Humble Potatoes, Recession, Innovation and Profits

Many many years back when I visited the UK for the first time as a much younger person I stayed there long enough to soak up the culture of the place. Most things I saw or experienced amazed me a lot.

This was because everything seemed so different from what I saw and experienced in India till that time. My young mind was like a dry sponge absorbing all I could and busily reflecting on anything that came my way.

For example, I saw that cars in Manchester or London did not have dents or scratches on their bodies whereas any car in Kolkata had a number of these ugly dents and scratches all over their bodies. There were certainly lot more cars plying the streets than I would ever expect in Mumbai or Delhi and the streets were old and not so wide but clean. The environment had a ring of safety and confidence around it. When my wife lost her passport we did get it back from the local police station within a few hours after losing it. I wasn't unduly worried about the safety of my one and half year old child. The very sight of the beat constables smartly walking past was reassuring. Even now it is hard to imagine such a things happening in India.

Why was it? I realized that the difference lay in the collective consciousness and the learning of the people. When there is collective learning in the society things become much easier, smoother and safer. At the back of your mind you are always assured that no one would intentionally bang your car from behind or none would clip your side view mirrors or scrap the sides while overtaking recklessly or throw your passport into the waste bin or I need not worry much about my son getting kidnapped.  

But there was another interesting thing I observed and it made a lasting impression on my young mind for life. What I observed was the ubiquitous use of potatoes in the meals of the Britishers. I found this interesting since in Bengal we also use potatoes in almost every dish. Here too potatoes were everywhere. I tasted the famous British invention of the 'Fish & Chips' in brown paper bags and then tasted the 'smashed potatoes', 'baked potatoes', 'French fries', 'Potato and Cheese' and so many other varieties.

But what made me think was how did potatoes come into the British culture and in fact in the European culture? Potato as far as I knew was not a native of the British Isle or that of Europe but a native of the South American continent. But being a little curious by nature I delved a little more and what I found surprised me a lot and offered me a wonderful lesson for life.

The advent of the humble potatoes in the European culture was around 225 years back roughly around 1775 to 1790. And that made a lot of sense to me. This time was an important landmark in world history in more ways than one. William Herschel, a British astronomer, discovered the planet Uranus, the first planet to have been discovered through the aid of a telescope. During this time, the French queen lost her dear head to the Madame Guillotine. The Americans were happy celebrating the Boston Tea Party and declaring their Independence. Opium War had taken place and the British annexed Hong Kong from the Chinese. The American constitution was framed with its noble humanitarian ideals.  The East India Company almost went bankrupt and the Parliament had to bail out the company. This was also the time, when the first hot air balloon went up in flight. Galvani discovered electricity in its useful form. Samuel Hahnemann invented Homeopathy. And while James Watt and a band of enthusiastic people were busy ushering in the Industrial Revolution people started working in deary factories in sub-human conditions and slaved for at least 16 hours a day and lived on pittance so to say. They even paid a fine to the owner of the factories for using a candle to work in the late evenings. And across Europe repeated crop failures had devastated the grain market

So this period may be briefly described as a period of war, conflicts, political upheavals, growth, bankruptcy and even climate change and also the age of great discoveries, inventions, scientific inquiries and poverty for the general masses -- a situation which we would easily recognize today as the same things are happening all over again -- perhaps at a much greater scale.

Precisely at this time and in this gap quietly stepped in the unloved, little know, unconsidered and probably unpopular potato. Two centuries after its introduction it became a staple of the British diet.

However, the humble potato did not take off, so to say, because of some upbeat campaign of some glamorous  'Potato Association' of Britain. Far from it. The potato's success was a result of resourcefulness and innovation of ordinary people during a time of crisis, food shortages and hunger. I can well guess that the overarching need for the heads of the families, in those trying times, was to feed their families. They found hope in the humble potatoes. And they used it with great ingenuity. And the hardy potatoes did not let them down either. They also cooperated with the hard pressed people. Though it was not an alternative to grain they proved versatile and people found them easy to grow even in English weather. And this probably made the potato so endearing to the British public and they developed many ways to enjoy them and even grew them in their backyards. I remember my good friend, Ian, quickly uprooting a potato from his kitchen garden and proudly holding it up saying, 'Isn't it nice. I grew it.' You may say that it was a unique case of brand loyalty that has kept the potato in the position that it enjoys today.

Today, history is repeating itself. The underlying story remains the same. We again see fluctuation in the GDP growth. We see wars and conflicts. We see companies, like the East India Company going bankrupt and being helped by the Governments. We see job cuts and managers desperately trying to cut costs. And we see reduced expectation of sales, no new products and services -- generating an overall gloomy atmosphere leading to general economic depression.

But the consumers stay nimble as always. They are busy re-framing their problems according to their budgets and now coming up with new solutions and new expectations. It doesn't mean that the consumers are only busy figuring out cheaper ways of doing the same thing. They have different things to do and want to do it differently. The consumers still want to go on holidays, eat out, entertain guests, buy curtains and shoes, beautify home, build new ones and bear children -- but differently.

This then opens up a huge and different profit making possibilities for manufacturers, service providers and financial institutions -- if only they care to observe the consumer a little more closely. This is simply because the existing needs of the society have not vanished – nor would they. These still need to be fulfilled. So, when the economy is down people simply look to different product categories to solve their persistent problems and needs. They do make trade-offs that reflect their conscious and unconscious decisions. The question is: Will a modern woman stop wearing her lipstick? Will Indian families stop saving money? Will they stop buying gold? Will they stop watching the TV? Not likely.

