Drawing room politics and the impact of apathy on business

There are many beautiful things about Pakistan including the fact that we are the largest group of conspiracy theorists or, so lost for direction, that the national past time is an ongoing debate as to what will happen next.

Tragically, when most should be worried about internal politics and its correlation to industrial, commercial and financial growth, we are busy debating if Trump will be good or bad for Pakistan.

Yes so typical lets find some one else and blame all our problems on them or as a consequence of their actions, but the finger pointing should start at home; look outside, the filth in the average middle class neighborhood, look to the skies, the poles carrying power/telephone and or other misc un-licensed cables. The web of their complexity displays the chaos and indifference in our social fiber.

We haven’t been able to streamline how to run wires between poles in 50 years, we haven’t figured out if where we live also doubles as garbage dump, 2 degrees north of our main gates. Look at the guy(s) coming in the opposing direction to the drivers right of way, look to the line up in a bank. You know what; look even closer at the line or the lack their off, at break time at any canteen at any school.

The elite are spending $ & £ to send their kids to private schools, yet none have taken out the time to see where our civic sensibilities are, especially in those formative years. We are too busy discussing all the shit we shouldn’t and none of what we should. Same parents would end up at coffee mornings debating how badly the system is broken, yet contribute nothing to its regeneration.

Our commercial reality is that to this date we do not produce indigenously, be it automobile engines, be it PCBs, we do not produce any thing at scale, we have no national computer or semiconductor production company, we have not a single 1$Bn tech company, let alone companies that are legitimately in the $B club, barring a few exceptions. We can debate how dada jis tax free money result in the creating of that empire to begin with.

We have no large institutional players doing any ecosystem building for industry, tech, education i.e growth hacking. We have empires built around 1st/2nd generation saiths, their children typically neither have the inclination or the ability to sustain this pipe dream beyond their own generation.

We would rather debate nightly and daily will our COAS have his term extended, is he about to become a Field Marshal, who is in or out of prison, what will happen to the accountability of a sitting prime mister viz a vi his family’s alleged involvement in only the biggest scam exposed ever.Where’s Musharraf, more importantly what is Zardari thinking, what will happen to MQM. Day in and Day out, the national debate cant rise beyond this garbage.

In a country boasting youth to be at 60% as a subset of the total population we cant find a Governor under 70 for the largest economic and tax contributing province. How can some one govern a populace where the representatives chosen to lead them have nothing in common.

A place where the reps of the judiciary come out and say the point man has no social profiles and does not use any social media, because some one was using a fake profile under their name. Clearly we have bigger issues at hand than making public statements about this stuff. “Az Khud Notice” is the proverbial cluster f** of this generation. If some one were to analyze how many of these were initiated and their outcome, they’d need a full time staffer to analyze what I can tell them now, ZERO.

The stack, breed, pedigree of politicians we have, make Trump not from a lesser child but the son of a saint. Surely we didn’t not elect these morons, I for one have not, they do not represent me, I did not ask for a guy who opens or used to open briefings by saying “skoority(security)” I did not ask for men and women fighting out the agendas of their shitty political establishments on air. I am sick of the pundits and spin doctors who nightly predict this or that, a cursory glance says that all the pundits predict both sides of the coin and then side with which ever holds true. We as a nation clearly deserve this, due to the lack of calling a spade a spade, due to the lack of us giving a damn and due to our combined apathy.

Minus China not much is going on, we are in the circle of life that says

  • Find a bad guy party- give the population some thing to be busy about(this is called eating the mind share)
  • Make incumbents shaky so there is noise all over
  • Appoint ministers who my best guess says wouldn’t last 2 rounds of the popular TV show “are you a smarter than a 5th grader”
  • Rinse , repeat every day, till you die

China Is coming, China is coming, that may not be a bad thing, but what have we done to make sure our national interests are safeguarded, our jobs and money are not exported, what have we done to make sure there is transfer of knowledge and we up skill our workforce, where is the public discourse on routes, investments, growth plans, land acquisition disclosures and foreign policy changes to ensure mutual growth. Just yesterday we saw profiteering on the back of knowing where the routes will be and people having acquired wholesale land in those areas prior to the announcement.

We are growing in spite of all of this, not because of any of this, we are growing because in chaos there is opportunity. But we are being victimized by brain dain, people giving up- are victimizing us, we are victimized by the average persons in-ability to:

  • get credit
  • get respect in line at a bank or any public service
  • get fair compensation for our work
  • get professional counseling and direction to grow professionally
  • get social security
  • get free health care
  • get free education
  • get skills or training for basic sustenance

There are little to no Unicorns coming from the tech sector who will lift the fate of the country. I say this, not because I do not believe in our ability to innovate, I say this because of what we are using the technical revolution for

  • forwarding memes on whatsapp as a national past time
  • political and religious discourse on various groups on social media and then hating the other point of view
  • the consumption of content on youtube, based on the now trending button (cant even mention what it is, go look)*per capita we consume more video than India.

