Wednesday, January 26, 2011

Incredible India!?!

Today was Republic Day in India.

Think Independence Day in the U.S. and you get the idea. The holiday commemorates the passage of the nation's constitution on January 26, 1950.

Since it is always on the same calendar date (again, like our July 4th), the holiday could come in the middle of the week, as it did this year, or even on a weekend.

As in our country, the nation's offices close for the holiday. The main event is in Delhi where a parade of epic proportions takes place each year, but additional celebrations also take place in each state's capital city. Bangalore, as the capital of one of the nation's 26 states, hosted just such a celebration this morning.

Since offices were closed today, we used the day for sightseeing here in Bangalore. But, as we near our departure flight tomorrow night, this is also a good day to reflect on some of the things we have observed and learned about India in our two weeks here.

First, to understand India we have learned that we must understand its people and that means understanding its religions and races. India is incredibly diverse, much more so than China.

Three main religions dominate: Hindu, Islam and Buddhism, representing 95 percent of the people. Christianity, mostly introduced during the British occupation, represents only 5 percent.

Atheism is virtually unknown, unlike in China. Daily religious rituals are observed by almost everyone. Religion shapes and drives almost everyone and just about everything, based on our observation.

Second, to understand India, you must understand the national psyche.

A proud people with a civilization that pre-dates Christ, the nation was nevertheless under English rule for 347 years.

India gained its independence largely because it sent 2.5 million Indians to fight loyally beside the detested Brits in World War II and, with India emerging from the war as the world's fourth largest industrial power, the British felt they had no alternative but to free India in 1947 from colonial rule.

Third, all of these experiences have made Indians humble to the core, unfailingly courteous in every interaction.

If we heard a single greeting in two weeks that didn't have the word, "Sir" in it somewhere, I don't remember it.

Even in the face of maddening traffic that would drive a saint to road rage in the States, we never saw a single driver make a gesture in anger or shout a profanity.

But with this humility and courtesy has come a work ethic second to none. There is a fire burning brightly in the eyes of virtually every Indian, especially the young.

Indians seem to stare deeply into your soul as they smile at you or serve your coffee or wait beside you at an intersection.

Fourth, unlike some media reports, India is open and ready for business. They especially like Americans. Indians enthusiastically express their admiration for Barack Obama but they also talk
admiringly of George Bush. This came as a surprise but it also shows that we can't always believe what we read and hear.

If you come to India, you will be welcomed. You will also be safe. I never once felt afraid or uncomfortable, even on Sunday as we walked with our guide through the slums of Mumbai, made infamous in "Slumdog Millionaire."

There is graft. Our van was stopped in Mumbai traffic over the weekend and the driver had to pay 100 roupees (about $2.00) to enable us to continue on our way. We watched through the window as he handed over the bill.

But we saw no evidence or heard anyone say, in any meeting, that this is an issue for businesses doing business. It would be naive to think it doesn't happen but too many American companies are already here and operating successfully to view it as an impediment.

The official slogan of Indian tourism is "Incredible India!"

This might be a bit of an overstatement because much must be done to meet Western living standards but any businessperson, anywhere in the world, who is not thinking about how India does or will or should impact his future business is simply not paying attention.

Tuesday, January 25, 2011

The World Really Is Flat

We traveled this morning from Mumbai to Bangalore. Sure enough, the city is flat.

Maybe not so much flat as in topography, but clearly it is flat as in geography. In fact, the city is a mini-lesson in world geography because every major multinational corporation seems to have some type of presence here.

We saw buildings, in some cases campuses, with names like HP, Microsoft, Accenture, CapGemini, Intel, Cisco...the list is seemingly endless.

What are they doing here? In faraway southern India? In a city that just 20 years ago had 500,000 people and today has 5,000,000?

Two reasons:

1. The weather is spectacular Think San Diego. And that's true just about every day of the year, with just enough rain to make the city look like a giant garden with blossoming flowers and trees everywhere.

2. The education is abundant and technical. Over 150 schools, colleges, universities and technical institutes are located here. PhD degrees are more common than temples.

Prior to the early 90s, when growth happened, the city was home to many Indian defense facilities. The thinking apparently was to locate as many of India's brightest people and sensitive projects as far away from Pakistan and China as possible.

So Bangalore had a history of being a home to many very bright engineers and scientists even before Tom Friedman discovered the city and wrote about it in his 2005 bestseller, The World Is Flat.

