SAST Wingees

Cooperative Business Models

Strategy+business carried a great article on Cooperatives covering such leading companies as Rabobank, Italian retailer Coop and others. The article has some great insights on why the cooperative business model is a powerful alternative. Unfortunately, the article did not include good sub titles to drive the message home better. So i took the liberty to do that (s+b, please pardon my heavy cut/paste). Key takeaways: 1. Coops are major contributors to national economies:

Although co-ops tend to operate with little fanfare and are often unrecognized by the financial press, they account for 83 percent of Dutch agricultural production, 55 percent of agricultural production in Italy, more than 50 percent of banking services in France, and 21 percent of Spanish health care (according to the Commission of the European Communities). In continental Europe, these companies employ approximately 4.8 million people, 20 percent more than the total work force of large corporations in the same region. The largest cooperatives boast sales that rival those of any business. In 2004, sales figures included d9 billion ($11 billion) each for Coop and Coop Norden (consumer cooperatives in Switzerland and Scandinavia), more than d30 billion ($36 billion) each for Edeka and ITM Enterprises (retailer co-ops in Germany and France, respectively) and d40 billion ($48.5 billion) for the German retailer REWE Group.

Right here in India, Amul is India’s largest food company and is one of the most successful cooperatives with 10 million milk producers as members. 2. Coops may be a better model than investor owned companies when it comes to ethical and legal lapses:

Cooperatives are often assumed to be merely local affiliations of small and midsized companies, and therefore limited in scope and reach. But their deep roots in their countries of origin — as well as their surprising pervasiveness and stability — are exactly what puts cooperatives in a strong position in the new global economy. Through their highly participative governance models (involving both members and employees in making decisions), the cooperative system is particularly well suited to combining entrepreneurial and social objectives. Because it encourages internal checks and balances and general transparency, cooperative structure also makes it easier to avoid the ethical and legal lapses that have brought down the management of many investor-owned companies.

3. But can they withstand competition from big-pocketed competitors?

During the last few years, Unicoop Firenze faced unprecedented competition from retailers entering Italy, including several European giants: Carrefour, Panorama, Esselunga, and E. Leclerc. “These entrants triggered a full-blown competition over prices and distribution,” says Maura Latini, channel director of Unicoop Firenze. “Luckily, we had prepared for this over the previous years by competing against each other.” Before this competition set in, COOP’s management had moved to create internal competition between the chain’s supermarkets and “hypermarkets” (larger outlets that combine features of supermarkets, department stores, and specialty stores, introduced in Europe to compete with the influx of Wal-Mart and similar retailers). This helped COOP establish price leadership in products across the board and ensure better food quality. “Management had decided to introduce this mechanism so that our employees would get used to competition before we had to face it directly,” adds Ms. Latini.

4. Okay, what are the failures?

Success, in Europe or elsewhere, is not assured. Cooperatives have faltered at times. This happened most recently in the 1990s with Great Britain’s famous “building societies,” cooperative banks that had pioneered low-interest mortgages for their working-class members. In a series of publicly criticized moves, the boards of some major cooperatives rewrote the governance rules to make directors less accountable, sold the companies to more conventional businesses (for example, Lloyds Bank took over the Cheltenham & Gloucester Building Society), and allowed a few directors to pocket disproportionately large gains. Observers concluded that cooperatives, like many idealistic experiments, would simply not stand up against conventional business practice; they would need special legal protections to survive.

As the article details further, there are several other advantages and disadvantages like anything else. In countries like India, where large sums of capital are hard to come by, cooperatives can really be a workable alternative by creating a network of micro-entrepreneurs. I recently read a report that a package shipping company (called couriers in India) has formed in South India using a cooperative business model. They want to take on the Fedex, UPS and DHL of the world. Sorry, could not locate a reference on the internet to link to.

Balls of fire – group defense against predators

Came across a very interesting report in the Science News – Honeybees swarm a predatory Killer Wasp and collectively raise their body temperatures to a point where the Wasp gets killed. Extremely interesting. In general, the smaller the size the harder it is to ward off bigger predators.  Some insects, fishes etc. have evolved what are known as aposematic displays to warn predators.  The wikipedia entry on aposematism has some excellent links. Social Caterpillars entry in the Wikipedia has some interesting material on group defense:

It is generally thought that aposematic coloration is most effective in deterring predators when insects group together. Indeed, the most common mode of active defense among social caterpillars is aposematic display, often combined with synchronous body rearing, flicking, and “en masse” regurgitation of toxic or unpalatable chemicals. Studies indicate that the spread of alarm through colonies of social caterpillars is mediated largely by tactile and, possibly, visual cues. Caterpillars can detect the airborne sounds generated by the beating wings of flying wasps and flies and respond with rapidly jerking movements. Vibrational signals set up by the agitated caterpillars and propagated by the communal web would appear the most likely means of alerting the colony to danger.