When was the last time you got a forwarded message from the MIT open courseware session, when was the last time some one shared any thing worthy of a share that was not in the political satire space or a joke.

We are a reflection of what gets shared. Religious intolerance, the gross categorization of the conspiracy of the E number in all processed foods being haram. I could go on, what we don’t see is people organizing focus groups to discuss pressing business issues, what we don’t see are youth organizing to discuss community action plans.

What we do see is the mental spacing out of kids, meeting virtually whilst ignoring reality and living in their bubble, I call these kids the helmet babies, they are so encapsulated within their helmets they cant bear being without them.

Lo and behold the Panoptican, a Panopticon is a type of institutional building designed by the English philosopher and social theorist Jeremy Bentham in the late 18th century. The concept of the design is to allow all (pan-) inmates of an institution to be observed (-opticon) by a single watchman without the inmates being able to tell whether or not they are being watched. Although it is physically impossible for the single watchman to observe all cells at once, the fact that the inmates cannot know when they are being watched means that all inmates must act as though they are watched at all times, effectively controlling their own behavior constantly.

Modern day version of this for our youth is the Cell phone, whilst it can also be used to build the Unicorns like Uber and AirBnB our take is slightly different we are busy waiting for likes on our mindless shares and being the first guy to find a shitty viral video in our social circle.

Long term impact of this on business will be a completely disconnected middle class; and when they grow up, under skilled, mis-guided, of no genuine service to them selves and to our great nation, but perpetually in waiting for the Army, US, Politicians , everybody besides them selves to do some thing so that our passport doesn’t need a visa to get global access.

 

 

Why Should I have to go to Dubai or Doha or Colombo or Bangkok?

(A follow up post to my earlier post on Pan AM 73)

29 Years and 10 months or 10896 Days after Pan AM 73 (Sept 5th 1986) was high jacked in Pakistan, roughly 3 decades later we still haven’t been able to recover from our loss. We can sum it all up in with these letters: AP-BCD. That is the registration number of a Boeing 737, which PIA leased to Emirates in 1985 a year prior to this highjacking, to start its operations.

Sadly, 3 decades on, PIA was till recently still flying it, struggling to fund a replacement, while the Dubai-based carrier has built one of the most modern fleets in the world. We must not blame them for their success but must retrospectively look at our over all ineptitude and failing political and economic position

This post has little to do with PIA but a lot to do with how others have capitalized from our initial victories and the early achievements our forefathers who had fought hard to put structure, growth, ambition and results in place.

Clearly due to their foresight and due to a sense of nation building they did what they had to do. Where as today every facet of society is impacted by the general apathy that is prevailing every where we look. Its easy to blame politicians its easier to blame men in uniform, but the real culprits are the average people who let the ruling elite get away with putting us in this hole.

If I want to go anywhere or do any kind of trade or be even marginally competitive I’m stumped at the beginning of that conversation because my initial cost of doing business or travel is higher than most if not every one else in the region. Plus the exchequer is loosing direct and indirect revenue and taxes, had most airlines stayed in Pakistan or had PIA not discontinued its services to majority of the destinations it flew directly to in the past.

Here’s a glimpse at the sad truth,  we have lost Cathay, Malaysian, Singapore, Swiss, Al-Italia, Japan Airline, Air France, Lufthansa , KLM and British Airways, I am sure there were others that I don’t know about missing from this list.

International Travel has gone up by 11% roughly by CAA estimates(2013/14), but the serviceability from PIA and global players is on the decline.

The domestic situation isn’t any prettier: whilst the  IATA (International Air Transport Association) forecasts Pakistan domestic air travel will grow at least 9.5% per year, more than 2X faster than the world average annual growth rate of 4.1% over the next 20 years. Keeping that in mind domestic travel options are equally non-existent but the needs continues to grow.

However despite growth in traffic domestically and internationally, the number of international airlines has drastically been reduced and the direct services of PIA have also been clipped. So its about time the powers be fixed PIA or sold it or at least made it more competitive?

(https://en.wikipedia.org/wiki/Pakistan_International_Airlines_destinations to get an idea of the terminated air routes)

As a consumer why should I have to travel in an opposing direction first to the GCC and then onwards or add hours to my travel time, if I actually want to fly to say Nepal or Tokyo.

