Abhay Kumar explains what leadership styles and skills successful CEOs need to possess to take their organizations into the next decade Introducing innovation at the speed of light is tough enough for today's service providers. Combine that with ongoing regulatory changes and ever increasing competition from consolidated players and over-the-top entrants and the picture becomes clear. CEOs are in the spotlight to successfully steer their organizations through significant transformation to stay ahead of the competition and profitably grow the business. If these are the challenges CEOs face today, what can they expect in 2020? More specifically, what leadership styles, qualities, skills and approaches will successful CEOs need to possess to take their organizations into the next decade? These were the questions that a new global study, commissioned by Amdocs with strategy consultancy Telesperience, sought to answer. In-depth interviews with CEOs, C-suite and other senior management executives at the world's top-tier service providers, including some of the largest in Asia Pacific (Apac), provided insights that uncovered views and forecasts for how CEOs will be running their organizations in 2020. Management Styles Are ChangingThe typical CEO has worked in different countries and even regions and has held at least three different roles at their current company. But professional diversity may not be enough to be effective in 2020. The survey found that the majority of senior executives in Apac (78 per cent) believe current CEO management styles need to change for them to remain successful five years from now. Fast-forward to 2020 and what makes an Apac CEO successful today will not be the recipe for future needs. The local industry believes collaborative styles will be needed to allow service providers to scale into the future. This means moving away from today’s favored styles of pacesetting and commanding, where the CEO is expected to have a clear roadmap of where the company is going and lead it there by example, to coaching, which values the contribution of others, connecting individuals’ goals to those of the organization. The majority of the executives who took part in the survey (67 per cent) also believe Apac CEOs in 2020 should be driven by a passion for innovation, and would provide the most value to their organizations through good corporate governance (1st) followed immediately by innovation (2nd). The Changing Face Of C-suites In Apac it’s not just the CEO leadership style that will change. New areas of focus and lines of business are already opening new C-level opportunities. Respondents cited that today the most commonly added roles hold responsibility for customer experience (1st), innovation and commercial activities (tied 2nd). Roles covering innovation, commercial, social, cloud, privacy and people tied for second place. Executives predicted that by 2020, new C-level roles would also include big data and digital (tied 1st). Today's C-suite team is likely to be the breeding ground for future CEOs. So it's interesting that 78 per cent of senior Apac executives believe that the CEO in 2020 will most likely come from CFO background, implying CEOs are expected to drive innovation while keeping the numbers right. Innovate While Minimizing Expense And Risk BarriersThe top barrier to Apac CEOs' success by 2020 will be “inability to support or execute change”, ahead of “lack of clear strategy” (2nd) and “competition” (3rd). So it’s unsurprising that the region’s senior executives plan to invest in outsourcing strategies to supplement internal resources in support of innovation investment imperatives. In 2020, Apac CEOs are most likely to invest in:1st place: Cloud services 2nd place: Customer experience 3rd place: Big data analytics To drive change it is believed that a blended approach of both outsourcing and insourcing will be required. For example, more than half are expected to outsource at least some support for cloud services (67 per cent), big data analytics (56 per cent) and digital services (56 per cent). 2020 is very much in the near future and this study suggests that the current generation of senior executives are already pondering their needs for continued industry leadership. Expecting to be challenged in 2020 with turning good ideas into concrete results quickly, APAC service providers believe CEOs will require a variety of skills and a collaborative approach to innovation and business, and plan to turn to external expertise and resources, such as professional services and outsourcing vendors, as a way to break innovation bottlenecks. In The New World of Customer ExperienceTM customers expect to be inspired and excited by a constant drum of new services, delivered in an intelligent manner through personalization and contextualization and shaped by a dynamic quality of experience regardless of device or network. And all this needs to be accomplished in a manner that accelerates business value for the service provider, speeding time to market, optimizing business processes and reducing costs. As players continue to consolidate, innovation is increasingly challenged by backend