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Archive for October, 2010

Tata Power vs. Krishna Power

My latest brush with Indian bizdev efforts in Israel- who outsourced my Huzpah?!

“No no no,  please don’t talk now!. First we meet, then we see if we can do business together!”

The heavy Indian accent on the other side of the line was brisk and unforgiving. No matter how politely I tried to brush off this upcoming meeting request, he would not take “NO” for answer. The officer at the Israel Export Institute, set me up for a blind date with an Indian businessman who was passing through town and requested to meet me. I was rushing home, tired after a long day and following a brief phone conversation, I concluded that this encounter was not the right fit for my company, but I guess I was wrong.

Mr. Krishnamanyam (Krishna will suffice) was hell bent on meeting me and, meeting me now! And it was this untactful persistence that persuaded me to give in for a brief cup of coffee.
It seems that I”m a sucker for anyone wanting desperately to meet me… a matter of ego.

But first thing’s first.

On the other end of the spectrum, a team of company directors from the Indian empire of Tata Sons Ltd. (India) are heading this way next month, and every man and his dog are getting ready to get some face time with their corporate gang. I was going back and forth with their rep, working on setting up a networking event for the Israeli clean tech space via my efforts at Clean Israel. You can just imagine their outfit- the hotels,  business lounges, and the timely schedule switching between government delegates and top brass corporation, that are lining up to meet them. Let’s hope that my karma will offer me a slice of their time as well…

And they are coming for business! Picking the best of the best, as if part of some reality show, selecting the new Israeli puppy to become ‘Slumdog Millionaire‘ and get their cleantech startup rolled out across the whole of India, let alone- the World .

Now back to Mr. Krishna.

Mr. Krishna is neither staying at the Hilton, nor is he escorted around the country by the Economic Attache from our Embassy in Delhi. And while he’s not coming out from yet another feast in the Business Lounge, that’s exactly what we should all be worried about…

Mr. Krishna is hungry!! Hungry to outsource contracting jobs off to India.

Krishna Power (my term for this phenomena) is a one-man show that is no bigger than the great Gandi himself. 5ft tall and weighing 60kg, this retired defense contractor, with a life time experience in large-scale machine shops and engineering factories, came to Israel on a 10-day visa and parked himself in a dorm room by the Central Bus Station. Armed with a local cell phone and a monthly city bus pass, Mr. Krishna is running up and down this land looking win manufacturing contracts to take back home to his affiliated factories in India. Be it machine parts, plastic molding, munitions, you name it- he’ll outsource it.

While other visitors bask at the 1hr domestic flight to go see our solar site in the desert, Mr. Krishna got up early for the 6:30am bus to Eilat (5.5hrs) and had a quick look-see, returning by sunset. Each day he meets new businesses, which in turn set him up with additional leads, resulting in a fat suitcase going home, loaded with sample components and design drawings, all off to be fabricated at “good price, good job“.

The concept itself is well known, yet it is still quite amazing to witness this global phenomena play itself out, live in front of your eyes on the streets of Tel Aviv. To coin it in Friedman’s words: Can the world get any flatter? Mr. Krisha probably didn’t even know where Israel is on the map some 5 years back. But I bet you that the Russian immigrant working on the molding press in Tel Aviv’s south side, will certainly know where his job is being outsourced to, come next year.

How should one respond to such a global play on our economy?

Notice I’m not using the word “threat”. While some see this as threatening our low end jobs, I see it as a tremendous opportunity to showcase our innovative products to huge markets India has to offer. By outsourcing some low end components to Indian factories, Israeli products can become more cost competitive across global markets. For every low end component that was outsourced to Krishna Power, an additional high end component (such as an Israeli software package) was given to him as well, thereby offering that Israeli IT company access to huge markets.

We should take this act as our wake up call, noting that our last remaining competitive advantage [for the time being] is our sharp minds combined with our innovative spirit. This should drive us to maintain a constant investment in education, R&D funding at the seed stage between academics and the business world, and government policy that breeds risk taking in new frontiers such as cleantech, nano-tech, biotech- basically anything that cannot be taken apart by the shipyards in Gujarat.

Anything else, is off to India- even our home grown Huzpah.

“Good things come to those who wait, but only things left by- those who hustle.”

Andy Grove, former CEO, Intel

Indian markets,  photo: Martin Lambie

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“See, I have to keep on top of things, ‘cos any days now, I’m about to close a lease with Walmart on 4 new sites.”

