domains.
Physical traits: qualities relating to
strengths withinbasic intelligence, energy
and drive, and professional will.
Mind traits: qualities relating to interface
with the outside worldpragmatic vision to
foresee opportunities; transactional skills to
build and motivate teams; and perseverance
to overcome obstacles.
To become an exceptional leader, I envisage
the need for a new set of traits beyond the
ones mentioned above. These are the traits of
conscience pertaining to the heart of the leader.
These do not call upon us to change our
hearts. They only require us to discover our
hearts. The tripod of exceptional leadership
has three strong, unyielding pillars: wholeness,
compassion, and transparency.
Pillar of wholeness: This is the defining
trait. Typically, the wholeness view is taken
from the perceivers vantage, with reference
to her mind, and processed in her intellecta
complete 360-degree view. That is exceedingly
difficult, and yet only half the job.
Each of our decisions and actions has an impact
on othersdirectly or indirectly. The whole
wholeness comes when we take an additional
LEADERSHIP
360-degree view, as perceived by others, with
reference to their minds and as processed in their
thoughts. Wholeness is a 720-degree viewa
360-degree view excludes while a 720-degree
view includes those who are excluded. A
720-degree view is the only yardstick of inclusive
development. Those who practice wholeness no
longer feel alienated; they feel they are aligned
with everything around them.
Pillar of compassion: Compassion
represents a feeling of unconditional
concern and love for others with a sense of
responsibility. It is the spontaneous wisdom of
the heart. Companies that have compassion in
their DNA never exploit society or nature, to
meet corporate goals.
Pillar of transparency: It is best explained
by holding a coin, tightly clenched in your
fist, with the palm facing the ground. If you
let go, you will lose what you are clinging
onto. But there is another way where you can
let go and yet keep hold of it. Turn your hand
over. The coin is still yours, with all the space
around it. When corporate leaders pursue this
journey, they discover a pleasant surprise; they
experience a triple top line of joy, peace, and
contentment. Not only for them, but also in the
personal lives of people all around.
It is heartening that many Indian companies
have taken cognizance of the new paradigms
and have adopted a more holistic approach to
business. It is an unavoidable stepping stone to
corporate longevity, a path towards growth with
profits and success with happiness.
India has possibly the biggest share of
human problems that the world faces. Indian
entrepreneurs therefore have the worlds
biggest opportunity to deploy their creativity
and inventiveness to solve these problems. If
they do so with wholeness, compassion, and
transparency, they will surely emerge as the
champions of a new India in the 21st century.
(This article is based on Quest for Exceptional Leadership: Mirage
to Reality.)
INDIAN MANAGEMENT MARCH 2017 51
 BETWEEN
THE
COVERS

SUMMARY
G LAKSHMANAN ON
PIVOT

EXTRACT
SMARTONOMICS

BOOKSHELF

52 INDIAN MANAGEMENT JANUARY 2017

 Shutterstock.com

INDIAN MANAGEMENT JANUARY 2017 53

 Money as a conceptand not just coins and notesis perhaps the most
important way of controlling the global economic landscape.
BOOK
EXTRACT

The
dynamics of
money
What is money? How has the nature of money The words that begin this chapter were written
changed in the US (and elsewhere in the world) over two decades ago. They remain truer than
and why? ever. Economists ideas have led to policies
How does money affect output, income, growth, and that have done the world harm. Unbridled free
employment? competition in financial markets has not proved
What is economic momentum, and why is the velocity utopian. Despite this, they remain influential.
of money a crucialand often overlooked A key way economists influence how we live is
variable? through their control of the money supply, credit,
How do central banks control the supply of money and interest rates. This chapter focuses on how
and the rate of interest? this is done.
SMARTONOMICS: How are money, interest, and inflation related?Why A good approach to getting to the bottom
SIMPLE, are interest rates today the most important single of any hard question, is the method of seven
POWERFUL
MACROECONOMIC
macro variable in the US, Europe, and many other whysused universally by seven-year-olds.
TOOLS FOR countries? For them, a why? question, even if answered
SUCCESS IN How can managers track interest rates globally?Why carefully, often leads to a second why? and
AN UNCERTAIN should they? a third, fourth, and so on, until the parents
WORLD
How do interest rates affect the economy? patience wears thin.
Author:
Shlomo Maital, How do central banks influence interest rates?Which This is a superb method for learning about
D V R Seshadri rates can they determine? matters in depth. By the time you have answered
Publisher: What is the fatal flaw in the current dollar standard the seventh why, you generally have a fairly good
SAGE Response global financial system? understanding of the subject.
ISBN: For all their miscalculations and the distrust So, let us apply this method to understanding
9789386062369
that now surrounds their profession, economists money and interest.
Pages:
280 will continue to exert a powerful influence over 1.What is money? Why is money so important
Price: how we live. for the economy? What is economic
R395 Alfred Malabre Jr.1 momentum?

54 INDIAN MANAGEMENT MARCH 2017

 2.Why do some experts think that money and
economic momentum are closely linked?
3.What are interest rates? Why do they get so
much close attention from everyone?
4.Who controls the supply of money? How do
they do it? Why do they sometimes create vast
amounts of money? How do they do this?
5.Why is the world so keenly interested in
the question of when will Americas federal
reserve begin to raise interest rates? Why
were interest rates kept so low for so long
anyway?
6.Why has the mountain of money created by
central banks in America and Europe not
generated inflation, as it has done in the past?
When will this mountain indeed begin to
cause prices to riseif at all?
7.Why is the global economic and financial
system so fragile, even after temporary
repairs were made following the 2008 global
financial crisis?
We will do our best to supply some clear
answers to these questions in this chapter. Our
data and examples will focus mainly on the US,
not the least because the US dollar remains the
worlds dominant currency (a fact that reveals
both the strength and the weakness of the global
trading system).
FIGURE 4.1 SNAPSHOT DATA FOR EACH OF THE THREE DEFINITIONS
OF MONEY FOR THE US, AS OF DECEMBER 31, 2015
Source: Economic Report of the President. 2016
(US Government Printing Office, Washington D.C.,
January 2016).
What is money?
For many, money is coins and paper notes.
This is the concrete representation of purchasing
power. But, in fact, for many years money has
been mostly an accounting conventiona
digital entry stating ownership of an amount of
purchasing power in a financial account.
Figure 4.1 shows the various components of
the US money supply, at the end of 2015.
Coins and notes amount to about $1.4 trillion.
Demand, or checking, deposits add another $1.6
trillion. Savings and time deposits add another
$9.3 trillion. Together, these three components
comprise what is known as M2 (the second tier
of liquid assets), or a total of $12.3 trillion, at the
end of 2015.
More than half of the over 40 billion paper
notes in circulation, worth about $1.4 billion,
are comprised of $50 and $100 notes. The US
Bureau of Engraving and Printing prints about 6
to 8 billion new notes every year, to replace worn
ones. The worn notes are shredded and discarded.
Sometimes, visitors to a federal reserve bank
receive a small package with shredded money. A
large number of US dollar notes circulate abroad,
in foreign countries, where the local currency
does not enjoy stability or trust.
The other shoe
Before we begin to explain the mechanics
of money and interest, we want to set the
stage, to show the vital importance of a deep
understanding of monetary macroeconomics.
Those living in crowded tenement housing in
NewYork City, for example, had several stories of
apartments, with one bedroom atop another. It was
common to hear a neighbour above removing their
shoes and to hear them hit the floor. As one shoe
dropped, with a thud, there was an expectation of
the second to follow.This expression, waiting for the
other shoe, has come to mean awaiting a widely
expected event that may be delayed.
(Published here with permission from SAGE India.
All rights reserved.)
INDIAN MANAGEMENT MARCH 2017 55
 Looking to make a career change?
G LAKSHMANAN, INFOSYS
BOOK
SUMMARY

Crafting a
meaningful
work-life

I
n todays unpredictable world, the and lean startups, and applies them to career
average job tenure is four to five years. management.
Roles and responsibilities change The pivot method is a four-stage career, job,
constantly, and even smart, motivated and role change processplant, scan, pilot, and
professionals hit a plateau. What next? launchabout how to systematically bridge the
is a question we all have to answer gap between where you are now and where you
frequently. want to be.
We are better off than ever before as a society, Think like a basketball player: one foot
but not happier. People are realising this and stays firmly planted while the other scans for
seeking more meaning and impact in their jobs. opportunity. Then start passing the ball around
ABOUT THE AUTHOR How to advance your career without getting the court, or piloting to test the waters of the
G Lakshmanan is stuck? new direction. Eventually, you will be ready to
Senior Principal, Jenny Blake through her new book Pivot: The take a shot or launch in the new direction. Even
Infosys Limited.
Only Move That Matter IsYour Next One reminds if you do not have the guarantee of success, the
us that we live in a different time, and the launch means you are now ready to go in the
PIVOT: THE ONLY
MOVE THAT
possibilities are unlimitedas long as we are new direction.
MATTERS IS YOUR willing to pivot, i.e., change. The book details the four-stage career change
NEXT ONE A former Google employee and a UCLA process with new ideas, real life examples, pivot
Author: graduate, Blake is a career and business strategist, paradox, techniques, and tools. Here is a glimpse
Jenny Blake and helps people build dynamic careers they of a few of those.
Publisher: love. She is also a co-creator of Googles Career
Portfolio
Guru programme. Career operating modes
Pages:
288 (Hardcover) We work in one of these career operating
Price: Defining pivot modesinactive, reactive, proactive, and
R599 Blake borrows concepts from agile development innovative. When impacters (individuals who

56 INDIAN MANAGEMENT MARCH 2017

optimise for high work impact) find themselves Do not take your pivot personally, like there
in inactive or reactive mode, they look to pivot is something wrong with you. Plateaus are
to operate in a proactive or innovative mode. a good thing! They signal you are ready for
something new.
Get scrappy Whether you are considering a career change,
Get scrappy means having a lean approach to or a job change, or figuring out what to do next,
piloting bigger career changes. A lean pilot is the this book provides practical insights.
one that does not cost a tremendous amount of
time, money, or energy. They are small tests to
help you determine if you enjoy this area, have
the skills to succeed and differentiate yourself
within it, and they have the potential to fulfil top
value priority.
Look for career pilots that have high potential
upside with limited downside.

