CTRAN Consulting Pvt. Ltd. is a part of BASIXGroup, a premier corporate house held in high regard in the field of micro-credit and livelihood promotion in India. The group has had over a decade of operation in over 10 states in India with over 5,000 employees.
You have a wealth of over 15 years of professional experience with a strong background of management education. You have lived life of a salaried person as well as an entrepreneur. What has been your experience as an entrepreneur like? Who is your role model whose leadership trait you follow or like? What triggered your move to become an entrepreneur when the usual norm is of a salaried job?
Mr. Ashok Singha: Firstly, entrepreneurship is all about challenges and ability to cope with uncertainty and high tolerance for opportunity cost without bothering about any short-term gain but focussing on the longer term goals. It is in other hand like Dili Ka Ladu; Jo khaya Pachataya, Jo nahi khaya who pachtaya. I have been active in the formulation of several programmes like Orissa Tribal Empowerment and Livelihood Programme (OTELP), Western Orissa Rural Livelihood Programme (WORLP), Civil Society and Poverty Programme, Orissa Modernising Government Initiative (OMGI) in Orissa, Tejaswini in Madhya Pradesh; working on the power sector reform in Orissa, Uttar Pradesh, Andhra Pradesh, Madhya Pradesh; public enterprise reform, land reform to bring in my expertise of process improvement in governance and bridging the gap between the work relationship between Government, Private Sector and Community based organisations mostly intervening in the process of engagement and accountability issues. I also serve in the Government of Orissa taskforce Bhumi focused on land reform issues. My company CTRAN also works with more than 60 private companies in advising them on carbon credit and sustainable business solutions. However, I have also endured horror; like betrayal of a partner and long time colleague; my saving dipped to just one lakh and another lakh I put in FD to make provisions for two of my colleagues who walked out to an uncharted terrain with me. You require strong family support and well meaning friends and colleagues to be a successful entrepreneur.
Frankly, my life has been largely shaped by Mr Vijay Mahajan, my first boss and he is also currently the chair of my Board. Very early in my life, I started working with him and he has been my friend, philosopher and guide. For me, he is like Mahatma Gandhi and Narayan Murthy, altruism to scale and growth embodied in one. He is a great institution builder. He built PRADAN , with Mr Deep Joshi (Deep recently got Magsaysay award) and I worked with him in starting BASIX (we were five then, till recently BASIX has 5000 people working and it has grown from Rs 1 crore in 1996 to more than Rs 700 crore in 2009. I like his passion for large scale change and making a difference in the lives of millions. The other person, I admire is Mr Ratan Tata, who professionally manages a diversified enterprise group and through professionals and has immensely contributed to the growth of the nation.
I always look for flexibility in doing different things but strategically converging to some longer term goal that I have for myself. This is not possible in a large organisation. That is the reason; I did not enjoy working in the operational role in BASIX and left PwC after three years partly for the same reason. Another part of me is a norm breaker of sort, my quest for new experience, prompted me to work on new frontiers (I took up a summer internship in Action Aid when everyone else was opting for industrial placement during our PGDM) and that can be possible only if you have an entrepreneurial environment. I don’t think I will ever enjoy being a salaried person.
With a growing concern for environment and the initiatives by government and corporate to go ‘green’, do you think the world is waking up at the right time or is it too late? Are these initiatives sustainable and towards right direction? What is CTRAN’s corporate vision?
Mr. Ashok Singha: Well, I consider, it is too late” to be aware and be concerned” but not too la0074e to do something about it and my young team in CTRAN are the “doing” type. Our ancestors in Vedic era worshipped nature and respected the five elements, systematically, that value degenerated largely because of our lifestyle change. At one point we chased donors and begged showing our poverty now we flaunt and chase only wealth, in both the cases we did precious little. These “green” concerns require several inter-change of wealth, experience, values to make it fair and equitable for all. Currently, the movement has just started, it requires a generational shift and I am afraid politically, we have lost the script thanks to some political compulsion and bureaucratic collusion; on the other hand most of the businesses in India are still focussing on the short term gain but not on the long term cost due to environment. One has to understand the macro-economic impact of climate change, not only disasters and their recovery saps the demand but also destruction of infrastructure affects efficiency. Industries are not working enough with academic and technology institutions on innovations in processes and technology to address climate change. There are role models in China and even in India (like Suzlon, Praj , ITC Group) who not only invested in green initiatives but also gained immensely.
