In the recent times, there has been a paradigm shift from an “Informational Age” to a “Conceptual Age”; i.e.  there is shift from labour-intensive work to knowledge-intensive work- in other words, making full use of your creativity in obtaining added value outcomes. Every day, we come across various complex and dynamic problems, which require out of the box thinking and optimal use of your creativity. To enhance and nurture this creativity, we need to provide a suitable environment to it, which does not curb it. At the same time, we have to focus not only on the creative outcome, but also the creative process that it follows.
1) Intrinsic nature of creativity: A process can be considered creative without referring to others’ evaluation of the product. It might be possible that a similar idea has been presented before, but considering its intrinsic nature, more focus should be given on what led to the need of such a creation and how it was approached.
2) Contingent nature of creativity: Sources of creativity are quite diverse and circumstantial. They are often built on the study of various inventions, and they emerge out of not only good ideas but ideas that might be considered useless or wrong. Creative processes do not follow any laws, but at the same time they are not random generations.
3) Collaboration in creativity: Collaboration of an individual with other individuals brings an added value to the process with cannot be attained by a single individual. This way the process sees through a culmination of various sparks, which enables it to achieve an optimal solution. Team work, which is a very generic term, generally brings better results as compared to a single individual.

An important theory which encompasses this entire ideation process is the concept of “autopoiesis”- a system of self-production and self-creation; where the system produces units which comprise the system, in other words, a self-sustaining solution to a problem. It is not just about innovating, but it’s also about narrowing down to the domain, the social segment which particularly requires attention over an issue, and also about the affordability of the solution.

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With the NDA government completing a year in the office, there are various promises it set out to complete and faced numerous challenges in completing. Let us take a look at the view of its promises and the delivery of those promises.

1) Tackle price rise
Tamed. Sharp fall in crude oil prices led to a large part to the dip in prices but the government’s steps too tamed inflation and improved supplies. Special courts to stop hoarding/black marketing has been implemented. Setting up of Price Stabilization Fund is in the process. Government is yet to decide on unbundling of FCI ops.

2) Employment and Entrepreneurship: Develop labour-intensive manufacturing such as textile, footwear, electronics assembly and tourism
In process. Building blocks being put in pace, steps being planned for job creation. Plans being worked on strengthening traditional employment bases of agriculture and allied industries and retail.

3) Tackle corruption
Set up a system to eliminate scope of corruption through public awareness, e-governance, system-based policy, driven governance and simplification of processes. It has been successful in curbing corruption at the top.

4) Taxation reforms
Steps taken to end tax terrorism. But tax policy still remains a problem. Government has set up panels to examine knotty issues. But missteps in past months, particularly on the issue of MAT on capital gains of FIIs, have trigerred controversies. Notices to FIIs put on hod but controversy has hurt the wrok to shore up image of tax authorities. There has been progress in GST implementation. Lok Sabha has approved the bill and states’s concerns have been addressed.

5) Assess decision and policy paralysis
Steps taken to shore up decision-making. Beaureaucracy’s involvement has been intensified. PMO has emerged the centre-point for key decisions. PM routinely interacts with top secretaries.

6) Economic revival: To spur stable and balanced growth
There are signs of revival in growth. Economists and multilateral agencies such as IMF and World Bank have forecast 7-8% growth in the short term and predicted that India will overtake China. Weak spots remain in infrastructure, overall industrial growth. Reform measures should help ignite growth.

7) Strictly implement fiscal discipline without compromizing on funds availability for development and asset creation
Government has stated its commitment to fiscal discipline without compromising funds for development, but has relaxed target of reducing deficit to 3% of GDP by one year to ensure spending on infrastructure. More resources are being transferred to states due to 14th finance panel recommendations. Also a panel has been set up to strategize how to tackle subsidies.

8) Track down and bring back money stashed in foreign banks and offshore accounts
Law has been passed. Government introduced tough black money legislation. Set up an SIT to probe cases of black money. Both Lok Sabha and Rajya Sabha have approved the Bill.

