Monday, December 31, 2012

Getting Started with CSR - part 1

The new companies bill has been in discussion for quite some time now -- it is looking at bringing significant changes to the existing companies act of 1956.  One new aspect of this bill is the mandate on CSR being implemented by companies.


At this time (Dec 2012) the bill has been approved by the Lok Sabha and awaits approval of Rajya Sabha.  Its only a question of a few months now that the bill will get moving and become an Act.  However, with the debates and discussions that have been happening on many fronts including the Minister of state interacting with the Industry -- CSR mandate is a given and can only get more demanding with time.

The highlights are that if a company has Rs 5cr profits in a year then they need to get into a structured CSR program that applies at least 2% of the average net profit from the last three years (more detail below as reference).  While there is enough flexibility in the current approach for companies falling under the ambit to not do much about it, however, I think that the lack of any serious resistance from corporates on this aspect of the bill is a great indicator that Indian Industry is now mature and ready to apply CSR in day to day life.

A large number of Indian Corporates and MNCs in India already have an established CSR arm, with policies and action happening on the ground.  The only piece they will need to review is whether the spend on CSR is matching the 2% rule or not.


For the companies that are now looking at starting off their CSR projects/committees, I have views that I will share in the next part of the blog.  Let me close this one with just thoughts on how much Rs 1mill - which is 2% of Rs 50mill (5cr) can impact the society:
1. Skilling for employability - 200 youth a year
2. Education for 100 students in the disability sector
3. Healthcare for one community - with a daily availability of good doc for the whole year
4. Creation and maintenance of 10 hole-in-the-wall kiosks - impacting up to 3000 students every year

These are only some ways ... many more can be chosen from ...


REFERENCE:
The key elements on CSR in the Company Bill are:
1. Every company having net worth of rupees five hundred crore or more, or
turnover  of rupees one thousand crore or more or a net profit  of rupees five crore or more
during any financial year shall constitute a Corporate Social Responsibility Committee of the
Board consisting of three or more directors, out of which  at least one director shall be  an
independent director.
2. The CSR committee to ensure application of 2% of the average of last three years profit of the company towards CSR.
3. The committee monitors implementation as well and gets the spend, the activity and the outcomes reported in the annual report.
4.  The suggested areas for the CSR activities include but are not limited to:

(i) eradicating extreme hunger and poverty;

(ii) promotion of education;
(iii) promoting gender equality and empowering women;
(iv) reducing child mortality and improving maternal health;
(v) combating human immunodeficiency virus, acquired immune deficiency
syndrome, malaria and other diseases;
(vi) ensuring environmental sustainability;
(vii) employment enhancing vocational skills;
(viii) social business projects;
(ix) contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; and
(x) such other matters as may be prescribed.



References

http://www.mca.gov.in/Ministry/pdf/The_Companies_Bill_2012.pdf

Wednesday, December 12, 2012

Self-Reflections: How to live at the edge of a precipice

“Inertia is subtle; it creeps up unnoticed.” says Dr Daisaku Ikeda.

When I look back at the days that I believe were days when I grew the most in my life and compare them with the times I was most bored and wanted to just run away, the common part in all of them was long days with same work day in and day out.  However, I realize that the difference, between periods of growing and periods of ennui, came from the following:
  1. In the growth periods, I had ideas, I had opinions that I wanted to test out.  While the work was same day in and day out – how I did it and what I expected out of it was different on a daily basis! Compare that with the drab days … only opinions are on what should not be done, only ideas are what has not worked, and the feeling of “I knew it …this was going to bomb”!
  2. A very important difference was trust.  In growth phase, I remember that I had an implicit trust in people and when someone did something wrong repeatedly, I would just get together with them to figure out how to do it right. However, this same me behaved differently in the ‘bad’ times – I would regularly fight, shout and beat down people, not tolerant of a single mistake.
  3. And interestingly, in growth times, I seemed to know each and every detail of the what was going on in projects, in team member’s lives, and even customer thinking.  The "down" times had quite a contra view … I was complaining that I didn’t have time to look at everything, nobody keeps me updated, how am I to do anything if customers keep changing their stance and so on.

So it becomes obvious that in growth periods, I believed.. and I was driving the change, believed that I was making a difference.  Whereas in the period lacking growth – rather slipping downwards … I felt and believed that I was being led by someone else and most of the times the leader was making mistakes!

The challenge then is not just reaching the precipice but sustaining the drive at the precipice.  The key is understanding the difference between rhythm and routine.  To watch out that the repeating activities do not become mechanical in approach but continue to open up something new/fresh every day/every time.

Tuesday, April 10, 2012

Eternal Hope for a Better Life

In one of the mobilization drives in our skilling center in an Industrial town of Haryana... I got to visit the home of a potential student.  I must admit I was not very enthusiastic in the beginning about going there in the evening as it was time for me to return to Delhi. But looking at our Center Head's enthusiasm, I agreed.

Then as we started negotiating the way towards the colony where the boy lived – I felt more and more out of place. Finally, we reached the place and found that the boy’s parents were not there. Somehow the mother came and I didn’t quite know what to do or say – so our Center Head led the conversation (like an expert I must say). However, the mother was non-committal about the son taking up the course and kept repeating that the father will take all decisions. All this while a picture of the boy’s life was emerging.

The boy’s parents had come to the town 22 years back, as a young couple, from a small village in Eastern UP to make something of their life. Father got employed with clothes/woollen factory then. Over the 22 years, 4 children were born. They kept living in a one room place in the slum all these years – they still are at the same place! 

The boy, eldest of the 4, dropped out of school after 10th class to support family income doing a 2k/month job. He said he wanted to support his father to get his sister married off.

