Wednesday, October 26, 2016

The Mistry of Sacking

The board of TATA Sons, on Monday, decided to sack Cyrus Mistry, who had been serving as the Chairman at India’s largest conglomerate, thereby sending the entire Indian business community into a state of shock. Ratan Tata himself would be the interim chairman till they find a suitable replacement for Mistry. Non-performance and undermining TATA group’s value system are being touted as possible reasons for the ouster; however, the real reason for Mistry’s sacking remains to be a mystery. While this unprecedented move could spark a battle between two of Mumbai’s oldest business families that share very close ties (the Mistrys own about a fifth of TATA Sons), here’s a look at some famous sackings of the world:

1. Walt Disney

At the mere age of 18, Walt Disney was fired from his first animation job at the Kansas City Star newspaper. His editor cited his “lack of imagination and good ideas” as the reason. Disney then acquired Laugh-O-Gram, an animation studio but drove it into bankruptcy. After moving to Hollywood with his brother, they started up the Disney Brothers’ Studio, and eventually created Mickey Mouse and Disneyland. As a film producer he received 22 Academy Awards from 59 nominations and went on to win more individual Oscars than anyone else.

2. Steve Jobs

Not many know that Jobs was fired from Apple, the company he cofounded in 1984. He was in his 30s and Apple had just announced the revolutionary “new” Macintosh with a mouse and first ever Graphical User Interface (GUI) on a commercially sold computer. However, at $2500, the computer was hard to sell. Jobs wanted to go ahead and spend more money on the Macintosh, but his board wanted to focus on the older but more successful Apple II. He was fired by the then CEO of Apple, John Sculley. By 1997 Apple was a sinking ship and was going through a huge financial crisis. Its competitor Microsoft had launched Windows 95 and was taking the tech world by storm. Apple needed a better operating system with modern features and flopped for one run by Steve Jobs’ new company called NeXT. Talks were initiated between the two companies and finally Apple acquired NeXT for 427 million dollars. Steve Jobs joined Apple under the title of an advisor and rest is history.

3. Thomas Edison

Edison always conducted experiments while working at Western Union. During one of his night shifts in in 1867, he was experimenting with batteries when he spilled some sulfuric acid that ate through the floor and onto his boss’ desk below. The next morning he was fired and went on to invent the phonograph, the motion picture camera, and the ever-lasting, practical electric light bulb.

4. JK Rowling

Rowling worked as a secretary for the London office of Amnesty International, but dreamt of becoming a writer. She secretly wrote stories on her work computer and daydreamed about a teenage wizard named Harry Potter. Her employers finally got fed up, giving her the boot.  Getting fired helped kick-start her true ambitions and she wrote the first Harry Potter book shortly after getting canned. Her severance check helped support her over the next few years. Today, she's a multi-billionaire author, having penned one of the most successful book series of all time.

5. Louis van Gaal

Even the sports fraternity has not remained untouched by high profile canning. Louis van Gaal was sacked as the Chief of the Manchester United Football Club within 48 hours of his side winning the FA Cup, beating Crystal Palace 2-1. The club claimed that van Gaal was let go because ManU had played poorly that year, scoring only 49 league goals, failing to qualify for Champions League, and finishing fifth in the Premier League table.

Sumit Chakravarty
Faculty - INLEAD

Monday, October 24, 2016

How safe are our ATM services

Multiple blogs have been written on utility of tech in banking services. So much so, Citibank this year shut down 5% of its branches in India due to their under usage as a result of their customers’ access to home-bank ATMs and  Brown label ATMs and  usage of netbanking for making payments and fund transfers. ATMs serve as a huge support to all the working people who do not have time to visit their bank branches and withdraw money, so much so that an ATM machine and the hosting room are becoming the new payment gateways, which will further reduce the need to visit branches. We are in this day and age, witness to the phenomenon of machines taking over the work of humans. Yet we don’t mind it one bit, as it makes lives more convenient. More often than not we ignore the fallacies and risks associated with the same and choose not to mull over the safety of this phenomenon or how vulnerable it leaves us. Because that’s inconvenient! And soon enough a red flag has been raised with the recent Yes Bank ATMs’ software glitch which left 3.2 million card holders exposed to online fraud.

The scare spread like the bird flu and forced experts to analyse and ask the simple question: “How safe are our ATMs”? And as users, we realised the importance of the oft used business phrase ‘caveat emptor’. It’s the principle that the buyer alone is responsible for checking the quality and suitability of goods and service before the purchases are made.