Cognizant Bloggers

Updated: Aug 7, 2006
I already knew that there were a few Cognizant bloggers out there. We recently started an internal blogging initiative and through that I found that there are quite a few more. I decided to create a Cognizant Blogger Blogroll. Goes without saying that all of these are personal blogs: 1. Bill Howard maintains an extremely interesting blog called “Nuur-e-faanuus”, that covers the intersection of project management and Urdu poetry. Bill knows 19 languages and is an expert on content management, portals, information architecture etc. His blog has been featured by Desipundit. 2. Pandurang Nayak who writes on Microsoft technology. He recently wrote a great post on Zoho’s office suite. 3. Shahul Hameed writes on Islam and Sufism in his blog “Faizee”. He has been blogging since Apr 2004. 4. Lakshmi Nagarajan maintains a blog called “Reflections”.  Her talk about quitting caught my attention. Hope she will keep blogging atleast. She is passionate about blogging and has been blogging since April 2003. 5. Madan Menon writes a quirky blog “penspencilsnomore”. Very passionate and enthusiastic individual. 6. Raman Krishnamoorthy maintains an excellent photoblog called ilovechennai. 7. Kesava “Kaysov” Mallela  – user interaction designer, his blog “one where”. 8. Ankush Joshi – a  teacher  who is forced to work in the IT industry as he calls himself.
Great meeting all of you through blogs or otherwise. P.S. if there are others that i have missed, please let me know. i will update the blogroll.

How popcorn pops or does not pop – some new ideas

How does popcorn pop? Why is it that other grains don’t pop?

Wikipedia entry on popcorn says:

As with all cereal grains, each kernel of popcorn contains a certain amount of moisture in its starchy endosperm. Unlike most other grains, the outer hull, or pericarp, of the popcorn kernel is thick and impervious to moisture.

As the kernel is heated past the boiling point, water in the kernel begins to turn to steam, generating an internal pressure of about 9 atm. In kernels of other grains (and in damaged kernels of popcorn), this steam escapes as fast as it forms, but in the tightly sealed popcorn kernel, the steam is held tight by the pericarp and the pressure starts to build until the pericarp suddenly ruptures, causing a small explosion. The force of the explosion turns the kernel inside out. More importantly, because the moisture is evenly distributed throughout the starchy endosperm, the sudden expansion turns the endosperm into an airy foam which gives popcorn its unique texture.

Two explanations exist for kernels which do not pop, known in the popcorn industry as “old maids,” after being exposed to high temperatures. The first is that unpopped kernels do not have enough moisture to create enough steam for an explosion. The second explanation, according to research led by Dr. Bruce Hamaker of Purdue University, is that the unpopped kernel may have a leaky hull.

 

I was wondering about this leaky hull theory and while browsing the Chemistry World magazine from the Royal Society of Chemistry, I found this really interesting explanation:

The secret to maximising pop-ability lies in the chemistry of the corn kernel, says Hamaker. He has identified a
crystalline structure in popcorn that appears to determine popping success. His team tested a variety of popcorn
brands, and found the most poppable ones share a characteristic chemical structure of the outer hull (pericarp).

The data suggest that cellulose in the pericarp is responsible for the development of exothermal events and increased crystallinity. ‘The propensity of cellulose to form crystalline structures in the popcorn pericarp during microwave heating improves moisture retention and hence popping performance,’ they write. Improving pop-ability – by breeding varieties with optimal crystalline structure; by chemical modification of corn kernels; or by genetic modification – could result in a better product in three to five years, predicts Hamaker.

So, the perfectly popping popcorn is not too far off in the future. Can’t wait.

Back to India: Even the staid old Silk Sari can be a vehicle of innovation

Since I came back, I have been observing with great admiration this silk sari manufacturer called RmKV with a popular store on Usman Road, T. Nagar. A while back they released a sari with 50,000 colors from the palette in 1 sari and entered the Gunness Book of World Records. Today they released a first of a kind reversible silk sari which can be worn 4 different ways,
The Hindu : Tamil Nadu / Chennai News : RmKV launches reversible silk sari:

K. Sivakumar, Partner, Rm.K. Visvanatha Pillai and Sons, told reporters
on Wednesday that the sari had four pallus and four matching borders
with two body colours. More than 50 silk workers spent more than six
months in weaving the sari. The weaving technique is new, and RmKV has applied for a patent.

It turns out that they have a R&D department that churns out all these great ideas. Goes to show how innovation can remake any industry. Notes & References:
1. For those that are unfamiliar with Sari. Check out the Wikipedia:

Some versions of the history of Indian clothing trace the sari back to the Indus Valley civilization, which flourished in 2800-1800 BCE. One ancient statue shows a man in a draped robe which some sari researchers believe to be a precursor of the sari.

2. A few years back RmKV won a National Award for weaving the famous painter Raja Ravi Varma’s Hamsa Damayanti painting onto a silk sari. 3. Our friend, Kaps, mourning the loss of RmKV’s founder. Great loss indeed.