Is Nestlé the only culprit?

Nestlé S.A. is a Swiss multinational food and beverage company headquartered in Vevey, Switzerland. It is the largest food company in the world measured by revenues and ranked #72 on the Fortune Global 500 in 2014. (Source: Wiki)

One of the most popular product in Nestlé’s portfolio, Maggi Noodles came under scanner in India. An officer from state of U.P food safety & drug administration ordered tests on over a dozen samples of instant noodles. Nestle claims that the product does not contain Monosodium Glutamate (Popularly known as MSG: Used for enhancing the taste). Gorakhpur lab & Kolkata lab (Considered to be among the best in country for food testing) found the samples to be positive for MSG. In addition Kolkata lab also reported the samples to be containing dangerously high levels of lead content. Lab reported 17.2 ppm of lead in the sample. According to food safety regulation norms in India permissible lead content ranges between 0.2 ppm to 10 ppm depending on product categories. Instant Noodles falls under a category with a limit of lead restricted at 2.5 ppm.

Instant noodles are identified under food category code 6.4.3, which includes “pre-cooked pastas and noodles and like products” that are “pre-gelatinized, heated and dried prior to sale”. These categories of food are governed by Codex international standard 249, standards of food safety recognized by WHO. The masala used in these noodles is identified in code 12.2, which includes herbs, spices, masalas, seasonings, and condiments (eg. seasoning for instant noodles), where the use is “intended to enhance the aroma and taste of food”, according to FSSAI regulations.

Controversies are not new to Nestlé. In 1974 Mike Muller wrote an article for War on want called “The baby killer”. Articles focused on impact of alternative introduced by Nestlé for breast feeding the newborn babies. Swiss court on the basis of the report, warned Nestlé that if the company did not want to face accusations of causing the infant deaths or illness, should change the way they do the business & not to use unethical sales practices. Following the report Nestlé products were boycott across Europe, UK & US. The campaign also garnered support from health authorities & medical professionals in developing nations. Momentum gathered by this even lead to 1981 formation of code of conduct to govern sale & promotion of products substituting breast milk.  

Mike Muller has been consistently active against companies which are purely money minded & does not care towards the health of people.

In one of the recent articles Muller posed an important question. Though this was not applicable to just Nestlé as a single company but to the entire industry. While in 1970’s challenge was high child mortality rates, malnutrition, quality of water, in today’s times issues have been replaced with obesity, diabetes & heart diseases. Back in 70’s industry was accused of harming the health of the babies. Now it has raised to a level of harming the entire nation. In either cases issues about the food industry’s responsibilities remain unchanged.

UN’s current millennium goals are due to expire in 2015. In such case, question of importance is should the sustainable goals focus on unsustainable & unhealthy lifestyle of riches or on the plight for the basic needs of the poor? Also, should UN actively engage with global food giants to control products & marketing to improve people’s health. For answers to these questions we will have to wait & see until we discover/ invent machines that can take us to future.

This article is not intended towards the questions raised at Nestlé but towards the general issues relating to the food industry.

FIFA scandal explained.

The Fédération Internationale de Football Association (commonly known as FIFA: International Federation of Association Football) is the international governing body of association football (soccer), futsal and beach soccer. (Source: Wikipedia)

Founded in 1904 & currently having a membership of 209 national associations is one of the largest sports bodies in the world. FIFA reported the revenues of over USD 1.3 billion with net profit of USD 72 million. FIFA is responsible for organizing & promoting the game, however it does not govern the rules.

Recent news of an ongoing scandal in such an old organization raised many eyebrows. It was brought into limelight by some investigative journalists of repute. Charges raised include rapaciousness, rigged elections, corruption & bribery. Charges have been pressed against nine of the highly ranked FIFA officials & five other corporate executives by U.S department of justice. It is estimated that FIFA officials have been engaging in malicious activities over past 24 years. Out of these 18 years have been under the leadership of Joseph Blatter. Under his leadership football has increased its popularity many a fold. FIFA also became more successful financially during this tenure. In recent developments, even after the scandal became public he has been re-elected to lead the organization for the 5^th consecutive term.

Is FIFA only party to the scandal?

