US-China and India competition

As the economy of the US continues to struggles, the public debate on outsourcing leading to service sectors jobs to India and manufacturing jobs to China is increasingly becoming strident. Sane voices of business leaders like Jeff Immelt of GE and others are getting drowned by jingoist talk. I just hope that the ultra nationalist sentiment does not get beyond a point that the political leadership in the US is forced to become more and more protectionist. Such a move will only increase bitterness amongst the emerging nations and the US which will neither be good for the US nor for the world at large.

US needs to become more competitive, it has to re-focus its growth priorities to more cutting edge technology rather than continuing to cling to old manufacturing areas like steel. Change is a continuum and the faster one is able to adapt to it the better it is for the country.

I am confident that Barack Obama will be able to steer his nation on a middle path of global collaboration based growth.

Growth imbalances and recession

The economic bubble that was waiting to burst in Dubai has finally burst and the Dubai ruler owned Dubai world has defaulted on debt payment. If one was to closely examine the development model of the region it is not too dissimilar to a Ponzi scheme. A a false sense of well being is artificially created by fueling growth by putting in more and more funds into grand projects that are exclusively the preserve of the rich. In the recession hit world the rich have become cautious and are not willing to consume as before. No wonder the bubble has burst.

The economy of the entire region is resting on a single petrodollar leg. Human capacity of indigenous people has not been built and the economy is sought to be created through expatriates who come in to the region for attractive remuneration. A diversified asset base that is built on the strength and innovation of the local people with support from experts from outside has not been created. It is high time that the Gulf region rulers start thinking on recreating a model that is more sustainable and maybe less jazzy but brings all round prosperity to the people of the region. It is also a lesson to both business and nations who need to look at their growth models more closely.

Increasing business footprint

Most corporates realize that business does not look up in spite of making investments in building a large sales force that knocks repeatedly on customer doors to sell products. We do not get the expected results because the business strategy, the offering be it a service or a product, the marketing pitch are not aligned to each other.

Some invest into consultants to help them identify problems, opportunities and help re-structure business.

The solution perhaps in having a highly experienced broad spectrum business advisor who can help refine business strategy on the one hand, position the offering, deploy their network of contacts and deliver results. But most such people are sitting on company boards and are not willing to invest time for others.

In today's age of specialization where experts have built skills in niche areas like re-structuring, financial management, process specialists, visioning, business strategy etc etc. getting broad spectrum macro business advisors is the challenge.

How India's poor saved the country from recession

As demand for good and services plummeted in the US, global exports got impacted and the world rapidly spiraled into recession. The Indian economy was jolted too but the social sector schemes aimed to provide employment to the poor suddenly appeared from nowhere to keep consumption and demand for everyday goods and services up. The poor continued to buy his daily quota of bread, oil, lentils and other consumer goods. Naturally the factories kept producing and profits continue to come.

This brings to us a new form of development growth model where the need of the poor nourished the welfare of the rich and the industrialized. I had never looked at social development from that angle.

To business this gives another opportunity to support social development not for the sake of charity but because this makes good business sense and is good for the shareholder. This calls for a re-alignment of corporate business strategy, focusing on this new market segment and taking advantage of it.

US military interventions impact on global business

The US is the largest economy of the world and the financial cost of Iraq and Afghanistan wars is still small in percentage terms. The quagmire in Afghanistan can lead to a prolonged US presence in the region not unlike that in Korea except here the shooting will continue. The financial costs will continue to rise as it seeks to douse one fire after another. History has taught us that ultimately wars take their toll on nations.

Smaller economies like those of China and India are increasingly becoming more and more independent in their thinking, hitherto small businesses of these countries have begun acquiring parts of US global corporations and manufacturing and services locations are moving East.

Global businesses world over will be forced to revise their business strategies. Entrepreneurs and other decision makers who are able to read the events early on will benefit, those who continue to wait will one day find that the best deals have gone to competition, costs have risen and profits have dropped. These are ones which will fade away and disappear into history, the visionaries will survive.

Global shifts in business alignment

Many political economists believe that in future business alignment will be driven by a strengthening of the China US business to business relationship. The rationale behind this thinking is that the export driven Chinese economy driven by US IPR and US business operating from China will drive in self interest towards greater alignment and synergy between the two countries.