Similarly why should I have to go to Colombo if I want to go China or India. Direct flights options being next to non existent we are forced to fly to the global hub of our limited partners. They are definitely exploiting this, if we had more carriers, this would benefit the end consumer and would allow for more trade and cross cultural exchanges. (Given our current geo political and socio religious stances perhaps the question is, if any one would really come to Pakistan for tourism? Perhaps that is an other post all together)

Similarly in the past We, the consumer had the option to break journey in Europe with either a large buffet of PIA services or other European carriers. Today both on pricing and level of treatment Emirates and Etihad do not consider the PK-GCC-PK route as tier one, we are forced to pay non competitive rates due to a near monopolistic control, yet tier one service is only reserved for “Caucasians” “Westerners” as determined by visual queues gathered by all the GCC players and their staff. Saudi Airlines being the exception as they are “douches” to pretty much every one regardless of creed. They should be given a history lesson on the help received from the SSG Commandoes in 1979. Perhaps their long term memory loss will be jogged then.

Simple example of what happens on this route, Airlines serve doggy bags instead of real in-flight meals citing not adequate travel time, further the planes on both Emirates and Etihad from Karachi at least, more times than none don’t dock with the terminal they are parked away from the terminal and we are treated to stairs and a bus ride once in the GCC. At the very least services should be reciprocated as both airlines dock at KHI.

On other similar time frame flights originating from Dubai or Abu Dhabi the doggy bag argument doesn’t hold, nor does the less than decent treatment. We are special like that, we teach people how to fish and they take the pole from us and use us as bait.

We are becoming more and more inaccessible as a country and as a people, as our religious right drives us to further isolation our political and state machinery and their ineptitude will drive us to economic isolation.

The question is, why hasn’t any one given 2 cents about this phenomenon? Clearly its been 30 years in the making. The issue really is that the 1% who continue to influence these decisions are the same 1% who travel First and Business class, so they aren’t impacted by the common man or the average Pakistani laborers plight when he gets treated inappropriately because they will get off in Dubai and make their connection to their next vacation stop, using Marhaba services. There is Zero impact to their lives. Actually they prefer not being associated with the “other class” of Pakistanis onboard.

So its not just only about air lines and flight options its about how we are widening the divide by not caring. Its about time some one cared enough and figured out a way by bringing back some of the international airlines and worked on a strategy to fix our own broken down infrastructure. We must demand that, of our government at the very least. That a good idea, but we will have to take a flight to have that demand heard.

Clearly since more than half the political machinery is in England for Eid, it may be a good option to perhaps to utilize PIAs still functioning flight and shed light on this cause, before PIA stops flying to London too.

If Tendulkar ran CNN : The State of Media in Pakistan (Cliff notes version)

I profess, I know nothing about Cricket and I am sure Tendulkar will say the same about running an enterprise, for arguments sake CNN. There is a crisis of professional leadership within the realms of Media enterprises in Pakistan. It is any thing but professional and not aligned with strategic growth objectives of the people employed within.

When Genworth Financial broke off from GE, their Ad Campaigns spoke about heritage and legacy. Its worth a watch.

Where is the heritage in our media industries lineage; where the entry point and dominant factor in starting up, is not really being a startup it is actually the anti thesis of a startup. The lineage is that of running mills, being in the tobacco and ghee trade along with being gold smiths (not to be confused with Imran Khans, children’s Gold Smith lineage). Nowhere else in the world can I draw parallels to this sort of lineage in this sector. Alas I digress.

Lineage does matter, because if you come from the “trades” you treat your people like you would treat blue collared individuals. It is a departure from how you would treat white collar and professional managers. The death of this industry will be due to the slow paced nature of the people at the helm and the unrelenting desire to not change and professionalize the culture and the setup of the industry. With the reach that Media now has in Pakistan, if some one tactfully connected the dots, between digital, social , print and electronic- clearly their dominance would be felt further than the shores of Pakistan alone.

This industry is not concerned with building talent, where the old guard is dominant (refer to earlier article on the Old Guard) and where the pursuit of profits comes before the pursuit of professionalism and in many ways ethics, accountability and commitment to the work force employed within.

Nothing has changed since these Media groups propped up and nothing is destined to change unless the people who work here demand their rights and the audiences they cater to also hold the enterprises accountable.

It’s a classic problem “don’t fix what is not broken”, from the Media enterprise owners perspective, their “boss” is the “audience” the audience has an unrelenting thirst for consuming “marginal” to “sub-par” content.

You guessed it, these Media outfits specialize in churning that stuff out, hence when their ad-revenues don’t take a hit, they continue with the way they build their organizations and how they scale, with 0 regard for professionalism and sustained growth for the pillars who run the business. The 100s, if not thousands of people employed in the profession are marginalized every day. They fear that today they are employed and thanks to the post Musharraf era where these Media enterprises grew out off , they are happy to be employed. Given the balance of power being in-equal, these employees are left with no option but to work in a grossly non professional, dis organized environment.

