– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

Social media is the new buzz word in the marketing world. It has given an unprecedented level of voice to customers and potential customers, and as a result can provide companies with deep insights regarding customer views, opinions, sentiments, behavior and buying trends. By listening to social media and mining social media, it is possible to create market, customer and competitive intelligence of unparalleled accuracy and quality.

In recent times, the prime example of harnessing the social media for competitive advantage was demonstrated by the re-election of President Barack Obama in Nov 2012. His campaign had a specialist data analytics team that helped Obama refine the process of targeting TV ads and created detailed models of swing-state voters that could be used to increase the effectiveness of each campaign tool, from phone calls and door knocks, to direct mailings and most importantly, social media. No wonder, even as the Presidential race tightened in the closing weeks, President Obama maintained a substantial lead in both Facebook ‘likes’ and Twitter followers over Governor Romney. By the end of the campaign, Obama had 22.7 million followers and 32.2 million likes, compared to Romney’s 1.8 million followers and 12.1 million likes. In sum, the online behavioral data of American voters was co-related with their offline political identity and beliefs, using social media and data sciences, to a devastating effect. Clearly, a better harnessing of social media was one of the key differentiators, which resulted in Obama’s victory over Mitt Romney.

The Indian Context

Insofar as India is concerned, the impact of social media on the Indian political scene was examined in a previous Orkash blog post. Despite low internet penetration rates, social media is emerging as the single most powerful channel in India that is influencing a host of perceptions, from political sentiment, civil society led activism to consumer behavior. Another trend that is very visible is that internet penetration is rapidly spreading amongst the mobile phone users, a population that had grown to nearly a billion by end 2012, from just 45 million in 2002. Mobile phones based social media networks is the dominant format that is going to be prevalent in India. Key sectors in India where the data analytics of social media will impact business are the ‘Business to Consumer’ brands, for example financial and insurance instruments, consumer durables, entertainment industry, hospitality sector, electronic gadgets, retail, wellness and healthcare etc.

Social Media Intelligence “The Ultimate” Tool

Information that companies need for marketing and to meet competitive challenges is moving quickly from published and proprietary sources to the open, chaotic world of social media platforms.

Social media is rapidly changing the buying behaviour of customers. Individuals are increasingly expressing viewpoints on products, brands and services, seeking opinions online, commenting and comparing purchase options. Key influencers in such communities drive opinions and garner sentiments, in turn impacting purchase decisions. Concurrently, stray thoughts travel across the world in seconds, causing upheavals. Social media intelligence thus accords insights into the means to influence decision making.

SocialInt1
The above screenshot of ORKASH technology identifies various Facebook users who have “Liked” the Honda page and commented on Honda . This also helps identify the influencer in this user network and clicking on a user id provides user details ( name, age group, gender etc. ) . The viewpoints through the users posts and status updates can be captured and a simultaneous analysis can be done on the influence this user has by capturing follow-up comments, “likes” received and the sentiments of the follow up comments.

At the organizational level, companies need to become hunters of information rather than gatherers. At the same time, companies would also need to mitigate impacts of competitors “hunting” them in social spaces, by making their employees/ team members aware of how easy it is to inadvertently divulge valuable information. Companies can also fall easy prey to mishandling of a complaint or dissatisfaction expressed by a consumer on social media, with severe repercussions for brand reputation and goodwill.

Socia media intelligence is a mission that should extend across the length and breadth of companies, particualrly those with BtoC products and services. Social media based intelligence will sharpen strategic insights and may help pre-empt key actions of competitors or lead to adjustments of marketing strategy. Navigating this new environment effectively requires new skills and technologies that can produce analytics and useful intelligence from vast amounts of unstructured data that is being generated daily on social media sites.

How Companies are using Social Media

Brand Reputation

As a case in point, Honda Motor Company has been using social networking sites to enhance its brand reputation. It is on all the major social networking sites like Facebook, Twitter, YouTube, Flickr, Pinterest, etc. Honda’s social media strategy is based around supporting business and corporate goals such as new product launches, corporate communications, public relations messages, tackling rumors, engaging with customers and communities like fans/ racing community and more. Honda is effectively using the social networking sites to keep track of conversations about the company, deliver key messages about their corporate social responsibility efforts, innovating new technologies, and also build relationships with journalists and bloggers.