9) Ensure conducive, enabling environment for doing business in India, set up world-class investment and industrial regions as global hubs for manufacturing, faster approvals
Mixed results. Government has unveiled measures to make it easier to do business in India but investment cycle is yet to pick up. Environmental clearances, other approvals have been fast-tracked but implementation of projects has been slow. Manufacturing needs a push to create jobs and get engines of growth roaring again.

10) Banking reforms and bad loans
Unveiled appointment norms for top state bank jobs. Jan Dhan Yojana launched successfully. Tackling bad loans has made limited progress; large defaulters use regulatory loopholes to delay resolution.

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Innovation is a difficult concept for well-established firms, or basically any firm which has established its structure properly. So here are a set of attributes which are present, either partially or fully, in successful businesses.

1) Aspire
In a corporate setting, many CEOs have discovered, even the most inspiring words often are insufficient, no matter how many times they are repeated. It helps to combine high-level aspirations with estimates of the value that innovation should generate to meet financial-growth objectives. Quantifying an “innovation target for growth,” and making it an explicit part of future strategic plans, helps solidify the importance of and accountability for innovation. Establishing a quantitative innovation aspiration is not enough, however. The target value needs to be apportioned to relevant business “owners” and cascaded down to their organizations in the form of performance targets and timelines. Anything less risks encouraging inaction or the belief that innovation is someone else’s job.

2) Choose
Fresh, creative insights are invaluable, but in our experience many companies run into difficulty less from a scarcity of new ideas than from the struggle to determine which ideas to support and scale. At bigger companies, this can be particularly problematic during market discontinuities, when supporting the next wave of growth may seem too risky, at least until competitive dynamics force painful changes.

3) Discover
Innovation also requires actionable and differentiated insights—the kind that excite customers and bring new categories and markets into being. How do companies develop them? Genius is always an appealing approach, if you have or can get it. Fortunately, innovation yields to other approaches besides exceptional creativity. The insight-discovery process, which extends beyond a company’s boundaries to include insight-generating partnerships, is the lifeblood of innovation.

4) Evolve
Business-model innovations—which change the economics of the value chain, diversify profit streams, and/or modify delivery models—have always been a vital part of a strong innovation portfolio. As smartphones and mobile apps threaten to upend oldline industries, business-model innovation has become all the more urgent: established companies must reinvent their businesses before technology-driven upstarts do. Leading companies combat this troubling tendency in a number of ways. They up their game in market intelligence, the better to separate signal from noise. They establish funding vehicles for new businesses that don’t fit into the current structure.

5) Accelerate
Virulent antibodies undermine innovation at many large companies. Cautious governance processes make it easy for stifling bureaucracies in marketing, legal, IT, and other functions to find reasons to halt or slow approvals. Too often, companies simply get in the way of their own attempts to innovate. There’s a balance to be maintained: bureaucracy must be held in check, yet the rush to market should not undermine the cross-functional collaboration, continuous learning cycles, and clear decision pathways that help enable innovation. Companies also thrive by testing their promising ideas with customers early in the process, before internal forces impose modifications that blur the original value proposition.

6) Scale
Some ideas, such as luxury goods and many smartphone apps, are destined for niche markets. Others, like social networks, work at global scale. Explicitly considering the appropriate magnitude and reach of a given idea is important to ensuring that the right resources and risks are involved in pursuing it. The seemingly safer option of scaling up over time can be a death sentence. Resources and capabilities must be marshaled to make sure a new product or service can be delivered quickly at the desired volume and quality. Manufacturing facilities, suppliers, distributors, and others must be prepared to execute a rapid and full rollout.

7) Extend
In the space of only a few years, companies in nearly every sector have conceded that innovation requires external collaborators. Flows of talent and knowledge increasingly transcend company and geographic boundaries. Successful innovators achieve significant multiples for every dollar invested in innovation by accessing the skills and talents of others. In this way, they speed up innovation and uncover new ways to create value for their customers and ecosystem partners. Smart collaboration with external partners, though, goes beyond merely sourcing new ideas and insights; it can involve sharing costs and finding faster routes to market.