The opportunity is ripe for the taking, for a singular or multiple individuals who can change this balance of power, who focus on building consummate business professionals and re distribute the wealth generated from the media ecosystem. All we need is a true, disruptive startup with access to capital that by virtue of its treatment of its employees and holistic content can capture the hearts and minds of the audiences.

The barriers to cost based entry may be high, but barrier to distribution and access is minimal if done right. Hopefully some true, smart entrepreneur sees the opportunity and sizes it. It would impact the lives of thousands of people who for once are in dire need of that change. Perhaps some one from within the industry also sees the need of the hour and takes a leap of faith and starts to believe in Karma.

Vertical Growth by Horizontal Partnerships

“Real generosity towards the future lies in giving all to the present.” ― Albert Camus, Notebooks 1935-1942

No one exemplifies this trait better than two brands who have seemingly taken the market by storm over night. It takes a lot to be an over night success. Both Meat One and Day Fresh have gotten the formula right. Looking at our demographics and subsequently our culture and cuisine trends in relation to true demand problems, these two have slotted them selves in to being on the supply side of that demand side problem.

What makes this even more interesting is that in Milk segment Engro Foods, tried its hand in a one year experiment with a large budget and 20 odd stores and failed. Both on the uptake of the service and market acceptability. The franchise model didn’t work out for them and they concluded the experiment having spent half of the allocated funds and graciously bowing out of a space dominated by the local player Dairyland . Some times its not a matter of scale or being in the business already its about execution and a well thought out strategy.

So whats next for Dairyland and MeatOne, in an ideal world one would like to think beyond individual companies and dynamics and look to build synergies. To that end a natural distribution point for Dairylands product would be at MeatOne and it would help drive foot traffic which would increase same store sales for MeatOne.

But some one has to take the imitative to review such corporate partnerships and alignment. It also builds a strategic barrier to entry to other Meat or Dairy players who would then think twice about entering the market as they wouldn’t be competing with one strong brand but two and both the incumbent players would have a larger safety net when a new competitor tries to enter.With other large local and foreign conglomerates planning to enter both dairy and meat markets it would be a very interesting mix if these to got together to come up with same store concepts.

With ICI now ironing out the details on a tie up with Unibrands to market the Japanese infant milk brand Morinaga, the writing is on the wall for people to tap in to the milk nutrition market space.In the Meat section there is no substantive information yet but both Engro and ICI are rumored to be exploring these segments, which tells a telling tale around the potential and market size. There are a dozen if not more mid sized, traditionally export oriented brands that are looking to solve the puzzle of cold chain, logistics, distribution and building consumer brands. Much like Meat One did.

Given our shopping habits and an emphasis on fresh consumables, but given the time/traffic and other pressures of not being able to go out to the corner store daily, A multi concept food store that has Milk, Meat, Produce and Bread could be the next retailing phenomenon in the local urban/metro space.

If some one were to build a store footprint that would cater to the consumers basic needs they would most certainly create a new market entry point for them selves, their brand and distribution channels. The market has already shown that people are willing to pay a slight premium for hygienically produced and packaged products in the dairy and meat space, the likes of Hyperstar have proven the same for fruits and vegetables, fresh baked goods at middle market bakeries also prove the concept of paying a premium for a healthier preparation of the same product. The combination of all four should result in an ideal mix for a new relating concept.

These items already exist today but in their own distribution channels if there were horizontal partnerships in the space, the vertical gains would essentially give the non-branded, lower end of the spectrum and traditional producers a tough time. Its time for Pakistani companies to look beyond the obvious and explore avenues that increase their footprint and share holder value.

 

 

 

Mind The Gap – Khaadi –

Gap Inc was the formidable US clothing retailer that was always relevant and wildly popular. It literally came from no where and then grew to having Banana Republic on the high end of the spectrum and Old Navy on the lower end. But some where in the middle it lost its own brand identity and it became too vanilla in a category it had created it self. Where others were giving it a run for its money on its own turf, it was a crisis of confidence, leadership and missteps.

We have our own, perhaps even better version of the Gap success story. Khaadi. It is the one brand that has done every thing right, from customer service, to designs, to branding, to placement to creating its own niche and beyond. But the question is what happens next? 2015 is very different from 1998, staying fresh over a 17 year run is not an easy task for any business, let alone fashion retail. Khaadi has to be commended for what it has done so far.

2014 saw it expand to online a few years after its expansion to the Middle East, Malaysia and the UK. Compared to other retailers, Khaadi has had a decent plan every time when it came to expansion but at a global e-tailing or retailing level there are some things that are strikingly familiar to Gap. Lets start with the Malaysian expansion, the target market there cant possibly be Pakistanis or South Asians alone, just by pure numbers it wouldn’t make sense. What would make sense is to target the local Malay population. They frankly don’t know what Khaadi means or represents.

