From Carrefour to Dena Bank

There are some vital pointers that you learn when in a business school. And especially when you are in a b-school that’s ever so evolving you really get to know the stuff that really matter to the current world. That’s one good thing about SPJCM. They are always open to improve themselves, to the extent that they ask us on a periodic basis about how to improve and what to do. Not many b-schools take the student’s suggestions so seriously.

Anyways, so I was talking about pointers. And one such piece of advice that I learned, is that business is not about doing business in a business-like way! People from venture capital derive newer business practices from the way a mother divides a cake between her 2 siblings! It sounds funny but it’s true. So to do your business in a better way, it’s necessary to understand how someone else does business and then borrow ideas from other fields as well.

One such syllogism which I felt would be really cool is the barcode reader at a Carrefour aisle. To give you a bit of a background, Carrefour is the second largest retail chain in the world, with a very large presence in Dubai, where I was for like 6 months. Now, at any of the Carrefour hypermarkets you find a simple barcode reader at the end of every aisle. Dubai surprisingly has no MRP system in place (so they can charge anywhere from 1dhs to 5dhs for a can of coke). Thus, the price tags at Carrefour for each product are printed at the edge of the shelf where a product is placed. Now if you can’t find the price tag for whatever reasons, you can just go to the barcode reader, point the barcode of the product towards the scanner, the scanner immediately scans the barcode, consults the main system and displays the ‘Carrefour price’ for the product (since there’s no MRP). The entire process takes less than 5 seconds to complete (if you exclude the time taken to walk to one of the barcode readers that is).

Typically what you are doing is asking the customer to do the job instead some attendant assisting him/her.

Now let’s keep Carrefour away for a while and talk about Dena Bank. Like any nationalised bank, Dena Bank too has its own set of drawbacks when it comes to service. Its true many nationalised banks are now providing services that are at par or even better than what the private banks do, but sadly Dena Bank isn’t one of them. Now my home town is a shanty old place which virtually hasn’t changed at all since a long...long time. And that town has a Dena Bank where I have an account.

One fine day I was standing in the queue for cheque deposits. More than half of the people in the queue were there to get their account balance checked. The people who were with me in the queue were somewhere in the bottom of the pyramid segment. These people earn not more than $3 a day. Their account balances would never cross the Rs.10,000 threshold. For these people, owning an ATM card that has a yearly fee of Rs.299, and carries a penalty cost for having a lower balance is out of question. And that’s the reason why they keep pestering the teller guy by giving him their pass books and asking for the account balance. That’s the reason why more than half the people in my queue were not there to deposit a cheque. What I also saw while I was waiting for my turn were the ‘Target 2000 cr’ tags dangling from the ceilings. Apparently Dena Bank seems to have initiated a target to achieve a pan-India bank deposit of Rs.2000 crores by 2008 I think.

Now get a load of this: The teller guy, who’s one small entity in this ‘target’ of achieving Rs.2000 crores of deposits by 2008 wastes more than half of his time in just checking account balances! And there must be innumerable such teller guys throughout India who must be wasting some part of their time just checking balances only! If that guy is too busy checking balances when will he accept cheques that directly help him in his objective of getting more deposits?

Can’t the ‘balance checking’ activity be deskilled? So that even the customer can check the balance without the need of having an ATM card?

Can’t we help the teller guy by allowing him to do what he’s really supposed to do?

Can’t we bring the barcode readers from Carrefour and install them in Dena Bank?

That gadget will occupy less than 12 square inch on the wall but will do a lot of things. It will de-skill the job of balance checking. You are co-creating value along with the customer without having to invest in large ATM machines and plastic cards. All you need is a normal passbook with an embedded unique barcode. If the bank doesn’t have a centralised banking system it’s ok to implement this system even on a local scale. You are removing all the unproductive work done by the teller guy. The barcode reader empowers the customer, it gives more productive time to the teller guy and it decreases clutter.