Our mission in CTRAN is to develop energy and infrastructure that enhance shareholders value through a sustainable transaction based model using Process and Financial innovations contributing to inclusive growth and accountable development by managing climate change and reducing vulnerability through adaptation. Our vision is to see that we are a world leader in providing sustainable solutions and guiding the transition to make the world a better place to live. It may not happen during my life time but our effort would never be considered too late.
Energy has always been a critical resource for development and has long been exploited to further so called development interests at the expense of environment. What has been CTRAN’s role in Energy Management, helping organizations meet their energy requirements in a sustainable manner at a reasonable cost?
Mr. Ashok Singha: You are right; energy intensity is linked to GDP growth, but initially grows with the growth in income and declines with the decline but after an inflection point it declines. In CTRAN we have an energy management unit that advises clients on energy efficiency and clean technology; environment management unit assists them in the compliance matters and the infrastructure and institutional development group works with clients in Government and Private sector in several areas relating to corporate sustainability initiatives, policy issues, etc. Our Clean Development Mechanism team tries to structure transactions to offset these additional environmental friendly investments through carbon credit revenue.
CTRAN is involved in Social Infrastructure and Advisory Services. How is it contributing to the social sustainability and development goals of the nation?
Mr. Ashok Singha: I have partly answered this question. It is important to look at society as a whole, when we think about any large scale change or intervention. It is required to put emphasis on education, health and livelihood issues. To me it is not only, the fossil fuel based energy, but also the way we manage our water, agriculture, forest, mineral resources, the construction and transport infrastructure is going to shape our lives in future. Let me give you an example, if we need a transaction based model we have to create incentive for the forest through the one who destroys it in one place to create in another place. Similarly we would need behavioural change in the way we design our houses and workplace to make it more environment friendly, a modal shift in transport. Most of these have to be built into the planning and programming strategy; that is the reason our social infrastructure team focuses on decentralised planning, policy interventions, public-private community partnerships and sustainability issues. The goal of the nation is largely linked to the Millennium Development. Goals and our delivery systems have been largely engineered around that.
Kyoto protocol made governments of Annex 1 countries impose cap on carbon emissions. This opened the flood gates for a thriving business of climate change consultancy, offset project development, Carbon trading and brokerage. How do you see the market post 2012? Are there any apprehensions about it? How is CTRAN gearing up for the same?
Mr. Ashok Singha: CTRAN business model was not based purely on Kyoto Mechanism. I must reveal at this stage, one young and very talented intern from XIM, T Vijay has worked with me on developing a business plan for CTRAN which was largely resting on Kyoto. I re-jigged it. I decided to focus on sustainability solutions rather CDM advisory. This change was triggered through a memory of a case that I had to do in Prof. Govindarajan’s Class in 1991 and that was on Marketing Myopia. The lesson is: what they teach you in business school can help you too in taking decisions and committing life (neck) in to it. Therefore, since we do not depend much on one mechanism or one product, we will continue to grow both nationally and internationally.
Well post Kyoto (2012), the market will still exist, and there will be players and we will continue to advise them. There would be margin pressure as CER (or whatever name it would be then) would be close to reflect its true value. There could be new payment mechanism, incentives for domestic actions. There is talk for creating a separate block of Annex III (as per current terminology) which may have a mechanism close to Joint Implementation or even sectoral Cap and Trade. There is certainly going to be a focus on Least Developed Countries and enhancing assistance for them and we are already working in some of these countries. We have a strategy and our senior managers are quite alive to it and pursuing it and our board is guiding.
Due to the recent downturn, the CDM market saw a 30% dip in transactions in 2008 over 2007. For buyers it made more sense to simply buy guaranteed CERs on the secondary market rather than non-guaranteed CERs/ERUs through time-consuming forward transactions and thus many origination activities in the primary market were frozen. How did the recent downturn affect CTRAN? Do you see an opportunity in this?
Mr. Ashok Singha: It is a reality and it certainly affected us. Our revenue streams from transactions went haywire but as we did not entirely depend on this, we survived and many peer companies were not that lucky. Secondly, CER price is driven by both short-term and long-term factors. The short term factors are (1) spread between natural gas and coal prices (2) energy demand (3) economic activity. The long term factors are based on the number and type of CDM projects registered issuance pattern and emission targets. In this scenario if you get down to doing a technical analysis, trend is upward though volatility will remain. So the market outlook is quite positive. There are several domestic adaptation actions we are involved in and that is going to continue any way.