What they do know is social engagement , their love for trendy clothes and bright colors(even the men). No less Khaadi does not have a Bhasa Malay media campaign. Id caution on taking the billboard and tv engagement space. Malays are pretty digitally plugged in, so a social media campaign or two targeting engagement and brand development would have most certainly helped. Khaadi is too big now to not think about these strategic missteps and it puts it in a similar space like Gap should it continue to not address these items.

Then we have the online store, a great leap into international retail without the physical footprint. But to be a serious player and to beat the “aunties” who are buying Khaadi product from Pakistan and stuffing suitcases and taking them to the US to retail or sell to friends or family, Khaadi has to re evaluate its supply chain, production, fulfillment and delivery logistics. Else it will be beat on price on its own goods locally procured and hand carried to the US and beyond.The first thing that has to change is the online experience. It is harrowingly slow, the site needs to be updated to a proper e-commerce portal with multi currency and multi location shipping. The site just doesn’t need a refresh but instead needs the Khaadi touch to make the experience special like the brand it self. The potential of the e-commerce store at some point would outweigh the sales volumes and FX earnings if executed properly.

That has nothing to do with Khaadis core business, which is to manufacture top quality product. Here in lies the problem similar to GAP, reach out and get the help you need as opposed to trying to do every thing in house or based on the advice of people you know.Its time to get professional advice. At a globally competitive level. Not at a mom and pop shop level where by having COD in Pakistan and shipping enabled to USA you start to think you are the best thing since slice bread. The shipping and checkout process is short of horrible. Khaadi needs to emulate its in store service equivalent to remain relevant. Enough said.

You have the potential, but you aren’t there yet. Its easy, you pay for what you get. In Khaadis case it has the cash to fund this growth. The question is, does it have the foresight and willingness to not die in an industry that it created, the signs are there, it needs a product reboot along with an online reboot. It has to innovate to stay relevant and grow. It would be interesting to see its in store year or year growth ratios.

Then we have the Khaadi Home and Khaadi Khas and Khaadi Kids phenomenon? Any one see similarities to GAP yet? Khaadi is a niche player that needs to go wider and deeper in its expansion strategy, just like Max out of the UAE. A home grown “value fashion brand” that has over 1.2bn$ in Sales and eyeing 3bn$ soon. Now that is ambition, fueled by growth, a stellar management team and not an army of one. They are focused, albeit their niche is a little different but they are doing all the things they need to do to stay on track.

Khaadi in its purest form is limited by the ability of its CEO/Entrepreneur/Chairman at large to wear many hats. The same person that brought it this far. That’s where a Senior global management team comes in to play to go beyond the current state. The CEO should have the wherewithal to see the shape of things to come and realize that he has done an exemplary job in building one of the smartest, well managed, high growth brands in the country. But to play at a global level, re-define the niche and build distribution and logistics capabilities along with production uplift, he needs to now move up to the big boys table. Commit financially, mentally and in principle to lead the charge to make Khaadi into Pakistan’s true first Billion-dollar brand. This can be achieved with focus on the brand it self and not diversions and distractions into other ventures just because you are cash rich.

Stay true to the core before diversification in to other lines of business. Khaadi has had an admirable and phenomenal journey; it can go further but only with the right strategic outlook and plan. The mix is good, but the leadership beyond the founder is questionable for a global expansion charge, that fuels growth 50X from where it is today.

| Performance Shading | the art of self-serving KPIs

KPIs(key performance indicators) in the broader context of the enterprise and in providing color to ones output are a great tool. Every major corporation around the globe has some form of KPIs, they have been around for centuries in one form or an other. The age old saying, “you can’t improve it, if you cant measure it” resonates with pretty much every one. So if we have established that performance management/ KPIs etc are good for business, then what’s the issue?

That in it self is the issue, namely the blind or sole reliance on KPIs , metrics, performance score cards without understanding the nuances of measurement it self. Here’s an interesting story that revolves around a decade of interacting with mid-to-senior level executives, who are potentially 2 degrees removed from the operative management teams of large scale enterprises that rely on these systems. This crowd to me, are in the business of executing busy work, work that is being created to measure only the things they feel are worthy of measurement, as those are the only things they can influence towards positive improvement.

So there are essentially entire groups of people, within enterprises we know and cherish around us, that essentially have people employed for the sole purpose of doing busy work; then representing it as a key input to the over all process of the organization and generating miles of score cards and performance charts around their accomplishments. At the risk of sounding inept or inefficient, leaders don’t cross question this type of output.