system complexity, impacting service providers’ ability to deliver on customer expectations. Professional and managed services vendors that offer innovative IT and business services which deliver business value, drive immediate operational improvements without lengthy software integration, together with global best practices and a worldwide 24/7 support model, can help these large companies move as fast as they need, while ensuring an efficient cost structure. This type of partnership enables service providers to gain advantages from best practices accumulated from projects around the world, enabling them to achieve desired results faster and with less risk. With a joint commitment to business results, service providers can rely on such partnerships to ensure business growth. The author is regional vice president, Asia Pacific, Amdocs
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India has come through unscathed, surviving a balance of payments crisis in 1991, the east Asian contagion of 1997 and the 2008 global meltdown, writes Sandeep Bamzai Twenty-five years to the day, India began its tryst with the reform process. A balance of payments crisis and the dismantling of the Soviet Union which fashioned the end of rupee-rouble trade meant that India had to pony up in a hurry. Prime Minister P.V. Narasimha took the reins of power in extremely trying and difficult times. A major political assassination had meant that the Congress party had lost its popular leader Rajiv Gandhi and Rao not the first choice had been asked to step up to the plate. A consummate politician Rao understood what India required. It needed to shed its socialist dogmas, it needed to unfetter its economy and it needed a technocrat to usher in the radical changes. Rao's first choice was I.G. Patel from the London School of Economics who declined the offer. His second option - a career economist who had virtually held every important finance position in the bureaucracy - Dr Manmohan Singh - who became the instrumentality of change.Sandeep BamzaiAs he rose to read his first budget, India awaited change, it anticipated a new order, but what it got was a kick in the seat of its pants. Cataclysmic changes were announced with great rapidity and precision. Devaluing the rupee (between July 1 and 5, 1991, the rupee was devalued twice), decontrolling gold, freeing up the stock markets to foreign portfolio investment, dismantling import controls, slashing customs duties, virtually abolishing licensing controls on private investment, cutting tax rates and breaking public sector monopolies - a veritable catalogue of initiatives changed the course of this country forever. From a nation trapped in its socialist moorings, Narasimha Rao understood the need of the hour and backed the economist FM to the hilt. Interestingly, a vast swathe of extremely capable bureaucrats and policy mavens assisted the new FM in all his endeavours. Montek Singh Ahluwalia, Shankar Acharya, K.P. Geetakrishnan, M.R. Sivaram, N.K. Singh (subsequently a RS MP), Y.V. Reddy (who became RBI Governor) and even Rahul Khullar (who became Commerce Secretary and then TRAI chairman) who was private secretary to Dr Manmohan Singh when he was FM. N.K. Singh recently told me that 'Reforms were as much prompted by an impending economic crisis than intellectual persuasion; more by the former than latter.' Interestingly two other gentleman played a handsome part as dramatis personae in those tumultuous times - P. Chidambaram who was commerce minister and his able secretary Montek Singh Ahluwalia who were instrumental in ushering the spanking new trade liberalisation regime. Montek Singh then moved to finance and assisted the FM. In his maiden budget speech, the single biggest change was the banishing of the the licence Raj. It was abolished facilitating private sector (including foreign investment) across industrial sectors and providing greater access to foreign technology. Foreign exchange reserves teetering on the edge of a precipice at $1.2 billion in 1991 have shot up to $355 billion this month.Duties were rationalised. Unthinkably, Peak Customs duty rates were slashed from 220 per cent to 30 per cent. Since it has been pared further. Commerce is the modern axis, everything revolves around it. Deep rooted beliefs and dogmas have to be consigned to the rubbish heap of history. The Hindu rate of growth is now an aberration, not the norm. Ironically, the moves to liberalise the economy and have it plug and play with a globalised world was done by what was in effect a minority government headed by Narasimha Rao. In 1991-92, GDP growth hit skid row at an abysmal 0.5 per cent. Many believe that the same dream team headed by PM Manmohan Singh for 10 years failed to deliver big ticket second generation reforms or transformative ideas hemmed as it was by allies like DMK, Left and later TMC. The lost decade has unfortunately been lost, but imagine if MMS 2 had been as exemplary as MMS 1, India would have reaped the breakthrough benefit. India has come through unscathed, surviving its own balance of payments crisis in 1991 when it had to pledge its gold, the east Asian contagion of 1997 and the 2008 global meltdown. It obviously wants more, it awaits deliverance from being a capital, power and infrastructure deficit nation. The writer is a senior journalist and author currently working on his fourth book at a top think tank