Riskometer
Measure your risk temperature by identifying
which of the zones you currently fall into: playing
it too safe (when you might find yourself slipping
from the comfort zone into the stagnation
zone), when something feels edgy but exciting
(stretch zone), or when a next step seems too
overwhelming or extreme (panic zone).
Impacters avoid stagnation and panic zone, and
pivot from the comfort zone to the stretch zone.

FONT not FOMO

Impacters are not afflicted with FOMO: fear
of missing out. They have FONT: fear of not
trying. Connect with that part of you that
knows, deep down, that you are anti-fragile;
that shocks and setbacks only make you stronger
and that you can succeed at whatever you set
your mind to.

Pivot pitfall
One pivot (changing career) pitfall is
stretching too far, ending up in ones panic
zone, paralysed by fear. Instead, focus on small
career experiments first that help you test the
waters of a new direction. A strong experiment
should test three Es: enjoyment, expertise,
and expansion.

INDIAN MANAGEMENT MARCH 2017 57

 BOOK
SHELF
Top management must-reads
Committed Teams: Three
Steps to Inspiring Passion
and Performance
Author: Mario Moussa, Madeline
Boyer, Derek Newberry
Publisher: Wiley
Price: R1484
Based on research from
Whartons Executive
Development Program
(EDP), Committed Teams
identifies the common
challenges arising when
people work as a group
and provides key guidance
on breaking through the
barriers. It draws insights
from the EDPs living lab,
which is an intensive two-
week simulation during
which executive-level
participants run complex
global businesses. The book
will help you build high-
performing teams with an
evidence-based framework
that delivers results.
58 INDIAN MANAGEMENT
How To Be a Great Boss
Author: Gino Wickman,
Rene Boer
Publisher: BenBella Books
Price: R820.97
If your employees brought
their A-Game to work Price: R384
every day, what would it
mean for your companys The authors present this
performance? Studies have
repeatedly shown that the
majority of employees are
disengaged at work. But
it does not have to be this
way. Often, the difference
between a group of
indifferent employees
and a fully engaged team
comes down to one simple
thinga great boss. In this
book, the authors present
a straightforward, practical
approach to help bosses
at all levels of an
organisation get the most
from their people.
MARCH 2017
Competing Against Luck:
The Story of Innovation and
Customer Choice
Author: Clayton M. Christensen,
Taddy Hall, Karen Dillon,
David S. Duncan
Publisher: Harper Business
Price: R1,341.04
Building Internet of Things
path breaking book every
company needs in order
to transfor innovation
from a game of chance to
one in which they develop
products and services
customers will be willing
to pay premium prices
for. How do companies
know how to grow?
How can they create
products that they are sure
customers want to buy?
Can innovation be more
than a game of hit and
miss? Harvard Business
School professor Clayton
Christensen has the answer.
Building the Internet of
Things: Implement New
Business Models, Disrupt
Competitors, Transform
Your Industry
Author: Maciej Kranz
Publisher: John Wiley & Sons
(IoT) provides frontline
business decision makers
with a practical handbook
for capitalising on this
latest transformation.
Focusing on the business
implications of IoT, this
book describes the sheer
impact, spread, and
opportunities arising every
day, and how business
leaders can implement IoT
today to realise tangible
business advantages.
The book points out the
benefits of integrating IoT
into your organisation
tomorrow.
Rebuild and realign underutilised assets to effect a turnaround.
PRADIP CHANDA, AUTHOR, RISE LIKE A PHOENIX
STRATEGY

A fresh
lease of life
INDIAN MANAGEMENT MARCH 2017 59
 A
n underperforming
company is one in which
return on investment drops
below the cost of capital,
and shareholders rightfully
ask whether the enterprise
should be wound up, assets
sold, and the freed capital be invested in more
lucrative opportunities.
Recent amendments to bankruptcy laws in
India to tackle NPAs suggest empowering asset
reconstruction companies to act like receivers
who focus on winding up operations, lay off
staff, and auction off saleable assets to pay off
creditors who rarely get more than a few cents
for every dollar due.
Unfortunately, closure
of large companies goes
I came to realise that beyond hurting only their
resource crunch will be shareholders and employees.
the biggest short-term Other stakeholders in the
companys ecosystem
challenge facing the
ancillary companies, their
new CEO. employees and families, the
infrastructure support system
to service this mini universe,
markets, schools, entertainment centres,
hospitalsbecome equally vulnerable.
I argue that an attempt to turnaround
underperforming companies should be
mandated in an economy which can ill afford
to write off assets to merely pay creditors
(primarily banks who are often guilty of
crony capitalism). The need of the hour is to
create asset management companies staffed by
turnaround experts who are entrepreneurs at
heart, managers by training and experience,
and committed to make companies in
distress not only viable, but ready for
sustainable growth.
I believe there are three key elements to
ensure a successful turnaround vision,
60 INDIAN MANAGEMENT MARCH 2017
organisation (preferably headed by a new CEO
for a turnaround), and resources.
I came to realise through personal experience
that resource crunch will be the biggest short-
term challenge facing the new CEO, and I
strongly recommend asset utilisation as the
cornerstone of any turnaround strategy in my
book, Rise Like a Phoenix.
Most managers tend to believe that legacy
assets are millstones responsible for the
companys downfall in the first place, and doubt
the usefulness of such assets in changing market
scenarios. They are being myopic; creative
utilisation of many such assets is often the only
resource available to turnaround CEOs, and
many have used these successfully.
Asset utilisation strategies are not new.
The next time you pick up a box of tissues,
you may recall that Kleenex was the pioneer
in this field. Kimberly Clark had developed a
cellulose product as fluffy as cotton, way back in
1914, which was used extensively during World
War I, as dressing in field hospitals. At the end
of the war in 1919, the company was lumbered
with a huge inventory of this product and faced
massive write-offs.
A useless legacy asset? To some perhaps. To
a turnaround manager, no. Kimberly Clark
launched Kotex Sanitary Napkins and Kleenex
Tissues soon, thereafter using the same
technology and the inventory. The rest is history.
The much-vaunted turnarounds of IBM
in 1999 and Ford in 2015 are more recent
examples of asset utilisation-led turnarounds.
I recount in the book how I made use of legacy
assets, ranging from idle workmen to machines
and unsold inventories, to essay a turnaround in a
music company in a hostile environment.
I share my learnings from that time, fine-
tuned since, from many consulting assignments,
to describe a process which a turnaround
manager will find invaluable.

