Character & Competence

 

I am tempted to republish this article in this blogpost as the nation needs to rethink, reinvigorate and move forward to reach its visionary goal of becoming a developed nation. 

Character and Competence  

 

 

B Yerram Raju 

 

Economist and Founder-Director, Telangana Industrial Health Clinic Ltd. Co-Author of the book ‘A Saint in the Board Room’ (2011)

 

Global Inequality Report 2022 mentioned that top 10 percent earn as much as the bottom 64 percent. India’s policy reforms during the last two decades saw high growth and high inequality levels intermittently. Quite often we also witness confrontation between the legislatures and Courts. We have also come across persons of acknowledged high competence landing in jail. Why?   

 

Sustainable and inclusive growth demands both competence and character. In order to define competence and character, and seeing the paths of their convergence, some storytelling becomes necessary.

 

The McKinsey Global Institute’s latest research on human development in Mapusa, a small town along a historic trade route in Goa, and in Porto, the second largest city in Portugal, unfolds “the story of both places that had virtually the same GDP per capita of $33,000 in 2019. At the country level, they are worlds apart: India’s GDP per capita was $6,700 (Purchasing Power Parity) or US$1941.82 in 2019, compared to $34,900 in Portugal—overall more than five times less.” 

 

Nevertheless, we are witnessing a few reputed leaders of self-aggrandisement and self-esteem directing the nation into the debris of material prosperity while a few others are wedded to the development of society. Hence, there is a strong need for recalling the basic principles of living that our inherent culture taught us emphasising competence with character.

 

S Radhakrishnan, the philosopher-statesman of India, said: “The ideal man of India is not the magnanimous man of Greece or the valiant warrior of medieval Europe but the free man of spirit who has attained insight into the universal source by rigid discipline and the practice of the disinterested virtues. He has freed himself from the prejudices of his time and place.” Indian heritage lies in humanism and universality. This sets the tone for redefining character and competence as traits of individuals and corporates. 

 

Wheels within Wheels

Meta, Amazon, Google, Wipro, Microsoft etc, are in no mood to keep their roasters intact. Jobs are removed in tens of thousands. NINJA (no income no job, no asset) had set in again. Banks and housing, and real estate companies are scared of their recoveries. Rising interest rates, lowering consumption sentiments, volatile markets, and untamed inflation are at the beginning of a new end. 

 

India, for the moment, seems to make a difference, raking in higher than expected revenues in GST and GDP growth forecast from the CRISIL placing it at 6 percent and Nomura at 5 percent in ‘23-‘24. When winter sets in, can spring be far behind?

 

Pure economics defies answers to many problems confronting society, while behavioural economics does offer solutions if character and competence move like two wheels of the forgotten bullock cart. 

 

If persons of character are afraid of their shadow and fail to take decisions keeping in mind the three ‘angel-robed demons – Central Vigilance Commission, Central Bureau of Investigation and Comptroller-cum-Auditor General’, competence in them takes a backseat. Autonomy, transparency, and timeliness in taking decisions never mean ignoring rules and regulations.

 

Lack of character is different from failure of character. Lack of character is unpardonable while failures are remediable. People who fail should be given an opportunity to correct and they should be made clear about the boundaries and consequences of the failure.

In Chapter 13 of Bhagavad Gita, (Kshetra, Kshetragjna Vibhaga Yogam), Lord Krishna defines the character: ‘Amanitvamadambhitvam, Ahimsaakshantirarjavam, Acharyopasanam, Saucham, Sthyryamatmavinigrahah’. The substance of the sloka is that a person with character should be devoid of pride and disrespect; should be humble, patient, and steady; should be able to have control over his self; be clean and clear in thinking and have restraint. We are at a point where we know what is right but are hesitant to adopt it. The Supreme Court had to pull up a plaintiff over the penalty sought on YouTube for airing what he preferred to see. 

 

High Character, Low Competence

How do we handle people on our leadership team who evidence the highest character, and the best motives, but are incapable of doing effective work? In a matrix of competence and character, fixing such people would be difficult. Organisations also skip them while mapping coaching and mentoring persons for results and sustainable growth. The loss is to the organisation and not to that person.

 

If we can draw a matrix of high character with high competence, high character with low competence, low character with high competence, low character with low competence in a Board of Governors, we will be able to establish the reasons for the failure of many a corporate who got the best ratings but ended up as disasters. 