Let’s understand as laymen what really happened with our ATM cards…

ATMs can be home-bank (managed by bank) or non Home-bank (or Brown label which is managed by third party). The software in the brown label ATMs are managed by service providers, which in this case was Hitachi Payment Services. The 90 affected ATMs in the present case connected to the infected server. So the hackers got information of all the people who used those ATMs, and cloned their cards. Since customers often use non home-bank ATMs the impact spread to 19 banks. The hack led to misuse of about Rs. 1.03 crores, where most of the cloned cards (about 641 in number) were used for transactions in China and USA, where OTP is not a mandate for card related transactions. (Hindustan Times, 24th Oct 2016)

While Hitachi claims no breach in service, the matter is under investigation. In fact, there are no stringent regulations for ATMs, debit and credit card services in RBI guidelines.

Solution to the hack…

No one knows. It can only be prevented, till the next smart hacker cracks the new code. Banks need to take over control of ATMs, which they outsource to third party as it may be too expensive to run ATM counters all over the country, even in places where they do not even have a bank branch. The outsourcing partners in the meanwhile need to be a lot more vigilant and ensure security control measures and reduce operational risks. As users of these cards, we need to keep changing our pin numbers frequently.

My memory will in this case fail me most of the time. As if remembering my iPhone pin wasn’t enough!

-Ms. Monica Mor, Sr. Faculty, INLEAD

Friday, October 21, 2016


The Nobel Peace Prize 2016 has been awarded to Columbian President Juan Manuel Santos for his resolute efforts to bring his country’s 50 year old civil war to an end. It was a war that left over 220,000 dead and over 6 million displaced. A laudable effort by no means!

So, this was the winner’s story in brief. Has anyone even bothered to find out who lost out in the race to 2016’s Nobel peace Prize? Who could have made it in the panels of history and yet did not? Who were these noble souls who did such great service that got them Peace Prize nominations?

This is the story of that loser, who in no way can be called that, simply because what they do is death defying. Their service to their nation and its citizens are unbelievable and selfless.

They are the WHITE HELMETS. Their motto inexplicably would be; “When the bombs rain down, we rush in to save”.

Their Story…

You would have few days back read in a blog by an INLEAD faculty about the plight of Syria, a great historic nation ravaged by civil strives and terrorism. The story begins from there. Syria is the most dangerous place on Earth, and on an average the country is ravaged by anywhere from 50 – 80 barrel bombs daily from ISIS or from the Russians or from President Assad’s troupes. While the ones who bomb feel they have done their bit in supporting their own selfish cause, the losers are inevitably the common citizens who get trapped under debris and perish. In a country where public services no longer function, Syrians had given up hope of seeing that rare light at the end of the tunnel. It was in these hours of despair a bunch of young Syrian men came together to help save people who get caught in debris. They are fully aware that more bombs may fall on the same site, yet pulling out people from under the rubble is what they do. They say it’s the call of Allah.

They train in Jordan and Turkey in areas like cutting through boulders and iron bars, fighting fire, handling babies trapped in unlikeliest of places under the debris, giving on the spot paramedic support, and so on. They are absolutely unfathomable in their energy to surge ahead under trying circumstances and in their passion to help the affected. They are young, have families who are equally vulnerable, do not know whether they will see the sunrise the next day, yet they remain undaunted. Even one life saved is a blessing they seek. Since the war began, White Helmets have saved close to 62,000 lives in Syria. But they have lost more than a hundred of their own brave soldiers. A small price to pay they say in a country where hopelessness abounds.

Finally they are recognized…

An Oscar nominated team from Hollywood decided to pay ode to them, and for once and for all shift the world’s focus away from ISIS and bombers to the White Helmets and their selfless acts of bravery and sacrifice. They have produced a documentary on White Helmets, which is currently streaming on Netflix and they had also been working really hard to get this group the Nobel Peace Prize this year.

The White Helmets may have lost the Nobel Peace Prize, but the world is a winner in having amongst it such brave sons of the soil.

- Ms. Monica Mor, Sr. Faculty, INLEAD

Monday, October 17, 2016

Syria –Then and Now


Syria, officially the Syrian Arab Republic, is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the west, Turkey to the north, Iraq to the east, Jordan to the south, and Israel to the southwest. Its capital is Damascus.

A country of fertile plains, high mountains, and deserts, Syria is home to diverse ethnic and religious groups, including Syrian ArabsGreeksArmeniansAssyriansKurdsCircassians, Mandeans and Turks.

