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Thursday, March 4, 2010

HIGH, SHOCK, LESSON

For a large number of people around the world the period 2008 - 2009 - 2010 will go down as years of contrast.

Year 2008 -
In 1952 War-ravaged Japan takes off on a spectacular growth path that sees its economy grow at an average of 9.6 per cent per annum for the next 19 years. South Korean strongman Park Chung Hee signals a commitment to an export-led model of growth. The seeds are sown for a remarkable expansion that sees the Korean economy growing at an average of more than 8 per cent per year between 1962 and 1989. In 1990s A huge new economy, China, joins the group. Come 2007 and India had arrived. The Indian economy had recently been notching up some of the highest growth rates in the world and year 2008 was the ultimate flight stage. All the indexes were at Peak. There was a roar in the market which was never seen before. I achieved my career best performance till date in the midst. We entered the year 2009 with double the enthusiasm and optimism. However it’s fair to say that 2009 will go down as easily the most interesting, harried, stressful, and memorable. We were not prepared for what was in-store for financial industry.


Year 2009 -

As we entered 2009, the world mood was somber, the macro economic environment bleak, deflation a real threat, the outlook for asset prices poor and regular news about banks falling. Closer to home in India, the most important Bombay stock exchange was at 10,000 (much below the highs of 2008 which was 20,000). In the days that followed, we learned about the Satyam fraud (India’s Enron like Fraud) post which much soul searching was done by India Inc and us players in the financial services industry. Further globally, Iceland became the first country to default on its obligations; Fortress, a listed hedge fund, saw its stock price down 96%; and the US announced a contraction in 1Q 2009 GDP. It all looked bleak and actually quite scary.

My department had borne the brunt of the global economic slowdown in the form of impairments. With a strong will, we started to confront the tough times. We operated in an industry that is arguably the worst hit. The history of sporting comebacks is replete with stories of great successes and abysmal failures. For every Bjorn Borg (who made an entirely forgettable tennis comeback 8 years after retiring) there is a Lance Armstrong (who overcame cancer to come back and win the Tour de France 6 more times). A Leader’s inherent talent is of little consequence without his team backing him in every step that he takes. I see an interesting analogy here to our business. Luckily we had a Lance Armstrong in form of our department head that not only stood by the department but also turned the tables around.

Year 2010 – The last 2 years are ones which I won’t be able to forget. They have shaped the way I think – “Fly high with feet firmly on ground”. It was like a reality check - to develop more on strengths and work on eliminating any weak links. The 2 contrasting years have taught me a lot at both ends – personal & business. At the personal front, I have learnt to celebrate success and at the same time accept defeats. Four qualities which lead to success in both 2008 & 2009 were discipline, focus, perseverance & enjoyment. It’s very important to have fun in what one does, without which one can never give the best. The recession has provided a moment to step back and contemplate, to come to a truer understanding of life lessons like that happiness is not derived from material things - "Most people really don't need bottled water". At business end, a company should not just be profitable but be strong as well, growth cannot come at the price of compromising basic fundamentals. The fact that cohesive units / teams can win all battles was reinforced in me.

I see years to come as opportunity to learn from our mistakes, to rise from the fall

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