 

The high character – high competence scenario will automatically lead to a high corporate governance (CG) scenario. But one without the other will not lead to a good CG scenario. It is said, “Economics without ethics is empty, and ethics devoid of economics is limp”.

 

We did not learn our lessons after the 2008 recession. The proverbial Vijay Mallyas proliferated and none of the cases of misgovernance and colossal bank losses got resolution. Over a decade of arguments in the highest courts of jurisprudence, involving malfeasance, misappropriation, corporate failures, and bad governance still defy resolution. On top of it, even the Insolvency and Bankruptcy Code gives the longest rope for resolution and those resolved, benefitted the errand.  

 

It is hard to disagree with EV Ramasamy Naicker, a Tamil philosopher of the 20th century, who said, “When I used to carry heavy bags during my younger days, my back would bend due to the weight, but not due to shame. Being straightforward and having less food is far better than diluting our character and taking lots of rich and quality food.”

 

The history of today’s wealthiest nation tells us about what happened between 1923 and 1948:

-        President of the largest steel company, Charles Schwab, lived on borrowed capital for five years before he died bankrupt.

-        President of the largest gas company, Howard Hudson, went insane.

-        One of the greatest commodity traders, Arthur Catton, died insolvent.

-        President of the New York Stock Exchange, Richard Whitney, was sent to jail.

-        A member of the President’s Cabinet, Albert Fall, was pardoned from jail to go home and die in peace.

-        The greatest ‘bear’ on Wall Street, Jessie Livermore committed suicide.

-        President of the world’s greatest monopoly, Ivar Krueger committed suicide.

-        President of the Bank of International Settlement, Leon Fraser committed suicide.

It was the pursuit of money to the exclusion of other goals that caused them their downfall.

 

Market behaviour largely depends on individual investor behaviour like buying-high-selling-low or buying-low-selling-high. Behaviour here largely is related to the character and not pockets. This character is typically borne of greed and not need. It is more like a honeybee that flits from one flower to another, sucking honey as it flies. But when it perches on its hive, it stops humming. 

 

Man is made by his own beliefs. ‘As he believes, so is he.’ (Bhagavat Gita). Henry David Thoreau may have told in different words, the same thing: ‘What a man thinks of himself: that is what determines, or rather indicates his fate.’

  

We need resilient boards of companies that can build teams of executives with foresight, virtuous and timely response, and adaptation capabilities.

 

India is at the cusp of change and the dream of India 2050 has to be realised by a generation that is seeing the garbage at the foot of the hill. They should be directed to reach the top of a mountain and every step counts. It is competence with character that should enable a crowning future. 

https://epaper.telanganatoday.com/Home/ArticleView?eid=1&edate=20/01/2023&pgid=48693

 

  

2021 and Beyond

 

It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness; it was the epoch of belief, it was the epoch of incredulity; it was the season of Light, it was the season of Darkness; it was the spring of hope, it was the winter of despair...” This is how Charles Dickens begins his novel, A Tale of Two Cities.

Bottom of Form

Vision and Strategies Change

 This is an apt description of this age. We are at a maddening speed in technologies. Industry 4.0 has entered. Artificial intelligence, block chain technologies, man machine learning, robotics are the decisive forces of change in most organisations. Digital applications are replacing the traditional gurus (teachers). Tick boxes define the success of persons, whether in schools or office selections. People would like to travel, if possible, at the speed of light. Several corporates are rewriting their vision and strategy documents.   

 Conflicting Contours

 If those characteristics define the age of wisdom, street fights, large family divorces, abandoned children in larger numbers than before, failures in inter-country relationships redefining trade rules, ignoring climate warnings, several persons yearning to cross the boundaries aiming high only to know that ‘distant hills look green’, reflect the age of foolishness. 

 Mobocracy Vs Democracy

 With Joe Biden taking over the reins of the largest democracy, democracy would appear to be on the path of restoration. But, on the other hand, in India, with the unrelenting farmers’ agitation, mobocracy seem to be asserting itself, mainly because of the failure in following the Constitutional process for a well-thought-out reform in the sector. With 123 amendments, Indian Constitution seems to be under attack off and on and begs for a comprehensive overhaul, so as to keep the Fundamental Rights enshrined there intact.