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For a country that seeks to become a global power, there is nothing more important than the health and well-being of its citizens. India is trying to ensure good health for its citizens through an effective and comprehensive healthcare system. The health of citizens is vital as it reflects the quality of life of people and impacts the economic development of the country. India is working to establish a strong healthcare delivery system under its agenda of overall development of the state. BW Businessworld recognises the country's need for a robust healthcare sector, and believes that the present is an opportune time to mould the existing policies through deliberations and dialogue on the future of the healthcare industry in India. The second edition of BW's India Healthcare Summit held on 5 June in New Delhi with the theme 'Smart Healthcare: Making a Smarter Difference' sought to highlight all the healthcare issues by mapping and connecting all stakeholders and partners in the government's goal of 'Swastha Bharat' to achieve 'Sabka Vikas' by including ideas and opinions from the government, industry, domain experts and citizens alike. To view images, click here: For A Healthy India (This story was published in BW | Businessworld Issue Dated 10-08-2015)
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BW Smart Cities organised a day-long conference on 'Enabling Smart Cities' in Jaipur, Rajasthan on 8 July 2015. It was the first in the newly-launched state series of engagements, which concluded with an open house on smart cities. The state-level conferences focus on building a better understanding about, and an interactive discussion forum on, India’s urban development imperatives including sustainable infrastructure, the next generation of public services and ensuring safety of citizens under the ambit of the government’s vision for smarter cities. The next one is in Ahmedabad on 31 July. To view images, click here: Building A Smarter Future (This story was published in BW | Businessworld Issue Dated 10-08-2015)
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A few weeks ago, my driver made the unfortunate mistake of taking himself off on leave. I objected: too many leaves, too long, who’s going to get my shopping done, etc. That fell on stone deaf ears and knowing there was little I could do about it, he evaporated away to his hilly home. I was miffed. But then, with no one to fetch and carry for me, here was my chance to dive head-first into the on-demand economy. I soon found myself traipsing all over town in Uber and Ola cars, feeling independent and liberated not to have to keep someone waiting and sweating out in the sun or grumpy about setting out in the evening. I filled my phone to the brim with shopping apps and began to check out each grocery service, one by one, adding exotic fruits and imported goods to my list, I called for someone to polish my woodwork, fetch dinner for guests who dropped in, pick up herbal juices from a hospital, send me health-friendly snacks — and finally, the ultimate self-indulgence, I asked a concierge service to fetch me a Rainbow pastry, a fat colourful sweet delight that would make my diabetologist faint in shock. Practically everything you’d want is suddenly available without you having to lift a finger. Well, or lift it a little to tap a button. But there’s a difference between promise and delivery. Trying to emulate the Uber model, on-demand startups put in the technology (Uber insists it’s a technology company) but find the logistics and quality of service needed are quite another matter. And yet, they still set up shop by the droves, figuring out slowly that the technology also means accountability and transparency and a poor tolerance by customers, of failure to deliver to standards. The explosion of startups catering to your every need has been sudden, as explosions tend to be, and are quickly filling a space that is becoming confusing, though interesting. There are too many players with too slow adoption by the masses. For a culture that has been accustomed to kirana shops, long-time relationships with everyday home service providers, the vegetable vendor who bellows on the street outside each morning, and nicely troublesome domestic help, this push-button instant meeting of needs is a shock. The more traditional won’t even try it. For workers like my driver and my fuss-budget of a carpenter, it’s disruptive – they won’t even know what hit them. Undoubtedly, new jobs would be created from a new economy, but the transition will be long and painful for many, such as regular taxi drivers who suddenly find their value plummeting. But the newcomers should watch out, for the disrupters can themselves be disrupted as new models completely overrun previous ones. With the focus being on acquiring customers rather than making money from them, the funding will one day run out, forcing these new services to shut down, or consolidate. And yet, having once tasted blood, those who sample on-demand services won’t want to settle for anything less going forward. Meanwhile, I ran up quite a bill and was enjoying the last of my Rainbow pastry when the doorbell rang and who should be standing there but my driver, back four days early from his vacation. I stared at him in dismay and he looked back at me in surprise as I wondered what jobs I had for him to do the whole day. (This story was published in BW | Businessworld Issue Dated 10-08-2015)
