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Castles of Sand: Here Today, Gone Tomorrow

This article was published in tehelka.com’s ‘Personal Histories’ column with a different title in their 27 Sep 2014 issue .


It happened almost overnight. A company that had been built brick-by-brick over 90 long years, a firm that employed 85,000 people in over 80 countries, collapsed in a few short weeks due to the actions of one man. Just one man’s greed for higher annual bonuses destroyed a veritable institution in the world of accounting and consulting. Arthur Andersen.

It was a bolt from the blue for us in India. The unthinkable had happened. We had an acute sense of history being made, and being a part of that history. Only, it was the wrong kind of history. All of a sudden, tens of thousands of careers were at stake. Bright young people who had trusted their future to us were left in the lurch. Though the Indian arm was considerably smaller than some others, we nevertheless were a microcosm of what was happening worldwide.

In our midst were some who had married recently, and others who were expecting little ones. There were those who had taken large loans for buying flats. Among the older colleagues were some who had leveraged themselves to educate their children abroad. Across the board, people were desperately dependent on their pay cheques. If Andersen ceased to be, where would they go at this terrible time? In the wake of the 9/11 attacks, the job market was at a nadir.

All this had come to pass because of one selfish man sitting in some office somewhere on the other side of the planet. While India was at last beginning to enjoy the fruits of globalisation, we had the dubious privilege of experiencing the perils of it — first-hand.

The first decade of the new millennium was a terrible one for us. The 9/11 bombing was followed by Andersen’s collapse. As if that were not enough, along came the sub-prime crisis. These three calamities had two threads in common.

First, all three were results of warped minds and dark emotions — be it greed, anger or plain vindictiveness. Second, none of them had anything to do with India, but their impact was felt by us in full measure. Globalisation had truly arrived.

The aftermath was traumatic. The most difficult thing I have had to do in my three decades in the corporate world was to look a colleague in the eye and tell him that he no longer had a job. Knowing fully well that he and his wife were expecting a child in two months, and she had just quit her job in anticipation of the bundle of joy.

Difficult times also bring out the worst in some people. Accusations and barbs began flying indiscriminately. From melodramatic whispers like ‘he is snatching food from my son’s lips’ to more unmentionable ones.

But alongside them were others who showed their true worth during crisis. They worked doubly hard, and took voluntary pay cuts so that some of their colleagues could keep their jobs. Among them were senior people who took such deep cuts that they took home less than their juniors did.

When the dust finally settled and each of us found new equilibriums in life, some of us found that our perspectives had changed. We were now acutely aware of innumerable factors far outside our control that could wreak havoc on our personal and professional lives. We couldn’t avoid them, and we could do nothing to combat them.

The greed of Wall Street could lay low innocent victims in Chennai. Men like Bin Laden could destroy the lives of nameless folk in Hyderabad and Pune. Events on the other side of the planet could bring things crashing down in India. There was only one defence — to be prepared for the unexpected.

The lesson I take away is that in our new interconnected world where unseen strangers can yank the carpet from under our feet, our best allies are prudence and humility.

Thin LInes

This article was published in Economic Times Corporate Dossier on 12 Sep 2014.

RV Raman, former head of KPMG’s Consulting Practice, tells five stories from his formative years.


1. Grab your chances.

The battery of tests and campus interviews had finally ended, and I had my first job offer from Tata Motors, a coveted prize for mechanical engineers in the early 80s. Just as I rose and shook hands with the panel, they popped me a question. Did I want to be a mainstream shop floor Graduate Engineer Trainees like many before me, or did I want to join the new Management Services Division (MSD)? The folks at MSD, they said, did computer programming; a new area where the waters were yet untested.

It was in an era when ‘computer science’ and ‘information technology’ hadn’t entered the Indian lexicon. I had a snap decision to make. I could take the tried and tested route to the shop floor, and take the well-treaded path up the organisational ladder. Or, I could risk striking into a new territory.

The thrill of telling a machine what to do was irresistible. I chose MSD. It was a decision I never regretted; a choice that took me into software, and then into management consulting.

Unexpected chances were thrown my way twice more in my career. I grabbed them. I’m happy I did.

2. Never stop adding skills. Reinvent yourself.

“Don’t rest on your laurels,” we were told at Tata Motors. “Opportunities will be endless if you continuously add skills.”