 Financial Sector 

 In the financial sector, Covid-19 shook the world while in India, the scenario is much worse as frauds and cybercrimes are surging, threatening financial stability. Reforms in this sector should move strategies ahead of structures. Two World Bank economists in a recent blog commenting on asset purchases in emerging markets and developing economies, say that unconventional policies and unconventional times had set in. “History is a reminder to central bank’s credibility if asset purchase programs are used for prolonged monetary financing of fiscal deficits.”

 Investments in water, environment, natural resources, education, health and hygiene, and emerging technologies would be the defining features of sustainability.

 Ethics in Governance and Yoga

 Ethics in governance and transformation processes seem to be of criticality. Albert Einstein had said, “We should be men of values rather than men of success, ” Winston Churchill had said “We should extend values beyond our homes.” The corporate executives are selling their professional skills and not their conscience. It is the attitude to life and the value system one has to cherish and live with. Values are not like a sensex graph varying every day or with every person. Values are universal in character. It is the application of values that has been undergoing a change. Clean minds are as important as clean physics and dharmic yoga makes more sense than mere physical yoga embraced by people in different parts of the world, with PM Modi’s clarion call to the nation since 2014. 

 Post Covid, the stars surface

 During this third millennium, with sputnik science reaching for livable space even on Jupiter and the moon, India would be moving ahead of other nations and prove its leadership in space technologies. She has already proved herself as a leader in pharmaceuticals and software and would move its best foot forward in the transformational world. No wonder McKinsey in its most recent article has put Asia as the leader of the future and generations will define the future in terms of pre-Covid and post Covid. 

 The year 2021 and beyond will see the world transiting to a different horizon. The wisdom of the aged will fall behind the expectations of youth and it is this youth that are going to redefine the age ahead. I am not a soothsayer but the writings on the wall are clear.

 (The writer, an economist and risk management specialist, is author of “Roots to Fruits – The Journey of A Development Banker.” The views are personal.) 

   https://www.moneylife.in/article/2021-and-beyond/62745.html

 

 

 

Vision 2030: Unfinished Agenda that is fair, just and egalitarian

The 71st Republic Day makes me reflect on the unfinished agenda for growth before the nation and a vision for the next decade. It is one thing to set a quantitative goal post and quite another to move higher on a qualitative agenda.

 

Such a qualitative goal requires more inclusivity and higher sensitisation than what we have at present. 

 

As a citizen, I would like to dream of an India, where peace and tranquility prevail; where transparency in governance exists in all fields; where there would be 100% food security and 100% self-sufficiency for food; where market forces do not devour the poor and the weak in society. 

 

India should be a country where better water and farm management would lead to better employment and least migration to urban and metropolitan areas from the rural areas; where population growth would not stand as an impediment for further growth of the economy; where all the employables get fully employed and the less employables would be endowed with appropriate skills and knowledge for full employment; where there is free entry and exit for firms in the economy with no parasites. 

 

Also it should be a country where women can walk freely even at midnight anywhere in the country; where values of life fall in tune with the culture and ethos of the nation and where the digital divide between the rural and urban vanish; where information asymmetry and moral hazard do not exist and where all the sectors of the economy realize their mutual dependence to their mutual benefit and the growth rate of the economy would move to a double digit figure as a matter of practice. 

 

I recall what Swami Ranganadhananda said once: “I look forward to the day when rural people stop easing themselves in public and start eating in public.” 

 

The statement is profound and carries with it an agenda for action: provision of good sanitation, safe drinking water, crossing the caste and other societal barriers and food within the reach of all. 

 

Fortunately, during the last few years, the Swachh Bharat mission has taken the open-defecation-free (ODF) areas close to 80-90% in several cities, although a lot remains to be done in many rural areas. 

 

Aspirational Districts program would similarly make several lagging districts to come to the forefront. Still, a lot needs to be done for an ODF India and safe drinking water being universally available. This calls for a synthesis between social and economic budgeting.

 

The barriers to realising such a vision would be:

• Fragmented political will;

• High population growth;

• Poverty and low level of literacy;

• Inadequate resources;

• Weak financial sector mired in unrecovered corporate debts and frauds;

• Poor governance;

• Improper structural plans;

•  Institutionalization and harmonization of legal aspects to set up monitoring systems.