The following paraphrases the recommended
process:
Desist from making grand vision statements.
Talk about what can be done in the next
six months.
Embark on a revenue-generating activity
involving as many departments as possible,
utilising the companys remaining assets. The
order book may give useful pointers.
Use this activity to transform a demoralised
organisation into a cohesive unit, which is
ready to support new initiatives with a positive
mindset.
Conserve cash to fund only revenue-generating
activities. Audit all assets, physical or otherwise,
and find ways and means to extract income from
these.
ABOUT THE AUTHOR Strengthen the organisation, inducting new
Pradip Chanda
people to act as change agents wherever
is a management necessary, and develop change agents from
consultant, within. Change the culture to can do from
columnist, and an
expert on corporate wont work; tried it before.
turnarounds and Develop a mid-term plan and make sure middle
startups.
managers are executing this well.
STRATEGY
Sanjay Marathe \ dinodia.com
Start thinking about sustainable long-term
growth strategies.
The book uses mini case studies to elaborate
on the process that I talk about.
One such is the India Post story. A turnaround
story that began a few years ago and has
gathered real momentum in 2016. A classic
case of a rusty behemoth weighed down with
dubious legacy assets, including a large
workforce requiring extensive re-training to
deal with the demands of a digital world, and
derelict properties dotted around the length
and breadth of the country. It is following the
process and seems to be well on the way to
full recovery.
These processes can be applied in any business
situation, but are particularly relevant to those
faced with renewal and/or revival challenges
the CEO of an underperforming company,
head of a stuttering strategic business unit
(SBU), or product manager of an FMCG losing
market share.
(This article is based on Rise Like a Phoenix: Scripting
Corporate Turnarounds.)
INDIAN MANAGEMENT MARCH 2017 61
Monolithic or microservices architecturewhich is a better choice?
RAKESH KHANNA, SYNTEL
Shaping the
future
I
n todays service-led, cloud-centric,
and API-connected business landscape,
monolithic software struggles to keep
up with the rapid development of new
innovations, tools, and platforms. In
this always on and always connected
world, it is no longer feasible to release
software products on a multi-month or multi-
year development cycle.
Microservices is the architecture of choice
for companies seeking a highly scalable, cost-
effective, and resilient approach which helps
them operate in a fast-moving business climate.
Microservice-based software applications are
being utilised by companies such as Amazon,
Netflix, Uber, Comcast, eBay, Karma, and
Capital One for their business-critical apps.
Traditional monolithic applications work as
a standalone software program built to operate
separately and independently from other
computing applications. Since every component
must essentially be built-in in the application,
these types of systems have limited flexibility,
TECHNOLOGY
adapt poorly to change, and are prone to risk.
These drawbacks have led to a shift towards
adopting microservices, which are better
suited to business needs in the digital age. The
microservices approach breaks down a complex
application into several autonomous services,
which are small, independent processes that
communicate and work together to perform
the functions of a monolith in a more flexible
way. Although each component is connected
to another, it is assigned a different task using
a modular methodologyconnecting all the
pieces of the modern software puzzle to deliver
smoother, more agile business performance.
For monolithic applications, every time an
additional component is integrated or a new
change is required, the entire system must
be upgraded and rebuilt. With this style of
development, there is a risk of interrupting
background tasks which makes the system
susceptible to failure during startupwhich
results in poor business agility. Even minor
changes or enhancements can become a time-
INDIAN MANAGEMENT MARCH 2017 63

Migrating from monoliths and effort-intensive process,
to microservices is more prolonging time to market
and resulting in higher cost,
feasible for a business greater risk, and more errors.
than building an entirely Comparatively,
new system. microservices are autonomous
and independent, which
means that they can tolerate the failure of one
or more services without crashing the entire
system. Microservices are elastic, resilient,
and responsivedesigned to react quickly
to failure with only minimum application
downtime. Integrating new components with
much shorter lifecycles than the monolithic
legacy applications is one of the main reasons
businesses are migrating to microservices
in order to scale their developments to
accommodate numerous and varying processes.
Simply put, migrating from monoliths to
microservices is more feasible for a business
than building an entirely new system. No
company can afford to have operations grind to
64 INDIAN MANAGEMENT MARCH 2017
Shutterstock.com
a halt while a new IT framework is deployed,
and re-writing legacy applications from the
ground up is neither practical nor financially
feasible.
Relying on a single monolithic application
requires a long-term commitment to a
technology stack or particular version of that
system, effectively stopping the clock on an
enterprises technology environment at the
moment that application comes online. In such a
case, the entire application must be rewritten in
order to adopt a new technology or update
the software.
In the long term, this is not economical from
a business perspective. Both risky and time
consuming, these realities hinder company
growth and the ability to compete with newer
competitors who began life without the
technical debt that traditional players carry
around with them.
Holding on to archaic, monolithic
configurations might initially seem like the
 TECHNOLOGY

Updates to the simplest option, but the businesses to turn away from the old monolithic
microservices API can decision to do so will hinder mindset and begin the move to an architecture
the ability to innovate and more suited to todays digital world. In the
be deployed without have a detrimental impact modern business landscape, applications are
impacting business on propelling the business multi-faceted, touching and interacting with
as usual, allowing forward. Developments in virtually every part of your business, and
enterprises to innovate technology and innovation microservices are a powerful way to make the
represent revenue streams required change.
while they operate.
that business leaders can If your core systems are unable to evolve,
exploit, but without the right you will not be prepared to address a rapidly
framework to support them, growth will changing marketplace, meet changing consumer
be limited. expectations, or compete in the digital age.
In contrast, because they are resilient and However, with the right mix of skills, the right
flexible to todays changing work requirements, approach to technology, and a forward-looking
a microservices-oriented architecture gives mindset, any businessno matter how legacy
businesses a significant advantage by letting they might becan truly go digital.
them experiment with new business ideas.
Using microservices, systems can have
multiple versions of services running side by
side, providing backward compatibility and easy
integration. Updates to the microservices API
can be deployed without impacting business as
usual, allowing enterprises to innovate while
they operate. By adopting microservices,
companies can achieve up to a 20% reduction
in development costs and 20% faster time
to market.
Microservices applications also emphasise
real-time application monitoring, to enable
better system transparency and fast response
time. Semantic monitoring can provide an early
warning system that detects failures and quickly
triggers alerts to prompt development teams to
investigate or even restore service automatically.
In addition, systems can evolve incrementally,
by implementing one service at a time in
order to bridge the gap between a monolithic
architecture and microservices. Over time,
more aspects of the business will be shifted
to this style of software development until
ABOUT THE AUTHOR eventually the use of the monolith will shrink to
Rakesh Khanna an extent where it is no longer needed.
is interim CEO and When it comes to building software
President, Syntel.
applications, I believe the time is now for

INDIAN MANAGEMENT MARCH 2017 65

 CASE
STUDY

BlackBerry,
a screen shot
Rapid technological advancements transmuted a simple handheld device for mobile communication
into an all-inclusive multi-level functionality gadget by diligently converging scores of technology-
embedded devices. But BlackBerry, the pioneer handheld device which was once the most preferred
by executives, has lost its charm. What led to the companys downfall? A strong sense of denial and
complacency, or poor understanding of the needs of customers?

T
he mobile phone, with its
seamless capabilities, has
become a ubiquitous gadget
across time and space. Sleek
and stylish smartphones have
made dispensable scores of
devices that were once the
proud possession of people across the world.
The process of integration of cross-functional
applications into one compact device is still
going on.
The mobile phone has been subject to
incessant evolutionary strides ever since its
inception in 1984, starting with Motorola
DynaTAC 8000X. Then came Nokia, with its
model Nokia 5110 that had unique advantages
such as a long battery life and in-built gaming
features. With this started the trend of
replacement of various devices by developments
in unrelated verticals. After Nokia, Motorola
improvised upon its previous models by
providing additional features. One of them was
Star TAC, the first ever flip mobile phone.
The arrival of BlackBerry in the mobile
phone market ushered in the innovative
concept of the smartphone, which is able to
undertake varied tasks that were performed
generally by computers, along with the use of
the internet. BlackBerry 5810 was the first
model launched by Research in Motion (RIM).
Its unique features were physical keyboards
and the ability to access emails through mobile

INDIAN MANAGEMENT MARCH 2017 67

 phones. In 2003, Sanyo launched its model
SCP5300, the first phone to have an in-built
camera. Apple started stealing the show in
2007 with the launch of the iPhone with a
sleek design and features such as touchscreen
and intelligent sensors. A year after this
launch, Google came up with Android versions
of smartphones.
The product life-cycle of smartphones is
too short and the process of integration is
irresistibly tempting and disruptive.
Major milestones
BlackBerry had started operations as a
manufacturer of products for police forces and
the military. As time went by, they leveraged
technology and came up with products suiting
the needs of tech-savvy users.
Ebb and tide saga
The word BlackBerry was used as the synonym
for mobile phones when it enjoyed monopoly in
the smartphone market, during the early period
of the last decade. But this phase did not last long
owing to its cyclic adaptation misalignmentthe
exuberance of the BlackBerry fervour started
receding with the entry of iPhones into the
market. Other mobile manufacturing companies
too followed suit, backed by new operating
systems with more user interfaces and customer
engagement. The BlackBerry edifice witnessed
near-collapse, evident from the global market
share of its operating system and revenue
represented in figures 1 and 2 respectively.
The graphs clearly indicate a constant increase
in BlackBerrys market share and its revenue for
selected years. The year 2008-2009 was a point

BLACKBERRYS JOURNEY

In 1984, an engineer from University of Waterloo, Mike Lizardis, and another engineer from University of
Windsor, Douglas Fregin, set up RIM.
In 1992, Jim Balsillie joins RIM as the Co-CEO, along with Mike Lizardis.
In 1996, RIM releases its first keyboard-based device, RIM 900.
In 1998, a two-way pager, RIM 950, is released.
In 2002, voice calling facilities are added to the model BlackBerry 5810.
In 2004, RIM passes its one million subscriber mark on the eve of its 20th anniversary.
In 2006, RIM releases mobile phones with digital camera and other capabilities related with multimedia.
In 2007, Apple launches IPhone.
In 2008, RIMs stock price reaches $149 per share. But this was short-lived. The stock market crashed and
share price came down to below $50.
In 2009, RIM launches App store to combat competition from Apple and Google.
In 2010, it crosses 40 million subscribers. In spite of the fact that it loses to its competitors in the US, it was
able to compensate the same through its global market.
In 2011, it releases Playbook which did not succeed much because, in a hurry to compete with Apple and
other competitors, BlackBerry had released a device which had many issues.
Later in the year, Lazaridis as well as Balsillie both step down from their managerial positions in the company.
On July 9, 2013, another Canadian organisation Fairfax Financial Holdings offers $4.7 billion for purchasing
BlackBerry. (BlackBerry timeline: A look back at the tech companys history, 2013)