The system is scalable (since it can be implemented on a large-scale basis if required. All you need is to hook up all the barcode readers with the mainframe)

The system is robust and can work under harsh environments (since a barcode reader doesn’t involve any moving parts. It just has a laser scanner and an LCD display screen)

The system is fool-proof (obviously you don’t expect someone to hack into the mainframe using a barcode reader do you?)

The system does deliver a better price-performance relationship (because by charging somewhere around Rs.20 from the customer as a onetime payment for getting an embedded barcode, I’m giving the customer an opportunity to check his balance as many times as he wants till the time he no longer remains the bank’s customer)

This is how Dena Bank can derive learning from Carrefour.

This is how the teller guy can do what he’s actually meant to do (i.e. to deposit cheques)

This is how Dena Bank can achieve its pan-India ‘Rs.2000 crore by 2008’ target.

What say?

The tale of the 2 cab drivers

The final few days in Dubai are like the first few days in Dubai. There's a renewed spirit in the air and all that aura crap! You tend to look at things quite differently. Suddenly you start looking at people as if they are not 'just there', but 'why' they are 'there'? Which brings us to the point of the discussion: the two cab drivers.

Apparently, we were on our way to a little bit of outing late in the evening. It had been a long time since we could call ourselves as 'free' in real sense, and we wanted to freak out sort of. So we called for Sudhir – the guy who transports people to their destinations at half of what it would cost in a normal cab. We waited for 2 hours for that dimwit to arrive, and he didn't as luck would have it.

So finally we decided to get into a legal cab. We got hold of some guy, who was last in the line of cabs, but somehow got to us first and we sat in without realising that its ethically wrong to do that, and realised only after there was a barrage of words (abusive quite naturally) hurling back and forth between the cab driver and the rest of the cab drivers.

Of course, nobody can sue him or something, since there's no written rule, but whatever! The point is he broke an understanding in the community (ever seen how the rickshaw drivers at a rickshaw stand collectively decide who goes first and all? So this was like one of those times when a rickshaw driver broke the norm.)

And to clarify, we live in International City (though there's nothing so international about it; except the fact that you've got buildings named after countries and flags of different colours fluttering on the road dividers) and International City is quite far from the main city (i.e. Dubai). And even cab drivers do have this tendency to get lost in the pursuit of getting to the main land given the fact that there are so many 'round-abouts'. (round-abouts are pesky little places and are the 'only' places where you can take a U-turn on the road or move into some other direction; else the road runs straight as long as it can)

So this guy messed up in taking round-abouts (which means we travelled more distance since the road runs straight) and the bill was shot up by 100%.! And the fact that he had messed up was quite apparent on his face, since he had stopped blabbering something about we being 'sharif' people which he had begun right from the moment we got into the cab.

So what do we do? It said 90 on the cab meter while ideally it shouldn't have gone more than 45 dhs (dirhams – UAE currency)! So we zonked that guy's brain out regarding the road signs and the fact that the bill doubled. We eventually only paid 45 dhs, since that's what it ideally costs. Somehow I was happy about what happened to the cab driver since the way he bypassed those dutiful and ethical cab drivers and got to us first, this was what he rightfully deserved in the end.

Now the fun part starts when we are to go back to International City. For the ride back home, we found a cab dude from Pakistan. Very soft spoken, polite, but as most cab drivers, he too was quite a jabberwocky. And he talked about his experience when some white men hopped into his cab, all drunk, started abusing his nation and the people, and then declined even to pay for the transport. The complete opposite of what we had experienced while leaving International City.

And now starts the mindless introspection and comparison of the two drivers (when you're into something called an MBA, you become so increasingly analytical, that even cab drivers become a case study for you!) Right, so back to the cab drivers! Now firstly, both the cab drivers did what they had to, to earn money. Some use more aggressive and unaccepted ways (aka Cab driver 1) while some use the rightful path (aka Cab driver 2). And yet both get screwed in the end (Cab driver 1 got only 45 dhs instead of 90 cause he screwed up in the round-abouts, and cab driver 2 didn't get the pay from those 'white men' cause they were all drunk)

So who stands to gain in this whole 'ethical' and 'non-ethical' debate? I think none of them!