• Deficiencies in implementation.

 

Some of our strengths recognized worldwide are:

 

• A middle class estimated at 350 million out of a total population of over 1.2 billion providing a stable market;

• The second largest English-speaking scientific, technical and executive manpower in the world;

• An abundant supply of raw materials;

• An extensive rail and road network;

• A stable political system based on parliamentary democracy;

• A common legal system with English as the court language;

• India is emerging as a major market and investment destination;

• The dramatic economic reforms initiated in 1991 have left a wide canvas of positive thinking and affirmative action.

• India is one of the top five in the world’s growing economies even after this temporary slowdown (5% of gross domestic product (GDP) at the end of FY2020).

• The sweeping change from unorganized to organized ways of doing businesses with the introduction of the goods and services tax (GST), Real Estate Regulatory Authority (RERA) and the Insolvency and Bankruptcy Code (IBC).

• An ardent desire to pursue financial inclusion agenda and 

 

Another major strength is India’s ability to respond to crises:

 

When there was a crisis in meeting the food requirements against the backdrop of colonial misrule, with severe famine and large patches of drought, we fought it out valiantly through the green revolution and made India self-reliant in food; we are now on the threshold of food exports. When we had a crisis in foreign exchange, we ably steered through. 

 

Most of the natural calamities – recurring floods in several States or hard-hitting recurring cyclones in Andhra Pradesh (AP), Assam, West Bengal, Bihar, Tamil Nadu, earthquakes of Latur in Maharashtra or Bhuj in Gujarat; the Tsunami of 2004 in Tamil Nadu -- have been ably handled with domestic resources.

 

Gross inadequacies are noticed in terms of value addition due to inadequate attention to crop specific infrastructure and post-harvest technologies like pre-cooling, cold storages with assured power at uniform voltage, price hedging operations, and market reforms in the farm sector. 

 

Some States have initiated special studies in this regard to prioritize their investments in these areas and deploy the needed resources. The impacts of these initiatives would be felt in due course. However, there is a regulatory overhang in India with more than twelve Union ministries, corresponding state ministries, laws framed by the Union government with rules framed by the state governments for implementing them. 

 

Still, due to the several food control orders governing the production and trade of those commodities and crops into which the farmers would like to diversify, the farmer, rural industry and farm trade are virtually strangulated. While there is an awakening in respect of these areas, the speed of reforms and actions in these areas deserve urgent attention.

 

Farmers benefit from more accurate weighing, faster processing time, and prompt payment, and from access to a wide range of information, including accurate market price knowledge, and market trends, which help them decide when, where, and at what price to sell. E-NAM has not fully absorbed the e-Choupal model.

 

Farmers selling directly to ITC Ltd through an e-Choupal typically receive a higher price for their crops than they would receive through the mandi system, on an average about 2.5% higher. The total benefit to farmers includes lower prices for inputs and other goods, higher yields, and a sense of empowerment. The e-Choupal system has had a measurable impact on what farmers chose to do. The system also provides direct access to the farmer to information about conditions on the ground, improving planning and building relationships that increase its security of supply. Farmers Producers Organizations (FPO) are gaining ground, albeit slowly. FPOs need clusterisation to derive greater advantage. 

 

Every Law should stand the test of the Constitution and stakeholder consultation a priori and should be subject to regulatory impact assessment at the beginning of the first Parliament session of the year.

 

Increased urbanisation during the last five decades has not diminished the rural space significantly. Comprehensive connectivity of village complexes providing economic opportunities to all segments of people remains unfulfilled. 

 

The integrated method that will bring prosperity to rural areas envisages four types of connectivity: physical connectivity through quality roads and transport; electronic connectivity through telecom with high bandwidth fibre optic cables; knowledge connectivity through education, skill training for farmers, artisans and craftsmen and entrepreneurship programmes, where the future roadmap of economic growth lies. 

 

It is not so much globalisation that is important as global competitiveness that is the need and healthy growth of manufacturing micro, small and medium enterprises (MSMEs), empowering women and reordering the subsidy regime in all the fields. We have no room for complacence. 

https://www.moneylife.in/article/vision-2030-unfinished-agenda-for-an-india-that-is-fair-just-and-egalitarian/59226.html