I have partial disagreement with this US China world view. Chinese like all other nation states are driven by self interest. The ongoing global recession has been exasperated by the rapid drop in US and European consumer demand. China is bound to re-align its business model to focus more on domestic growth from the existing export growth. The two most populous regions of the world India and China, inspite of their political differences will bury the hatchet and start working together to strengthen business to business ties. Africa and parts of Asia that are resource rich will increasingly get aligned to economies of India and China who will increasingly become the major customers of commodities being produced by them. While North America and Europe will continue to be major global players but business to business global re-alignment has begun.

Perils of internet VC fund placement networks

I got conned last week in paying $500 to a network group whose agent informed me that they will get us early stage finance for one of my companies. We got the commitment letter for funding which however required us to pay another $2500 to a consultant who will negotiate the letter on our behalf. When we refused, the commitment letter was withdrawn and threatening letters were written.

I see a lot of blogs speaking on the incompetence of entrepreneurs and the lack of understanding of the investing process. I trawled and couldn't find a single blog describing the experiences of investees with investment placement agents.

I know majority of the agents are hardworking, straight and deliver value for money. US regulation in this area is almost invisible to investees who are forced to move from pillar to post for fraud redress.

In the internet world of today, these people will not be able to hide because the world is watching.

Small and medium sized corporations- lessons from large corporations

Corporations just like organisms have a life and implode or wither away at the end of their life cycle. Having worked for over a decade in a multinational corporation, I have noticed that once the corporation grows beyond a certain size it tends to become a conglomeration of satraps. Each satrap has an empire that is run in accordance to the whims and fancies of the satrap. Depending on the vision and management style of the individual satrap it grows, flourishes or withers away. The organization parts over time lose their vigor and withers away, other parts get afflicted and the disease spreads leading to ultimate demise. GM, Chrysler, Lehman and a host of other are examples of this phenomenon. These examples exist world over.

Small and medium sized corporates need to learn from this phenomenon and prevent implosion as they go up the value chain in growth and quality. Level headed leadership, human management capability, humility while being aggressive are some of the characteristics that will enhance life of organizations. Swollen headed CEOs, lack of responsiveness to customers, status quo orientation are some afflictions which we need to prevent occurring in our companies.

Collaboration with start ups and medium units

Just like living organisms, corporations also historically are known to have a life cycle of their own. An exceptional entrepreneur conceptualizes and builds a corporation, a great team takes it forward and the change in market paradigm, poor leader or act of God leads to its demise. There are very corporations which are more than 200 years old.

Some of the start ups of today will be the corporations of the future. They have the flexibility, the drive, the decision making capability to grow, expand and become strong. Just like the most profitable business gets created when a product or a service or offering is at the early stages of its marketing cycle, so I believe in collaborating with start ups.

There are two such start ups with whom I have been building a relationship for some time now. Both of these are based out of the US and experience so far has been good.

I am keen to collaborate with more start ups and create a multinational corporation during the half of a life time that still remains.

Social network sites and business

I have been using linked in to build global relationships. This is a great medium for connecting with people and exploring business opportunities. However, individual group managers of linked in designated groups are often a bottleneck in networking. Posts aimed to invite collaborating companies are shifted to the job section where they should not be. On the other hand, you will see large numbers of frivolous posts on the discussion forums. Most of these are from placement agents, networkers seeking to connect with anyone.

I think there is a need to regulate linked in better. This could be in the form of defining rules for each of the group managers to follow, curtailing the roles of group managers and restricting these to use of things like offensive language etc.

The popularity of social networking site is the freedom that these provide to people. This voice of freedom should not be permitted to extinguish.

Collaborating with European companies

I have been trying to wrestle with the problem of reaching out to non English speaking European companies. Many countries in Europe have great technology and skills but we in the English speaking part of the world are unable to access them. Language clearly is a barrier that is tough to break. Perhaps there is another challenge. The inability of the Europeans to come to terms with the rapidly changing global landscape where demand for goods and services is rapidly shifting to India and China. Although the political leadership is cognizant of the change. What I now see is a typical change management syndrome with business and society structured into three broad segments innovators, followers and laggards. I am trying to hit on the innovators to lead. After all in the 18th century the Europeans were leading the world. It is just a matter of time that the innovators will take it upon themselves to lead, collaborate and take advantage of the business opportunities in the emerging markets. Europe- emerging markets of India and China business to business relationship is ready for this change.

