The Lesson from Seth Godin's Post

I read Seth Godin's blog quite often and over a period of time have come to expect that with each post I would learn something new, or gain fresh insights into stuff I was already aware of. I am usually not disappointed -- at worst, I might find a post or two to be about a business or a market or an industry that is far removed from mine or that I don't understand, and so less engaging. However, his last post (reproduced below in its entirety) was quite disappointing -- not in the sense that it was dull or uninteresting or lacking in gravitas, but in the sense that it was misleading, if not wrong.

The lesson from two lemonade stands

The first stand is run by two kids. They use Countrytime lemonade, paper cups and a bridge table. It's a decent lemonade stand, one in the long tradition of standard lemonade stands. It costs a dollar to buy a cup, which is a pretty good price, considering you get both the lemonade and the satisfaction of knowing you supported two kids.

The other stand is different. The lemonade is free, but there's a big tip jar. When you pull up, the owner of the stand beams as only a proud eleven year old girl can beam. She takes her time and reaches into a pail filled with ice and lemons. She pulls out a lemon. Slices it. Then she squeezes it with a clever little hand juicer.

The whole time that's she's squeezing, she's also talking to you, sharing her insights (and yes, her joy) about the power of lemonade to change your day. It's a beautiful day and she's in no real hurry. Lemonade doesn't hurry, she says. It gets made the right way or not at all. Then she urges you to take a bit less sugar, because it tastes better that way.

While you're talking, a dozen people who might have become customers drive on by because it appears to take too long. You don't mind, though, because you're engaged, almost entranced. A few people pull over and wait in line behind you.

Finally, once she's done, you put $5 in the jar, because your free lemonade was worth at least twice that. Well, maybe the lemonade itself was worth $3, but you'd happily pay again for the transaction. It touched you. In fact, it changed you.

Which entrepreneur do you think has a brighter future?

Like many other famous and popular bloggers, Seth Godin does not provide his readers with a window to comment on his posts, presumably because moderating and responding to a large number of comments can be too tedious and time consuming. Be that as it may, I found I had a couple of things to say with respect to this last post, and since there was no space for comments, I decided to come back to my own space where I am monarch of all that I type, as is my usual wont in such situations.

Let me tell you which entrepreneur I think has a brighter future: I think the kids behind the first stand have a brighter future. Now let me tell you why I think so. For one, they provide a reasonably good product at a reasonably good price, and deliver it fairly quickly through efficient processes -- all good and highly desirable business values in themselves. Secondly, because their entire delivery cycle moves fast, they are able to cater to more customers within a shorter time-frame. This gives them more throughput, higher volumes and a better top-line. The second stand delivers an experience that is described by Seth Godin over 4 paragraphs (as compared to the modest description of the experience at the first stand, within a single paragraph). Is such an elaborate and if I may use the word - enchanting - experience really something that a lemonade consumer is looking for? Well, perhaps 1 in 10 customers is (my guess). Now do the math, and while you're at it remember that a dozen people drove past the second stand because it was taking too long.

Lemonade is not a high-touch / high value-add product. It does not need an elaborate conversation with the consumer to understand their needs or their pain points. The scope for innovation is anywhere between zero to very little, even for a highly ingenious entrepreneur. Expectations are fairly well understood on both sides of the lemonade dispensing table. If the point being made is about user experience and the perception of value and stuff like that, then lemonade is not the best choice to write a customer delight story around. On the contrary, this could almost become the story of how not to hype-up a mass-market commodity product by building fluff around it.

