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AcomplexchallengeforourPSUs|mydigitalfc.com

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AcomplexchallengeforourPSUs
ByArunKumarJainJun292015
Tags:Oped

MOREFROMMYMIND

13:41 IndianBankpaysRs165.62crasdividend
togovt

Managingdecisions&biasin
3EE

13:39 SyndicateBankQ1netdips38%toRs302
cr

Savingwomenfromtyrannyof
orthodoxy

13:37 BoIQ1Netplummets84%onhigherbad
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Geoengineeringisnota
solution

13:06 IRBinfraarmtiesupRs1,400crforNHAI
project

corruptionwasrampant.

MakeinIndiacantransformthe
east

13:03 Govttotransfermgmntcontrolof8loss
makingITDChotels

In2000,BSNLwasincorporatedtocompetewithprivateplayers.This

IRneedsmassivefundsto
restructure

13:02 MicrosoftlaunchesWindows10:Here's
whatthatmeans

Tillthemid1990s,thecentralgovernmentanditscompaniesweretheonly
suppliersoftelecomhardwareandservicesinthecountry,andthewaiting
periodforfixedlinephoneswasanythingaround57yearsdependingupon
yourlocation.Ascanbeexpectedinheavilycontrolledregimesand
conditionsofshortages,blackmarketintelephoneconnectionsand

companyhadanearlyleadintermsoftelecominfrastructure,countrywide
presence,tieupsfortechnologywithglobalplayers,governmentsupport,
andtrainedmanpower.Intheearlyyears,BSNLhadtotalmonopolyoverthe

FCSUPPLEMENTS

10:08 Sensexrecovers100pointsonvalue
buying

fixedlinebusinessandmobiletelephonyhadjustkickedin.Thecompany

09:36 FirstBell:Niftylikelytoopenflat

thusrakedinhugeprofitsandcashreserves,butasmobilesbecame

11:04 AshishBahugunanewchiefoffood
regulatorFSSAI

ubiquitous,itsteadilylostgroundtoprivateplayers.

11:34 Googlebidsadieutoitssocialnetwork
In201314,BSNLsufferedamassiveRs14,979crorelossinthelandline

11:32 OnePlusaimstosell1mnsmartphonesby
yearend

businesswithanetlossofRs7,085crore.Thecompanystillemploysover2
lakhemployeesthatweregoodfortheanaloguefixedlinebusinessbutare

Theplayisthething

hardlyrequiredinthedigitalera.Itcandolittlewiththismanpower.

Whyanalyticsmatter
Enterthenetwork

Telephoneandpostalserviceshavebeenmassivelyimpactedwith
technologicalstridesincommunication,connectivity,mobility,changing
socialmores,andreformsinregulatoryregimes.ThestoriesofIndiaPost
andITIarealsosimilartoBSNLoncechampionmonopolies,botharenow
strugglingtofindthegroundbeneaththeirfeetdespitehavingaccessto
primelandsandproperty,dedicatedmanpower,unmatcheddistribution
networkwithmassivepresenceineverypartofthecountry,andgovernment
supportforfinances.

FCInvest|FCBuild |FCRoar

11:28 HerotoacquirecertainassetsofUSbased
EBR
01:07 GraftchargesstallHouse,reforms
22:57 Onlinenatives
22:47 Privatefundsmayhandlegovtpension
corpus
19:25 Catchupwithcotton
22:55 Greekshowdownlooms,creditorsturnup
theheat
09:16 GreeksdefyEuropewithoverwhelming
'No'inreferendum

