Thursday, June 18, 2009

Makes & Breaks in Politics: Analogies with Corporate World

One of the most important concepts in Indian culture and philosophy is that of the role of a creator, savior and destructor. People in India, since ages, have believed that the life cycle of anything, be it a nation, or civilization or a human life, is nothing but three phases of creation, survival and destruction. From the religious point of view also Brahma the creator, Vishnu the savior or protector and Shiva the destructor have been associated with the highest level of divinity. Keeping aside the theological aspects of this concept, it also has a very far reaching implication in almost everything thing – including the corporate world and the politics.

In a span of three decades the creation, growth and the recent debacle of BJP is a very relevant phenomenon in this respect. There have been introspections (or atmamanthan – one of the terms that Vajpayee had made popular even among the Hinglish crowd), review meetings, innumerable columns and writings on the causes of the debacle. Very logically nothing surprising has come out of all these. Most of the things that have been pointed out seem to be known to all. Nevertheless, none of these findings should be ignored with a ‘we-all-knew-this’ attitude like the kids in the class of Christopher Columbus who were all asked to place a boiled egg with shell firmly on a table and Columbus was the only one to break the shell, flatten the bottom and place it firmly on the table.

In Swami Vivekananda’s words ‘education is the manifestation of perfection already in man’. It’s no rocket science or the lack of it that makes someone a success or failure. In most cases debacles happen for reasons that are always known. So all the exercises for reinventing the reasons for any failure is always welcome. It’s also important to study success and failures at various fields and spheres because at the end of the day the reasons for any success or failure have some common things, knowing which just helps us to become more aware, educated and enlightened.

I’d like to analyze the growth and decline of a company which I’ve see from a close distance and draw an analogy to the same for politics. The intention is to infer that growth and decline always follow a particular pattern and the successful corporate and politicians always try to understand the pattern as best as possible.

The nineties saw a large number of technology startups in the San Francisco Bay area, popularly known as the Silicon Valley. The nearby universities at Stanford and Berkeley always provide an uninterrupted supply of talent to the Bay Area. Most technology companies either are head quartered or have important design centers in Bay Area. Intel, HP, Sun, Google all started in Bay Area. One of the technology areas which saw quite a few startups in nineties is called EDA or Electronic Design Automation, which provides CAD (Computer Aided Design) tools for designing semiconductor chips for electronic products. While semiconductor, which includes behemoths like Intel, IBM, Nokia, Motorola, Sony, Samsung and innumerable others, is a huge industry, EDA is very small. Individual revenues of Intel and Nokia are $40b and $50b respectively and the entire EDA industry has revenue of only $4b. That’s why EDA is perhaps one of the most fiercely - often bordering to nasty – competitive industries.

Little different from the Congress monopoly in Indian political scene, EDA had a sort of oligopoly dominated by the big brothers Cadence & Synopsys for quite some time. There were many small entities like the regional parties, but none could do anything significant till late nineties when a company named Magma suddenly rose like a sphinx. With barely a few million dollars of revenue in late nineties it attained $250m (1/8th of total EDA GDP) in 2005. When the semiconductor design houses were getting frustrated with the complacencies of the biggie-duo Cadence & Synopsys, a dashing young Indian entrepreneur, Rajiv Madhavan, still in his twenties, brought in fresh hopes and newer and more efficient ideas for making chips. The big brothers Cadence and Synsys didn’t provide a one-stop-shop and the customers had to buy a suite in pieces and stitch them together. On the contrary Magma came up with a single stitched elegant suite. Most importantly Rajiv exactly understood the problems and the aspirations of his customers - the chip makers.

The result was phenomenal. Apart from Google, not many startups in Bay Area can boast of such a success in so less time. Magma came into being in late nineties and by 2002 it had already become number two in areas of its operation, displacing the big brother Cadence. Magma’s reputation in customer satisfaction became a matter of threat even to the other big brother Synopsys. The entire designer community felt proud to be associated with Magma. In started attracting the best of the talents.

In a few years Rajiv could ‘destruct’ the old hegemony of the big brothers Cadence & Synopsys and ‘create’ a successful company. Rajiv was indeed a great Creator with all the right traits required for ‘creation’. He was aggressive, emotional, passionate, possessive, ruthless and ambitious. The Big Brother Synopsys tried its best to put him down, but he was just unputdownable.

The next logical phase of the business is retention or ‘protection’ of the growth. There’s a startling difference between destruction/creation and protection. It’s no theology, but sheer practical sense, that the protector Vishnu has been given a totally different image than the destructor Shiva. The Protector is much more matured, not emotional, very practical, composed and off course much more benign than the Destructor. The traits required for destruction/creation and protection are as different as playing cricket and singing songs. It’s not necessary that Sachin Tendulkar can also sing like Kishore Kumar. That’s when the problem started with Magma.

Rajiv is an excellent creator but turned out to be a bad protector. He went on with the same aggression, arrogance and emotions with which he’d created the company. He slapped a law suit on the Big Brother Synopsys without much reason and drained huge amount of money for fighting the case. Synopsys kept on dragging the case as long as possible because they knew Magma would bleed heavily with the sky-rocketing legal costs in USA. His views and comments in public became too harsh and arrogant as compared to the relatively soft image of Synopsys. At the same time his lofty claims about some of Magma’s future products didn’t turn out to be fully true in due course. Gradually people started to dislike the very arrogance and aggression in Rajiv that they had liked few years back. In the mean time very silently and humbly Synopsys came up with a really good product that challenged Magma’s superiority in recent times. Gradually people started to prefer the ‘softer’ Synopsys rather than the ‘hard’ Magma. That was also the time when the global slowdown starting taking its toll and Magma went into a whirlwind downfall.

Let’s turn back to the rise and decline of BJP from just two seats in 1984 to close to 200 in 1999 and down to 120 in 2009.The nineties saw the dramatic rise of BJP who could well understand the pulse of the nation. India had been frustrated with the fifty years of misgovernance, corruption and minority appeasement by the Congress. Indians badly needed some fresh outlook, transparency and a cultural nationalism to pump up the declining global position of India. BJP came up with the right mix of aggression, passion and emotion to destroy a fifty year old dynastic misrule and setup the startup of a successful coalition government in the center for the first time. Almost the entire educated middle class aligned themselves with BJP in the nineties.

But when came the turn of protecting the same government it started losing ground because of the same reason why Magma started failing. The same aggression that brought BJP to power became the negative point. The excessive attack on the older Big Brother Congress was not taken in the right way by the same people who’d voted the Congress out a decade ago in favor of BJP.

Like I hope Rajiv matures as a protector, BJP can also overcome the transition from a destructor/creator to a protector. It’s just a maturing phase that will pass by. The same people who had brought BJP into power in nineties might not be the best candidates to play the role of ‘Protector’. There has to be a change of guards. This shouldn’t be seen as an embarrassment or humiliation for the old timers because their contributions and expertise are not being ignored. It’s only that after Sachin’s innings it’s time for Kishore Kumar to sing. Let Sachin not attempt to be Kishore Kumar. Sachin is Sachin and Kishore Kumar is Kishore Kumar. It’s no embarrassment to Sachin that he is not Kishore Kumar. It’s just not his cup of tea.

Coming back to where I’d started – let’s understand that we not only need a Shiva, but also a Vishnu. That’s what runs a business, and that’s what runs politics!!

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