The perils of virtual business

In pursuit of the growth of my business I escaped being conned by a person running a Ponzi scheme. I met him in Milwaukee and I could at that moment not understand what he was offering. With the Madoff story becoming public, things are becoming clear how people are taken for a ride.

Fraud has no boundaries- it exists in all parts of the world. In the virtual business world you do blind dating and can be conned relatively easily. I am lucky so far but I don't know if others have had similar luck.

In these times of global recession, one is being forced to innovate to survive and grow and virtual business models are great. These are hugely facilitated by the social media and one can build good relationships across the globe.

It is tough to find the right combination with both parties being tentative, scared of the unknown and of each other. Maybe, new technology and more information on global publically accessible databases will help break these barriers and facilitate business. Yes, we will all lose a bit of our privacy. But I feel a bit more transparency will do us no harm.

Entrepreneurship is not restricted to the rich. The poor too have it. They lack in exposure, education and information in addition to capital. Social development programs rarely focus on making the poor owners of their destiny. Instead the givers become the owners, the capacity builders, the do gooders and the poor are the recepient.

There is a lot of talk amongst socio economists of direct hand outs to the poor in countries like India. Perhaps they are unaware of the reality of the world of the poor in India where exploitation of the poor happens at the post office, bank, money lender, contractor, job giver, colleague, village headman, politician, bureaucrat etc. In direct handouts there is an assumption that as money will get credited into the account of the poor, he will receive it. It doesn't happen like that.

Make the poor the owners of the enterprise, assist him with knowledge, information and management process but let him run that business. You will see them succeed and true poverty alleviation happen.

Projects for the disadvantaged

During my quest for looking for collaborating institutions who would help identify entrepreneur minded poor communities be they in the rural or the urban area, I am facing a whole range of challenges. Reaching out to the right community set is perhaps the biggest of all. There are too many do gooders in between the entrepreneur like me and the community. Each intermediary seeks to have a bit of the pie for themselves.

Political leadership is not adequately internet savvy to take advantage of opportunities that are presented on social networking sites like linked in. Inspite of the global diffidence on the political leadership of a country, this the group that the world has to live and work with. Its evolution into the world of internet is happening and I hope that in the future we can reach and connect with them to work with their constituents. Not only this will give us return in financial terms on the money that is deployed but there is an added attraction that somehow somewhere we have made a bit of a difference to the lives of the poor.

Community development

Most community development models have been developed by government agencies, charity groups, not for profit entities, corporate social responsibility providing corporates but rarely by communities themselves. Project development and financing institutions view communities and the poor as a group who require to be uplifted from penury. The relationship between the two is that between a giver and recipient.

On the other hand business organizations build businesses and prepare business models with a view to generate ever increasing wealth. The original equity or debt gets quickly paid back by the company and the company becomes self sustainable.

The question then comes to mind is that why can we not undertake community development on business lines. After all many communities have assets in the form of land or could own rights over forests or have certain skills in arts and crafts etc.

Development professionals need to re-look at their project development models and perhaps unlearn some of their methods and look at communities as productive assets who can generate wealth just like any private business.

We are in the process of development projects on these lines.

It is becoming increasingly clear as the global recession plays itself out that the balance of economic power is slowly but surely shifting towards Asia. US and Europe will however continue to dominate in technology and research. Two way business growth between the developed countries and India and China will get stronger. Companies in the US and Europe behavior will follow the classic pioneer innovator, follower and laggard model while looking for collaboration and new opportunities in the fast growing Asia economies. It will not be too far in the distance that the followers will join the pioneer innovator clubs and the trickle will turn into a flood.

I am seeing this play out in my business where I see pioneers collaborating with us in entertainment, finance, healthcare and education. The pioneer innovators who are building these collaboration based business with us are all from USA. The Europeans are still too waiting on the sidelines.