In my experience any one who takes more than four sentences to describe what they do and how it impacts the bottom line, basically has no input to the bottom line. Either their loyalty/perseverance or tenure has allowed them to essentially build a fort around them selves and lock themselves in. With only them knowing what they do all the time whilst creating the illusion of commitment and high-end performance.

As you peel the onion you find out, that all there is to this story is much the same, that it has not changed over the course of time, but these “performance shaders” have become so skilled at maneuvering the corporate culture & the organizational dynamics and have almost developed an instinct to shade reality by hiding behind meaningless numbers, charts and score cards. That is a susbtantial problem.

Elsewhere in the civilized business world, this sort of inefficiency is eventually caught and a course correction ensured. The reason why I am almost spell bound by incompetence around the enterprises I see domestically is two fold. Performance management is a skill, like a sous chef that needs practice, training and years of learning to master. But in our enterprises a course in “TQM”, “Franklin Covey-Modules” , “presentation skills”, “time management” etc all count towards the holy grail of a consummate HR/learning management professional. We have not equipped our functional leaders within the talent management space to either have the breadth or depth of exposure required to manage, grow and groom talent. At best we follow archaic systems. The CEOs and leaders of the organizations go to impressive foreign courses, they attend executive work shops, but two tiers below them the idea of learning and development revolves around buying software to execute a learning management or a performance management system- at best.

Secondly we have a culture of life time employment. Perhaps some of our societal needs govern that, but to be globally competitive we have to draw fresh blood into the system. Instead, we bring in fresh blood, which gets tainted an old color by the old guard that is still calling the shots. The old guard has to be counseled out of these enterprises. An enterprise by definition is not a charity, if that is the reason for employing some of these folks, then enterprises should do the next best and noble thing and setup charitable alternate workforce development opportunities much like the “many faces of the an organization whose ex-employees proudly display the coveted (R) in front of their names post retirement and go on to pretty well for them selves”.

The other cultural norm is the “scarcity” of the CEO/executive leadership and their interaction across the organization. This creates a temperature difference, much like on your windshield on a humid evening, you may perceive to imagine what the environment outside looks like even with the mist on the windshield, based on your own experiences having driven past a particular point every day for the last many years, but the reality could be much different on a particular evening. Using only intuition in most cases the CEOs perception may be far from reality, thus giving a false sense of what needs to be done. This is a classic example of being asleep at the wheel. The CEO may expect some thing, which the performance shaders are well equipped to masquerade when called upon. The CEO gets a fall sense of security in knowing that his people are closely looking at numbers and measuring things. Whats amiss in this equation, is the inability of the CEO to challenge what’s being measured and why.

Recently a group of very senior and talented external HR / Performance Management consultants (albeit not Sahabs by any stretch of the imagination)  in Pakistan were discussing some of their large scale projects. (Past projects for my benefit-without names for obvious reasons of discretion).

The central theme that emerged was, that like society at large, the corporate fabric of performance is also shaded, just like we shade the truth in our every day interactions, corporations are no different. For professional organizations, the typical life of an outside CEO is three years, hence they only tend to focus on short to medium term gains, they didn’t join the organization to be a hero, so they don’t ask the difficult questions. In the domestic “saith based” organizations, it is an implied rule that there is and can be no one smarter than the owner operator, who much like the feudal ecosystem of our country really only came to power by preying on the insecurities of the people, so the people will only do, what I call alignment with tasks which receive “clapping and praise”. By just doing the things that earn them the “saiths recognition” they are already very deep in the performance shading business. The only way to run a globally, regionally or locally competitive organization, short of the involvement of under invoicing, tax evasion, illegal subsidies, duty forgiveness schemes and the likes there of, is for the leadership of companies to question the performance shading that is so prevalent around them. This can only happen with the right level of skill set, exploration techniques and above all the will and integrity to really make a difference.

” Do not waste a minute — not a second — in trying to demonstrate to others the merits of your performance. If your work does not vindicate itself, you cannot vindicate it.”

Thomas Wentworth Higginson

M.I.T (Millionaires in Training)

I was going through a list of self made millionaires/billionaires in Pakistan and its interesting and perhaps noteworthy that a negligible amount are from this generation. The reality is, “daddy or great grand daddy” earned most of the current money within the coffers of the current generation. So then really, these kids/young adults are realistically Millionaires in Training (MIT). Substantially different from the other MIT that encourages and creates entrepreneurs and creates real and true wealth.

Looking a bit deeper, the entrepreneur syndrome is pervasive no less in the second generation M.I.Ts. I scoured the web for profiles of at least a few dozen-second generation M.I.Ts, without fail every single one of them lists “entrepreneur” as the central theme in their glorified profiles. An other interesting fact is that most of them started their career at twenty some thing with a Director of “something” role. That’s what wealth buys you, a seat at the table. But there is no reason to apologize for a noteworthy lineage of wealth.