I'm not saying the second stand is doomed to fail. I'm saying that the second stand caters to a niche market, and should locate itself in a neighbourhood where there are abundant target customers -- those 1 in 10 who: (a) have a lot of time on their hands (b) don't mind waiting in a queue to get what they want, rather than settle for something else which could be procured faster (c) prefer hand-made lemonade, which is made at the appropriate pace at which good lemonade should be made (d) attach a lot of importance to the beaming countenance, graceful bearing and joyful spirit of the individual behind the stand making the lemonade, and finally (e) like to pay, of their own volition, an amount of their own choice which is commensurate with their own assessment of the value they got from a transaction. I'm sure such customers exist, and in fact, other than Seth Godin who walked away 'touched' and changed by the experience, I could be one of them myself. But then where are the volumes? Even to generate the volumes needed to make this a viable business proposition, the second stand would have to have enough smarts to locate the right neighbourhoods where such niche markets exist and are as yet untapped. If I were a VC, I'd invest in the first model and not the second, though I may give my business to the second more often than the first, circumstances permitting. Not that I am betting on the failure of the second, but that I am betting on the success of the first. There are more people who are not like me (and Seth Godin), and the people who are like me (and Seth Godin) are in a hurry more often than I am (not sure about Seth Godin). C'mon - this is lemonade we're talking about, not high-end consulting or private banking or haute couture, where exactly the opposite argument would no doubt hold. Different horses for different courses!

There's a phenomenon that I'd like to call the comedian's momentum trap. When you are watching comedy your mind is already set to 'laugh' mode. You feel your mood lifting within the first few seconds, and a feeling of levity seems to come from nowhere and pervade through you. A few really good jokes are all it takes to build the momentum of laughter. Soon you're holding your sides, tears rolling down your cheeks ... all that. The momentum of this is so strong that even a weak joke will get more laughter out of you than it deserves. If someone else cracked the same joke in a stand-alone mode or in some other context, you'd have found it barely risible and it would have just fallen flat. I think Seth Godin's readers arrive at his blog with a similar 'momentum' -- a momentum of expectation, of the momentous. So just about anything that is posted there is seen as great insight and gets retweeted and delicioused and digged, just like all other posts.

I wonder whether Mr Godin would realize at some point that the real lesson from his blog post is a little different from the lesson he hopes readers will take away. Well, it was, for me. Ergo this post.

"It Won't Happen" - Why Justifying Investment in Prevention is a Challenge

Whether we are dealing with risks to our health or risks to the continuity of our business or risks to the safety and security of our society, the age-old wisdom of prevention being better than cure is easy to recall but difficult to cost-justify. Even when there is adequate evidence that points to a statistically significant probability that disaster may strike us, most people would rather spend time, energy and even money, sometimes, on debating the need for investing in preventive measures. People on the side of the debate that call for investments in prevention would be treated by those on the other side of the debate as alarmists, and would be challenged to prove not only that it is highly likely that a disaster of the type they are anticipating could happen, but also that it would wreak the kind of havoc they are forecasting it would. These are the people who would bet good money that it won't happen, and lose, rather than invest the same money on preventive measures. Typically, these are also the people who benefit from the status quo, and who therefore would resist changes that acceptance of the likelihood of disaster would entail. In the context of climate change, these would also be the people with vested interests who would spend a lot of time and money on climate change denial and avoidance, because accepting the reality of climate change would mean far more changes to their business models than they can handle.

The current 'best practice' approach on disaster management is broadly stratified into 4 'levels' that deal with strategic and tactical planning, and implementation of various types of measures and countermeasures. These levels are: Prevention, Containment, Mitigation and Recovery. To a rational mind, it is fairly logical and self-evident that you would first try to prevent a disaster from happening, and if you just can't prevent it you'd try to restrict any damage that might be done to as narrow an impact zone as possible, try to minimize the damage done even within that narrow impact zone, and try to recover the situation and restore normalcy to the extent possible, as quickly as possible. Attempts to tackle disasters at any of these 4 levels need careful planning and skilled execution, and cost money. While investments at all 4 levels have their own pay-offs, the best RoI comes from investments at the level of Prevention, as opposed to the other 3 levels. It is not difficult to see why, as the following example illustrates. For a marathon runner, a fractured leg (resulting from some accident, let's say) even when mended will never be the same again. In the case of this athlete, money spent on averting the accident that resulted in the broken bone will pay back far more than large sums of money spent on post-accident treatment (which, incidentally, may not even ensure a full return to pre-accident normalcy). The problem is that such wisdom usually occurs in hindsight, and for the most part the athlete is likely to believe that it won't happen, simply because believing that it might happen would mean investment in Prevention, which in turn would involve too much of a change in lifestyle as also an outflow of cash.