Marketing and Sales

Many corporates are using social media to promote brands and products and to connect users to the company’s home pages. To a certain extent, they also use them to generate leads and even to help make sales. Most importantly, they use it to listen to what their customers are telling them about the products and their experiences with the company and its products.
Specifically, social media marketing is currently being used by organizations to:

  • Increase traffic to a website
  • Create buzz about a company or it’s product.
  • Learn what customers and fans want, their opinions, and consumer experience
  • Generate sales leads

When they begin implementing a social media marketing initiative, many companies
discover that they save money. After all, an account on Facebook or Twitter is free,
so it shouldn’t come as a surprise that, when social media are added to the marketing mix,
expenditures can decline.

SocialInt2

The clustering engine of ORKASH technology demonstrated in this snapshot enables an overview of the themes under which the Brand is featuring in the media. Such an analysis enables assessment of the effectiveness of marketing campaign and for lead generation, as well as for competitive intelligence.

Addressing Consumer Dissatisfaction

An old adage : “It’s much more profitable to keep an existing customer than go looking for a new one.” This remains wise advice across the corporate world, but is often widely ignored in practice. Companies too often fail to respond to complaints in a timely manner, and risk losing the same customers they spent large sums acquiring in the first place.

Customer service professional nowadays do comprehend that poor experience no longer results in a customer telling 5 friends through word of mouth: but that they can instantly reach hundreds and thousands of people, courtesy reach of social media. Customers are taking their frustrations with products and services to sites like Twitter, Facebook and YouTube, in the knowledge that social media networks can generate more attention and faster responses than calling a customer service centre.

A response by the company on the social media itself, apart from assuaging the irate customer, also serves to project a positive image of the company to a host of social media spectators.

Conclusion

The pace of change, insofar as data and information is concerned, is accelerating beyond imagination. As a case in point, Facebook was founded in 2004 and Twitter in 2006. Yet, in less than a decade of their existence, such platforms are transforming the information exchange and social networking rules.

Companies, political parties and organisations across the globe are increasing their efforts to understand social media trends. For the era of gut instinct, to estimate personal preferences, may be all but over. Deciphering social media trends, backed by analytical tools, is the new dawn.

ORKASH technology has engineered analytical tools for all the above domains. The accompanying snapshots are representative of the social media analysis tools that ORKASH technology offers.

SocialInt3
This screenshot of ORKASH technology identifies the users that are tweeting about Honda. The font size of the users twitter handle indicates its significance. A deeper analysis of influencers can be done from the sub features of Multi Handle analysis and Top Users Pie Chart.

 

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– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

Summary: In an unprecedented phenomenon the AAP has created a powerful impact in a very short term by its mere entry into national level politics.  ORKASH’s research here  uses social-media data (i.e. many millions of social media conversations) and game theory models to identify and analyse the forces that are shaping many new, but ‘fragile’,  trends  in the Indian political environment in the build up to the 2014 elections.  We find two major dimensions of AAP’s impact at the national level, namely:

  1. ‘rules of the game’ of the Indian politics have changed significantly, triggered by the AAP phenomena. However, how different parties would respond to these, internally at the organization level and externally in their strategies, is the new uncertainty.
  2. the statistics of the outcome of the 2014 elections, such as winning margins, vote-bank splits, voter polarization, vote swings, rural versus urban voting pattern divide, are all set to change. Political parties would do well to put the effort to interpret these and take the steps to accommodate and plan for the execution and operational implementation related changes these represent for their campaigning. (Even if the Aam Admi Party were to get a mere 5% of votes, it has the potential to emerge as a major influence factor in the election results, given the thin margins of victory that  are likely due to a three-way or four-way  split contest in a large majority of constituencies.)

Statistics show that the AAP seems to be developing into a national level phenomenon. The party has taken both the Social Media and the News Media by storm by becoming the most talked about Indian political party. Using Orkash’s Social Media Analytics platform to analyse data from Twitter, we can see some very interesting trends.

  • The AAP has over 16 lakh (1.6 million) tweets about it whereas the BJP and Congress lag behind at 14 lakh (1.4 million) and 11 lakh (1.1 million) respectively.
Graph 1

Jan 15 – Feb 15, 2014

Graph 1

  • The AAP is not just a North India or Delhi specific phenomenon as 41% of politics related tweets in South India discuss the party whereas the number is 34% in the North. Between 40-50% of tweets in South Indian cities like Bangalore, Chennai and Trivandrum discuss the AAP. Below we can see tweets on the AAP originating from cities, all over the country.
Graph 2

Jan 15 – Feb 15, 2014

These trends show the AAP appealing to a wider base than any small Regional party has managed in a long time.                   (Note: The numbers in smaller cities are relatively less, but statistically significant given their lower population)

Disrupting the National Level Political Equilibrium

The AAP, merely with its entry, is impacting the National level political dynamics.  To understand this we use a Game Theory model to depict the game of Indian Politics. Consider a line which depicts the electorate, and voters spread out uniformly in a linear fashion, along it. Each voter has only one vote.