In the early 2000s, Syria headed towards gradual economic liberalization to spur growth. Some of the structured reforms agenda were supported through IMF technical assistance, including strengthening banking supervisions and regulations, modernizing the monetary framework developing a government debt market, strengthening and streamlining revenue administration, and improving public financial management. While poverty and unemployment were on the rise, Syria was making progress towards achieving the UN millennium development goals.

In 2009 “Doing Business Indicators”, Syria ranked 137 out of 181 countries, performing poorly on access to financing, and registering poverty, while making progress.  The three main obstacles in Syria’s growth were corruption, inadequately educated workforce and poor power situation. At the same time, political reforms were limited, except those initiated by President Bashar Al Assad.
But this is when things started to go downhill; when Russia supported rebels started to clash with America supported President Assad’s forces. And soon enough ISIS made Syria its base for unleashing terror across the globe.

The 2011 uprising has evolved into a crippling and violent civil war with fierce fighting between the regime and various secular and Islamist opposition groups in different parts of the country. Syria has politically disintegrated into autonomous provinces and territories controlled by the central government, Islamic State of Iraq and the Levant (ISIL), and various rebel groups. The conflict has also attracted financial and military support from external powers, including Turkey, France, Saudi Arabia, US and Russia.

The population of Syria is estimated to have shrunk by at least 20 percent since March 2011. According to the United Nations High Commission for Refugees (UNHCR), more than 250,000 people have been killed and more than 800,000 have been injured as a result of the fighting. As of February 2016, UNHCR reports that about 4.7 million people have fled to Syria’s immediate neighbors—Iraq, Jordan, Lebanon, and Turkey. Almost 900,000 refugees had declared political asylum in the EU by December 2015. At the same time, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) reports that there are 7.6 million internally displaced people. About 70% of population is without adequate basic needs of food, water and education. Services—such as retail, wholesale, transportation, construction, and banking—have contracted sharply on account of a collapse of the overall economy, particularly tourism, and with heighted security risks, destruction of roads, and economic fragmentation impeding trade and commerce. Banking has been further impacted by the economic sanctions.

A recent report by the charity group World Vision and the consultant group Frontier Economics estimated that the conflict has so far cost Syria $275 billion in lost growth opportunities — 150 times more than pre-war Syria's health budget. A World Bank report estimates the damage to the capital stock in Syria to be more than $70-80 billion. The situation has deteriorated greatly since then.

There can be only speculation by political and economic pundits as to when the light will be visible at the end of the dark and dreary tunnel for Syrians. Let’s pray that humanity eventually wins and the world is, sooner rather than later, rid of the malaises of rebellions and terrorism.

- Ms. Shalu Solanki, Faculty, INLEAD 

Thursday, October 13, 2016

The Great Indian E-commerce Festival & the Snapdeal saga

The Great Indian Festival ‘October 2016 – what a huge success it was! Flipkart clocked sales of 15.5 million units while Amazon clocked 15 million units. In value this converts to Rs. 3000 crores worth of sales for Flipkart in the 5-day Great Indian Festival from the 1st to the 6th of October, 2016. There are more sales lined up all the way till Diwali. While Flipkart focused on big ticket items, especially electronics, Amazon focused on acquiring new consumers. Amazon Prime whose subscription can be bought at Rs. 499 was a huge gainer during this time. The success has left both the e-commerce players heady & happy and they have drafted aggressive plans in terms of funds infusion and promotional expenditure.

A question for you reader at this point… Did you realize that I have only been talking about Amazon and Flipkart? Have you noticed the absence of ‘Snapdeal’ in the e-commerce conversations these days? Where is this third biggest player in the Indian online retailing landscape?

Let’s find out more about the missing  Snapdeal…

It was only a year ago when Kunal Bahl, CEO, Snapdeal had boasted that his company would overtake Flipkart in sales. The company has since suffered and now lags way behind its two main rivals Flipkart & Amazon. Clearly a lot went downhill, especially with their deep discount strategy of early 2015. They never really acquired regular customers, and only got the floating ones who wanted to enjoy the discounts. It proved to be rather untenable for Snapdeal. This was followed by their brand ambassador, Aamir Khan’s “intolerance” remark. While the company did not renew his contract as their brand ambassador, many people post remark-controversy uninstalled Snapdeal apps. Then again Amazon stole the e-commerce thunder with better quality, service delivery and response to customer issues. Statistically, more people were found to be downloading Amazon app than any other in the first quarter of 2016. As on March 2016, Flipkart’s market share in the e-commerce space is 37%, down from 2015’s 43%; Amazon’s market share is 24%, up from 2015’s 14%; while Snapdeal’s market share is 14% down from 2015’s 19%. (Economic Times, 6th October 2016)