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Like many others, I too was taken in by the swanky exteriors and glib talk of many a foreign, private bank. In 1992, soon after the historic economic reforms kicked in, many made a beeline for opening accounts in Standard Chartered, HSBC Bank and so on. I remember, to keep the ‘chaff’ out, these banks first demanded a minimum balance of Rs 25,000 for savings accounts. After a hue and cry was raised, they brought it down to Rs 10,000. For small professionals, even that was too much, and some of us, tail between our legs, went back to the old state-run banks where the requirement was just Rs 500. The intent was obvious. The foreign banks were not here to serve the poor. They wanted to keep those accounts out and target the high net worth and the big borrowers. Rural India was even further away. That task of cranking up the villages fell on the state-run banks. The ‘socialistic’ history of banking in India will always be an overhang to be reckoned with. The Nehru government nationalised the Imperial Bank of India in 1955, and the behemoth, SBI, was founded. There were three waves of nationalisation thereafter, and by 1980 we had 27 state-run banks covering around 90 per cent of the bank branches in the country. Today, despite liberalisation and foreign banks coming in, state-owned banks are still big. They account for 76 per cent of the advances, 77 per cent of the deposits and 82 per cent of the branches. More important, the professed goals of nationalisation — to break the monopoly of a few, to include the masses in the banking system and to fund priority sectors — is still the governing philosophy. The big problem they now face though is they don’t have enough money to lend. Even finance minister Arun Jaitley in his 2014 Budget speech admitted these banks needed a float of Rs 2.4 lakh crore. The impact of slow credit growth is both direct and crippling. Failure to recapitalise banks slows growth and is detrimental to everything the Prime Minister and his government are trying to put in place. Meanwhile, the government is facing the ignominy of breaching the Basel III accord, a global, voluntary regulatory framework that has prescribed bank capital adequacy norms. The government is aware of the problem. Finance secretary Rajiv Mehrishi said a few weeks ago the government will inject Rs 18,000 crore this fiscal, and around Rs 36,000 crore next year. A recent report by global investment and research outfit Jefferies estimates that these banks can raise around Rs 50,000 crore if they sell their non-core assets. This is chicken feed in relation to what is required. So what are the options? A report by a panel headed by former Axis Bank CEO P. J. Nayak, submitted last year in May, suggested that New Delhi privatise national banks by lowering its stake to less than 50 per cent. In the alternative, the government should stop meddling and allow banks to function autonomously. They now take orders, often contradictory, from two masters — the RBI and the finance ministry. While privatising or lowering the government equity in banks will raise the funds to recapitalise banks, it is a political pill that is difficult to swallow. How will the government be able to launch its ‘social inclusion’ programmes like the Pradhan Mantri Jan Dhan Yojana? The lakhs of unionised employees of state-run banks too are all set for rebellion! An option is to lower government equity to 33 per cent and allow it to hold a ‘golden’ veto. Understand the full picture of this mega banking snarl penned by deputy editor Raghu Mohan. That is not all. Our offering this fortnight also includes a hard-hitting story by associate editor Joe C. Mathew revealing that despite all the talk about ‘Make In India’, 70 per cent of the medical devices market has been grabbed by foreign players, leaving the ‘locals’ with low-end products. Also, don’t miss the story about the government getting tough on the menace of mobile call drops by special correspondent Neeraj Thakur and all you wanted to know about Uber but were afraid to ask by senior editor Mala Bhargava. (This story was published in BW | Businessworld Issue Dated 10-08-2015)
