India Inc India Inc: Friday, 14 January 2011 14:28

Politics of Business with Alpesh Patel - Clean and Ineffective or Corrupt and Effective?

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Some snippets from a recent conversation with a business team trying to get a deal done in India. I have written it on a no name basis as the business transaction is ongoing:

“The problem is the new CM (chief minister) is supposed to be clean. He is trying to do things by the book. In fact he is so scared that it makes more sense for him to complete re-tender the whole project and start again. The problem this places us in is we’ve worked through several CMs and each time we get close, they change the person. We’ve never paid bribes, but apparently, at least with the corrupt ones things got done. Now no one knows what’s going on.”

Lesson: ‘The Prince should be treated like a King’: Work on the next CM too. Start building bridges with who might be the next guy.

“It’s got to the ridiculous state, we were asked by the astrologer of one of the ministers that if we wanted something planted in his mind, he could arrange it, for a ‘consultancy’ fee. That is, he could predict our future, and we would only be paying for that prediction.”

Lesson: ‘The hand that rocks the cradle may rule the world, but the man who has the ear is just as important.’ Who is the most influential with the Ambanis? Their mother. Sources of influence are not necessarily found in the business environment. Astrologers or anyone with the ear of the decision maker is important. British intelligence in the Second World War worked on the horoscope readers of senior Nazis to plant ideas. The movie Inception, where a team plant business ideas into the mind of a competitor, is not so far-fetched after all. Doubtless numerous astrologers will find themselves at the sharp end of honey-traps very soon.

“We’ve been told we’ve got to get to the political master in Delhi to make the CM move as he is looking at being absolved of any responsibility of any decision. And the best way for him to do that is either to totally re-tender, yet again, or have Delhi instruct him instead.”

Lesson: ‘Provide Political Cover for the Decision’: As more scandals hit the papers in India, more businesses will have to help the decision-makers look after their best interests – which are always self-preservation. Knowing how to preserve them is critical. ‘Cover’ can be an open transparent process or more likely, agreement from a higher political authority. Finding the soft-spot will make it easier to close the deal than thinking the direct approach alone will always work. This of course is not new to India.

Alpesh Patel is founding principal of India PE fund, Praefinium. He is an executive board member of the UK India Business Council and author of 13 books on investing. He is a board member of the United Nations Association (UK) and a “Dealmaker” for the UK government, charged with looking for outstanding technology businesses from India to HQ in the UK.

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