68 INDIAN MANAGEMENT MARCH 2017

 CASE
STUDY

Figure 1 GLOBAL SMARTPHONE OS MARKET SHARE HELD BY BLACKBERRY FROM

Global smartphone OS market share held by RIM (BlackBerry) from
2007 TO 2016 (BY QUARTER) 2007 to 2016, by quarter
25%

20%
Share of shipm ents

15%

10%

5%

0%
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3
'07 '07 '08 '08 '09 '09 '10 '10 '11 '11 '12 '12 '13 '13 '14 '14 '15 '15 '16 '16

Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2
'07 '07 '08 '08 '09 '09 '10 '10 '11 '11 '12 '12 '13 '13 '14 '14 '15 '15 '16

Source: https://www.statista.com/statistics/263439/global-market-share-held-by-rim-smartphones/

Source: Additional Inform ation:

IDC; Gartner Worldwide; IDC; Gartner; 1st quarter 20 0 7 to 3rd quarter 20 16
Statista 20 17

Figure 2 BLACKBERRYS REVENUE FROM 2004 TO 2016 (IN MILLION USD)

Blackberry/RIMs revenue from 2004 to 2016 (in million U.S. dollars)*
25,000

19,907
20,000
18,423
Revenue in million U.S. dollars

14,953
15,000

11,065 11,073

10,000

6,813
6,009

5,000

3,037 3,335
2,066 2,160
1,350
595
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: https://www.statista.com/statistics/266240/global-revenue-of-rim-since-2004/
Source: Additional Information:
RIM Worldwide; RIM
Statista 2016

INDIAN MANAGEMENT MARCH 2017 69

The iPhone had certain of inflection vis-a-vis its market
share for the operating system,
crucial features whereas for revenue, 2011 was
which were lacking in a landmark year. The overall
BlackBerry. It had an trend for both the indicators
extremely intuitive and is analogous to the bell-shaped
curve, signifying growth and
user-friendly design,
deceleration. Revenue had
along with an excellent reached its peak during 2011,
operating system. followed by a vertical fall after
one year.
BlackBerry was continuously
improving its product line after developing
pagers and two-way communication devices. This
helped the company increase revenue constantly.
But after the launch of the iPhone in 2007, they
started facing a setback. However, they could
increase their revenue until 2011. This may be
due to its success in the global market, in spite
of losing the domestic US market. But, once
Apple and Google started penetrating the world
market, BlackBerry lost its market share to its
competitors.
An addiction for customers
It was on April 19, 2007, a Tuesday night at
8 p.m., that BlackBerry services were shut
down owing to technical issues. And users of
BlackBerry phones who had got addicted to
emails and other services offered by it were
literally stunned by the blackout. Many top
executives of various companies had expressed
their concern over the sudden move, but a few
were happy because as they said they would find
more time with their families. This was a clear
manifestation that BlackBerry was an addiction
to most of its users.
ABOUT THE AUTHOR
Stuart Gold, Marketing Director of Omniture,
Ranjan S Holla said he kept turning the device on and off and
is Regional Sales
Manager (South then removing the battery and trying all sorts
India), DFP, of actions he could take from his side. He
Germany.
also confided that then he could understand
70 INDIAN MANAGEMENT MARCH 2017
the dependency he had on that device. Lynn
Moffat, Managing Director of New York Theatre
Workshop, had dropped the device that morning
and hence thought her phone had stopped
working because of the incident; she was later
happy to know that all her BlackBerry brothers
and sisters were facing the same issue. Elaine Del
Rossi, Chief Sales Officer at HTH Worldwide,
initially fought with the IT team thinking that
the issue was with the company email server,
but after the services were restored, she heaved
a sigh of relief saying she had not worried so
much when she quit smoking. Some users gave
statements that they were in fact forced to
reconsider their bad habits. BlackBerry, after
getting their services back to normal, issued a
statement that they were trying to understand
the root cause of the problem. However, they
had a doubt that it was owing to the growing
customer base, which had grown from 5 million
to 8 million within a year. But BlackBerry had
faced a few issues in the previous year too, in
Juneit had affected only a few operators for
a short duration. But this time, the problem
persisted for almost ten long hours.
Cyclic adaptation misalignment
It was a good adaptive cycle between 1984
and 2007they were able to continuously
innovatestarting from pagers, they moved on
to mobile phones, smartphones, and then added
features such as messenger and email facilities.
By 2007, the Canadian conglomerate was one
of the most valuable companies with revenue
touching around $67 bn. The journey went
smooth until the launch of the Apple iPhone
in 2007, which sparked a cyclic adaptation
misalignment at BlackBerry.
The iPhone had certain crucial features which
were lacking in BlackBerry. It had an extremely
intuitive and user-friendly design, along with
an excellent operating system. Within a year,

Google also came up with its user-centered
interface, Android.
After these, only by the end of 2008 did
BlackBerry come up with its Storm model, which
had its own set of flaws and failed miserably in
the market. By the time BlackBerry modified
the new model, Apple and Google had already
reached the next stage in the adaptive cycle. They
also launched virtual stores, wherein users could
download applications. Google introduced Play
Store in 2008; Apple too came up with App Store
in the same year. When RIM launched BlackBerry
App World in 2009, it was clearly late. By that
time, its competitors had continuously worked
and improvised on their apps. BlackBerry had
learnt a lesson from their previous experience of
lagging behind, and hence within a few months
of the tablet launch by Apple,
BlackBerry too launched its
The security was so high playbook tablet. However, they
that it created trouble for suffered further setback by
its usersthe entire data bringing a low-quality product
to the market. By launching
got deleted after repeated
a tablet hurriedly to speed up
false login credentials. adaptation, in fact, BlackBerry
was burning its finger once
again for want of any groundbreaking innovation.
WhatsApp messenger was yet another platform
that undermined BlackBerrys significance.
Through the lens of customer reviews
BlackBerry Storm: We considered this
model to understand how initially BlackBerry
took the challenge posed by Apple and Google.
Launched in November 2008, this model had a
lot of issues (Anon., n.d.a). It was for the first
time BlackBerry had faced some heat in the field
of smartphones after having monopoly in the
market for more than seven to eight years:
The very purpose of the smartphone is to do
functions performed by a computer, which
also includes internet browsing. Internet
CASE
STUDY
could not be accessed on this phone for want
of browsers.
Wi-Fi was not installed
There were many bugs in the device software,
which also included some errors such as
asking to accept user agreement frequently.
This affected device performance and led to
user dissatisfaction.
WhatsApp features were not built into the
phone.
BlackBerry Z10: Launched in 2013, this
phone had a slightly different feature compared
to the other BlackBerry phonesit had only
virtual keypads, unlike the other models that had
physical ones. There were also many other issues
that were of concern for users of this model
(Anon., n.d.b):
Both Android and iOS had their own App
stores and were offering sufficient applications
which the users could make use of. But, for this
model, apps provided by the model as well as
those given through the store were very less.
Many of the most used social media apps such
as YouTube and Facebook were not accessible
The entire phone was built on a single
processor, unlike others that had dual
processors
Internal memory consumed by the operating
system was much less, which meant that the
features offered by the phone, in total, were
also less
One of the main pillars on which BlackBerry
stood was anti-theft protection. But the
security was so high that it created trouble for
its usersthe entire data got deleted after
repeated false login credentials
There were performance issues toothis
model of phone could give satisfactory
performance for about one year after
purchase, but it went down drastically after
some time of its operation.
INDIAN MANAGEMENT MARCH 2017 71
 BlackBerry Passport: It was released in 2014
October. As in the case of other phones, this
model too had advantages as well as disadvantages
(Anon., n.d.c):
In spite of the availability of WhatsApp,
updates did not have security from BlackBerry
as WhatsApp was installed through Android.
Camera quality was not as good as other
competing phones in the same category.
The device and the screen were wide, making
it uncomfortable for users.
In most smartphones, whenever something
needs to be searched or typed, the website
or the operating system itself will give
suggestions, as to what may be the word the
user is looking for. Hence, it is quite common
that users did not make much
use of the physical keyboard.
BlackBerry Priv took The phone also had track
almost 20-25% of battery pads. This again is not a feature
power as compared to required in phones. They are
Samsung Galaxy Note5. of use in laptops and other
devices wherever touchpads are
available.
Passport was launched to mainly target
business users and help them increase
productivity. But the installation of many
games in the phone brough down productivity
of the user, which was also not welcomed by
some.
All notifications used to come only to its hub.
The user had to enter the hub and then get
the idea of what notification has arrived.
The security feature was complicated and
difficult to remember. If the password was
forgotten, then the entire data would be lost.
However, some benefits were noted by a few
ABOUT THE AUTHOR
of the users; for example, the battery backup
K R Pillai is was good. It used to stay for a longer duration of
Professor, School
of Management, time than competing models. This used to happen
Manipal University, despite the fact that 4G was continuously on.
India.
Another advantage was that screen brightness
72 INDIAN MANAGEMENT MARCH 2017
was good. Even at 45% brightness, it was easily
visible without changing the settings.
BlackBerry Priv: In order to fight
competition, BlackBerry came up with an
Android-based phone. It was released in
November 2015. However, in spite of the hard
efforts, even this model faced a lot many issues
(Anon., n.d.d):
The front camera was 2 mega pixels,
which was very less for a phone in such a
category. This made video calling and other
options tough.
The mono speaker invited a lot of criticism.
This model consumed a lot of battery for
checking emails. It took almost 20-25%
of battery power as compared to Samsung
Galaxy Note5.
The physical keyboard was not really required
by the customer. Neither did it function
smoothly.
There were bugs in the software used in the
device.
The BlackBerry hub did not show notifications
individually. One had to enter the hub every
time to see them.
BlackBerry offered excellent quality with
regard to exteriors. But in this model, mostly
plastic was used and this reduced the quality.
Along with physical keyboard, a touch
keyboard was also offered in this model. But it
had its own issuessensitivity was less and it
used to malfunction at times.
It took a much longer time to be fully
charged. (Some users have said it took around
24 hours).
The phone was highly priced as compared to
competing models.
Its total weight was 190 grams, which was a
bit too heavy for a mobile phone, especially in
the category it was serving in.
The processor was hexacore, whereas other