8) Mobilize
The best companies find ways to embed innovation into the fibers of their culture, from the core to the periphery. They start back where they began: with aspirations that forge tight connections among innovation, strategy, and performance. When a company sets financial targets for innovation and defines market spaces, minds become far more focused. As those aspirations come to life through individual projects across the company, innovation leaders clarify responsibilities using the appropriate incentives and rewards.

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Prime Minister Narendra Modi, as a part of his vision, announced the development of 100 smart cities in the country by 2020. So what exactly is a smart city? The Smart Cities Council defines a smart city as one which “uses information and communications technology (ICT) to enhance its livability, workability and sustainability” by “collecting, communicating and crunching” data — within and across departments and third parties. Since then, its been a race among the cities in order to prove efficient enough to be developed as a smart city. The Government has promised that every state would get atleast one smart city, with the project expected to be in full swing by October of this year, with a target of 20 ‘smart’ cities this year, and 40 in the subsequent years- Gujarat International Finance Tec-city (GIFT) being the first ones. Also, there will be a cap of 2-3 smart cities in a state.

Urban development minister, Venkaiah Naidu said that in a couple of months, around 500 cities will go in redevelopment. In order to develop smart cities, it is necessary to empower municipal bodies and by making the urban areas livable over a sustained period of time. Efforts are being made to rightsize the flow of revenue in each state and to convince the representatives of the states and municipal bodies across the country to allocate more land towards smart cities. These cities would have portable drinking water, assured power supply, efficient public transport, and would be pollution and congestion-free.

But the problem that arises is that one year since Modi’s announcement, India is still struggling with the concept of smart cities. Minimal amount of the amount allocated in the Union Budget for development of smart cities has been utilized. The exact meaning of a smart city is still unclear, not only in India- but across the world. As more people migrate to urban centres for employment, cities need to get smarter about how they manage the utilities, transport and congestion, healthcare as well as education. So the governement has put together all these to come up with one of its own.

A city challenge has been announced, in which cities will compete on various parameters. This will be a two stage process- the first being that the cities will be narrowed down on the basis of attention to Swachh Bharat Abhiyan, payments of salaries to municipal staff on time, etc; the second being the self financing abilities of the cities, service levels and track records in implementing reforms.

But in the end, the people will hold the key to the success of these smart cities. This has to be an inclusive movement, involving the entire population. It is not just in the hands of the government. At the end of the day, a city is “smart” only when those living in it are at the heart of the design.

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Managers make portfolio decisions based on a series of logical justifications. The choice to invest, cut back, buy back or exit is ideally guided by the strength of a business’s structural logic; the potential to improve the business or create synergies with other businesses; and the state of the capital markets-whether they are likely to over- or under- value the business relative to the NPV of its future cash flows.

These three logics are essential for making good portfolio decisions. The decision becomes simpler if the three logics all point in the same direction. When they don’t, decision making gets complicated. For example, if a business is likely to sell for more than it’s worth, there is little reason to buy and and good reason to sell- unless the business would perform much better under your ownership or it adds value to another business you own. If a business is structurally less attractive because of being in a low-margin industry and has a significant competitive disadvantage, you are likely to want to sell or close it- as long as the price you can get is more than the value of continuing to own it. But if you improve the competitive position of the business or if it strengthens you capabilities in a related segment, you may choose to retain it.

The trick is to make informed trade-offs among these different reasons for buying and selling businesses. It is important to give weight to all three logics and avoid letting momentum build up around any one so that others have little influence or are completely ignored. Too often we come across executive teams that decide what to buy first and consider how to add value only as a part of integration process- or that commit to hold onto an underperforming business without considering whether it might interest enthusisatic buyers. But here, the focus is more on the cases where these logics suggested different paths and how the managers found a way forward.