If planned and executed properly, preventive measures can be quite effective in averting disasters. In all likelihood most people would not even be aware that a disaster could have struck them but was successfully prevented. And that is precisely where the problem lies, in terms of justifying the investment. When successful, preventive measures don't even let you know that they have delivered results. Most people would barely see the ghost of the disaster looming over them, if at all they do, and then disappearing - it would barely be a blip on the smooth surface of their daily routine. Only a few would know anything about the magnitude of the disaster that was averted and how close they came to being hit - and these would be the people who are closest to the apparatus that monitors the leading indicators of the disaster and triggers / oversees the preventive measures that should kick-in. Other people would, over a period of time, when the public memory of the disaster that never struck has faded, sceptically ask as to why so much is being spent on prevention. The ones who confidently bet that it would not happen will continue to believe that it hasn't and that it never will, while the few in the know will try to point out that it almost did, on at least one occasion, and is likely to happen again in future - and would promptly be called alarmist. And the same debates would continue.

By very definition, investments in Prevention will not tell you that they are working for you. If indeed disaster does strike, in spite of preventive measures, then it points to the underestimation of the probability and/or the scope and impact of the disaster, or else the effectiveness of the preventive measures. In such cases a common mistake would be to consider the investment in Prevention to be a waste. ("What's the use of spending so much if it had to hit us anyway" would be the line that sceptics would take.) Quite to the contrary, investments in Prevention should be directly proportional to the cross product of probability and impact. If it did hit you finally, and hit you badly, it most likely means that you got the probability and/or the impact wrong. (Of course, other reasons could be failure of execution / technology, but again that would most likely be due to inadequate investments.) And now it is the turn of investments at those other 3 levels - Containment, Mitigation and Recovery to work for you and deliver returns on those investments. However, even if they do work out as planned, they will never take you back to the way things were just a moment before the disaster struck. There is no resetting to normal, once disaster strikes: there is only adapting to the 'new normal' - a term that comes into vogue in the aftermath of a disaster, as it has in the wake of the global economic crisis.

Prevention works at the fork in the path of reality unfolding around the disaster - at the point in the eternally streaming flow of cause and effect, where things could turn left and towards disaster, or turn right and away from it. If the preventive measures are effective, things will take the right turn (quite literally). To justify the investment beyond doubt, you have to go back in time to the fork, as it were, take the other route to the left, and witness the alternative reality. Unfortunately, the laws of physics, as known to mankind up until now don't permit time travel. And so you have to settle for conjecture and speculation as to what might have happened, and whether the investment was worth it - there would never be any solid proof that it was. In science fiction, concepts like the 'Butterfly Effect' and movies like the Terminator series explore the possibility of going back in time to specific moments, where the outcome of a single seemingly insignificant event changes the course of history. The need for investment in Prevention would be obviated only if and when such time travel becomes possible in our real world, and not before. As of now, there is no going back - the only hindsight allowed to us is foresight. Which is why we need to make sure that we get this sustainability thing right the first time around. There will be no second time, and no world to get it right in, if we don't.

The Wisdom to Know the Difference

As a child in school, I used to make silly mistakes while solving problems in subjects like Mathematics, Physics etc. Typically, I would work out the solution but at the very end do something stupid (the equivalent of adding 2 and 3 to get 6) and get the final answer wrong. I vividly remember one of my teachers admonishing me once, and urging me to focus hard on the problem till it was fully solved and resulted in the correct final answer. "Life gives you no marks for wrong answers, even if your approach and method are correct" he declared in the soft but authoritative tone of a mentor who has seen a lot in life. "Remember, it is all about the final answer!" he added, with an indulgent smile, eyes twinkling benignly behind the thick lenses of his spectacles, and a slight wag of his index finger. It was a lesson I had to learn the hard way, and a very useful lesson that has helped me in confronting and overcoming many challenges in life. Many. Not all. Definitely not some of the more complex ones - the ones, for example, dealing with human relationships in the face of adversity, where there is no "correct final answer".