BlackBerry, despite being
a pioneer, lost their sheen
due to sheer negligence
of customer aspirations.
Figure 3
Source:http://www.businessinsider.in/Theres-no-hope-of-anyone-catching-up-to-Android-and-iOS/
articleshow/53815473.cms
models offered octacore. This
made its processing speed less.
The email feature was always
BlackBerrys USP. But, it made
use of IMAP. It did not work in
push type email. This meant it
took more efforts of the user to
have email in the phone's inbox.
The picture quality was low as well as camera
made some noises while being used.
Obsession with Android
The Android operating system, initially developed
by Android Inc., was later bought by Google
Inc. and introduced in the market in 2007. This
system, based on Linux, was initially offered
in touchscreen devices such as mobile phones
and tablets. It was later presented on televisions
and wrist watches, testifying its ubiquitous
compatibility. This has led to an overwhelming
obsession towards Android OS as evident from
Figure 3. Two prominent operating systems such
as BlackBerry and Symbian (2009) appear to be
non-existent now. The potential of Android to
SMARTPHONE PLATFORM MARKET SHARE
(Based on worldwide smartphone sales to end users)
CASE
STUDY
monopolize the market appears strong, signaling
a potential threat to iOS as shown in Figure 3.
Androids play store, which offers millions of
free applications, is its USP the applications
range from games for kids to a variety of business
applications for professionals, making it the
choicest one across demographies.
BlackBerry seems to have understood its
strategic oversight. It is well comprehensible
from its latest decision to power its mobile
phones on Android OS. It is expected that
BlackBerry consumers can have knock-on effect
advantages of this hybrid alliance. The company
claims that the Android-powered BlackBerry
devices have fused the best integrated messaging
experience on Android with the added security
of BlackBerry, and the consumers truly have the
best of both worlds.
Concluding comments
In this highly competitive era, it is imperative
for any brand to understand the untold and
emerging needs of the customer to ensure
survival in the market, uninterruptedly.
BlackBerry, despite being a pioneer in producing
handheld devices for communication, lost their
sheen due to sheer negligence of customer
aspirations. Inventors of smartphones and leaders
of the market for almost a decade, the company
had seen an avoidable downfall in the mobile
phones (smartphones) market due to cyclic
adaptation misalignment. Friedman (2005) says
that all business executives, entrepreneurs and
innovators, whom he interviewed, agreed on
one thing: they had been able to do things
they had never dreamed possible before, or that
they were being forced to do things they had
never dreamed necessary before (The World
is Flat; P. 44). BlackBerry was basking in past
glory, overlooking the emerging aspirations of
customers and seamless possibilities of the global
competitive playing field.
INDIAN MANAGEMENT MARCH 2017 73
 CASE
STUDY
BlackBerry, as a brand, continuously went
on improving the existing models of phones.
They never thought about radical improvements
in the technology field, which they could have
understood if they maintained better customer
relations and mapped their requirements.
They had thought that only business users
will drive the smartphone market; but in fact,
other consumers drove the market post 2007.
Also, they had introduced only a few of the
attributes such as email, whereas
competitors developed phones
Customer engagement that had almost all features of a
must be incorporated as computer and were welcomed
an antecedent to product by the customers. The learning
or service development. curve of BlackBerry was going
down. They were continuously
refining their own product
lines and never thought of radically redesigning
their products, which was actually done by
market rivals Apple and Google. The BlackBerry
management was more focused on just improving
business rather than focusing on research and
development for any major innovation. This
paved the way for the competitors to come up
with disruptive technologies.
The case of BlackBerry is reflection of the
fact that any reputed brand must strive hard
to spearhead, rather than being infinitely
complacent in its past or present glory. The
company/brand should navigate itself ahead of
time to be much sought after always, or else
keep pace with changes in the market to avoid
being overtaken. A company must foresee the
aspirations of not only the present customer base,
but of prospective customers too. Infrequent
or sporadic modifications in the product/
ABOUT THE AUTHOR
service need not be successful when customers
V Jagannathrao
demand a comprehensive refinement and
is Assistant
Professor, Manipal user empowerment.
International Customer engagement must be incorporated as
University, Malaysia.
an antecedent to product or service development.
74 INDIAN MANAGEMENT MARCH 2017
Those manufacturing personalised devices
are confronting a community of self-directed
consumers. Hence, they have to adopt their
business process to empower/delight them.
Bibliography
Anonymous (n.d.a). BlackBerry Storm 9530 - User opinions and
reviews. Retrieved from GsmArena: http://www.gsmarena.com/
BlackBerry_ storm_9530-reviews-2540.php
Anonymous (n.d.b). BlackBerry Z10 - User opinions and
reviews. Retrieved from GsmArena: http://www.gsmarena.com/
BlackBerry _z10-reviews-5251.php
Anonymous (n.d.c). BlackBerry passport - User opinions and
reviews. Retrieved from GsmArena: http://www.gsmarena.com/
BlackBerry_ passport-reviews-6457.php
Anonymous (n.d.d). BlackBerry Prev. - User reviews. Retrieved
from PhoneArena: http://www.phonearena.com/phones/
BlackBerry-Priv_id9744/reviews
Barris, M. (2014). Mobile Marketer . Retrieved from Top 10 mobile
customer-engagement campaigns from the first half of 2014:
http://www.mobilemarketer.com/cms/news/strategy/18140.html
BGR. (2013, December 13). How we stopped communicating like
animals: Retrieved from http://bgr.com/2013/12/13/telephone-
timeline-a-brief-history-of-the-phone/
BlackBerry timeline: A look back at the tech companys history.
(2013, September 24). Retrieved from Global News: http://
globalnews.ca/news/860689/BlackBerry-timeline-a-look-back-
at-the-tech-companys-history/
Business Dictionary. (n.d.). Retrieved from Business dictionary.
com: http://www.businessdictionary.com/definition/brand.html
Friedman, T. L. (2005). The World is Flat: A Brief History of the
twenty-first Century. New York: Picador/Farrar, Straus and Groux.
Gustin, S. (2013, September 24). The fatal mistake that doomed
BlackBerry. Retrieved from http://business.time.com/2013/09/24/
the-fatal-mistake-that-doomed-BlackBerry/
Lai, E. (2014, December 15). 11 things wrong with the
BlackBerry passport. Retrieved from http://blogs.BlackBerry.
com/2014/12/11-things-wrong-with-the-BlackBerry-passport/
Moussi, A. (n.d.). Mini Case Study: The downfall of BlackBerry.
Retrieved from http://www.adaptivecycle.nl/images/Mini_case_
study_BlackBerry.pdf
Sashi, C. M. 2012. Customer engagement, buyer seller
relationship and social media.
Stone, B. (2007, April 19). Bereft of BlackBerrys, the Untethered
Make Do. The New York Times.
The Economist. (2012, January 14). Retrieved from http://www.
economist.com/node/21542796: http://www.economist.com/
node/21542796
Wilson, J. (2013, July 1). Why is branding important? Retrieved
http://www.strategynewmedia.com/why-is-branding-important
Wirtz, J., 2013. Managing brands and customer engagementin
online brand communities.
76 INDIAN MANAGEMENT MARCH 2017
Relationships are the building blocks of trust and transparency.
RAJENDRA P BHARTI, LAL BAHADUR SHASTRI INSTITUTE OF
MANAGEMENT CORPORATE
GOVERNANCE