US and European companies

In the course of building a collaboration based business I have been interacting with companies both in the US, Europe and other parts of the world. I observe some trends which fascinate and intrique me at the same time. The fastest response to a business offer comes from India and the US. European, East Asian companies rarely respond and when they do relationship building is difficult. On the other hand, I find it easier to work and collaborate with US companies who after the initial concerns on protection of IPR, commercial concerns, contract legalities etc are resolved, things move relatively quickly and smoothly. Ever since, I have been to initiate potentially long term and enduring relationships with US companies in the entertainment and healthcare segments. I hope to build similar ones in other segments like education and food processing too.

The questions that come to my mind- how to crack into the European, Australian and East Asian market and reach out to companies there. I am looking for answers but I know that ultimately I will discover and a truly global collaboration based business will come into existence.

Food processing opportunities

In today's global bear market, there are two economies- India and China who are inspite of everything continuing to grow at a reasonable pace. India is a domestic growth story. With a billion plus people it affords huge opportunity in every business segment. Unutilized capability in North America and Europe can be gainfully deployed in business ventures in these countries. We believe if projects are jointly conceptualized with talent that is drawn from across the globe, a win win model can be developed. 

Food processing is still in a nascent stage in India and there is opportunity for new products, technology, business processes and systems. 

With demand not being a constraint in this market, the challenge is to conceptualize the right project for this market. 

As a risk mitigation measure, a multi country business is always better than a single country business. 

Integrated Healthcare Development Project

This is the second of the global collaboration projects which has moved ahead with the help and collaboration of partners across the globe. SAC and Clinical Research Partners USA are collaborating to create a series of IHDP clinics in multiple cities and countries. While CRP USA is bringing the technical knowledge on the table SAC is using its business and management capability alongwith its global network to convert an idea into a business. We are also coordinating to bring in financial capital critical to a business.

IHDP implementation happens in collaboration with hospitals who provide clinical advice to chronic diabetes, cardiac and other life long ailments. We provide the day to day healthcare support critical to enable patients to live a normal life. 

Our business plans are ready, we are working to identify hospitals with whom we can build the partnership and move the project forward.

I invite innovative business ideas and owners of such ideas who are seeking to move these from the laboratory to the field to connect with us and let us work together to take these to the people.

Strategic alliances with higher education institutions

Most higher education institutions in North America and Europe are cash strapped. A lot of them work hard to attract foreign students for study. The revenues from these students helps balance the balance sheet substantially. The situation has become more difficult in the global recessionary market. 

A new government has just taken over in India. There is an increasing realization that if growth has to continue in India, more institutions providing quality higher education will be required. Higher education institutions include engineering, management and skill providing institutions. 

Early trends indicate that there is a strong likelihood that the higher education sector in India will be opened to foreign institutions. This is a huge business opportunity in a global recessionary market. Joint ventures, strategic alliances and greenfield projects all can take advantage of this opportunity. We in SAC can help you.

Patents and innovation- protection

You work hard, spend huge intellectual effort in fine tuning your idea and finally converting the idea into a game changing innovation. You get a patent protection on it. Now the challenge is to convert this innovation into a business proposition. You have already shared this with your close friends and your immediate network but none of them have been able to convert that innovation into a business. Now you are looking for options. You use the internet, social networking sites like linked in and others hoping that someone, somewhere in some part of the world with business sense will help you convert your idea into a business venture. 

Innovators will meet such people, some of them will be genuine, others will be non serious and frivolous while a few will be out to steal the concept. The challenge is now to select the right person. I have come across some innovators who are faced with this dilemma. In one case, we succeeded in building trust and are taking steps to convert the innovation into a business venture. In another case, I did not succeed. Maybe I did not make the right noises and build that trust or maybe the innovator was just too scared of taking the plunge. 

There are no easy options here. It is just like dating. You make it with some and do not make it with others. You go by your gut feel. 

Super specialist unemployment and business opportunity

With demand for goods and services ebbing in most parts of the developed world, specialists who were hitherto accepted to be the critical components in a business are finding themselves being asked to either take early retirement or are shown the door. Talented people are suddenly finding themselves without work. 

On the other hand economies like India and China while there are large numbers of educated graduates, there are relatively few highly experienced super specialists. These economies were largely command and control economies where bureaucrats played and to a large extent still control the top decision making jobs. 

The private sector institutions in these institutions are starved of top quality talent. Business opportunity for talented people who are getting de-mobilized in the West exist in these countries. The trick is in finding, accessing and capitalizing on this.  