On the sports field of the same school, I kept hearing this one homily: "It's not about winning or losing, it's about playing the game to the best of your ability." As I grew older, I noticed that they typically said this to those who came second (or third) in the race. Winners are seldom told this; they are only congratulated and given a medal. I used to get quite confused by what appeared to be mixed messages, to my impressionable and naive mind, and I was too young to even identify the source of my confusion. All I could see was that it was the trophy, bright and shiny, that everyone coveted - be it for academic excellence or sports, and the system was set up to award medals and prizes to the one guy who topped the class, and to make everyone else want that, somehow, anyhow. While I could see why it had to be that way in some cases, I wondered why this seemed to apply to just about everything else in life.

As an adult, I have come to recognize the boundaries of the simplistic models we sometimes use, in our naivety, to understand, describe and deal with the complex challenges of life. Life is not a mathematics test and nor is a 100 meter sprint. Both of these have a beginning and an end, simple rules and clear targets to achieve, and a finite number of possible outcomes. Yes, life does consist of situations that closely resemble either an exam or a game or both, but it also consists of other situations that really don't. It is essentially our need for cognitive fluency - our resistance to complexity that makes us force-fit all situations into a zero-sum model. Life, on the whole, is just not a zero-sum game, but we make it look like one because it makes it easier for us to handle. And that's where we make the mistake that Einstein cautioned us against with these words of advice: "Make things as simple as possible but not simpler". The zero-sum model is neat, simple and lays out clear rules for winning and losing, and so we go ahead and use that as the basis to model all human endeavour. In the sphere of education, all the systems we have set up for evaluating our children's performance are based on the zero-sum model. (Exceptions, though they exist, are too few to be statistically significant.) We have extended the ostensibly resounding success of this model into our adulthood as well. We wage war to resolve conflict, since war leads to decisive victory. We compete in free markets for market share and growth, edging out our rivals. All the systems we have created at work (performance measures, KRAs and KPIs, RoI, quarterly results) and at play (scoring goals, scoring runs, bettering the timing of the world's best athlete) are zero-sum models. Message: Achievement, not Effort, matters.

What we have not recognized is that this has resulted in creating a culture of over-achievers, as I have argued in a previous post. And a culture that silently encourages Jugaad, as I have argued in another previous post. If you can't win by staying within the confines of the rules of the game, then bend or break the rules so you can win. Because only the final answer counts. It is precisely this culture - of winning at any cost - that has led us, the human race, to the brink of collapse as evident in the 3 major global crises the world is still reeling under, as a glance at the global economy, the environment and socio-political landscape will testify. We are where we are, in each case, because a small number of over-achievers have been playing to win a zero-sum game, to meet their own narrow goals. Zero-sum is the reason why we use wars to work out conflicting needs between two groups of people, instead of trying to achieve congruence of different agendas through negotiation and diplomacy, in a spirit of partnership, tolerance and mutual respect. The bravado associated with winning wars, the drama, the romance, the glory ... all make us pooh-pooh earnest attempts at a peaceful positive-sum resolution, which the uber macho alpha prime male stereotype would mock at as the approach of wimps. On the contrary, it is war that is the refuge of the weak, as the strong will only look for peace.

Few events in recent world history have brought out the contrast in these two approaches (particularly in the area of global diplomacy / foreign policy) more starkly than the two Presidential campaigns in the United States last year. We saw the conservative business-as-usual approach, albeit with some modifications in a few areas, and the "other guy's" strategy that was radically different, since it was based on inclusiveness - an intent to actively engage with allies and a willingness to negotiate unconditionally with adversaries, even with those that were historically considered to be enemies. It is not as though the latter is unprecedented in the history of the United States (or of the world) but to a lot of minds, caught up as we were in the panic of the crises of our current time, and in part due to the outrage expressed by the incumbent Party, it seemed like a revolutionary approach. When Obama was elected President, I considered it a testimony to the American people's resolve to adopt a dramatically different position on the world stage and to actually lead other countries and communities to a world of peaceful co-existence. However, reactions from most people - Republicans as well as Democrats, Obama's supporters as well as detractors - when he was awarded the Nobel Prize for Peace, have led me to believe that Americans elected him President simply because they thought he was the only guy who could save them from the financial mess that his predecessors had left behind - essentially a domestic issue. It wasn't really a mandate to him to go implement his vision of world peace, as I realize now. Sadly, a significant proportion of the American population displays a "don't know / don't care" attitude towards the rest of the world, not realizing the long-term impact of that attitude. Several political analysts and commentators have been criticizing Obama in the last few months for having "apologized" to the world for America's hubris and imperiousness in the past, for trying to build bridges with the Muslim community, etc., claiming that such moves have diluted the leadership position of the United States. It's a pity that they do not realize that what he has been trying to do, in fact, is to restore the U.S. to its former position of glory, but in a way that is different from what their simple, zero-sum minds have been trained to think.