Stakeholder
harmony
I
n 1974, while travelling in a train through
a border town between Bulgaria and
Serbia, NR Narayana Murthy was engaged
in a conversation in French with a young
woman and the talk drifted to how tough
it was to live in an Iron Curtain country.
Before too long, a few guards came along
and pulled them out. Murthy was dragged through
the platform into a small cell, where he spent the
next 72 hours without food or water. This incident
made him lose all sympathy for Communism,
and led him to take one of the biggest decisions
of his life. He made up his mind to become an
entrepreneur who would create thousands of
jobs for the then struggling Indian middle class.
He was transformed from a confused Leftist
into a determined, compassionate capitalist.
Murthy went on record stating that this incident
sowed in his mind the seeds of creating an Indian
multinational software company.
Infosys, the nearly R65,000 cr software company
employing 1,99,000 plus people, was co-founded
in 1981 by Murthy along with five enterprising
friends. For more than three decades, Infosys

INDIAN MANAGEMENT MARCH 2017 77

 Photos Courtesy Infosys
has been regarded as a beacon for corporate
governance excellence and internationally
acclaimed best management practices, and
has been a source of national pride for India.
Murthy, who could relate himself to the future
needs of society, envisioned this world-class
software company during the worst 72 hours of
his life.
Business enterprises are conceptualised from
the creative thoughts of those who evolve
futuristic framework of productive relationships
between growth ambitions of people and
emerging environmental symptoms.
Such leaders are institution builders
Murthy and his who envision through their quest
friends passionately to see relational paradigms that can
built a robust vision serve foreseeable future needs with
significant value. Envisioning is the
for their dream
continuous process of creating a
company. vision out of individuals dreams,
ambitions, and self-esteem, and
the spectrum of prospects and possibilities
appearing to emerge from the scanning of
environmental symptoms. Many people
perceive vision as a mere statement, which it
78 INDIAN MANAGEMENT MARCH 2017
is not. Vision is a sensitive driver of change. It
is a dynamic instrument that guides for long-
term socio-economic relevance and enables the
organisation succeed even in an unpredictable
future.
In this VUCA world, the instrument of vision
needs to be carefully developed and sharpened
frequently in response to the metamorphosis
in the external environment. Murthy and
his friends passionately built a robust vision
for their dream company. Drawing on the
dynamics of responsive relationships between its
stakeholders, over the decades, they relentlessly
strived to develop an ecosystem which can
support sustainable long journey of excellence.
Murthy, the iconic team leader who
spearheaded Infosys to create the highest
standards of corporate leadership, exhibited
(along with the other co-founders) exemplary
leadership wisdom when he decided to select
brilliant professionals to lead their company.
Such corporate wisdom was earlier portrayed
by the likes of the legendary JRD Tata and
Bill Gates, who passed on the reigns of their
companies, passionately created and nurtured

by them over decades, to corporate leaders with
impeccable track record.
When Dr Vishal Sikka was inducted to steer
Infosys into a relatively more challenging
future, Narayana Murthy welcomed him by
saying, I am pleased with the selection of Dr
Vishal Sikka as our new CEO. Vishal brings in
valuable experience as a leader of a large global
corporation. His illustrious track record and
value system make him an ideal choice to lead
Infosys. Infosys had earlier exhibited traits of
exemplary professional wisdom by creating the
role of non-executive chairman and by giving
this role to non-founder business leaders like
K V Kamath and R Seshasayee.
On one hand, when Narayana Murthy stepped
out of the corporate leadership and trusted
the selected professionals to
lead Infosys, he walked into
Passing on top leadership the expanse of enlightened
greatness where renunciation
roles to professionals is
of emotional urge to be
not an act of detachment, in consulting loops of all
but certainly a decision management decisions,
coming out of the spirit of becomes a pre-requisite. On
renunciation and strong the other hand, when such
transfers of leading powers
trust on professional take place for a brighter
competence and integrity tomorrow, the founders
of new incumbents. and new corporate leaders
enter into new dynamics
of relationships which have to become agile
with frequent compassionate communication
and experiences of trust. Such decisions
naturally involve fresh structuring of relational
responsibilities and a change in expectations
between the board and the founders, and
resultantly enhance corporate gravity if
ABOUT THE AUTHOR both sides appreciate the delicacies of the
Rajendra P Bharti relationships. Corporations work and succeed
is Director (CEO), on the strength of relationships.
Lal Bahadur
Shastri Institute The Infosys episode is a case of disregard
of Management, of the need to nurture relationships between
Bareilly.
promoters and professionals in such a
CORPORATE
GOVERNANCE
responsible way that, as expressed in the words
of William Clay Bill Ford Junior, the Executive
Chairman, Ford Motor Co., There are no
surprises for either side.
All great organisations have climbed the
ladder of greatness majorly because their
leaders ceaselessly caressed and innovatively
nurtured the relationships with shareholders,
customers, employees, regulators, and society
at large. Passing on top leadership roles to
professionals is not an act of detachment, but
certainly a decision coming out of the spirit of
renunciation and strong trust on professional
competence and integrity of new incumbents.
When we look for the reasons for what has
caused the dent on the image of the global IT
giant, respected for governance standards, there
emerges a clear case of evaporation of trust,
which in turn happened because all three sides
could not nurture the relationships. These
three are:
Founding promoters, represented by Murthy,
and large shareholders such as Mohandas Pai
and V Balakrishnan
Non-executive Chairman R Seshasayee
EO Dr Sikka
The context of the responsibilities of the above
three for nurturing relationship needs to
build on the governance philosophy of Infosys
which has following four pillars:
A trusteeship model wherein the management
is the trustee of the shareholders money
High degree of disclosures with total
transparency
Truthful communication about internal
management
Rising above regulatory requirements in
upholding corporate governance standards
Promoters and major shareholders
In case of the promoters and large shareholders,
their relationship with the board of directors
is that of patrons. JRD Tata, in an interview
published in Economic Times, had expressed the
INDIAN MANAGEMENT MARCH 2017 79

In India, a broader secret of his leadership in
framework of the role of one sentence: Select the best
people, care for them, and set
non-executive chairman them free. It requires great
(NEC) is evolving. emotional maturity and very
high level of wisdom to watch
the organisation, passionately built by you,
blossom under others. Change, if envisioned for
sustainable excellence, sometimes entails some
pain in controlling the emotional expressions,
particularly in public. The strength to enjoy
this pain comes from the appreciation of the
self initiated relationship of trust with the
professional CEO, who, in case of Infosys, has
expressed his intentions of radical changes
involving several disruptions. This relationship,
once bruised for faltering on either side, may
not only shake the confidence of investors but
can cause worries in the minds of clients also.
Though there arise questions of abnormal
80 INDIAN MANAGEMENT MARCH 2017
Shutterstock.com
salary hike for the CEO, inappropriate
severance package to the outgoing CFO, and
dismissal of the General Counsel, Murthy,
Mohandas Pai, and Balakrishnan might have
not seen enough logic in such uncommon
decisions but the relational responsibility of
founders and major shareholders warrants that
instead of talking to media, they should have
communicated with the Executive Chairman
and the CEO, looked into their logic with a
futuristic perspective, and tried to improve the
governance practices.
Non-executive chairman
In India, a broader framework of the role of
non-executive chairman (NEC) is evolving with
a good number of public sector undertakings
and private companies experimenting with its
effectiveness. This role is aimed at achieving
seven objectives:
 CORPORATE
GOVERNANCE

Mentoring the CEO
Facilitating an exclusive focus and full
concentration of the CEO on managing
the company
Passionately nurturing the boards relationship
with promoters and important stakeholders
Ensuring a responsible synergy between
organisational vision and decisions of the
board
Leading the directors for effective functioning
of board
Functioning as a procedural authority to
lead the board in unexpected and abnormal
situations, upholding the envisioned
governance standards,
Leading the board in the unforeseen
eventuality of CEO transition.
In a situation where the illustrious founders
have opted out of the management, maintaining
very warm and compassionate relations with
them, becomes a very important component of
the role of the NEC.
Clearly, thus, the success of the NEC majorly
depends on extraordinary abilities to nurture
relations amongst directors, with major
stakeholders and especially with the founders.
In the Infosys episode, it appears that the
responsibility to maintain compassionate relations
and frequent communication with founders
and major shareholders was inadvertently
compromised by the NEC, R Seshasayee.
The CEO
The CEO being the professional pilot of a
corporate entity can succeed only when he is
sensitively in touch with the switches, signals,
But how does he relate his role to the apparently
external, but actually integral, component
of environment which is made of feelings,
reactions, and feedback of founders and major
shareholders? At times, they may not appreciate
their relational responsibility and react out of
their emotional bondage with their leadership
traits, which had helped them in leading the
company, maybe in a different context of
strategic imperatives. But their importance in
terms of their expectations is higher since they
are the ones who created and built the company
from scratch to strength.
The CEO, therefore, has to have vibrancy
and compassion in his relation with promoters
and major stakeholders, particularly during
the transformation phase. The relationship
responsibility of the CEO calls for approaching
the founders to share the logic for decisions
which involve major shifts from the companys
norms and practices, even when due diligence
has been observed.
Statement of Ownership and Other Particulars as Required Under Rule 8
of the Registration of Newspaper (Central) Rules, 1956.
Title of newspaper : Indian Management
Periodicity of the publication : Monthly
Language in which it is published : English
Retail Selling price of the newspaper : R60/-
per copy
Place of publication : Spenta Multimedia Pvt. Ltd.
Peninsula Spenta, Mathuradas Mill
Compound, Lower Parel, Mumbai 400 013
Publishers name : Mr. Maneck Davar
Nationality : Indian
Address : Spenta Multimedia Pvt. Ltd
Peninsula Spenta, Mathuradas Mill Compound,
Lower Parel, Mumbai 400 013
Editors name : Mr. Maneck Davar
Nationality : Indian
Address : Spenta Multimedia Pvt. Ltd.
Peninsula Spenta, Mathuradas Mill Compound,
Lower Parel, Mumbai 400 013