My simplistic view is as follows, if you had 10M$ available to you, for arguments sake and you went and licensed a popular casual dining/fast food chain that you’ve seen from your various privileged child hood trips abroad you are not worthy of calling your self an entrepreneur, you can no less call you self an opportunist of the first order and some one who understands business dynamics really well. That, I will give you. You deserve the praise that in a stable of a few dozen similar individuals with equal or more cash than available to you, you were the first to realize an opportunity existed and you beat most if not all to market with bringing established brands to your home country. But that doesn’t make you an entrepreneur or a business wizard. That just makes you some one taking the easy road to glorified business success.

What really should be happening is the deployment of these funds available, into enabling Micro and SME type transactions. Wealth creates more wealth, but the deployment of this wealth(by M.I.Ts) into under served and upcoming segments with local and regionals solutions is what’s needed. Then these M.I.Ts would make a real difference and create true wealth independently and leave a lasting impact.

If they continue to invest in Sugar Mills, Processing Plants, Textiles, Tanneries, Power Companies to name a few, they will never be able to impact areas that need both capital and strategic partners which these M.I.Ts can prove to be, at a concession stand ticket price in most instances.

The focus should be to move away from capital intensive, or industrial businesses to more localized, impactful ideas. Become seed stage investors and help cultivate the entrepreneurs whom they invest along with. This is the only shot these M.I.Ts will have towards true greatness and in redeeming themselves as titans of industry. If they continue down the generational path they have historically they will just be “Mr. X’s Son/Daughter” of “XYZ Fame”. Time to change the rules of the game and re invest in the country (a little differently) that made their father and forefathers wealthy, but slightly adjusting their own outlook. Since the industrial and agriculture space creates a bulk of the jobs, by no means is this an invitation to stop doing that. The idea is for diversification. So you ask how do you seed the thought for this diversification?

It’s a good question, when you as an M.I.T have been classically conditioned to think about one thing since you opened your eyes, its difficult to have an other perspective. The first realization is the fact that you need to diversify and look else where. Like an Alcoholics Anonymous success criteria, the first step is to recognize you have a problem. This can only come from within. What comes after that can be achieved much like AAA meetings with support from others and a network of supporters.

In the corporate world such supporters. more and more coming from the outside. In the form of Chief of Staff roles that work with these M.I.Ts and established CEOs alike. The Chief of Staff generally works behind the scenes to solve problems, mediate disputes, and deal with issues before they are brought to the Chief Executive. Often Chiefs of Staff act as a confidante and advisor to the Chief Executive, acting as a sounding board for ideas. Ultimately the actual duties depend on the actual position and the people involved. Given the inexperience in many ways of the M.I.T breed of CEOs propping up, this could be a saving grace in many ways. But for this to happen, the M.I.Ts need to move past the “saith” ideology of “saith” knows best.

It is some thing the M.I.Ts should look at. Bringing one on board without sacrificing egos, that they are incompetent or working their way up the ladder. This is the buffer that is missing in Pakistan. The smart M.I.Ts will recognize this quickly, the same roles exist in some ways in the form of Board of Directors that their parents have deployed and whose counsel they seek in matters of business. This is the one true shot the M.I.Ts have in creating their own working mechanism and define how they would do business and it really wouldn’t hurt to enlist some smart folks who would help them in the journey.

Its always easy to spot the smart M.I.Ts from the crowd, they are realigning them selves to have smart plays in new business domains relying on expert advisors and Chief of Staff personnel to setup their own family offices and build their own business frontiers. It does help to have a fully funded bank account, to bank roll the ideas, ventures and companies that will help them define their own legacy.

 

Are we there yet?

This is the question TCS should be asking it self. Given the market size, its operating experience in Pakistan and the scale that has made it ‘case study worthy’ at Harvard; nothing notable besides a spade of layoffs has put TCSs in the limelight recently. That and hiring an ex-banker to lead its re aligned strategic holding company. At the face of it, some change any change, with a positive glow would make sense. But nothing besides an ad campaign and billboards that say “hazir” void of even the basic contact details of TCS like a phone number or URL have shown up.

TCS is/was poised for a lot of things, namely a large play to vertically integrate its logistics and warehousing to squash the other players in the e-commerce space, by owning the last mile logistics and delivery along with years of distribution experience. It seems, TCS has executed many uncoordinated strategies and like others of a lesser corporate/technical pedigree slapped around a quick and dirty “online site” without thinking through the end game.

