Of Satyam, gullibility and the cyclically greedy

Willful default

The skeletons tumbling out of the Satyam cupboard have attracted a flock of self-righteous vultures, if one may mix metaphors.

However, this context raises questions about other acts of willful default including by those in the marketing and communication business.

Turning a blind eye

That the senior managers, PwC, bankers etc. were ‘asleep at the wheel’ at Satyam has now been repeated ad nauseum.

Sucheta Dalal (MoneyLIFE Issue of 15/01/09), points out facts that have not been as widely noted:

“Its (Satyam’s) FY2001 results were flashed on two websites 15 minutes before the board meeting was scheduled to start.

In August 2002, the Department of Company Affairs questioned its accounting methods, but that investigation was buried.

Analysts, who tracked Satyam in the mid-1990s… say that a private company of the Raju family had built all its software campuses. Although no wrongdoing was alleged, there was suspicion that Satyam’s construction cost was somehow higher than those of Infosys or Wipro.”

About the Satyam-Maytas palindromic imbroglio, she writes:

“Strangely, the aspect of money being transferred to the family does not seem to have come up at all. Were the directors, earning fat sitting fees, too polite to ask? … After all, Dr Palepu earned Rs.92 lakh from Satyam and other directors earned as much as Rs.13 lakh, plus perks.”

In 2005-06, Business Today and AT Kearney ranked Satyam in the Top 13 Best-Managed Companies in India. In 2007, E&Y gave Ramalinga Raju its Entrepreneur of The Year award.

Did the truth escape the attention of all these worthy organizations, and that of the TV cowboys, who lean forward with such intensity that one fears for the cartilage of their elbows?

The emperor’s new clothes

But there are other acts of willful default too. Among them is not pointing out that the Emperor may be "reveling in nudity. "I have known people who said that ideas which many people considered crazy were nonetheless executed, because ‘nobody wanted to ruffle any feathers’.

Consider a consumer durables maker who introduced a “Talking washing machine.” Did anyone involved believe the Indian housewife was so lonely she wanted to converse with a tumble-dry mechanism? What next… a microwave with which she can have a meaningful relationship?

A couple of years ago, everything you looked at was infected or injected with aloe vera. Now, it’s the strawberry season. Wherever one turns, there are nubile actresses slathering their body and pre-pubescent kids lathering their hair with strawberries. “What next?” wonders the terrified consumer.

Guilt by concealment

Marketing Research reports are sugar-coated at the behest of a Marketing Manager – or often, even without any such push – and make statements such as, "There seems to be some resistance to this new product concept among consumers". In honest-speak that would read, "Everyone is convinced this idea stinks".

Similarly, marketers happily introducing products with “claim level” statements such as, ‘contains the goodness of XYZ’, while hiding the fact this goodness comes from non-XYZ sources.

Gulliblity @ the speed of light

Sometimes, the situation involves naivete of unbelievable proportions.

But it is said that for every credibility gap, there is a gullibility fill.

Many of you have received absurd email forwards. One said that the chap who created Orkut platform received money every time someone signed up, or posted a scrap on it, etc. It would have taken only a couple of minutes to figure out that if that were true, the guy would have become the world’s richest man in less than two weeks. You may say that’s only an email, but knowledgeable-sounding ‘experts’ talk equally wildly of ‘monetising eyeballs’ (and possibly other body parts) and nobody says, “Hello, but in this business idea will anyone ever actually pay for anything …or is FREE the business model?”

James Grant said after the Enron episode: “People are not intrinsically greedy. They are only cyclically greedy.”

Perhaps they are also “only periodically guilty”. But it is for each one of us to decide if default is a fault.