Growth since then has skyrocketed. It's apparent everywhere. New freeways. A new Metro. New buildings.

We visited upon our arrival with two leading examples of the types of companies that have benefitted from this explosion.

First, we toured the learning facilities of Wipro Ltd. With over $6 billion in revenues, it is the world's number one provider of integrated business, technology, consulting, testing, and process

The company currently employs 120,000 people worldwide, over 18,000 on the campus we toured. Continuous learning is the corporate mantra, however, and each employee is required to complete 13-14 days of professional and continuing education annually. To meet this requirement, the Wipro learning center employs 127 full-time faculty, most with doctorates.

Next, we went to the sprawling corporate campus of Infosys. This company, started in 1981 with only seven full-time employees, it now has 150,000 (but with only 200 having a "title".) The company has revenues of $5.7 billion, designing and delivering technology-enabled business solutions to "help Global 2000 companies win in a flat world."

Again, education and lots of it was the recurring theme. Infosys has a $120 million campus, InfosysU, located in Mysore, about 90 miles away.

Each year 1.3 million people apply to work at Infosys but only 15,000 are hired, making entry into the company's year-long training program more competitive than Harvard.

The world may be flat but we're going to be looking up to the Indians and the Chinese if we don't make a new commitment to education. They already have.

Monday, January 24, 2011

The Steve Jobs of Indian Insurance

Innovation seems to know no boundaries these days.

We've come to expect constant innovation and out-of-the-box change from technology leaders like Steve Jobs at Apple, Sergey Brin and Larry Page at Google, and Mark Zuckerberg at Facebook.

But innovation in insurance? In India? You've got to be kidding.

That's exactly what we found this morning here in Mumbai when we visited with Sandeep Bakhshi, chief executive of ICICI Prudential Life Insurance Company Limited.

Joining him, both in the meeting and in his innovation plans, were Judgajit ("Jit") Das, Chief of Human Resources at the company, and Ashish Rao, VP of Human Resources.

First, they said, you must understand the life insurance industry in India. Prior to 1955, there were 230 life companies. Then the government nationalized the industry and there was only one.

Today that company, Life Insurance Company of India ("LIC"), has 300 million policyholders, easily dwarfing every other insurance company in the world when measured this way.

In the early 90s, the government decided it made sense to open the industry to competition again. Prudential was one of the first new companies into the market. Today there are more than 20 major private sector companies plus LIC, still state-owned and still the biggest with 70 percent market share.

Prudential today has 6 percent market share but ranks third in the market with 6 million policyholders.

The company, as a foreign-owned entity, is required to have an Indian partner with majority ownership. As one of the early entrants to return, Prudential quickly entered into a joint venture with ICICI Bank, one of India's largest with more than 2,528 branches across the nation.

This proved to be very smart and, today, the retail bank assurance channel is Prudential's largest source of business, generating more than 35 percent of policy revenues.

The second channel is where the story gets interesting, where the innovation begins, and where Prudential in India may be creating a new model for insurance sales worldwide.

Two years ago, the company had 250,000 agents and required 20,000 employees to supervise these agents.

Then, Sandeep had a brainstorm.

He looked around, realized that his customer of the future in India spoke three languages: English, a second traditional language like Hindi, and a third one that he calls the "language" of technology.

These future customers, Sandeep thought, would be huge in numbers. And, for at least another generation, India will not only grow in population but the median age will continue to get younger.

So, he innovated. He cut 250,000 agents to 130,000 and he cut employment from 20,000 to 14,000.

Then he took his biggest risk of all.

He invested the savings into technology so that his company could learn to sell insurance over the Internet. He took his best and brightest, told them to figure out the insurance sales model of the future, and finally told them that he would guarantee them three years to find success--no questions asked.

All this in a country where the World Bank estimates 80 percent of the population still lives on less than $2 per day. But also a country where broadband is growing at breakneck speed. And where incomes are too.

How's that working out for you, Sandeep?

Well, of course, it's too early to tell. Companies the size of ICICI Bank and Prudential Corporation Asia aren't known for being foolhardy. So they must know something about the future of India and that is very likely to have the word "Internet" in it.

To see the future of India, make an appointment to see Sandeep Bakhsi.

Saturday, January 22, 2011

Meet The Professor

We should hire Vaidy.