There is a sheer market advantage to being in business since 1983, having about 2000 locations within the country and 5000 people to support a phenomenal business. A few easy steps would have ensured sustained top and bottom line growth in a space that could be dominated for years to come. TCS was an innovator, a one of a kind hall mark in Pakistani business that created things like Sentiments express, way before it was fashionable to send roses on valentines in Pakistan via courier. They had the pulse of the industry/country and always sensed it a mile out. So what happened? An outsiders view in would lead one to think that they became fat and happy. It happens to the best of us.

While this was happening at TCS, local, regional, international players all sizing up the opportunity of a 200M people population have jumped in to the space them selves. Their success in diversification/online e-tailing and distribution is varied. Not for the lack of trying but for the lack of the missing pieces. There is still no real online payment solution in Pakistan, there is still lack of trust buying online, there is further the dilemma of distribution and warehousing, the last mile where in exchanging goods for a fee from the client.

TCS would be on top on all of these fronts, had it only tried. They are as trustworthy as a brand gets in Pakistan (many years ago I was at a DHL center in Karachi and a middle aged woman walked in and said “bhai is ko London TCS karwana hay” )so that their first check mark. TCS also has its own delivery network and warehousing hence its own people making deliveries and collecting payments thus that’s three checks in one, So why haven’t they leap frogged in and left every one biting the dust? For one, lack of vision. Its not just them its every one around them.

Lets explore this phenomenon. Go to any mid/large sized Pakistani enterprise, ask the CEO to meet their Head of Strategy and or IT, you’d be shocked at the response you get and further shocked once you meet the typical Heads of IT. If the conversation already hasn’t gone to, “Zara IT walay ko boliyae ga, (please call the IT Person)” there may still be some hope.

The average IT Leader in Pakistan hails from one of 4 areas, A Bank, An FMCG, Pharma or at best a mix of all plus some Saith experience thrown in for fun. With a potentially solid operating background but 0 to imaginary exposure to real  e-commerce , technical proficiency and web 2.0 style agility. It’s pretty much a lost cause when it comes to scaling and building technically competent sales, delivery and distribution channels. Yet by owning the newest smart phone and attending every conference in Pakistan and Dubai on (tech) some how the perception and industry worship is evident for the old guard in this space. Typically followed by the Sahab title at the end of the name.

This old guard is doing a dis service on many fronts, first by literally holding back organizations and subsequently the country as they try to enforce their limited know how on to problems much larger than their own comprehension. Secondly by systematically weeding out and not hiring people smarter than them selves and marginalizing the talent pool. Last but not least putting out products and services that come pre-packaged (at a pretty decent price tag) and slapping them with their own logos. Eventually the owner operators of firms will figure it out, hopefully not before its too late.

Lets re-direct our focus to TCS once again. I would like to see them position them selves as a worthy competitor and eventual acquisition target for Amazon.com. It’s a matter of time when Amazon comes knocking to Pakistan, that journey may be a few years out, but they are most certainly in India and they will come across the border.

The population density demands it and soon their shareholders will too for neglecting a market this size. Rocket Internet feels the same way, with nothing besides a marketing budget and an army of “Western oriented, 20 some thing marketing minions” they don’t have a lot going for them. But if TCS continues to disappoint, they have will every thing to gain. They have started consolidation wars within various channels where they were afraid they were loosing ground and on some not so honest to goodness advice from their minions.

TCS, you are almost there, I want to see Pakistani companies in the league of the best of the world, but you have some course correction to do. Don’t let traditionalist general managers run e-commerce and give strategic direction without having ever operated in the space before, take a leap of faith, don’t hire people you know and don’t put people in charge who come from the old guard. The Leadership should be asking some very hard questions, around break up value of the business units, the potential of an IPO , structuring for tax efficiency managing revenue leakages and things of that nature, way before any thing else. Last but not least, PR-Marketing-Branding need to be refreshed, the brand recognition is almost as good as Shaan Foods but its economic value hasn’t been cashed in nearly as much as Shaan. More on Shaan an other day, right now the task at hand is to really force some critical thinking at TCS not on just an e-commerce play but a host of other things. Advice is always free, so whilst we are at it some valuable services for TCS to consider:

  • Merchant to End client Delivery (Think Mall presence to collect, package and ship goods directly typically to overseas Pakistanis)
  • Using its expertise to get in to the food delivery business, using the same infrastructure to start with test markets in the evening.
  • Ebay-like store fronts for home based and other vendors to showcase via TCS and ship and collect cash on delivery via them.
  • Using its presence across Pakistan to be a true grass roots level survey company and data collection entity.
  • Hiring strategically at every level within the organization and taking hard decisions without emotions when it comes to right sizing

I neither have all the answers nor the course correction strategies, but as a fan of where the company started and how far it has come, only a well wisher who’d like to see this TCS in the same league as a company that’s shares its name across the pond.