In 1977 when Janata government first came to power on the back of a majority it messed the plot in about two and a half years. As heartwarming its success was (if the defeat of Indira Gandhi was considered the defeat of civil right suppression), its failure was not a surprise. It was the first time India had a non Congress government at the center. It was also the first time coalition politics came up. As much deft governing a country like India requires, so much more skill managing a boat running on coalition fuel demands.
At the backdrop of this, it is not surprising that Janata government had little to no institutional memory to draw its lessons from. It had no reservoir of prior experience and thus no skills in managing the country.
In 2011 Trinamool Congress(TMC) swept the Bengal Assembly elections. Poriborton or “a structural change” became the rallying war cry of TMC. Hopes of better governance and a steering away from leftist politics inspired the masses, on the back of which TMC registered its first assembly victory. It was the first time in 25 years Bengal had a non Leftist government. It was also the first time a non-Congress, non Left party won. It was the first time TMC had a major role to play in state politics. As much intellectual capital steering Bengal away from the embraces of leftism requires, even more so forging new policies (in a new political paradigm of cooperative federalism) demands.
Cut it any way which, TMC had a patchy record at best in governance.Ranging from Ambika Mohapatro case to delaying of Teesta accord- spanning from refusal of FDI in retail and insurance to a general breakdown in civil rights in the state- TMC remains an immature political party at its best.
And it is not surprising because like Janata government- it is the first time for TMC- and it has no organisational knowledge to build upon.
In 2013 December, Aam Aadmi Party poised a significant challenge in the assembly elections with a stunning 28 out of 70 seats in its pocket. It was the first time a political party was handed the mandate to rule within a year of formation. Not only was it a 1 year old party but had no “repository” of politics and political management to draw from. It was an empty reservoir in terms of organisational knowledge.
And no doubt, that its failures were stark and serious- from its numerous skirmishes with the Centre to its abdication of Delhi on drop of a hat it was an unmitigated disaster in governance.Its janata durbars, a much touted governance measure on the lines of direct democracy had to be kept aside because of mismanagement; Somnath Bharti’s vigilantism to dharna politics – all were the hallmarks of a party wonderfully bereft of ideas.
However AAP defying history (abdications have very low success rate when judged by history) came to power in 2015 assembly elections with 67 seats. This time the general expectation was even a prodigal son should be given a second chance. But AAP has bungled and in large measure the last 5 months have ranged high on decibals low on intent.
Modi government is in many ways straddling the mean between these failures. BJP government in general has a reservoir of experience in administration. Modi himself has administered a state. But then their strengths are also their weaknesses. It has been 10 years that BJP administered country last and like anything time also depreciates experience by removing able hands from the gene pool/ service pool (e.g. Vajpayee, Shourie etc)
So if Modi government has had successes it was because of this past experience and its failures nevertheless are undoubtedly in areas where it never had new ideas in its repository and those areas which are uniquely belonging to Centre- “civil rights”, “education” etc (nitpickers may find fault in me classifying them as Central subjects while they are concurrent but think of crowding out effect- Centre’s precense renders state inconsequential)
It is not a surprise that in large measure knowledge acts like a muscle. And soft skills/managerial skills are even more so. Lets call them managerial muscle in short.
What are the areas where India has developed managerial muscle?
1. We are slowly learning to tackle public health – we have learned to tackle and eradicate polio- a big milestone in my dictionary. I believe in the next 10 years a lot of other public health mess will get taken care of : TB for example.
Just to think in 2009 we had the highest burden of polio victims. In 2012 we were polio free!
2. Learning mountain warfare- we have a big advantage over China in the sense that our defence forces have a much deeper experience of combat while China doesnt have it.
3. Disaster management- no explanations needed. Very strong and deep managerial skills and organisational knowledge here.
The deepest of social understandings should be fertile. And it is no different in this case. The idea of knowledge muscle can be very well built inside the framework of capitalism as well.
An entrepreneur who learns by successive failures is a prime example of this- the same reason why venture capitalist firms discount first time entrepreneurs more aggressively than seasoned ones. A CEO who has gone through at least one trough in a business cycle also falls into this category.
And finally when Sanjay Bakshi mentioned that one of the causes of market myopia is a higher discounting of past managerial setbacks (Point 5 )- he was bang on because market is unable to tease out the nuances between corporate misgovernance and genuine setback.
Strangely this very same “mental model” can be used to separate the wheat from the chaff. Judge the man based on his access to “managerial muscle”.
Case in point will be to study the potential turnarounds:
1. Eicher Ltd.
In 1994 Eicher bought out Royal Enfield (RE), a high end motorbike maker and yet till 2000 Eicher continued to bleed in this segment. For an annual capacity of 6000, Eicher continued to churn out barely 2000 bikes.
Faced with a question of coast or shut, the iconic motorbike maker received a shot in its arm in the form of Siddharth Lal. A 26 year old die hard fan of Bullet (the iconic range of bikes from RE) with substantial backing from the promoter family.
You see, he was a young scion of the promoter family.
He realised one thing very quickly. Tractor makers will have very low “knowledge/managerial muscle” to turnaround an iconic bike brand. He roped in R.L. Ravichandran- an able hand with deep experience in bike segment (earlier experience in Bajaj Auto and TVS Motors)
2. Ajay Piramal
Ajay Piramal was a man who is the epitome of a managerial learning machine. His knowledge muscle got honed by repeatedly engaging in tough business situations- of management buy in, industrial conflict resolution and the works. Today he uses it to his advantage in solving simpler but more rewarding problems – like how to buy companies with able management.
I wanted to add a third and fourth and fifth example to the list. But I am tempted to turn the mic towards you.
Where all, have you come across examples of “knowledge muscle” working its charm?