Infrastructure projects management

There is huge unultized capability in energy, steel, auto, food processing, mining etc in North America and Europe which is struggling to survive in the global bear market. On the other hand there is substantial unmet demand for such goods and services. Many Corporations find it difficult to crack into the otherwise lucrative India market because of what are perceived to be huge social, political, bureaucratic and regulatory barriers. 

The current bear market affords a major potential in risk diversification and business expansion to business. SAC can help reduce the entry pain and break into this difficult but potentially lucrative market. We have integrated social sector models that can be deployed to assist in implementation of mega infrastructure projects. Specialised expertise and generic local capability is a potent combination that can be deployed to effect. 

With the general elections coming to a close in India by middle of May, this is a good time to explore and exploit the situation. The bear market will not last forever and once it is over, it will competition as usual. Now is the time to make your move.

Learning from entertainment industry collaboration efforts

I had set out enthusiastically collaboration efforts in the entertainment industry. We had planned to organize music related events worldwide. Unfortunately the collaboration effort did not succeed in one place but in other places it has achieved great success. 

I would like to list out the reasons where I failed. It failed when expectations of both parties although clearly outlined at the start was not followed up and updated.  As the project planning moved ahead, expectation management was left at the oral level and corporate principles of documenting conversations, making alterations to existing agreements was given a go by. Critical communication gaps emerged and the relationship tanked. It ended with rancor and distrust on both sides. 

Where it succeeded was where we kept discussions at a purely professional level and did not let emotions get ahead of us. We are going strong on at this stage with our programs but it was a learning that I wanted to share with others.  

Principles for global collaboration

Cultural differences need to be resolved while entering into collaborative arrangements with companies and individuals worldwide. Most of us from Asia generally find it difficult to say no to things that we are not comfortable with; we are especially reluctant to make a negative statement to people who we categorize as elders, religious people or people in what are perceived in Asia as coming from 'noble" professions like medicine, religious people and others like people in high office, well connected people etc. We also try too hard to get a deal going and are willing to negotiate which is perceived as vacillation or resorting to trickery in other parts of the world. I have found additionally differences in approach to doing business in different sectors in the same country. The entertainment industry in general is less structured and organized as other sectors like manufacturing, IT, finance and the like. My recommendation that the best way to handle these challenges is to adopt a structured approach while dealing with people in culturally different locations. Documenting discussions, making out legal agreements, defining roles and responsibilities, insisting on a structured process to doing business are some ways these differences can be bridged. Collaboration is critical to success and perhaps some of these aspects may help us in our journey to collaborate and grow together.

Innovative utilization of super specialists in US and Europe

A large number of super specialists in US and Europe who till yesterday were sought after by employers are suddenly finding themselves out of work. Our global collaboration model seeks to utilize the capability and innovation of these people in our business development framework. Innovation and capability in my view has more value than cash. If this is deployed for public and business good, it has the potential of being a winner for all. We encourage patent holders, scientists and innovators to initiate a business dialogue with us. Together we will help create a business venture that will give both intellectual and financial rewards to both. We seek to get the best minds working in synergy to beat the recession.

Investment credit shortage and recession

Access to credit is one of the major impediments to growth. We are deploying the global collaboration model to overcome this impediment in a case of a hospital chain owner. Synergistic alliances with companies in various parts of the world is organized. Alliance partners bring to the table, for the benefit of all, their individual strengths in technology, management skill, financial resources, sales and marketing capability. While this does entail a lot of due diligence and work but at the end of the day it is highly intellectually satisfying and financially rewarding activity for us and our collaboration partners. We are thus able to help each party achieve their individual goals even in the prevailing recessionary environment.

Business during the global recession

Planning for our global entertainment events I travelled a couple of weeks back to the US and the UK. I observed that while there was a great emphasis on detail but structured and logically approach to issue identification and resolution were missing. There was a great desire to do business but very little thought was given to the macro picture which drives business.
Our planning of global entertainment events and other collaborative ventures is moving steadily forward because we have adopted a new approach to business which looks at the macro picture first, identifies areas of consideration and then goes into the details of each area. Planning is done as we go along this journey of discovery. This I am finding is an excellent way to beat the current recession and explore new opportunities.