TherecanbenodenyingthatPSUshavedoneanimmenseservicetothe
nation.Theyhavefulfilledthesocioeconomicmandatetoprovideessential
servicestothecountrysremotestregions.Theproblemisthattheyonly
knowhowtodobusinessinprotectedindustriesandstabletechnological
environments.Assoonasrealcompetitionkicksinandindustrystructures
becomecomplex,PSUsstartbleeding,andbarringexceptionssuchas
BHEL,shareholderslosevalue.
ThefactisthatPSUsarenotgearedtofaceuncertaintyandenvironmental
dynamicity.InthecaseofBSNL,orforthatmatterITIandHMT,itwouldbe
toosimplisticandfaciletoblameitonmismanagementorpoorleadership.
Thegenesisofproblemliesatmultipleinterconnectedlevels,including
perceptual,knowledge,structural,cultural,technologicalandorganisational.
Unlesstheseissuesareaddressed,PSUswillcontinuetobedrivenby
industrymomentumratherthantheirmanagementscalibratedapproachto

EDITORIALOFTHEDAY

directionandchange.
Inasituationofstableandsupportivetailwinds,anyonecanswim.However,
vulnerabilitiesgetexposedwithapproachingheadwindsandthisiswhere
realleadershipisrequired.
Perceptional(darshan,soch)andorganisationalcultureconstraintsleadto

Hotcash
WemustunderstandtheneedforPnotesto
settlethedebate
Theneverendingcontroversysurrounding
participatorynotes,akaPnotes,isbackin
focusfollowingthelatestrevelationbythe
SupremeCourtappoi
more...

biasesthatcohabitwithlogicresultinginthreemajordisadvantages,viz,

PREVIOUSEDITORIALS

discountingandrejectionofnegativeinformation(confirmatorybias),mental
blindness(overconfidencebias)andhubristhatnobodycantouchusand
lackofurgencytochangeandact!Themindsetsaredeeplyembeddedwith

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decadesofpersonalexperiencesand,therefore,areextremelydifficultto

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Knowledgegapandperceptualvacuityareadestructivecombinationthat
feedoneachotherleadingtoaviciouscycle.Inthecaseoftelecomindustry,

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7/28/2015

AcomplexchallengeforourPSUs|mydigitalfc.com

BSNLkeptthinkingitselftobeinthebusinessofprovidingphoneservices

FinancialChronicle

whereastheindustryhadmovednotjustintowirelesstelephonybutalso

5,291likes

content,data,multimedia,entertainmentandcustomerledinformation
pipelines.Voiceconnectivitybecameabasicvanillaserviceinanewworld
wherethecustomerhadhugechoices.

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ThestructurallimitationsofPSUs,whicharewellknown,render
independentdecisionmakingdifficultdespiteeffortstoprovidefreedomto
boardsandminimiseinterferencebythegovernment.Technological

Bethefirstofyourfriendstolikethis
Anand Vinay Sachin Nagendra
LaMar Venkatesh
Aranya
Karia Walandikar
Sutar Kumar Campbell
Vakalapudi
Mondal
Kottapalli

advancesrequirefarsightedness,risktakingability,andbusinessacumen
tograspandmakerapidresponsestotransformandtakeadvantageofa
changingenvironmentbeforeothersdo.Learningnewwaysofmanaging

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andunlearningoldmindsetsaretheonlywaystosteerthecompanyintimes
ofvolatilechange.
Thenewrealityischangeorperish.Toinitiateandmanagelargescale
change,aholistictotalcompanyviewleadershipprogrammeisneededthat
simultaneouslydisincentivisesbusinessasusualoperationalmode.Fresh
knowledgeandperspectiveswouldprovidenotonlynewconceptual
understandingsbutalsothetoolstohandleshiftingcustomerpreferences,
newsourcesofrisk,emergenceofnewmarketsegments,andimpactof
decisionsonfutureorganisationalpreparedness.
Structuralindeterminacy,technologicalcomplexity,disruptionsandever
enlargingcustomerexpectationsarethenewindustrynormalsinaneraof
globalcompetition.Thenextinlinetofacetectonicchangesarethedefence
PSUs,anditwillbeinterestingtowatchhowtheycopewiththat,and
continuetoexcelandgeneratepositivecashflowswhilecontributingtothe
Indiansecurityenvironment.Theyalsofacethesameincumbentscurseas
theirotherPSUbrethrenthereasonsthatbroughtsuccessearlieralso
carrytheseedsoffailureunlessgeneticallymodified.
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