 Line 1

We have two ‘National’ parties – the Congress and the BJP. They are the players of this game – C and B, respectively. The objective of the game is for the players to position themselves along the line in such a way, so as to garner the maximum share of the votes. The assumption is that voters vote for the candidate closest to them, in terms of position. In political terms, this would mean that voters vote for candidates who are most aligned with their voting priorities and that political parties take stands with the motive of garnering the maximum possible vote share. So in this two player game what have C and B been doing historically?

Line 2

The logic of the game suggests that the only place the two Players would strategically stabilize would be exactly at the center, such that both appeal to the median voter. By definition an equilibrium is a state of rest where no player has an incentive to shift from his/her position. In a game with players competing for vote share, this implies that at an equilibrium, the players are positioned such that no deviation by any player can bring it more vote share, no further gain can be made by deviating. This situation is thus, an equilibrium as there are no incentives to deviate. Consider any other combination of positions and you will see that in every case, incentives to deviate will exist. No other combination of positions, can be an equilibrium. Line 3Not an equilibrium case. Reason it out yourself.  

Enter a third player.

Unlike the national level, we have seen at the state level that the political environment is not just limited to two parties. Various regional players come into the picture.  Here we add a third player – A. If all three parties position themselves at the center, they each only manage 1/3rd share of the votes. Is this an equilibrium? No, were any one of them to shift slightly to the right or left, they would gain. 

Line 4

Consider any combination of positions in a 3 player game and you will see that with three players, no equilibrium is possible. 

Line 5

Think over the logic for the case above. It is not an equilibrium either. There is no stability in such a case, and players constantly change their position in response to another player’s actions. Stability can only come about if one player quits the game, or if two players decide to merge and reduce the game back to that of 2 players. Examining state level politics in states like Uttar Pradesh or Tamil Nadu we see that such dynamics have been at play for a while and have led to low victory margins and coalitions. Either the players cut each other’s vote share leading to narrow margins, or they join together (as coalition partners) to reduce the number of players and lend more stability to the game. In the 2009 elections, the average margin of victory in a parliamentary constituency was a mere 9.7 percent, the thinnest margin since independence, reflecting stiffer competition. We can see in the graph below, the median margins of victory across states in the 2009 General Elections. Notice that in the states of Andhra Pradesh, Bihar, Karnataka, Kerala, Tamil Nadu, Uttar Pradesh and West Bengal, where we see that regional parties are relatively more active, the median margin of victory lies between 5% and 10% only.Graph 3a

Graph 3b

Post 2009 Lok Sabha elections

AAP – the National Level third player

The entry of AAP is creating the same effect as state level regional parties, but at the National level.  The Aam Aadmi Party claims to have taken a stand different from what Indian politics had been accustomed to – No VIP Culture, No corruption, Moving past Caste and Community based politics and financial transparency regarding Party funding. What does this mean for politics? The AAP has refused to ally with any party with a dubious past which means it is unlikely that the National level political game will reduce to a two player game, unless the AAP ceases to be a significant player. If the National Level Political Game becomes a three player game – we will see disequilibrium.

The Congress and BJP will not be able to stick to their old strategies of wooing the median voter.

We take these stands of the Congress and BJP for granted to such an extent, that functioning outside of them seemed impossible. They ended up forming the rules within which politics was played. But with the emergence of the AAP we are seeing a perception change. Thus, in order to compete in the game, the Congress and BJP, must shift their stances strategically.

New rules will have to be written if the AAP establishes itself as a credible national player.

The AAP – Changing the Rules of Indian Politics

The AAP’s success in Delhi need not be replicated at the National Level, however it is clear that they are attempting to play the game outside of previously defined rules. Let us look in deeper at some of these and the changes we are seeing in the strategies of other parties, as a response.

Fielding Candidates who can get votes, irrespective of their Criminal past

The AAPs insistence on clean candidates for the Delhi elections as well as now for the Lok Sabha elections, and their direct challenge to MPs with corrupt pasts is a strategy which is causing much stress to other players. We are already seeing that the Congress and BJP, as a response, are unwilling to take the gamble of keeping their old corrupt candidates in the game. The Congress is thinking twice before providing a ticket to Suresh Kalmadi’s daughter or to Ashok Chavan, which would’ve been a no brainer for them in the past.