You can add value, but the business is structurally less attractive
Most managements try to avoid businesses with low returns, weak positions, and limited growth prospects, especially those in complex industries. But if you are good at adding value tosuch businesses, you should focus on that.
Acquiring businesses in complex, low-margin indutries is not a strategy to recommend lightly. One risk of buying or holding structurally unattractive businesses is that they typically don’t provide a reasonable return on incremental investments. Hence decision makers should consider three logics: How difficult is the industry? Can they add value to compensate for low underlying returns? Can they buy assets at a discount or without paying too large an acquisition?

You can’t add value, but the business is structurally attractive
Every manager likes an attractive business, one with high margins that has a competitive advantage. But if you are not good at adding value to this business, the crack is to learn how to add values, and to do so quickly.
It’s easy to presume that a company will be able to learn to be a good owner, especially when the business is attractive, but developing new skills at the corporate level is not easy. It requires significant changes in the mindset of the people and a willingness to letgo of old habit- failure is common in this.

You can add value to structurally sound business, but it’s overpriced
When you come across an attractive business that you can add value to, you will instinctively hold onto it. But if such a business has the price in the capital markets higher than its NPV, then whether you should refrain from bidding for it or selling it depends on whether you are looking to acquire or whether you already own the business and whether the reason for the overvaluation in the capital markets is likely to be temporary or permanent. One way is to hedge the risk of payment by paying for the acquisition in terms of equity rather than cash, or issue new equity and pay through it. Anothr way is to reduce the risk of overpaying. Even in this, you should still consider it selling under some conditions- if the premium offered by buyer is too big to ignore, or if the cash overcoms a shortage of funding to invest in other parts of your portfolio.

You own a structurally unattractive business and are subtracting value, but buyers are not offering a fair price
Managers with unattractive businesses to which they cannot add value will normally sell. But if you are not getting the right price, many companies will simply keep such a business and wait until they can offload it at a better price. But the tactic to tackle this depends on the reason for low price- be it a lack of buyers, the nature of those buyers, the information they have about the business, or the deal process. Another way to increase the price is to redesign the deal process. What to do depends on the risk of the subtracted value. If no value is added or subtracted, retaining such a business for a while will not reduce its value and so the selling need not rushed into. If the owner is subtracting value, the disposal of such a business is urgent. Getting rid of it, in any way possible, is likely to be the optimum solution.

In all these decision making, financial analysis was an essential aid. But apart from that, these judgements are critical in making good portfolio decisions.

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1st May, every year is celebrated as International Workers’ Day or Labour Day or May Day so as to commemorate the labourers and working classes, and is promoted by international labour movement, socialists, anarchists and communists. Generally, peaceful protests are observed on this day to focus on labour and immigration issues. However, on Friday, protesters clashed with the police forces in the west coast cities of the U.S., with a riot ensuing.

In Seattle, anti-capitalist protesters hurled wrenches and rocks, forcing officers to respond with stun grenades and pepper sprays. Footage on the internet shows riot gear clad policement through flashbang grenades on the crowd to disperse them. In response, protesters set garbage cans on fire and destroyed atleast two dozen vehicles.What was supposed to be a peaceful demonstration, turned into a riot. Atleast three officers were injured, two seriously with about 16 people arrested.

In Oakland, after a day of peacefule protests, crowds assembed through the streets in the night. More than 100 windows at businesses, restaurants and banks along the route were damaged in Oakland, and several people taken into custody overnight. One vehicle was destroyed and several others damaged in a local car parking lot.

In Portland, pepper sprays and stun grenades were used when some demonstrators threw objects at officers and tried to force their way onto a bridge, injuring one officer in the process.

However, in many areas, the protests were peaceful. In Baltimore, the protests were peaceful, after the officers involved in the manhandling of Freddie Gray, an African-American, were prosecuted. Gray was brutally beaten and died of spinal injuries on Monday. This incident was a national outcry and another example of the suppression of minority African-American by the white-dominated U.S. law enforcement establishment.

Such riots undermine the spirit of the public holiday which was being celebrated, and spread a wrong message across the world. International Labour Day is a day to raise the awareness about the upliftment of the labour and working classes, and to jointly work for their welfare. Such violent protests should not be encouraged.