Leadership comes with privileges, no doubt, but it also comes with accountability. Americans must realize that if they expect their country to lead the world by the same democratic principles as they expect their President to lead their country, then they must acknowledge that their country is as accountable to the rest of the world as their President is to them. This includes responsibility for world peace, considering America's position as a military mega-power and its hegemony in most other areas 'that matter'. And this peace cannot come by taking an "us versus them" approach (where quite literally, "us" = "U.S."), which for several years has been the fundamental plank on which American foreign policy was built. Obama's most significant contribution towards world peace has been in initiating moves that are already shifting the "us versus them" paradigm, and this is not something he started working on only after he became President. When it comes to world peace, there is no exam, no top score, no super-bowl, no tape at the finish line to breast ahead of others and no final answer. Peace is characterized by the absence of conflict, which comes from the de-escalation of tension, which in turn comes from the birth of hope among affected parties - the hope of working out a win-win resolution. Positive-sum, not zero-sum, outcomes. And again, there is no finality to it, no single event or milestone, the accomplishment of which can qualify as having achieved world peace forever. War is different from peace, in this respect. Start World War III and you will get a final answer - the end of the world, and nothing can be more final than that. On the other hand global peace is like nirvana: you continuously work towards it but you may never attain it. But that doesn't mean you give up your effort. And so it all comes down to effort and attainment.

The Nobel Peace Prize has been awarded to several people, including, as Rachel Maddow painstakingly points out in this video clip, some whose efforts towards world peace have ended in failure (Woodrow Wilson / League of Nations), some whose efforts did not bear fruit till several years later (Desmond Tutu / ending of apartheid in South Africa) and some whose efforts have yet to make any significant impact to disrupt the status quo (Aung San Suu Kyi / democracy in Myanmar). Why then single out Obama? After my initial post at my mini-blog on Friday, a few hours after the news about Obama's Nobel Prize broke (during which few hours I valiantly and more or less single-handedly defended the decision in various debates - actually, diatribes - that erupted on mailing lists and social media), I thought it prudent to back off a bit, let the dust settle over a couple of days and wait for second thoughts from observers, analysts and commentators. I would expect that Obama supporters, at the very least, look for the silver lining in all this, like Michael Moore. Especially if they are American, to whom my question would be: "What are *you* doing to support your President?"

Meanwhile, Elinor Ostrom and Olive Williamson were jointly awarded the Nobel Prize for Economics. Since I did not know enough about them or their contributions, I decided to do some research. "Let's find out who these people are and what the heck they have DONE to deserve this award, considering that they haven't achieved anything by way of ending the global economic crisis", I said to myself sotto voce, parodying the same line of reasoning that critics took in challenging the Nobel Peace decision. Interestingly, I found an article by Ostrom titled "Governing The Commons: The Evolution of Institutions for Collective Action", which addresses the classic Prisoner's Dilemma in game theory, and which also carries a paragraph that starts with:

"Changing the rules of the game to turn zero-sum games into non-zero-sum games may be one way to describe the arc of civilization for the past 8000 years"

I smiled as I read that, since a lot of this is pretty much the kind of thinking underlying the core values and principles that my little fledgling business venture is based on. I even have a downloadable FAQ (right click to download) that talks about playing to win versus playing for win-win (on Page 4, in the answer to the last question on Page 3). My own solution to the Prisoner's Dilemma has always been to stay silent and take the least cost approach for both parties taken together, and I've always wondered as to why on earth anyone should want to exercise any other option. Most economists expect that the "rational" decision of an average human would be to betray the accomplice, which is an indication of how deeply steeped in zero-sum thinking we all are.