Now there’s a true Canadian dilemma for ya. To which one of these two national values should my friend uphold? Connect with nature in the middle of our 3-day canoe trip out in the bush, undoubtedly one of the most Canadian things you can do at the end of August, or connect with the cellular tower standing on the distant horizon to plug into his BlackBerry for yet another less famous Canadian pass time- checking email.

We were paddling our canoe across yet another beautiful piece of Canadian backcountry, and there you have it. The spread between our two cultures was quite evident. While I can barely imagine negotiating rent with my landlord in Tel Aviv upon my return, my buddy here in the front seat of the canoe is contemplating on his smartphone the Terms & Conditions of a 10 year lease agreement with Walmart.

It was a great summer. I love coming back to Toronto after my 3 year stint at MBA school a few years back. Time was well spent with family and friends, and a mix of taking in all that a summer in Toronto can offer you, along with escaping up north into cottage country, ending it with the highlight of the trip- a 3 day canoe trip into the wild. What else can a man ask for? 6 guys, 4 fishing rods, 2 canoes and 1 cook and you have yourself the perfect setting for a great outdoors experience. It’s amazing how simple it is. One portage away from the highway, and you are in backcountry, the same way the early pioneers had found it when they paddled across this land, centuries ago.

And it was during this paddle, on the final days of my stay, that I noticed two distinct characteristics that define Canadian business culture. These vast distances that connect so many remote communities, across some of the most challenging weather conditions, have evolved two telling characteristics of Canadian business. And I think that there is something there, in the insight, worth taking back home.

Go big, or go home: I know that writing these lines sounds pretty obvious to anyone living in a big country. But coming from Tel Aviv, we get by pretty well by making do with small scale solutions and are easy to setup and provide a reasonable outcome, most of the time. Our ‘quick & dirty‘ attitude can only take you so far, and our geography has evolved us into thinking local rather than global. For a Canadian to go into business (and I’m not talking about the local corner store) he goes in with the understanding that his product has to be supported across 4 time zones, and his inventory has to support a market of 25Million people spread out over 5,000 km. I was listening once to the COO of Tim Horton’s (Canada’s largest fast food chain) explaining the challenges of launching a new lunch ‘Soup & Sandwich’ special nationwide. With not one of their supplier being able to supply them product cross the whole country, they have to coordinate timing and quality with several different food vendors in order to ensure a uniform customer experience across their 3,500 restaurants spread from sea to shining sea [that’s Canadian speak]. With that in mind, Canadians have evolved an operating scale of business that you just don’t see back home. This reminds me about my Aussie business experience, noted in a previous blog posting. Canadians think big, and understand the implications of big operations across their whole supply chain. They have no choice- this is Canada.

Execution is everything: With the previous comment well engrained in their mindset, the second point in Canadian business culture follows in almost naturally. And that is that if you’re going execute your business across such vast distances, and run your operations through snow blizzards and frozen roads, you better ensure you get the job done right- the first time! Take my cousin Adrian for example. Let’s face it, how many Jewish plumbers (not bankers) can you find in Toronto? He started off working out of the back of someone else’s pickup truck and 10 years later he runs a leading contracting company comprised of a fleet of service vehicles and bids on large industrial jobs in the plumbing & heating sector. Aside for working like a dog for a better part of a decade, he attributes his success to a single factor: “I only bid on jobs that I am confident that my crew and I can execute perfectly- first time round.” See in his line of business, if he has to send a crew up the highway some 400kms to do rework on a dodgy installation at some remote site, there goes all the profit margin on a 3 month contract. This one shot approach is seen evident everywhere you look.

And it is that kind of thinking that builds a culture of excellence in anything you do. From hiring the right people with the right mindset, to planning ahead and executing out your plan. I know that back home in Startup Nation it’s more common to adopt a f’ly-by-the-seat-of-your-pants approach to doing things, but don’t  tell me that we Hebrews could learn a thing or two planning forward.

As a favourite Canadian mentor of mine once noted: “Israelis are the world’s best in improvising  and solving  their way out of complex situations, into which they shouldn’t have gotten themselves in the first place…”

So those are the two biggest things I brought back with me from Canada- along with 4 bottles of  maple syrup.

Without words.                                      photo: Lee Koren

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