He could teach international economics with the best of them. He certainly taught us a few things about Indian economic history on Friday when we visited with him. He also helped us understand the future of India better.

V. Vaidyanathan (he goes by "Vaidy") is not really a "professor" but he could be. He is actually Vice Chairman and Managing Director of Future Capital Holdings, an emerging fast growing financial conglomerate based in Mumbai. He represents the new Indian professional class, left ICICI to become a professional cum co-promoter of a finance company to take advantage to his excellent reputation in Indian financial markets to build a business of his own.

Here are a few highlights of his "class":

In 1,600, when the British arrived, India had 30 percent of the world economy. In 1947, when they left, India had 1.5 percent. Britain appropriated the difference over the years to build its own wealth.

The per capita grew by 0 percent for 300 years from 1600 to 1900. Then from 1947 to 1990, growth averaged 3 percent per year. In the early 90s, India's leaders (like China's at about 15 years ago) had an epiphany, realizing that "wealth is good." This led to the opening of both countries but China surged ahead, India started late, but now India is now closing the gap rapidly.

Up to about 2000, most educated Indians studied and went abroad at the earliest opportunity. Ironically, this ex-pat generation of Indians send back a staggering $50 BILLION home each year. Earlier this flow was to relatives, now it is for investments too. India failed in population
control, but again, it is now a demographic dividend.

The India growth projections is not just hope. India's investment as a percentage of GDP is now touching 40 percent, up from 15% in 1990. This will lead growth into 2020 and beyond. India has 35 percent plus savings of GDP on a 1.5 trillion economy, you have a big corpus for investments.

The BRIC report (Brazil, Russia, India China Goldman Sach report) is now passé. India has beaten all these projections. New research now suggest that average per capita income will increase from about $1,000 per year to $7,500 per year by 2030. This doesn't sound like much money by our standards but this will make India's economy the world's fastest growth engine.

Corruption looks like a moral issue but is actually a economic issue. As India per capita goes into 3000- 5000 dollar plus, the corruption will come down automatically. See the inverse link of prosperity with corruption index and you see the point.

Finally, his theory the only thing India has to do to reduce poverty is by encouraging more business and not by slogans. And the new India is getting more business friendly.

Professor Vaidy was just getting started with his economics class lecture when his assistant interrupted to remind him he had another meeting scheduled.

The impact of the lost 400 years will be wiped out in 40 years.," Vaidy said as he concluded. "And the new India doesn't care what caste you come from, its business, value, achievement that matters."

Though China has raced ahead, and admirably so, the last word or chapter has not yet been written. Who knows when you wake up in 50 years from now the India that failed on population control may have raced ahead".

Friday, January 21, 2011

From Green Hills To Green Rupees

Barry Stowe grew up in the outer reaches of Green Hills, just a medium length bicycle ride from the Lipscomb campus.

It was a ride he made often as a boy attending Lipscomb campus school, then Lipscomb University where he graduated in the late 70s.

Today, he is chief executive of Prudential Corporation Asia, with more than 300,000 agents and employees in 12 Asian nations and more new markets under development. Their business units are in life insurance, funds management, and consumer finance.

The company is growing so fast Barry's people can barely keep pace. He describes his own physical condition as "perpetual jet lag."

Mike, Tom and I had dinner with Barry on Thursday evening in Mumbai. Barry happened to be in town for a board meeting of his Indian insurance company and we were the fortunate beneficiaries of his hospitality before he rushed off to the airport to catch a midnight Kingfisher Airlines jet to Hong Kong, a seven hour flight.

In the past year, I've dined with Barry on three continents as he has graciously entertained and educated our students--and me--on business in Asia.

He may have as good a view of what's happening in India and the rest of Asia as anyone in the world.

Joining us at dinner were Barry's CFO, Adrian O'Connor, and Graham Mason, chief executive of Barry's fund management business in Asia.

All are based in Hong Kong, where the company has its Asian headquarters. The parent, Prudential plc, has its home office in London where Barry spends considerable time.

A sister company, Jackson National Life Insurance Company, is relocating 500 employees to Cool Springs under the leadership of its new CEO, Mike Wells, who will be speaking at Lipscomb's next Nashville Business Breakfast on February 7.

We're in India this week and next because two years ago I asked Barry, on one of his trips home, where our next College of Business MBA study trip should visit. Without a doubt, he told me then, it has to be India.

I reminded him last night about that conversation and asked him if he still felt that way.