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In another of the Merger and Acquisition cases, Capgemini, a French IT services and consulting company announced on 27th April its acquisition of a New Jersey-based company, iGATE, an applications, network and business process outsourcing specialist. iGATE was founded in 2006 by two Indians, Ashok Trivedi and Sunil Wadhwani. iGATE recorded a revenue of $1.3 billion in 2014, with double digit growth and a 19% operating margin. The deal has been closed off at $4.04 billion, with Capgemini offering $48 per share of iGATE, which is 4.74% higher than its last closing price on NASDAQ($45.5).

The merger is expected to help the company attain revenues of $13.58 billion in 2015 and an operating margin of 10%, with around 190,000 employees, 27,000 of whom will be based in India. “iGATE is a leading company that perfectly fits our strategic ambition. It will give us a new status on the American market, and take further our industrialisation journey to offer ever more competitive services to our clients,” said Capgemini president Paul Hermelin in a statement.

The main aim of Capgemini was to reinforce itself geographically in the United States, and iGATE being a company having its firm roots in the US and India, seemed an ideal option. iGATE generates around 80% of its annual revenue from North America, and hence it will help Capgemini in increasing about a third of its revenue in a region which is considered to be the most innovative technology and services market in the world. This will also give them a new status in the American market.

The acquisition will be partly funded by Capgemini’s cash reserves, as well as an increase in the equity capital of the firm, simultaneously ensuring that the increase in capital will not dilute the existing shareholders by more than 6%. The rest of the funding will be made through debt. The merger has been agreed to by both the parties, with 54% of iGATE’s shareholders backing the deal.

As is normally observed in any M&A scenario, Capgemini’s stock prices are expected to increase after the merger, but will observe a gradual decline after a year or so. Capgemini is not looking forward to any big mergers after this for the next two years.

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It hasn’t even been a year, and Xiomi already has the Indian market in its grasp. Entering India in July 2014, Xiomi is today the fifth largest smartphone vendor in the country. Xiomi directly sells to its customers, and hence optimizes its costs by reducing marketing spending. Xiomi doubled its revenue last year, and right now has been valued at $45 billion in its last round of funding, after recieving a $1.1 million funding from DST Global, GIC, Morningside Group, HOPU Investment Management Company, Qualcomm Ventures and QiMing venture Partners.

Three days after its global launch of Xiomi Mi 4i in India, its first big launch away from homeland China, Xiomi announced that India’s leading industrialist, Mr Ratan Tata, has invested in this company. The monetary details of the deal, however, have not yet been disclosed. This is the first investment made by an Indian company in Xiomi, and the firm is anticipating this is to be the beginning of an exciting journey in the country.

Lei Jun, founder and CEO of Xiomi said, “Mr Tata is one of the most well-respected business leaders in the world. An investment by him is an affirmation of the strategy we have undertaken in India so far. This is just the start of an exciting journey, and we are looking forward to bringing more products into India.”

This is Ratan Tata’s  9th investment in the last 10 months. After stepping down from Tata Group, Ratan Tata, whose personal worth is $1 billion, has turned towards venture capitalism; investing in startups from his personal assets. His previous investments was in Snapdeal, where he invested close to $3.1-3.4 million, capturing a 0.17% stake in the firm. After Snapdeal and with a new found confidence in ecommerce industry, he has invested in Bluemoon, Urban Ladder, CarDekho, Swasth India, PayTm and Grameen Capital.

Ratan Tata’s investment in Xiomi is a new beginning of the startup investment space in India and is certainly a big boost for Xiomi. This has given Xiomi executives a confidence that they are following the right strategy in India, and that this could boost their sales manifolds. The fact that India it its biggest market outside China is a plus. Xiomi also plans to set up a R&D facility in India, and hence manufacture its own smartphones in the country.

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The beginning of this century, 26th January, 2001 to be precise, reported a major earthquake in Gujarat, with a magnitude of 7.7 and which lasted for over 42 seconds. Bhuj, a city situated 20 km from the epicenter, was completely devastated. Ahmedabad, Gujarat’s commercial capital, witnessed the collapse of 50 multi-storey buildings, with several hundreds of people dead. In Kutch, the earthquake destroyed 90% of the houses and around 60% of the food and water supplies. The aftershocks hit the areas for over a month. The earthquake killed around 20,000 people with around 8 times as many people people injured.