Brand Rejuvenation

Will a brand makeover pump up the game for Snapdeal? Well, the CEO thinks so. About Rs. 200 crores will be spent all the way till Dec 2016 to promote Sanpdeal’s new look. In a brand rebuilding exercise, on Sept 10th the company unveiled its new logo and a new brand identity “Unbox Zindagi”. The company wants to focus on the moments that an e-commerce customer experiences. They could be any; from website browsing to making the purchase to receiving the package to opening the box. The branding team at Snapdeal realized that the moment when the customer opens the box is most magical.

This shift away from just low prices, faster delivery and sales, to appreciating the customer’s aspirations should hopefully rejuvenate the brand and help position it better in their minds. Snapdeal insists that the rebranding is working, despite mixed response to their new campaign. And with many new distribution centers in their kitty, the company has claimed to have regained its mojo, bit by bit. As evidence they claim to have clocked their highest single day sale ever on the 2nd of October, 2016, shipping 1.67 million products in just 16 hours. Their website traffic has also risen by 20% and their conversion rate is up by 40% as compared to previous year.

It seems the Unbox Zindagi moment is working!!

So, Let the sales begin and let’s see if Snapdeal jumps into the fast moving e-commerce bandwagon once again.

-Ms. Monica Mor, Sr. Faculty, INLEAD 

Thursday, October 6, 2016

All’s Not Well at Wells Fargo

Wells Fargo – a name that was highly respected in the United States in the financial circles; A bank that has done immensely well for itself in the past one hundred and sixty odd years. This elite bank has however in the month of September got embroiled in a highly embarrassing scandal, wherein about 2 million bank and credit card accounts were opened without customer authorization to meet the impossibly high sales targets. These sales figures led to soaring stock prices, the profits from which were then pocketed by the CEO, John Stumpf. When the fraud was detected by USA’s regulatory agencies, John Stumpf went ahead and fired about 5,300 employees, which was almost 1% of Wells Fargo’s total workforce. The matter is now subjudice with hearings going on in the US house of Senate, and charges are being pressed against the CEO to resign and undergo criminal investigations.

Time travel to 1852...

In 1852 Henry Wells and William Fargo founded Wells Fargo and Co. to serve the western part of United States. Wells Fargo opened for business in the gold rush port of San Francisco. They catered to banking services including buying and selling of gold. Their hallmark was attention to detail, trust and loyalty to customers. The company went on to do very well and soon opened branches all across America. They would also do express delivery of money or drafts or gold via stagecoach (there lies the answer to a historically significant logo), railroad, steamship or via telegraph.

Their brand became a household name especially among the elite class. Soon after, they started delving in corporate responsibility and into responsible lending. A very important clientele was the armed forces, whereby servicemen could take home and vehicle loans at reasonable rates of interest and for a comfortable duration.

The controversy that led to the derailment of the stagecoach...

September 8, 2016 was when the various regulatory authorities in USA like the Consumer Financial Protection Bureau, the Los Angeles City Attorney and the Office of the Comptroller of the Currency, fined the bank $185 million, alleging 2 million fraudulently opened bank and credit card accounts. Not only that, there are allegations of forced closure of delinquent vehicle loans of US marine corps and other servicemen, while they were away on duty. Their vehicles, post acquisition by Wells Fargo, were immediately auctioned to recover the due amount. There are rules against harassing armed forces officials in USA which were violated by Wells Fargo rather blatantly.

Then again there are questions on the organizational culture of the bank. There are stories of branch managers locking the exit doors to prevent their employees from leaving their respective workstations before completion of day’s work. Employee harassment has come up as one of the charges against the bank, a case under the Fair Labour Standards Act.

The chip on CEO, John Stumpf’s shoulder earned as a result of an extremely successful organization, seems like the biggest burden for him as of now. There are investigations against the bank from all fronts, be it customer, its employees or its concept of ‘responsible banking’. Things look rather torrid with FBI also commencing its investigations as well as class-action suits filed against the bank.

All is definitely not well with Wells Fargo! A lesson for all organisations that are ruthlessly ambitious and brutal in their delivery.

-Monica Mor, Sr. Faculty, INLEAD

Wednesday, October 5, 2016

Are Indian Newspapers losing their charm?