I shall end this rather long post (and thanks for staying with me till here) with my own paraphrasing of the Serenity Prayer - Dear Lord, grant us the capability to win zero-sum games, the skill to negotiate a win-win in positive-sum partnerships, and the wisdom to know the difference. Amen to that!

Staying On Top: The Challenge to India's Leadership in Off-shoring

In a recent (August 2009) article in the McKinsey Quarterly (accessible by clicking here, and then clicking on the shortened URL link mentioned in the archived tweet), Noshir Kaka et al. suggest that Innovation will be a critical success factor for India to maintain a leadership position in the globalized business / technology services industry. Here's an extract from that article:

Indian business and technology services companies needn’t stand by passively and watch their global market share decline. Innovation will be the key to maintaining and even expanding their market share. Business models that continue to focus on low labor costs won’t suffice.

While it is true that 'business models that continue to focus on low labor costs won't suffice', in August 2009 this cannot be a epiphanic revelation! This is yesterday's news, not thought leadership. Most companies foresaw this many years ago, and (as the McKinsey article suggests) turned to Innovation (among other strategies), hoping to leverage it to create a sustainable competitive advantage for India as a destination. All Indian industry majors have been chanting the Innovation mantra since then. (Show me one Indian company of some standing in the global business / technology services space that does not lay claim to 'Innovation' as its key differentiator, several times over, at its web-site or in its brochures.) Several companies have been relentlessly trying to institutionalize Innovation in everything they do, in a bid to maintain their market share in the face of competition - from within the Indian market as well as from companies based in the other BRIC countries (and their corresponding regional neighbours in Latin America, Eastern Europe, Asia / South Asia / South-East Asia) and also emerging destinations such as Egypt (and, potentially, other West Asian / African countries). However, the very act of institutionalization makes it a replicable commodity, just like any other 'best practice'. Which means others can do it too.

My comment to the article (not visible at the site at the time of writing this post) is reproduced here below, and what follows subsequently is an elaboration of the rationale behind my argument and an elucidation of my point of view on the subject.

India's competitive advantage (beyond wage arbitrage) has always been scale and process maturity. Other destinations simply cannot match the ability of Indian companies to offer large pools of talent to dip into (in terms of breadth as well as depth), or to ramp-up their teams quickly. Besides, a lot of non-Indian companies are still struggling with the challenges of managing process quality in very large projects. However this is not a sustainable competitive advantage. China has the potential to match and surpass India's strengths in terms of both scale as well as process maturity, given the size of their literate population and their culture of rigour and discipline (which is being applied even now, for example, to learning English as well as learning large scale process management). But other than China, there aren't too many countries that represent a real threat to India. Innovation is a buzz word, in my opinion, and though this may sound counter-intuitive, it is a fairly commoditizable and replicable attribute. It does not represent a sustainable competitive advantage. Talent pools from the countries / cultures that presently constitute off-shore destinations (or aspire to join the club) are equally good or bad at learning, practising and delivering on the promise of innovation. There is nothing unique about Indian ingenuity that makes Indian talent intrinsically and significantly more innovative than the average knowledge worker in, say, China or Egypt or Eastern Europe or even Latin America!