14 years later, on 25th April, 2015, another earthquake hit Nepal, with the epicenter 50 miles from Kathmandu; with a magnitude of 7.8. The earthquake hit in on of the most seismically hazardous regions on Earth. The earthquake could be felt as far as Pakistan, Tibet, India and Bangladesh. Till now, more than 3300 deaths have been reported, with the death toll feared to rise further. Moreover, atleast 18 were killed and dozens injured when the earthquake caused an avalanche on Mount Everest. Over 61 more died in the neighbouring countries. Hundreds more lay in the rubbles. This is the country’s worst earthquake in over 80 years. A major aftershock followed on Sunday, which reported a magnitude of 6.7. Multiple aftershocks are feared to follow.

A number of buildings collapsed in the capital city, including ancient temples and towers. It will be a while before the full extent of the damage and the death toll can be known. Around 90% of the homes near the epicenter have been destroyed. Atleast 29 districts have been designated as crisis zones.

For a poverty-stricken country like Nepal, this earthquake will put a huge restrain on its resources. It is highly dependent on tourism, which will be hit hard because of the earthquake. Also, more avalanches are expected on Mount Everest, and it is unclear as of now how those stranded on the mountain will be rescued.

Numerous countries around the world came to aid immediately, India being one of the first. Indian Army and Indian Air Force are jointly working on rescuing trapped Indians stranded in Nepal. As a part of Operation Maitri, nearly two dozen aircrafts and hundreds of army men and NDRF men are rescuing people through air, meanwhile also helping in the reconstruction of roads, so that evacuation can start with the help of buses, as the air traffic in Kathmandu airport is very less. Prime Minister Narendra Modi is personally overseeing the planning and execution of the relief operations and evacuation of stranded Indians in quake-ravaged Nepal, making it one of biggest Indian rescue operations launched on foreign soil.

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On 21st April, Google launched a major update on its mobile search engine that would rank websites on the basis of their “mobile-friendliness”. What this means is that websites which have large texts, easy-to-click links and ability to resize their content to whatever screen sized it is being viewed on will be ranked higher in their search. Websites which are not mobile friendly will get demoted.

Considering the fact the Google is the leading search engine, and 50% of the web searches are made on phones, this could cause a huge drop in the traffic of the websites which have not updated the mobile version of their websites. They will appear less frequently on your search list. Because of the apocalyptic implications it can have on some of the websites, this update has been nicknamed “Mobile-geddon”.

Earlier, Google used to emphasize on relevancy in deciding which website will feature first in your search. But now, it also gives equal weightage to user friendliness. What it says is that if the content is good, but it’s not readable, then that is not a very good sign. Other than it removing “spam” from the internet, it is really a way of imposing Google’s vision on how the web should be like, using its search engine as a leverage to force site owners in its directions.

Itai Sadan, CEO of website building company Duda, says, “Small businesses are seen at greater risk because they have a higher likelihood of not knowing about the update, or not having the time or resources to make the change.” In its defence, Google announced about this update in late February, giving site owners almost two months to making any necessary updates in their websites.

This update will have plunging effects on small and medium-sized businesses. With no net neutrality already threatening them, this update might just well give them the final shove. A drop in their rankings could lead to serious decline in their online traffic, which could lead to a loss of thousands of dollars. Such companies might not have the adequate resources to bring the necessary changes in their websites. A large number of these companies might not have enough money to pay overworked web developers to create a new user friendly website for mobile users. Some of them might not even have heard that such a change was going to happen.

What Google wants is to create a web which is far easier to use, which is something that all users want as well. But this is another way of Google’s pushing site owners to work according to its whims. Although this update will not be reflected in desktop and tablet searches, but it can still disrupt the ranking of the websites worldwide, in the search engines of all languages.

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