Entertainment division SAC

We started our discussions with my US partner www.latinmusicfest.com on holding Latin music events in India. SAC collaboration network was deployed and now we are in advanced stages of planning events in India, US, Mexico, Puerto Rico, Brazil, Argentina, Colombia, UK, Netherlands, Spain, France and Germany.
This to me demonstrates the power of collaboration and putting the best minds across the globe to work. All those who are part of this project do not think of the bear market and recession but look to growth and collective prosperity.
We are constantly innovating and fine tuning our engagement models and making this work. This is a place for executing ideas. Bright minds are invited to get in touch.

Global collaboration in a recession struck world

Talent, entrepreneurial capability, drive is not restricted to a single country. In today's world just like in any other time, old companies will fall and new ones will emerge. My belief is that the new ones will succeed if they collaborate. With internet and digital communication taking giant strides it is easier for individuals and companies to communicate and come to business understanding that benefits both.
We in SAC have been working on this model for just four months and have already built an excellent collaborative business arrangement with an entertainment company in the US. Together we prospect and sell services in third country. I am seeing this collaboration increasing every day and individuals and companies from Europe too are joining in this venture. Let us collaborate and re-create growth for ourselves and for others.
If you have any comments or wish to join in do go ahead and write to me.

Global collaboration

Are you aware that there are parts of the world which have started showing trends of recovery of growth. In India- cement YOY growth was 11%, autos 23%, FMCGs 26.4%, food and beverages 28%, rail freight 7%, steel 4.2%, credit 24%, deposits +30%.
We are currently processing requests from clinical research organizations, media and entertainment content and event organizations to help them take advantage of this growth. Collaboration is the key to work our way through the bear market. Let us collaborate, work together and use our collective wisdom for mutual benefit. You can reach me via mail: ahluwalia.sudhir@gmail.com or sudhir.ahluwalia@sacglobal.org.

Pharma, healthcare, biotech and lifesciences

Let me mention some market buzz in the pharma sector. "Mint" a business newspaper published from India in collaboration with the Wall Street Journal reports that GlaxoSmithKline Plc, Sanofi Aventis and Merck are all wanting to expand and make investments. Does this not demonstrate that business prospects exist even in the bear market and there are ways to expand and beat the downturn? Of course the challenges of entering into new markets is always there and you will need to do due diligence, identify the opportunity, prepare a business plan, require hand holding support, resource the new organization etc. etc.
The above example is not a case of outsourcing of jobs, it is a case of expanding business footprint through synergy and collaboration.
Tomorrow I will dwell a bit on the opportunities in the clinical research area.

pharma, healthcare, biotech and lifesciences

We are all aware that the downturn has impacted bottom lines of companies, people are getting laid off, credit is scarce making it difficult to make fresh investments, there is little appetite for risk taking, we want to stay in cash and want to keep our heads down and weather the storm.

In SAC we believe that this is an opportunity to innovate and build new business models for growth. In the world BRIC economies are still growing; in India and China GDP growth is still above 7%, quality manpower is still available at reasonable rates and demand for goods and services is still there. The challenges of entering into these markets notwithstanding, these markets have helped many companies stay afloat. Caterpillar is getting nearly half of its revenues from these markets, IBM is showing healthy growth because of diversified models, even GM is still selling cars in some numbers here.

We in SAC offer a collaborative framework for companies to synergise and grow. Our pharma, healthcare, biotech and lifesciences etc. unit is already getting enquiries in building collaborative engagement models with us. We believe in high degree of transparency, value ethical behavior and work on a principle of trust. When innovative minds will get together businesses will get built.
Tomorrow I will raise the question which is uppermost in the mind of many people- debate on outsourcing and job loss.

Inviting pharma, biotech and healthcare companies

Hi
I am Honorary Chairmain of a global virtual business consulting firm (http://www.sacglobal.org/). We are trying to reach out to companies who are seeking to build a collaborative business relationship to expand their business footprint.
I believe that in the current recessionary environment synergy by bringing together skills across the globe will help hedge business risk, expand business footprint, reduce lay offs, maintain reasonable bottom lines and get us prepared for a leap forward when the market conditions improve.
Interested companies may kindly write to me on my gmail ID which is given on our website contact page.
Sudhir Ahluwalia