As they say, you cannot clap with just one hand, a scandal will require involvement of atleast two parties. A giver & a receiver. Wait, there will be one more party to it, a middleman since the deal cannot be struck officially there will be an intermediary involved who will facilitate the transactions off the record. With the FIFA, all its associates are likely to be scrutinized for the involvement in corruption. This means two of the world’s largest sportswear & marketing firms Adidas & Nike, football federations of Russia & Qatar, for being awarded the venue for upcoming football world cup.

With time even more companies & federations will come into picture for & play a part in proving corruption & scandals in FIFA.  

What were these people exactly doing?

Justice department has mainly cited deals struck between FIFA, sports marketing firms & broadcast networks for exclusive televisions broadcasting rights for the FIFA events. Justice department has alleged that FIFA officials accepted bribes from marketing firms for exclusive television rights. The amount of money involved is anticipated to be around USD 150 million according to primary analysis.

What is the recipe for perfect corruption?

1.    Red Tape: excessive bureaucracy or adherence to official rules and formalities create the perception that bribes is the only means for getting a job done. Organizations like FIFA have been closed to share any information apart from the revenue & profits. Add to this the confidence in power of position which leads to arrogance in believing that they are untouchables.

2.    Organization culture: in case of FIFA, according to Yenkey, an assistant professor of organizations and strategy at The University of Chicago Booth School of Business corruption was acceptable & nobody felt any evil about it. He cited the example of Chuck Blazer, a former official with FIFA and Concacaf, a governing group that oversees soccer in the North American, Central American and Caribbean region, who pled guilty in 2013 to charges that he engaged in racketeering, wire fraud, money laundering and income tax evasion

What are the indicators of a Pro startup Ecosystem?

What are the indicators of a Pro startup Ecosystem?

Past few years in India have been exciting for startups & entrepreneurial community. India is expected to be second largest startup ecosystem in the world in next two years period according to a recent report published by NASSCOM.

According to the report, in 2014, India witnessed over 800 new startups. The total amount of funding received by startups since 2010 is exceeding over USD 2.3 Billion. Apart from private equity & venture capitalists, there are over 60 angel investors & over 80 startup incubators & accelerators are active in the country. As this connection between entrepreneurs & organizations providing support to them deepens, the strength of entrepreneurial ecosystem grows. Add to this the rejuvenation added by budget for 2014-15 which has several proposals announced by finance minister. Budget surely promises to be encouraging for entrepreneurs & shows some serious commitment from government towards unlocking India’s entrepreneurial power to fuel desperately-needed jobs and economic growth.

Research has shown that the job creating potential of new, young & growing companies is essential for the economy of the country.

Typical methods used for evaluation of entrepreneurial ecosystems focus on sizing up risk capital, incubators, a supportive culture, etc. However there is significant room for improvement if we focus instead on the relationships between these elements and if we measure how the ecosystem has evolved over time.

What are good indicators of a good startup ecosystem?

1.       Connected Entrepreneurs

Connections between entrepreneurs is extremely important & valuable. A good community/ forum for learning & support, observing each other’s performance & to provide a feedback is a good way to stay connected. Communication or interaction may not be between entrepreneurs working in the same field (obviously, due to competition anyone would want to hold the information to themselves).

Experienced entrepreneurs can guide the novice entrepreneurs & help them avoid common pitfalls or help with a typical problem.

2.       Connections between support organizations

Highly collaborated & co-ordinating support organizations are essential for a good startup ecosystem. Discussions & interactions between support systems can avoid unintentional & unnecessary overlap of support for specific companies.

New & upcoming support organizations, or changes in leadership of an existing support organization point towards constant changes in support organization. This indicates that injecting the missing elements to the support is not sufficient to create a healthy ecosystem, but relationships between the support elements is more crucial & matters the most.

3.       Relationship between Entrepreneurs & support organizations

A support organization could be helping an entrepreneur either by mentoring or with the financial support. While incubators work closely with startup on functional aspects of the business model, venture capitalist & private equities are focused mere towards financial viability & success of the business model. A right mix of both these types of support organization is key to success of any new venture. This is mainly because both the aspects are interlinked & cannot be considered in isolation.