Now, two years after the dropping out of school, the sister was married off and also the family had spent all their reserves in building a house in the native village. The boy had re-joined school and will be completing 12th this year – he hoped. He also hoped, with a sparkle in his eye that he would be able to do a course with NIIT and get a worthwhile job.

I held back my emotions as I wanted to immediately help the boy. I tried to stay objective here and keep responsibilities with the right people.

Then the father also appeared – he looked like a sixty year old person though he was probably around 45. He said he wanted his son to have a better life than him and would be willing to spend on his training after he finishes his schooling - which was just 30 days away.  This sounded just right.

Then what the father said ... flipped me completely.  He said that they have a marriage in the native place in July and they would be leaving for it in June and be back in August -- so the boy cant do any course till then!  They will review post August.  Our course cost was really low and on top there was a scholarship and also job guaranteed at the end of it in a short period of 4 months. All discussions and arguments were stalled beyond this.  This was it.

Did he really want a better future for the boy?  He has spent his entire life savings building a house in the native place ... where he goes once in two years for 1-2 months and at the same time continues to live in one room shack with 5 more bodies ...

His younger children one more boy and girl ... seemed to be without any direction or hope ... or let me say were destined to live as per 'destiny'.

It seemed like they were all living on with a hope that sometime in eternity the life will automatically be better ...

Living with hope is important - nay its necessary but without change in approach, mind-sets, and appropriate action ... its hopeless!

Tuesday, January 17, 2012

Jaipur Rugs!

A couple of months back I had the opportunity of meeting Mr NK Chaudhury, the founder of Jaipur Rugs at a training on 'Sustainability', where he had kindly agreed to come and share about Jaipur Rugs approach to Business and Life.  I hadn't heard of Jaipur Rugs then and wondered what's the big deal.  Mr Chaudhury - NKC - as he is referred to by his family and friends - made a presentation - mostly speaking in Hindi.  His story is quite an inspiring story - here is a brief view.

In 1976, NKC started working on the hand-woven carpets by 1978 he had two looms and 4 families engaged in the production near Jaipur, Rajasthan.  In 1981, he started exporting formally.  Over the period of time he has been able to expand his production base to eight states in India, and now engages over 40,000 weavers across India.  They produce over 1million sq ft of carpet/rugs annually!  They only export!  Exporting to over 25 countries.

The carpets are all hand-woven and NKC realized very early that this quality product had much higher valuation in Western countries and he based his business model on that.  Jaipur Rugs is a family business with 2 of NKC's daughters (educated in US) driving the business primarily.  The elder daughter is the CEO and focuses on customer connect.  The younger one is the designer who brings out innovation from amongst the weavers to create new designs for customers.

Since I saw and spoke with Mr Chaudhary in person - I was amazed at his down-to-earth approach to life, the simplistic manner in which he focuses on his business.  In response to questions on what he feels is his mantra for success, he gave the following key messages:
1. Work directly with people:  When he started, people from his community outcasted him since he used to go and live with weavers from lower castes.  However, he did not give up on his approach and continues to go and live with the weavers today - as he feels that is the only way to develop people and also best understand them.
2.  Every one has ability and talent - we need to spot it and bring it out.  From his experience of living with the people, he says that each and everyone has something in them and it was his effort, learning, and challenge to figure out the abilities and nurture them.  Big thing is to give confidence to the people that they have the ability in them.
3.  Everything/every solution is inside us:  he is a practitioner of the belief that solutions to all problems and challenges lie within us.  He kept repeating the importance of introspection.  He said that when he reflected on himself, his approach, his attitude, his learning - he was able to build solutions to even people not working or being able to deliver quality work. 
4. Stay connected with customers always as the expectation and requirements change with time.  Bring the customer view to the development people/weavers regularly.

Jaipur Rugs story fascinated even CK Prahalad and he wrote a chapter on it in his famous book "Fortune at the Bottom of the Pyramid".  You can check out more on the company itself on their website.
http://www.jaipurrugsco.com/

Of course there is lots to learn from this simple man with simple dreams but big achievements and he encourages people to connect with him and his company, visit their production areas and in fact he proudly spoke of how students from many colleges visit them regularly.  So take the opportunity if you can!

Sunday, January 8, 2012

Life - Like Riding a Bicycle

Whether its making a social venture work, or a regular business -- one is constantly striving for sustainability and balance.  I am calling this 'life' as we all anyway spend most of our living time doing this.

I just found an analogy from Dr Yash Pal's book - Random Curiosity (a collection of questions from children and youth about life and observations of phenomena and simple but scientific researched answers from Prof Yash Pal).  Prof Mashelkar (ex-CSIR Head and Scientist) in his tribute shares how Prof YashPal  in a response to question - why are we able to balance a moving bicycle as compared to one that is stationary - provides not only a simple physics explanation but also a philosophical understanding relating the riding of bike to life. 

The key point to note here is that a person has to continue to turn the pedal and keep the bike moving for it to stay stable/balanced versus trying to balance a stationary bike.

The fact that we need to pedal and move to keep the balance points to three key aspects of achieving sustainability in life:
1) Life is dynamic - balance comes with active movement,
2) We need to have a rhythm and regular action on the right set of activities
3) We need to focus on a distance away from the immediate and let the handle be held loosely only to be firmed up during bumps and turns.

Sunday, January 1, 2012

New Year Every Day!

New day, new beginning!

As the new year dawns, the calendar is reset to begin from the beginning, the clock too starts afresh.  Only the moments gone by never repeat. 

Each moment that has been 'lived' builds our legacy.  Each moment that is waiting to come, brings an opportunity to create a legacy.

I determine to sieze every possible moment in this new day of the fresh calendar towards a worthwhile legacy!