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Iran’s landmark deal with the United States (together with its other UN Security Council partners and Germany) halts its nuclear weapons programme at least for a decade and ends Iran’s international ostracisation. Pursued in the face of crippling international sanctions, without the agreement Iran could have had its first bomb in 2-3 months. In arriving at the agreement, after 20 months of tortuous negotiations, the US and Iran have opted for negotiated compromises rather no agreement at all. It will profoundly impact Iran’s economic, political and security profile and change the matrix of relations in the Middle East. Hardliners in both countries, opposed to any agreement, not to mention Israel’s relentless opposition seeing its regional nuclear monopoly threatened, were enough to deter all but the doughtiest negotiators. The tremendous political capital and personal prestige invested by the two Presidents, Barack Obama and Hassan Rouhani, was the single factor which sealed the deal. It will end the 25-year-long hostility between the two countries. It is now for the recalcitrant US Congress to see the light. The agreement has blocked all four Iran’s pathways to the nuclear bomb: the highly enriched uranium reactors at Natanz and Fordow, the Arak reactor for weapons grade uranium, and the possibility of covert production of fissile material. A robust system of surveillance and monitoring by the International Atomic Energy Agency (IAEA) will be in place. Iran will also reduce its 19,000 centrifuges to 6,104 and its current stockpile of low enriched uranium by 98 per cent, possibly by shipping it to Russia. The implementation phase of the 10-year agreement will start within 90 days.Rajendra AbhyankarIndia, which itself had an arduous journey in reaching the US-India agreement on civil nuclear energy, has welcomed the successful and peaceful conclusion of the long-running negotiations. The agreement creates both opportunities and challenges which need an early and holistic evaluation by involving the government, industry and trade. For a strong and resilient economy, thirsting for a wide range of industrial and technology products and services, the possibilities are infinite. India’s multi-faceted relationship with Iran needs rejuvenation on all fronts eschewing the reactive tendency that set in after the imposition of UN and US sanctions. The straitjacket had forced India into actions which did not always align with its national interest: the reduction of Iranian crude imports from a level of 18 per cent annually to 12 per cent, and eventually 8 per cent, and a halt to RIL’s exports of petroleum products; inability to finalise and commit financial resources for projects like the Iran-Pakistan-India oil pipeline, development of Farzad-B gas field discovered by ONGC Videsh and the long-pending Chabahar port development. The lifting of sanctions will allow Iran to regain its top place as India’s crude oil source. Until the Iraq-Iran war, Iran was India’s second-largest supplier and the third-largest till 2006. Its heavy sulfur crude is well-suited to majority of our refineries. It reportedly has 30 million tonnes of crude in ship storage ready to be put out on the international market and its production could go up by 7,00,000 barrels per day by 2016. From the present supply of 3,45,000 bblpd a very quick increase is easily possible. Iran’s entry will reduce global crude prices to near or below $50 per barrel, another plus for the Indian economy. The picture on merchandise trade is mixed. With a turnover of $5 billion, Indian exports of agricultural products like basmati rice and sugar and selected industrial and chemical products have eased the pain on account of growing import of crude oil. Accepting payment in escrowed Indian rupees for these products has eased pressure on forex reserves though the liquidation of outstanding oil debt of $6.5 billion is now unavoidable. At the same time, the possibility of a parallel transaction and settlement route for our merchandise exports based on the Indian rupee, much as China is experimenting with its remnimbi, needs to be explored. Despite competition in the Iranian market intensifying, there is strong likelihood that our perennial exports of agricultural and processed food, beef and industrial products like small cars, automotive components and ancillaries will go up. Iran could also be a fertile market for our information and communication technology products, services and training. India could also leverage Russian invitation to Indian companies to jointly promote their nuclear power plants to explore possibilities in Iran. As Pakistan continues to deny India transit facilities across its territory, Iran remains the fulcrum of India’s access strategy to Afghanistan and Central Asia. India is building the road from Zaranj to Delaram in Afghanistan which will link its road network to the Iran’s. India-Iran discussions to jointly develop the Iranian Gulf port of Chabahar, together with a free trade zone and other infrastructure facilities, need to be pushed forward. That China has shown its readiness to commit funds to Chabahar underlines the urgency. The freeing of restraints will see enhancement of Iran’s leverage in India’s extended neighbourhood: West Asia, the Gulf and South Asia. Iran’s military and financial support to the beleaguered regimes in Syria, Lebanon and Yemen will only grow. Iran and India have a relationship based on shared history and similar views on current challenges in the