Clients based in North America and Western Europe (the predominant 'buyer' markets) have been tapping into India as a destination for well over a decade, and by now have a good understanding of the issues and opportunities that India represents. They know where the trade-offs are: while on the plus side, as I have argued, India offers a wider range of skills, better scale and better process quality, the down-side comes primarily in the form of higher attrition, greater geographical distances and time-zone differences, cultural incompatibility and to some extent lack of infrastructural robustness. Attrition can be a major problem for clients who have invested time, cost and energy in transferring knowledge. Secondly, while it is true that India enjoys the advantage of a large educated and English-speaking resource base, one must also remember that cultural compatibility is not just about being able to speak in a common language (which itself is debatable in the first place, since a lot of the knowledge workers who originate from smaller towns in India cannot really boast of fluency in English, not to mention American colloquialism). Thirdly, while time-zone differences of up to 12 hours do offer the advantage of having someone, somewhere, working on a project 24x7, they do not solve the problem of logistics (when professionals on either shore need to travel great distances to the other shore) and the problem of disrupted daily routine (when professionals on either shore need to be on conference calls at odd hours in their working day).

Comparatively, Central and South American destinations are closer, by way of both time-zone compatibility (in terms of virtual meetings / conferences) as well as geographical proximity (in terms of travel), for North American clients. The same goes for Eastern Europe in the case of European clients. Also, clients find better cultural compatibility in dealing with teams in those destinations, and business communication between client and provider teams is relatively easier and smoother. Language barriers are not significantly higher than when dealing with India, and in some cases may even be lower. Also, attrition is comparatively much lower in most of these destinations. The only disadvantage these destinations have is in terms of skill mix, scalability (especially in terms of ramp-up time) and process maturity. And that is where India has been scoring. Of all competing destinations, China is the only one that has the capability (not to mention the will!) of outstripping India on these fronts. Through concerted efforts in strengthening infrastructure (power, telecoms, etc.), in fighting attrition, in broadening and deepening the pool of trained and qualified professionals, and in imparting cross-cultural and soft-skills training to its resources (a la finishing schools), India can hope to keep the No. 2 slot if / when China overtakes India (may just be a matter of time). Perhaps this is a more pragmatic goal for India as an off-shoring destination.

That said, the opportunity for Indian companies to maintain their leadership position lies not in trying to fight the up-hill battle of keeping India as the most preferred destination. In fact, it lies in not confining themselves to India as a destination. Again, this is not an epiphany - in fact it is not even news. Most of the top-tier India-based service providers (including those founded by Persons of Indian Origin) have already started the process of building (or in some cases, consolidating) 'near-shore' hubs in Central and South America, Eastern Europe and other regions. A few have done this through organic growth, but most have done so through acquisitions of stake in local players, to whom Indian companies offer stability, scale, leadership in process maturity and access to other markets, in return for a better presence in the local / regional market, a ready local client base, and the ability to provide a multi-locational offering to their global clients. Leading Indian companies have already figured out that globalization is no longer about staying in India and offering ITO / BPO type of services to the world, as clients have increasingly started demanding lower attrition rates and flexibility in terms of location and time-zones, over and above range of skills, scalability and process maturity.

India as a destination will lose its leadership position in a few years - at the very least, the gap between India and other destinations will start closing rapidly (it already is) as they ramp-up and start competing. Innovativeness is not a special gift that is unique to India-based talent pools and believing that it is so can at best be termed as misplaced patriotism (at worst, it is a kind of jingoistic denial of reality) on the part of Indians. Innovation is a great value proposition and I am not suggesting that it should be abandoned altogether (especially because others will start offering it too!) The smart thing to do, for service providers of Indian origin, is to focus on developing a global delivery footprint (not just sales offices) and the ability to provide the right mix of capability, capacity (i.e., scale), team stability and cultural compatibility, and process excellence, at locations preferred by the client - on-site / off-site / near-shore / off-shore. And as the adoption of globalization shifts to the mid-tier client base, focus on forging strong partnerships with clients to achieve the distinction of becoming an extended team. Cultural compatibility and responsiveness to changing client needs are key. Innovation will just be a hygiene factor.

[This is not really a blog post]

Seriously, it isn't. I am just testing Disqus ... I hope it works now. I've been trying to get it to work, and I pride myself on a little more savvy than the average user (what with my techie background and all that - so what if it was in a bygone era?) but installing Disqus and getting it to work has been a major challenge.

If this works, you should be able to leave a comment - as a Disqus user, as a Facebook user, as a Twitter user, or with your OpenID, or just plain anonymous, with Name and email address.

Help me test this if you will. Thanks!