and sensors. The steering and driving role, in Name and address
of individuals who
: Mr. Maneck Davar
Spenta Multimedia Pvt. Ltd.
case of a large global company, is very complex own the newspaper
and partners or
Peninsula Spenta
Mathuradas Mill Compound,
shareholders holding Lower Parel, Mumbai 400 013
and warrants the responsibility of taking care of more than 1 percent
of the total capital
interpretational ramifications and repercussions
I, Mr. Maneck Davar, hereby declare that the particulars given above are true to the best of
of communication deficits and deficiencies. my knowledge and belief.
Mr. Maneck Davar
Dr Sikka is well accepted across the board Mumbai
(sd/-)
and is loved by his team for his out-of-the-box Signature of Printer and
Publisher
thinking, accessibility, and disruptive innovation. Mumbai, March 2017

INDIAN MANAGEMENT MARCH 2017 81

82 INDIAN MANAGEMENT MARCH 2017
How innovation accounting contributes to financial growth.
NIBHRANT SHAH, THEMIS
Rethinking
accounting
I
nnovation accounting is a quantitative
approach that determines if our engine-
tuning efforts are paying off well. A
substitute for traditional accounting
measures, it is all about learning how
to grow an imperishable business. It
involves measuring and communicating
the true progress of innovation through financial
ratio analysis, cash flow analysis, and various
other concepts and enables not just startups
but also well-established companies to prove
objectively they are learning how to grow a
sustainable business. The idea is to foster critical
thinking skills, interpret more using technology
tools, reduce emphasis on memorisation,
encourage more analysis, and change the way
data is interpreted.
Innovation accounting helps you determine
your most profitable product or service, your
best customers in terms of sales, your fastest
and slowest growing product, and whether you
can afford to invest in a new product launch
FINANCE
or not. Lastly, innovation accounting helps you
learn what lies ahead for you, your business, and
your company in retrospect.
Why you need innovation accounting?
When we need to make decisions revolving
around our business, our brain comes under
constant pressure. This is all the more so today
where the world requires every industry and
business to give back to society and restore its
trust. We need to think in a specific direction in
order to make our business more transparent
as well as pay immense regard to the resources
we conserve or exploit and the social benefits
we produce or lose. Eventually, we need to
ensure that they are factored into the value of
the company and in turn into our day-to-day
management. Since implementing the above is
rather a radical transformation, we need to rely
on expert accountants and their advice.
It is easy and inevitable to assume that
your accountant has everything on track if
INDIAN MANAGEMENT MARCH 2017 83
Cash flow and profitability your business is flourishing.
are different concepts, However, most accountants
focus lies primarily on
though bearing some filling out statutory tax
relation. returns without tracking the
performance of the underlying
business. It is crucial for successful business
entrepreneurs to comprehensively understand
the cash flow, budgeting, fundraising, and other
fundamentals of the business. And, that is where
the concept of innovation accounting steps in.
There are two kinds of entrepreneurs
those who bring innovation into their business
models on a daily basis and those who stick to
traditional approach, perhaps because of the fear
of failure or hesitancy to experiment. Although
the former approach opens the door for a
wide range of possibilities for the company,
it comes with its own set of advantages and
disadvantages. The bottom line of using
innovation is how the entrepreneur and his team
manage the workings of the technique with a
careful yet professional perspective. Below are
some of the ways a company can undertake
effective innovation accounting.
Maintain cash-flow budget and track
cash flow
A cash flow projection, also known as a cash
flow budget, is a convenient way to manage
money for a business. The main purpose of a
cash flow budget is to track and project cash
inflows and outflows over a particular period of
time. Most businesses track their cash flow on a
monthly basis; daily or weekly cash projection
is quite uncommon. One of the key figures in
preparing it is your starting and ending cash
balance in hand.
Most companies often believe that a cash
flow statement will show the profitability of a
business or project, which is not true. Cash flow
and profitability are different concepts, though
84 INDIAN MANAGEMENT MARCH 2017
bearing some relation. A cash flow statement
presents cash inflows and cash outflows,
whereas profitability is the result of accrued
income and expenses. A cash flow statement
also reveals liquidity while an income statement
shows profitability.
It is of great importance since it explains
the changes in cash and offers insights into the
companys operating, investing, and financial
activities. Another merit of having the cash
flow statement is that it helps showcase the
companys ability to generate cash to meet
its short-term obligations; also, assessing the
overall review of the companys liquidity and
solvency position.
Cash flow is a crucial step to maintaining
any business, regardless of its parameters.
Without consistent cash flow a company,
large or small, cannot survive in the business
for long. Knowledge of managing budget and
tracking cash flow paves way for small business
owners to a larger and sustainable business.
Any discrepancy in cash flow could lead to the
downfall of a business, not profitability issues.
That is exactly the reason why companies can
report a positive income while actually having a
negative cash flow.
Understand valuation and fundraising
Valuation, in simple terms, is nothing but the
value of the company. It determines the share
of the company that is meant to be given to an
investor in exchange for money. At an early stage,
the value of a company remains close to zero, but
the valuation needs to be a lot higher than that.
Needless to say, having the right resources to
evaluate your companys value is very essential.
A company needs to have a justifiable valuation
for getting an investor. One way to urge an
investor to take interest in your company is by
creating a valuation report with all your numbers
in place. These numbers need to be updated