Reading newspapers or dailies, as we call them, has been considered to be one of the best habits humans have imbibed, ever since the learned civilization came into existence. From politics to sports, arts and lifestyle to entertainment, the power of news dailies is not unfathomed. My affair (sic) with newspapers started when I was barely eight. With every passing year, the bond seemed to get stronger and stronger.  I didn’t know back then, that it would hit a rocky path twenty years down the line.

The front page is the most important page of a newspaper. It is what passers-by will have chance to look at, and so it represents the showcase that might determine whether or not they will end up buying the newspaper. Many of us working professionals, thanks to our pacey routines, could possibly afford to read only the front page. Thus, the stories of the front page are carefully selected to catch the attention of a large number of potential readers. Everyday, newspaper editors meet and discuss to choose what they believe are the newsworthy stories of the day to constitute the next day’s front page.

However, the scenario has changed today. Most of the Indian dailies have started featuring full-page advertisements on the front page, some even to an extent of the first three pages, especially during the festive season. Blame it on the fierce competition, or the race for fetching sponsorship, the so called “critical” front page and its news have shifted to the third or the fourth, thereby leading to distaste for avid readers like myself.

With a readership base of over 250 million, India is the second largest print market in the world. However, this market is still under penetrated for a country with a population in excess of 1,200 million and highly fragmented with over 60,000 newspapers printed in 22 languages (Registrar of Newspapers of India). Advertising revenue continues to be the key growth driver behind the industry as declining readership and increasing competition have led the players to further reduce their cover prices. As result, this sector has been the most affected by the slowdown in advertising due owing to the recent downturn. Further, due to rising newsprint costs players were compelled to undertake multiple advertisement rate hikes during the first half of 2008, which on one hand improved per unit realizations from advertising, but on the other hand made the media an expensive proposition for most advertisers. (Source: Indian Readership Survey 2008)

What remains to be seen is whether these dailies continue to be caught up with their pro-commercial approach or shift back to preserving their original charm as a powerful instrument of the print media.

What do you think? Do share your views and inputs in the comments.

- Mr. Sumit Chakravarty, Faculty, INLEAD

Sunday, October 2, 2016

Google turns 18!

Why India is important for Google...

By 2020 India is expected to have 650 million internet users from the current 350 million. We are already the second largest purchaser of smartphones in the world, with about 220 million users till 2015. Over 20 mobile brands are now assembling their products in India with the hope that infrastructure will improve with better internet connectivity and superior performance of 3G and 4G networks pan India.

The data above seems very exciting for companies that are trying their best to capture a larger share of the internet savvy Indian. Google is one such player with multiple products and services in the form of Chrome for mobile phones, Google Assistant in Hindi, YouTube Go for faster browsing on 2G connections and Google station  to provide Wi-Fi access in large public spaces. These are just some of Google birthday announcements for that nation which shows maximum promise for the years to come.

Google was set up in 1997, and was the product of a new found friendship between Larry Page and Sergey Brin at Stanford University, USA. The domain was registered on September 15th 1997. The name “Google” is a derivative from the word Googol, a mathematical term for the number represented by the numeral 1 and followed by 100 zeros. This reflected the founders’ vision to organize a seemingly infinite amount of information on the web.

In February 1999, Google moved out from its founders’ garage to its new office in Palo Alto, California.

The year 2000, when Google launched its most successful revenue generating service, AdWords, Google starts to grow by leaps and bounds. By 2001 when Google launched it Google images with a cache of 250 million images, it soon became a household name. There was no stopping this company when soon after it opened its first international office in Tokyo, Japan.

2004 was when Google introduced the world to social network via its platform called Orkut and in 2005 it set up the eponymous Google Maps, which by 2009’s addition of navigation has rendered us helpless and without which many of us cannot move around the city. With a slew of new products and services constantly coming out of its innovative labs Google became a powerhouse in the online hemisphere. They set up wonderful offices across the globe and came up with innovative HR policies, and by 2007 Google became the best company to work for in the entire world.

2013 was when Google pledged for a total clean energy commitment, and soon after launched their Google Loon, its balloon project for rural connectivity. Google hasn’t stopped even for a minute ever in its efforts to provide better and valuable services to its customers. The company is iconic and the functionality of its products is indefatigable.

So here’s to a rocking birthday with wishes for many more. We truly cannot imagine our lives without this brand, now especially when the brand is increasingly used as a verb! Let’s Google it, shall we?

Happy Birthday Google!!

- MsMonica Mor, Sr. Faculty, INLEAD

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