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D Shivakumar | Fight to the Finnish

D Shivakumar | Fight to the Finnish
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First Published: Fri, Jan 29 2010. 11 18 PM IST

Connecting success: The secret to sustained growth, according to Shivakumar, is a good balance between manufacturing and services. Jayachandran / Mint
Connecting success: The secret to sustained growth, according to Shivakumar, is a good balance between manufacturing and services. Jayachandran / Mint
Updated: Fri, Jan 29 2010. 11 18 PM IST
There are several non-verbal cues you can use when you are interviewing people. The way they sit, slouch, wave their hands, fiddle with their hair, use spoons to eat spaghetti and so on. Now, thanks to D. Shivakumar, managing director and vice-president of Nokia India, you can add one more to that list: the propensity to thump tables very loudly indeed. Thrice in the course of our interview, Shivakumar closed a stream of thought by knocking on the table very loudly. So loudly that the dictaphone burst into static each time.
Connecting success: The secret to sustained growth, according to Shivakumar, is a good balance between manufacturing and services. Jayachandran / Mint
Shivakumar thumps tables because he is certain about things. He is certain about things because he knows numbers and statistics and trends. All in unsettling detail. Like the fact that the ratio of mobile phones to computers in India is 1:11. Or that 17% of the value of a company is determined by its leadership.
We meet and chat over coffees and biscuits in Espoo. Espoo is the second largest city in Finland, close to Helsinki, and home to the headquarters of global telecom behemoth Nokia. Espoo is also the name of a conference room in Nokia India’s new office in Gurgaon. Where, inside frosted glass walls inscribed with Nokia corporate slogans, Shivakumar hastily walks in after a year-end review meeting with several managers.
So how was 2009 for Nokia India?
“It has been a very good year,” starts Shivakumar as he fiddles with a company access card that has a picture of a younger Shivakumar with much less grey in his hair.
But it hasn’t been a cakewalk for Nokia globally. While analysts are bullish on the company, many point to its weak presence in the high-margin smartphones business. Shivakumar has his own take on smartphones (see In Parenthesis), but goes on to give his personal take on the “decoupling” question, i.e., on how the Indian economy has performed vis-à-vis the global economy.
“I think we were both coupled and decoupled. We were coupled in the area of dollar-rupee exchange, oil prices, BPO jobs and so on. But we have a very strong domestic market. We were well regulated. And we have high savings rates as well. India and China performed very well because of this.”
Overall, he says, he was sure things would get better by March/April. “Things have turned out just as I’d been signalling to my people.”
The secret to sustained growth, he says, is a good balance between manufacturing and services. “In the US, manufacturing is less than 8% of the GDP. That was a problem. Too much money was being made in services. They were making money on top of money. That is simply not sustainable.”
India, he says, is on the right track, with an expanding manufacturing base and “good IIP numbers”, a reference to the Index of Industrial Production (the latest IIP numbers for November show a surge of 11.7%).
Very early in the interview, Shivakumar sets a pattern that is repeated through our conversation. Personal questions make him uncomfortable and he speeds through replies as quickly as possible, revealing only as much as he must. But then he segues the discussion to a much larger canvas. Then he relaxes and speaks expansively. A question on lessons learnt during a long prior stint with Hindustan Unilever Ltd somehow turns into a discussion on how fast moving consumer goods (FMCG) retailing is different from consumer electronics retailing:
“In FMCG, innovations happen only once in 15 years. Around six innovations in a century. The last innovation in toothpaste was white stripes. And before that fluoride, and before that the toothpaste in a tube. In shampoo, the last innovation was two-in-one shampoo and conditioner, Pert Plus in 1991. But in consumer electronics, innovation is much more frequent. In FMCG, the bulk of innovation is in the packaging and sensory aspects. But in electronics, new products come out all the time.”
Each observation is supported with details, numbers that aren’t rounded off, percentages and even dates. Also, the occasional thump.
It is the season for 10-year look-backs and look-forwards, and I ask Shivakumar how the last decade has been for Nokia in India. “The most significant 10 years in our history in India. Ten years ago, the country had 5 million mobile subscribers. Today, there are around half a billion. A 100-fold increase.”
He credits the steep growth in mobile penetration to prudent government policy and astute service providers. “The telecom industry in India proved that you can make money in India if you scale up tremendously at the right value points. It is possible to do this!”
Thump. Thump.
Nokia’s sustained early success in India, Shivakumar says, was because it had “nothing else to sell, unlike the other players”. Other handset manufacturers sold television sets, MP3 players and other products in addition to mobile phones. Nokia did not. The company made nothing else. So, Shivakumar explains, it captured market share in India by focusing on brand and distribution. “And we keep learning.”
Today Nokia has 4,000 promoters in outlets all over the country who feed information back to the company on what consumers want and how they buy. This feedback loop, Shivakumar explains, helps his managers decide what models to promote and sell.
So what phones do Indians want to buy in 2010?
“They want to listen to music on their phones. So it must have high capacity and battery life. They also want to send email. So full Qwerty keyboards are a desired feature. The phone has overtaken the computer as our window to the world. So it represents our virtual world and life. So users want apps.”
Shivakumar then goes on to explain how the Indian consumer is very different from others—his/her phone is a very strong personality statement. “There is a big element of sensory feeling in the phone you own. People should see and say wow.”
I wonder aloud how Shivakumar personally keeps track of the breakneck speed of change in the business. New mobile phones, protocols, operating systems and interfaces are launched daily. Shivakumar says that he has always been a little bit of a geek. “I have always had a reputation for owning good phones. The latest phones.”
His current device is the latest N97 Mini in garnet. His previous one was an E71. He already has an achingly new N900 sample in his office. How good is the N900? “Superb! Fast browsing. Great screen.”
Shivakumar recommends a buy. But when will it hit thousands of Nokia stores all over India? “Give us a couple of months.” When Nokia puts it like that, it is time to begin saving.
sidin.v@livemint.com
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First Published: Fri, Jan 29 2010. 11 18 PM IST