"Absolutely," he smiled.

When I commented on some of the logistical challenges and visual horror scenes we have witnessed as we've traveled this week, he said, "Look, the infrastructure in India is a train wreck but the future is in India's hands. The Chinese are ahead now but all of this chaotic democracy will be an advantage in the end."

From the lips of a man with more than $100 billion U.S. under management, I'll place my bet right beside his.

Thursday, January 20, 2011

Rich Man, Poor Man, Middle Man

Rich Man, Poor Man, Middle Man

We traveled from Delhi to Agra today to see one of the true wonders of the world, the Taj Mahal.

It's a five hour trip by car from Delhi but it's a trip that says just about all you can say about doing business in India in the 21st century.

This is not the U.S., Europe or even China. Businesspeople looking to do business in India better realize that because it's a different world...but it's a world that will have the fastest growing economy on the planet in the next two decades, according to Morgan Stanley.

We traveled through abject poverty on the road to Agra, today a city of about 2 million. Along the way, we saw hovels as homes, cow dung as cooking fuel, barefoot beggars and cantankerous cars.

But we also saw signs in every village advertising cell phones and cell phone service. We saw satellite dishes on those hovels and drivers talking on their cell phones in those old cars.

We also saw children in neat uniforms walking to school through villages where their dads are barely scratching out a living but the smiles and enthusiasm on their young, eager faces were contagious.

They now have a future and their future may change the world.

One employment index pegs the number of jobs created last year in India at an increase of almost 30 percent over 2009's rate. Top gainers in absolute numbers were in engineering, education and pharma. Jobs in the most demand, by category, were engineering, IT, sales and
business development, finance and accounting, and marketing and advertising.

India will finally have a middle class and it's going to be huge. McKinsey estimates that India's urban population will swell from the 2001 census level of 290 million to almost 600 million by 2030. Many, if not most, of these new urbanites will be attracted by higher paying
jobs and new opportunities, lots brought to India by ex-pat firms from countries like ours.

Is India's future certain? No, there clearly are many challenges. The road to the Taj Mahal was atrocious. Basic services like garbage removal and street sweeping, which we take for granted, are almost unknown. But right beside those potholed, filthy roads are cell phone towers. Lots of cell phone towers. Everywhere.

When we arrived at the Taj Mahal, we were awestruck. Words really are inadequate. This is a building that required 20,000 workers more than 20 years to complete. In today's dollars, our guide proudly informed us the cost would be $1 billion. All for a ruler's third wife who died
unexpectantly giving birth to his fourteenth child.

Wealth beyond belief marked India's existence for hundreds of years, just as it characterized England, France, Spain and China. But that wealth belonged to the fortunate few.

That dog don't hunt no more, as they say in southern India. The future belongs to the People. And, in India, that means the emerging middle class.

For American business, that means you snooze and you lose.

That's another thing they are saying in southern India. And in eastern India where we go tomorrow. And in northern India in the very shadow of the Taj Mahal.

Ask that shopkeeper on the road to Agra with his brand new cell phone.

The future is his.

Tuesday, January 18, 2011


Dr. Das Interview Part 1

Dr. Das Interview Part 2

We visited today with Dr. Jitendra K. Das who is the Director of the Fore School of Management in Delhi. His position as Director is equivalent to mine as Dean.

Dr. Das (pronounced "Dahss") is a tall, courtly gentleman. He appears to be in his fifties, with a distinguished speckling of gray starting to peek out. Although scholarly, having earned his PhD in Toronto, Canada, he has the animated speech and gestures of an entrepreneur.

As he talked about his first year at Fore, just completed, his excitement was contagious.

Founded in the 1980s, Fore is among a new breed of schools in India. A private institution, Fore lives by its revenues almost exclusively. Therefore its programs must sell. It must meet a need or it will no longer exist, and Dr. Das knows that.

So he is working on lots of new ideas, just like we are at Lipscomb. To go with his full-time MBA program (with 200 students) and his part-time evening and weekend programs (with 500 students), he is now planning to add a satellite campus in the fast-growing suburb of

He is adding degrees in health care and operations management. He has developed faculty and student exchange programs with universities in the U.S. and France. He is building a new classroom building at his primary campus in Delhi. He is considering adding executive education certificate programs online.

Sounds familiar, doesn't it?

Not only are his ideas almost exactly like our ideas, but his market is just like ours. Lots of competition. The students pay for their own degrees while working full-time jobs and, for
many, being a mom or a dad too.