It was advice I took literally. Only, I didn’t limit it to software. Two years later, I realised that learning more software languages was incremental and insufficient. I got myself an MBA from IIM Bangalore and entered management consulting, where we advised clients on IT choices they needed to make. Software was a tool that made operations efficient, but to do that you had to understand all manner of processes – a whole new set of skills for me to acquire.

Gradually, I figured that process improvement was not an end in itself. Clients wanted to maximise shareholder wealth. For that, IT and processes had to blend with people, strategy and M&A. To my technical skills, I now had to add an array of soft skills. It was not easy, but the rewards were disproportionate to the effort.

In search of that elusive meaningfulness in life, I am now reinventing myself as a part-time writer and a teacher. Only time will tell how rewarding this iteration will be.

3. Culture is set at the top

When we merged Arthur Andersen’s consulting practice with KPMG’s, we figured that organisational culture was the key to our continued success. Meritocracy was one of the cornerstones. People had to be rewarded for their contribution, and not for their proximity to leaders, or to the optics of working late hours. But no amount of saying so had the required impact.

We therefore introduced a mechanism for promotions that is now an industry standard. Every six months, Partners and Managers (i.e. the people running the practice) locked ourselves away for two days, where the performance of every consultant was discussed threadbare before promotions and ratings were decided.

There were two instances where my view of a consultant’s performance was diametrically opposite to the view of their managers. Despite several iterations, the gaps couldn’t be narrowed. I was faced with a choice. I could overrule the group’s decision as Partners often do, or I could let the process I had created determine the outcome.

I chose the latter. The consultants in question – both brilliant guys – were not promoted, and left the firm. But the culture of meritocracy was firmly established.

4. The importance of humility

“The day you lose your humility, you lose your soul,” my father had said early in my life. It was philosophical advice that meant little to a young boy then, but it was to come back strongly in later years.

It is easy to let success go to the head when bright young consultants begin addressing CEOs and Boards before they hit thirty years of age. It becomes even easier at 35, when you call industry captains by their first name. It’s a heady cocktail that makes you think that you know all there is to know. You have arrived!

Nothing could be further from the truth. Once hubris sets in, you stop seeing and listening. Your glasses become coloured, and your ability to understand your client’s problems gets impaired. You can no longer advise dispassionately, and you fail as an advisor. Humility is your insurance.

Once every year, I stand in a corner at Mumbai airport’s arrival area and watch the young and the middle-aged hurrying about, wrapped in their self-importance. It helps me keep my feet on the ground.

5. There is a thin line between ambition and greed

Consulting attracts not only some of the brightest people, but some of the most ambitious ones too. Sometimes, ambition can turn into something ugly. Not very long back, a successful and respected consulting Partner crossed the line. It began with a small confidential document being shared with an outsider. One thing led to another, and soon, the Partner’s name was on the slippery slope.

While the breach was not illegal, it was unethical nevertheless. What was shocking is how the Partner, with so many years behind him, convinced himself that he was doing nothing wrong. He wanted to add a zero or two to his wealth.

This was shockingly similar to the Galleon Hedge Fund case, where highly respected executives couldn’t resist temptation. They deluded themselves into doing things that interns in their office would have no trouble seeing as illegal. They have paid a steep price.


The original article (pdf) from Economic Times

Fraudster: The Novel

White collar fraud is not new to India, but the scale is.

The spectacular growth India has enjoyed in the past decade has driven the stakes higher than ever before, and has had an unintended casualty – ethics.

The growth that brought a flood of opportunities and created entrepreneurs has also enabled scam artists. Businessmen who had nothing to do with power generation, for instance, try to set up power projects. Colleges sprout on vast acreages in the middle of nowhere, with few students and fewer teachers. Warehouses and retail space sometimes serve as facades for real estate plays.

In this occasionally unholy dash, aspiration sometimes outpaces ability, and men resort to murky means. Access to funds and approvals become the tallest hurdles to profiteering, but some enterprising ones find ingenious ways around these obstacles.

In this, they are abetted by another consequence of our dramatic growth – greed. Men who held staid jobs for years suddenly find themselves as gatekeepers, controlling the flow of money and approvals. Some fall to temptation.

Fraudster is a story of the black sheep of corporate India.

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