Now if you put the philosophical jargons aside and come to economics, there too, this behaviour has a lot to offer. Both of the drivers have come here to earn a living. If I am right, they fly back to their nations maybe once in a year, and drive cabs almost throughout the year. They must be living in a 1 room apartment or a 2 room apartment that must be shared by 6-7 people, since there's no chance that they can afford to rent an apartment alone.

Just think, they meet their families only 15 times or so during their lifetime, they have a living space of less than 7 cubic feet for the whole year, and their work space is again less than 7 cubic feet. With virtually no emotional outlet, the passengers are quite naturally a preferred source of venting their feelings.

Isn't it ironic? They give out their feelings to the people whom they might never see again in life! The only thing that holds them back from settling back in their country along with their family is the exchange rate of 1dhs = Rs.12.33

Such is the power the money wields on them. They hate the whites for being too discriminative when it comes to skin; they hate the fellow workers because they add competition and make them earn lesser; they hate their life since they can't be nearer to their families.

Yet, they deliver value at sustained levels; yet they are always soft spoken; yet they are always at the service of the customers, and yet they eventually stand to lose, whether they use ethical or unethical norms!

The tendency to believe

Sometimes, I feel we are really stupid people. Our heritage and culture system has taught a lot about respecting the elders, and giving due reverence. But as the days progress in this myriad of classes and field visits and case studies and all that's so very MBAish, there comes a realisation that most of the people who have succeeded are the ones who challenge the norm. We as duds accept what the elders have to say. The very thought of questioning what they say has never occurred to us. Perhaps that's why we never questioned the source of the data on the internet; perhaps that's why we never questioned what the eldest CEO sucker of any company suggested to do in a case study. Maybe that's why we even blindly listen to the professors as to what they say, without having an opinion of our own. And maybe, just maybe that's also the reason why we are so very confident of what the MNC's and other big companies are doing to our country. Maybe even more confident than the MNC's themselves!

There was this realisation that dawned upon me while shopping in Carrefour (the world's second largest chain of retail outlets after Wal-Mart), that while I was back home, every morning there used to be 2 bags of milk laid at my doorstep, freeing me from the trouble of buying milk; that at precisely 9 a.m. everyday a hawker selling vegetables used to pass through my house with fresh vegetables; that the local Kirana guy used to stock a few pieces of that special brand just because I used to buy from him; that the laundry guy used to come every alternate day on his skinny Kinetic Luna with BIG bundles of ironed clothes, and charging only Rs.1.5 per garment including the cost of the home delivery… and all of them, used to do this same mundane task, everyday with sustained delivery standards throughout the year. 24/7, 365 days a year.

And the lives of all these people are getting challenged because the MNCs suddenly realise that organised retail adds up to only 3% of the whole retail pie chart. And thus, they start setting up back end services, start having talks with Indian companies and everyone is all gaga over the influx of hypermarkets and all that stuff. The 'stuff' that's eventually going to get me a job once I get out of this value addition phase! And what upsets me even more is the fact that I'm going to be one of the catalysts in the process of the demise of these minions; these everyday people who have delivered value with such precision, on a regular basis for a long…long time. So much so that it has become like a well-oiled system, the absence of which puts you off entirely. Just recollect a day when the doodhwala didn't arrive, or the laundry guy didn't come making you to wear the previous day's shirt again or something. It puts you off to such a great extent.

And on the other side, when MNCs put up hypermarkets you go to those glittering places in your car along with the family for shopping! Earlier, the doodhwala used to come to your doorstep to deliver milk at HIS cost. And now, YOU are going to the doodhwala (hypermarkets for those who didn't get the metaphor) at his doorstep to buy milk at YOUR cost (obviously you must have used your car for the transport to the hyper mart you idiot!)

Now tell me who's a dud? The doodhwala, or you??