The secondary CER market underwent significant growth of 350% in 2008 over the 2007. The price spread between pCERs and sCERs keeps fluctuating depending upon market and social -economic condition. What kind of hedging strategy is CTRAN following to make it recession proof in future?
Mr. Ashok Singha: This atrocity is a clear case of market failure. CDM largely is a product largely in buyers’ market but hoarding has started in India and elsewhere. Ideally you need a price clearing market (exchanges) or market clearing price (later through a market regulator), we don’t have any. Therefore, CER price does not reflect its true value and all forward contracts anyway are net of transaction cost. Left to me, I would like to link CER to Special Drawing Rights of nations as it is plus-sovereign goods. Strictly we are not in a position to hedge but our hedging decisions are largely based on the movement of the stock averages and their movement pretty well reflects the aggregate results of the CER asset under our management. But by nature our clients are diverse, so also their core business and the type of CERs. To that extent, I don’t see much of a problem
How CTRAN does differentiates itself from the competition where many established companies are trying to get a strong footing? How has CTRAN positioned itself in the market? What kind of marketing strategy does it follow? Where do you see CTRAN after 5 years?
Mr. Ashok Singha: We beat the competition by not being part of it. We differentiate ourselves in our offerings. We work with our clients in building a relationship. We invest a lot in relationship building and always focussing on the long term. Some market leaders in CDM started the price war, as a result we had to follow, but they are the ones who are in the receiving end. So we are becoming stronger by every passing day. The young team which has believed in CTRAN philosophy is working almost on the entire delivery space like any large organisation, in policy, institutional change and in projects. That’s how we are positioned and as I said we work on long term goals and larger issues. This strategy and approach is helping us go places. We work in more than ten states and even have linkages in some international projects. We believe we will be one of the leading companies in sustainable business advisory in next five years. We may not have a long history like our competitors but will have a very long and bright future ahead as a company.
Do you think that the B-Schools today are on the right path of tapping the creative bent of mind of the potential entrepreneur s? What kind of growth opportunities does CTRAN provide to a MBA graduates?
Mr. Ashok Singha: No. Most of the, prepare people for jobs. As it happens many institutes have come up who do not even have good faculty, they are creating over supply of poor quality products. I don’t know whether there is a process to spot one entrepreneurial mind when you now have to teach 100’s of students. Tell me how? What is the process of knowing –who is an entrepreneur? If I knew, I would beg and get him/her in CTRAN. Frankly, I did not know whether, I would become an entrepreneur or not when I was in XIM. I became one in due course and I need all the energy and intensity and blessings of God to remain that way. In fact, if I really wanted to stereotype, some of my batch-mates who had all the “right” conditions for entrepreneurship are still in jobs, some most unlikely ones are entrepreneurs. Therefore, the environment should be such that peer group encourage and pamper the culture of entrepreneurship, create a value system that focuses on wealth creation for many not for self, high integrity and building enough stamina to stay on course in face of uncertainty, encouragement for innovation and respect for friends and colleagues. Many of my teachers have stood by me, help has come from unlikely places like bureaucracy and my family has not interfered much during my moments of crisis to add to any dilemma. This later part is external to B-Schools and they can’t do much in this part except making students aware about these issues to enhance their preparedness.
CTRAN is an organisation nurturing innovation and, we are flexible. All my senior team members bear a huge opportunity cost of working in CTRAN but still we enjoy working together. We all love “CTRAN -a dream” and continue dreaming and realising and again dreaming beyond. We are building it piece by piece, breaking when it goes wrong to make it right. If you look for a fully furnished house-CTRAN is not for you, if you want to dirty your hands and live in the satisfaction of your creation, be part of it. If you want to taste it for 3-4 months, don’t come, you will never get a taste of it. It will be bitter for both. Frankly you can start a product and be a product leader and practice leader quicker than that you would in any other organisation. No where you will get the kind of flexibility and scope for decision making that you have here. But you have to have high tolerance for ambiguity and opportunity cost.
Any message for MBA graduates and for The CEO Insights?
Mr. Ashok Singha: My suggestion is to place emphasis on a career where you give a lot to society in terms of jobs and creating wealth for many not extracting the most for self. Imagine a situation, when your neighbourhood chai walla gives you an average tea and charges exorbitant price akin to Cafe Coffe day; will you go to that shop? Always try to focus on customer as a professional in business management and ask your managers/workers to focus on customer delight. They will help you survive and grow.
The CEO Insight is a very important step, we learn from each other and this is a good medium for sharing. I wish it all the best and admire the efforts of those who initiated it.