So, here is a world of opportunity. While companies are only focused on cutting back production and costs, the consumers are busy with their own imagination and initiatives to keep them one step ahead of the companies. This makes it all the more important for companies to use their imagination and technology to step in and catch up with the imagination of the consumers. Though this recession will be much different from the last the consumers will come up on top.

And why is it so? Because consumers are now familiar with both the high end and the low end brands. They have a choice of Bata, Kadim, Shreeleathers, Reebok and Nike.  They would not feel a bit shy or embarrassed to go for budget shopping and go to anyone who greets them with a choice within their budgets. They are now masters of favorably mixing or toggling between high end and low end brands for their various needs. So for companies that rely on lethargy rather than love for the consumers might become a thing of the past – a dinosaur. For example, GM whose only motto was to make money and not cars have already lost the race to Toyota and is now on the brink of bankruptcy.

Economics tell us that 'labor follows money'. The same is true of consumers. They would follow budget prices without any hesitation.

So, keeping up with the consumers is not about predicting the next big need or the next big move or great market research. It would mean a deeper understanding of their present needs and how to respond as creatively as possible.  This is because consumers are only re-framing their problems – not forgetting them for good. So, companies who understand how people with tight budgets re-frame their problems may not only identify new opportunities but also figure out ways to earn unexpected profits. Thinking and feeling about people’s needs can uncover ways to get into markets that once seemed inaccessible or even unimaginable. For example, the Re 1/- shampoo sachets -- shampoo companies are now ever so busy selling them all over India. And as I know they are expanding the business even in these trying times. They are adding more sachet machines (I am proud that I designed those budget machines) to their facilities. And they are still hungry for more.

Other examples spring to mind as I write this blog. For example, why take the trouble of making grade 53 cement only to sell it at a premium? People can very well do without this. Even the toughest roads are built on grade 42. So, why not make grade 30, for instance for making dwelling houses.

Similarly, why not sell cheaper power during night time so that people may run their washing machines to wash their clothes in the late evenings and use air conditioners to get a good night's sleep only to be more productive the next day. It would encourage the consumer to use more natural light during the day and the the power that is saved by ordinary consumers might be gainfully used by industries to produce goods and services for the market and the power companies profit more from it. This might as well save us the trouble of building additional power plants for the time being, when money is short supply.

Why doesn't someone think of buying the e-junk and making workable computers from the junk components for consumers who can't afford to pay more? Backed up by creative software developers it would quickly and effectively spread literacy and knowledge amongst thousands of underprivileged children.

Why the steel companies don't think of manufacturing rods of lesser diameters than they presently produce. The builders then get it cheaper and the houses that are built with such rods would become stronger and more robust in both tension and compression. And the consumer would also be happy to afford such houses and not default on house loans and heat up the economy.

Why do we waste material to build something solid when a hollow section would clearly be better (example, rubber liners used in mining industries). And why use costly imported steel or aluminum as reinforcement for rubber products when humble jute does the trick much better (one of my ideas tried out with great success by a rubber company).

Why make the walls of the gear box casing so thick and waste money -- clearly it could be made thinner. The customer pays less and the efficiency of the gear box increases greatly (another idea of mine which proved profitable for the company).

Why wrap steam pipelines with equal insulation thickness when variable insulation thickness makes the job more efficient and cost effective.

In every case, the consumer pay less but companies benefit and profit from it. It is clearly a great opportune moment in history for a win-win situation -- saving and sustaining the environment, helping consumers to tide over the crisis and also making a lot of money in trying times without destroying the morale of the people by sacking them or closing down industries. 'No wastage and more reliability of products and services' -- might be the new mantra. I got this insight by observing nature. Nature does not waste and its designs are super reliable. Just look at a tree or a river to get the idea. And what is more is that all these small changes that I talked about can be brought about by even more smaller changes in techniques and technology at almost at no cost. Isn't it wonderful!

Hence, this recession may be the ideal and the right background for experimenting with small changes that target big needs. Innovation is all about making small changes to make big and lasting social impacts.

And those small changes that would make a great impact would surely achieve the unchallenged status of the humble potato in the years to come.

As I finish writing this blog, people of the US would wake up to choose their next President for the Oval Office. The US has given the world in form of their Presidents some of the finest human beings and leaders who shaped the destiny of the world in recent times. To my mind, the finest of them was Abraham Lincoln. What he declared for democracy rings even true for social innovation to come to grips with the present Financial Crisis – 'For the People, By the People and Of the People'. The world needs 'Social Innovation' to help people keep their jobs, raise their families and give their children a good education. To fulfill this social role and responsibility this century would belong to Innovators, Designers, Engineers and Creative Minds from all walks of life. What we collectively choose to do as a human race for the next 100 years would  determine the destiny of our dear children and their next generations and the destiny of our dear mother earth.

So, long live the potato! My constant and enduring reminder of what innovation is, who drives it, who profits from it and how it might change the culture of our people for good and for the better. Let  collective consciousness, collective learning and social innovation of the society grow! We have nothing to lose but our worries!

Signing off for now,
dibyendu

I dedicate this blog to Dad who instilled in me as a school boy the enjoyment of studying Political Economy and the enjoyment hasn't waned a bit over all these years.