To make payment easier, he brings the bank to his campus on registration day. The bankers set up a kiosk and make student loans right there on the spot.

We talked about our differences and about our similarities. The latter conversation took a lot longer than the former.

Hopefully we can partner with Fore on various projects. When we return with students in March, 2012, Dr. Das has agreed to host us and to provide a faculty member to lecture on business in India.

We talked about student exchanges and even faculty exchanges. (I probably should keep that bit of news to myself until I can get home and reassure our faculty this would be a reward, not exile.)

We even talked about offering joint degrees online, with each faculty teaching a portion of the classes.

President Lowry is right...tomorrow's university will be a DIY university. It will be custom-tailored for market response to needs, for speed to market, and for creative solutions. Hello world!

Monday, January 17, 2011

Healthcare in India

Apollo Hospital Interview Part 1

Apollo Hospital Interview Part 2

Today we visited with key executives of Apollo Hospitals, India's largest private hospital company.

Founded in 1983 by Dr. Prathap C. Reddy, the company today has 53 hospitals and 9,500 beds. That makes it about the size of some of Nashville's leading hospital companies, which are among the largest in the U.S.

A day in Apollo's hospitals is amazing:

• Over 1,000 admissions

• Over 40,000 lab tests

• 175 MRIs and 270 CT scans daily

• 500 major surgeries

• 1,500 emergency room cases

We met with Anil K. Maini, president of corporate development for the parent company; Abhijit Majumder. general manager of the hospital in Delhi; and Dr. Karan Thakur, a young dentist who runs outpatient services in Delhi using the business skills he learned in two years of MBA study in the U.K.

You would have thought we were at a Nashville Health Care Council meeting.

Smart, savvy, extremely well educated, knowledgeable about U.S. healthcare as well as Indian healthcare, these three executives would have helped you to understand how we spend more per capita on healthcare than any nation on earth but only rank about tenth for what we get with our money.

They're converting to electronic medical records. They can do a knee replacement for half the cost in the U.S. They do organ transplants daily. They are working on wellness programs to combat epidemic levels of Diabetes Type II, a condition caused in India by genetics rather than by obesity as in our country.

They market their services throughout Asia but refuse to call the wealthy patient we saw checking in today a "medical tourist." These patients, who are attracted by the high quality of care and the reasonable prices, are simply "international patients."

Tom Friedman would have been proud because Apollo's world is definitely flat. Their hospitals daily whip x-rays around from doctor to hospital to radiologist via the digital highway, bringing healthcare to millions of rural Indians.

With the Frist family building a 500 bed acute care hospital in Shanghai and with pioneers like the Apollo group, Nashville's healthcare industry better be ready to go global because global medicine is a reality. And the market is measured in billions, not

thousands or millions.

Turney Stevens, Dean

My First Impressions of India


We arrived late Saturday evening to begin a two week trip preparing for a new Lipscomb MBA travel class to India, beginning in early 2012. Joining me are Dr. Mike Kendrick, associate dean, and Tom Gray, a Nashville business executive who chairs the international subcommittee of our College of Business Board of Visitors.

Quick facts about why we are in India:

*India is home 1.2 billion people, second only to China and four times the population of our country.

*Its economy is expected to expand 8.5% this year, with a growth rate that could overtake China by 2013.

*Some economists think India's economy will grow faster than any nation's on earth over the next 25 years.

There are two reasons why India's economy will soon start to outpace China's, according to a recent article in the Economist magazine:

1. Demography: China's workforce will shortly start to age and grow older; India's will continue to get younger for at least another generation.

2. Democracy: Although China has surged ahead because of its strong central planning, India's rough and tumble democracy has led to the nation having millions of young entrepreneurs all furiously doing their own things.

Since the early 1990s when India opened up foreign trade, Indian business has boomed. Ideas flow easily. Its people are exceptionally well educated and highly literate in what counts most in the 21st Century: the digital economy. Even our Indian guide is on Facebook, he told us yesterday.

You've heard about the bad stuff: Dirty toilets. Teeming masses. Dusty, dirty streets and very poor people.

We saw all of this and more yesterday on our first day in Delhi, the nation's capital. But is the future in India's hands? Many think it is and we'll let you know what we think over the next two weeks as our trip to India progresses. Stay tuned.

Turney Stevens, Dean