Possessing accurate regularly and should not be
reports is the key to delayed till the end of the
month, which might lead to an
fundraising and often inaccurate discounted cash flow.
these financial reports An entrepreneur is
reflect the companys required to be equipped
accounting standards. with basic business
knowledge, particularly the
companys revenue numbers.
Entrepreneurs who know their numbers have
an advantage over those who do not, since it is
the most important ingredient for long-term
success. The revenue numbers are a standard
for you to determine where you stand in your
respective industry and where you need to head
from there on.
When it comes to raising funds, entrepreneurs
are always confusedshould they establish
themselves first and then work towards raising
FINANCE
Shutterstock.com
money or vice-versa. However, fundraising is
not an easy job. Possessing accurate reports is
the key to fundraising and often these financial
reports reflect the companys accounting
standards. It has been observed that most startups
set an unrealistic amount and gradually lower
the numbers with realisation. This fact acts as
a ringing bell for entrepreneurs, so they start
considering and understanding the concept of
fundraising thoroughly. The numbers should be
backed by the financial and operational traction
achieved so far and those expected from a
pragmatic future budget.
It is a teamwork enforced by not just the
entrepreneur but also the investors to build a
sustainable business aimed at long term success
with considerable profit and respect for all relevant
stakeholders.While the entrepreneurs job is to
use the money judiciously to build a strong and
INDIAN MANAGEMENT MARCH 2017 85
 FINANCE
The business industry has efficient team and organisation
associated a form of fear which caters to market
relevant product/services, the
with an experimenting or investors job involves expert
innovative approach to and adequate mentoring of the
business. entrepreneurs, particularly
the beginners.The startup
ecosystem evolves only with active coordination
between the entrepreneurs, investors, employees,
and regulators.
Secure resource
Traditional budgeting process generally begins
around four months before the start of the
fiscal year. Departments including operating
divisions, business units, and others receive
budget packs that comprise forms which need
to be filled with forecasts of sales, profits, and
capital expenditure. The budget document is
finalised after the forecasts have been reviewed
and edited to the best at a senior level.
Although the operating divisions of most
established organisations are adept at using
political schemes to maximise their budgets,
they are aware of the fact that those budgets
are loose. They often acquire a large budget
to defend it against incursions from other
departments. The companys budget is estimated
from the P&L statement and the cash flow
analysis of the previous year. The overall budget
of a company essentially includes the cash
budget and the operating cash inflow, which
makes it crucial to keep these records in place.
Outsourcing
The business industry has associated a form
of fear with an experimenting or innovative
approach to business. Notably, it is more
economical and viable to outsource the
functions of the company to someone who is
well familiar with the vision of the company and
ABOUT THE AUTHOR
would take up the job. Outsourcing functions
Nibhrant Shah is like these take some responsibility and stress
founder, Themis.
off the companys shoulders, allowing the
86 INDIAN MANAGEMENT MARCH 2017
team to focus on the core competencies of
the business and areas which affect the success
of the company directly. A company with an
experienced outsourcing will also maintain the
confidentiality of client information and data
with a strict policy.
Technology also plays a role in the accounting
sphere, these days. Though, many companies are
not completely aware of all the applications and
even if they are the high expense factor blocks
the technology options for them. Again here,
outsourcing steps in to be a convenient option.
Although, keeping track of constant changes in
accounting rules is not easy for any company, an
outsourcing company would keep track of all
the changes and implement them accordingly.
This ensures that the client company is and
will remain in the positive face of the financial
market regulators.
Head for professional help
Frankly, being at the top of a business hierarchy
has both its pros and consthe responsibilities,
stakes, management, etc. And as a business
grows, accounting and finance becomes
increasingly complex and difficult to manage. It
makes absolute sense to seek a professional to
run and handle this aspect of your business on
your behalf.
It is important that your service provider
imparts you with the relevant business basics,
making decision making simpler and gainful. It
must be quite evident by now, how innovation
accounting helps entrepreneurs save time,
increase their productivity, build their empire,
and eventually grow to financial success. At
Themis, our core value as a company is to help
entrepreneurs grow their business by handling
these key operations for them. And the lesson
we have learnt from working with over 450
companies across India is: it is imperative for
entrepreneurs to focus on growing their core
business and letting professionals take over the
non-core activities.
A strategic approach towards recognition will go a long way in boosting employee
engagement.
MANOJ AGARWAL, XOXODAY
The right reward
A
ccording to a 2016 research
on talent management
conducted by the Deloitte
in India, the IT and the
ITeS sectors witnessed an
average attrition rate of
22% during FY 2015-16
and 21% during FY 2014-15. These rates are
alarming and the scenario is not very different
in other industries. Hence, it is imperative to
develop, nurture, engage, and retain talent is
gaining prominence.
Rewards and recognition (RnR) form a
significant component of any organisations
strategy. A properly designed RnR plan includes
appreciating your employees for their hard
work and performance. Motivated employees
are more likely to stay engaged with their
organisations and work for a longer period
of time.
The right kind of RnR is vital in keeping
employees motivated and committed, and
organisations are looking towards adopting
fresh and innovative practices to reward and
recognise their employees. We look at some
new approaches and technologies adopted by
startups as well as large enterprises to engage
better with employees.
HR
Experiences: setting a new trend
Modern workforce in the corporate arena is
multi-generational, comprising Gen X, the Gen
Y, millennials and now the Gen Z as the newest
entrant. When any organisation talks of RnR,
it needs to ensure it caters to the needs of a
plethora of employees reflecting diversity of
ideas and opinions. Employees of the modern
era want to invest their time doing activities that
cater to their passion and interests. In the form
of rewards, they want to avail such experiences
that bring them a bouquet of cherishable
memories. They prefer experiences over
tangible assets and freedom over stereotypes.
New approaches by HR startups in the
rewards space are designed to cater to
these evolving expectations. Xoxoday is
an organisation that provides experiences,
activities, vouchers, and RnR solutions
to corporates, worldwide. It has curated
and packaged experiences for people and
organisations to avail by adopting a fresh
approach to aggregate last mile experiences
and activities. Anyone as an individual or a
venture owner can host an experience for guests
(experience seekers) and Xoxoday makes these
experiences available for them to explore and
book on the go.
INDIAN MANAGEMENT MARCH 2017 87
 HR

Organisations that Enterprises can use these
adopt such a strategic experiences for employee and
client rewards. Packaged in
gamification of RnR are beautiful keepsake boxes, the
quite likely to experience experiences become a unique
increased employee fit for special occasions like
interaction and mutual long service anniversaries, spot
awards, personal occasions of
appreciation.
employees such as wedding,
birthday, anniversary, etc. In
order to impart a personalised touch to rewards
and engage employees, Xoxoday has leveraged
technology to build a gamified, cloud-based
SaaS (Software-as-a-Service) platform. This
software has been designed to manage the total
rewards (TR) programme of organisations.
Some companies that have started using
gamification and experiences as a part of their
rewards programme are Accenture, Infosys,
Adobe, and Microsoft, and startups such as Ola,
Furlenco, and Snapdeal.
Leveraging technology
When RnR meets streamlining and automation,
organisations benefit not just by rewarding
unique gifts to employees, but also by ensuring
that their total reward (TR) programmes are
well managed and executed. A good RnR
platform facilitates a transparent reward
points system. These points can be instantly
redeemed by employees against experiences,
vouchers, or activities. Another feature of such
a platform is that it is scalable and flexible, and
can be customised as per the companys vision,
objectives, structure, and culture.
Organisations that adopt such a strategic
gamification of RnR are quite likely to
experience increased employee interaction and
mutual appreciation. Through the technology
platform, they can showcase their top
and deploy people analytics to ensure their
employees stay happy and productive. Last but
not least, companies can save on taxes with their
innovatively designed rewards programmes
and can easily integrate the platform with their
existing human resource management systems
(HRMS).
According to a 2016 global research
conducted by the AON Group, rewards and
recognition features among the top three
employee engagement drivers, along with
enabling infrastructure and EVP (employee
value proposition). Rewards and recognition
also showed the largest positive dimension
increase on an annual basis, indicating that
organisations are taking their RnR more
seriously than before.
It will be fair to say that the corporate
concept of rewards and recognition is evolving
fast. Employees are welcoming new approaches
to RnR comprising innovative reward methods
such as gamification and reward means such
as experiences and vouchers. They are also
engaging themselves more with the newer
reward technologies that are being adopted by
their organisations.
Shutterstock.com

ABOUT THE AUTHOR performers on a live leaderboard. Employees

Manoj Agarwal can redeem experiences and activities of
is Co-Founder, their choice and imbibe learnings from them.
Xoxoday.
Organisations can monitor their reward spend

INDIAN MANAGEMENT MARCH 2017 89

 Top-of-the-line management ideas...

i n d i a n
m a n a g e m e n t
i n d i a n
FEBRUARY 2017 VO L U M E 5 6 I S S U E 2 PAG E S 9 2 r60

m a n a g e m e n t

MARKETING
i n d i a n

JANUARY 2017 VO L U M E 5 6 I S S U E 1 PAG E S 9 2 r60

m a n a g e m e n t

DECEMBER 2016 VO L U M E 5 5 I S S U E 12 PaG E S 1 0 8 r100

IN EMERGING
ECONOMIES
MARKETING IN EMERGING MARKETS
Dr JagDish sheth
Morgen Witzel
sanDeep Kapur
narasiMha rao
Dr abhisheK nirJar
SUccESSION PLANNING

SPOTLIGHT
B S C h O O L E D U C at I O n

The fasT Track BUDGET

for growTh 2017
spenta multimedia-mars
survey of indian bschools 2016

reforming
bschooln
VO L U M E 5 6 I S S U E 1 J A N UA RY 2 0 1 7

VO L U M E 5 6 I S S U E 2 F E B R UA RY 2 0 1 7
VOLUME 55 ISSUE 12 DECEMBER 2016

educatio
and nupur pavan Bang

DR JAGDISH SHETH DR RAHUL SINGH PROFESSOR PIYUSH SHARMA

Emory University Birla Institute of Curtin University
Management Technology

At a price that protects your bottom line

Get upto 45% discount on Indian Management. Global ideas and insights. Latest trends, opinion
and practices. Innovative thinking from international gurus. In-depth case studies and more.
Backed by the prestigious All India Management Association, its what leaders in India read to
succeed. Hurry, limited period offer. Send in the coupon below today.

I WANT TO SUBSCRIBE TO INDIAN MANAGEMENT... HERES MY ORDER!

Please fill in CAPITAL LETTERS and mail with your subscription cheque (add Rs. 50/- for outstation cheques) to: The Subscription Manager, Spenta Multimedia Pvt Ltd.,
Peninsula Spenta, 2nd Floor, Mathuradas Mill Compound, N M Joshi Marg, Lower Parel (West), Mumbai 400 013.
Tel 022 - 24811010. Email: subscription@spentamultimedia.com

Spenta Multimedia Private Limited. (Please ensure DD is payable in Mumbai.)

Terms & Conditions: Rates & offer are valid in India only, and for limited period. Offer closing will be announced by Spenta Multimedia Pvt Ltd. Kindly allow 30 days for delivery of first subscription copy. Spenta Multimedia
Pvt Ltd reserves all right to extend, cancel or discontinue the offer or any part thereof without giving any reason or prior notice. Details of same will however be published later in Indian Management. Disputes, if any, will
be subject to exclusive jurisdiction of competent courts in Mumbai only. Terms & conditions are subject to change from time to time. Subscription copies will be delivered by ordinary post as soon as issue is released in
marketplace. Spenta Multimedia Pvt Ltd is not responsible for postal delay, transit loss or mutilation of copies. Offer is non-refundable and cannot be combined with any other offer.
92