region. Whether on the scourge of the Islamic State or on preventing a Taliban resurgence in Afghanistan or curbing sectarian strife, there is room for India and Iran to work together. India is uniquely placed in having effectively harnessed its relations within three simultaneous triangles: Tehran-New Delhi-Tel Aviv, Tehran-New Delhi-Riyadh and Washington-New Delhi-Tehran. The strengths which India brings to these relationships will help to surmount a degree of negativity in the bilateral relationship after India’s IAEA votes against Iran. They could be assets to Iran as it charts its future course. An agreed action plan needs to be drawn up with inputs from major ministries, trade, industry and Iran-centered corporates like Reliance Industries, Hindujas, ONGC and the oil marketing companies. India’s policy towards Iran has now been freed of earlier compulsions. In the context of early visits to Tehran and Tel Aviv by foreign minister Sushma Swaraj and later by Prime Minister Narendra Modi, an early assessment of our equities is imperative. The author was former Secretary, Union Ministry of External Affairs, and has served as the Indian ambassador to the Euroean Union, Turkey and Syria (This story was published in BW | Businessworld Issue Dated 10-08-2015)
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Whether it’s poorly run Greece or Air India, it’s always others who end up picking the tab, writes Ramesh Jude Thomas GOT YOUR ATTENTION, DIDN’T I? But seriously, if it weren’t for this sovereignty business wouldn’t you give it a second thought? Think about it. Apple has enough cash on its balance sheet to acquire a few distressed assets like Greece without even resorting to leverage. Business governance as demonstrated by an Apple could turn around an underperfomer like Greece in a reasonable time. I say this because I believe it isn’t a lost cause. Just one that is poorly run. It is one of the oldest and strongest brands in the world. And in no time Apple shareholders will get a fair return on their investment. Seems like a plan. Not quite. This is turf and entitlement. You expect others to bail you out for your sins. Not unlike the “too large to fail” logic proffered for the massive subprime bailout. Everybody had their fun. Everybody knew exactly what they were up to; and lined their pockets till the money ran out. When it did run out and everyone stood exposed, it then became the turn of the hardworking taxpayer to cough up. Because if they didn’t these important institutions would crumble. It’s laughable that someone like Richard Fuld took home $400 million for destroying a 200-year-old legacy like Lehman (please watch the movie Margin Call). There is this neat piece on the Greek problem doing the rounds on WhatsApp about Mary the bartender. In short, her drunk and unemployed customers were spending less and less and her business was looking poorly. So she has the idea of giving them ledgered credit which they willingly accepted, resulting in a huge upswing in consumption and therefore sales numbers. Her bank structured the debt, creating bonds and selling them on the securities market as Drinkbond and Alcobonds. It all comes apart when the risk manager at the bank decides to call in the debt from the unemployed drunks. To save the bank, the government steps in and bails it out. The bailout comes from taxes. Then the government asks the taxpayers what they think... you know what happens. Can Air India ever be privatised? Why not? Because it is the endowment of the entitled. Which politician or bureaucrat in this country would agree to give up the benefits of a free ride like that. But at minus Rs 40,000 crores they expect the taxpayer to continuously cough up for a deliberately ill governed carrier that was once the pride and joy of this country. May JRD’s soul rest in peace. Can Air India be given a bailout package with tough conditions attached? You have to be kidding. I have heard of one of our Cleopatras who used to go to her favourite hairdresser in London first class on AI. This is her right, of course. Why should any bailout package rule otherwise. Why would her husband agree to such a bailout? If India is not a Greece, it’s only because of the millions of tax paying toilers like you who work their shirts off to keep the boys club covered. Think about this: nearly a third of India’s corporate debt stock is in the name of companies that do not have enough profits to cover interest payments. Public sector banks (who hold three fourths of these assets) have a dodgy loan ratio of 12 per cent. Think of what that means in money terms for a lender with a Rs 900,000 crore book size! Too big to fail. But who will underwrite these titanics? Whether it’s Greece or India or Air India the story is the same. Sovereignty brings entitlement. Which is always the opposite of governance. Which, in turn, is the opposite of government. Apple may not be allowed to buy Greece but a good OS could be the answer to its problems. The author is president and CKO, EQUiTOR Value Advisory (This story was published in BW | Businessworld Issue Dated 10-08-2015)
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