For the upcoming elections, the AAP effect will ensure that a Cleaner slate of candidates enters the arena.

Defying the Cast & Community based voting patterns

The AAP is making a concerted effort to ensure a wide appeal instead of being drawn into Caste and Community based politics. The party members proclaim themselves to be representatives of the ‘Aam Aadmi’. In the Delhi Assembly elections the AAP won 9 out of the 12 reserved category seats without appealing to these communities in particular. On the other hand Modi, for the first time, is being positioned as an OBC success story too woo the community. The downplaying of the BJP’s Hindutva stance and focus on governance in Modi’s national level election campaign has also been noticeable, displaying the strategy and focus areas of the BJP very clearly. Admittedly caste and community based politics makes up such a large part of the way Indian Politics is played out that major changes will take a while to manifest themselves.

The AAPs success or failure in positioning itself as a truly national party and it’s ability to sustain itself will be a huge factor in determining the future of caste and community based politics in India in the long run.

Clean Governance as an Agenda

As part of their agenda for Clean Governance, the AAP has been fighting for the Jan Lokpal bill resorting to high profile attention grabbing tactics on the issue.. They even dissolved their government when the bill was not passed in the Delhi Assembly, as per their demands.  The BJP has also been preaching an anti-corruption and good governance stand for this election which means that the AAP is directly competing with it in this domain. In the graphs below we see that the AAP is widely discussed in relation to clean governance and anti corruption on Twitter. The words anti and corruption are the most widely used negative words in relation to AAP, which when combined, tell us that it’s anti-corruption image has been well established. In terms of positive terms used with respect to the AAP we see – clean, good, support, right and free making up the largest shares. 

Graph 4a

Jan 15 – Feb 15, 2014

 

Graph 4b

Jan 15 – Feb 15, 2014

The VIP Culture

The AAP has refused  ‘Laal Battis’, high security and VIP accommodations. As a result, we have debates on the media and steps taken by several politicians to save their image. 

Ignoring the Aam Aadmi

The AAP claims to give people a voice versus decisions being taken purely by those elected. This has struck a chord with people as a result of which other parties are following suit. Janta Darbars are being organised in several states by different parties.

The Anti-VIP culture and Voice of the Common Man stands are more to build the party image and it is likely that most such efforts will be seen prior to elections. If the AAP includes the common man in it’s decision making process post elections and performs well, it is only then that such stands will grow beyond marketing gimmicks.

Party Funding

75% of the funding of the Congress and the BJP comes from unknown sources, allowing for corruption. Taking a different stand, the AAP publishes the details of all its donors, irrespective of the amount of donation. It also mentions the passport numbers of NRIs who donate to the AAP. People, the voters, have now seen that it is possible to play by different rules. This change in perception is the driving force behind the change in politics. An interesting interplay of strategies will be seen in the run up to these elections, in this situation of disequilibrium and uncertainty.

Likely Rifts and Shifts within Major Parties

Congress – The Congress party is at its lowest and will need to take drastic measures to redeem itself by disengaging with the rules of politics it is responsible for establishing.

In a step away from its usual High Command dominated selection of candidates, the Congress party is holding primaries (intra-party elections) to select candidates for some Lok Sabha seats.

Rahul Gandhi is being given greater responsibilities and a larger role to play. Cleaner candidates are being considered and the Congress party’s performance positives are being widely publicized. With the advent of newer cleaner candidates many of the well entrenched senior Congress members may not get the same leeway they earlier did, and many of them may even be denied a ticket. This will lead to confrontation within the party between the old and new. Rifts have already begun to be seen with many senior leaders unhappy with the primaries. The party structure is likely to shift in favour of the newer younger cleaner generation. These changes will take some time to manifest themselves but it is possible that these changes are just what the party needs to revamp it’s image.

BJP – A similar intra party change in structure will take place in the BJP, but the urgency may not be as high as that for Congress as the BJP has managed to create a strong campaign around Modi, helped by the anti-Congress mood in the country. The Modi campaign has been actively wooing the youth. A lot of young professionals have also been hired to run the campaign, and have come up with ideas like ‘Chai Pe Charcha’ and compilation of the book ‘Moditva’.  Over the past two weeks we see that the handles used on twitter, with respect to the BJP, are increasingly campaign oriented. Notice, there is hardly any mention of the BJP as a party. Modi leads the way with his new Chai Pe Charcha campaign, #namo4pm, #namoinkolkata, #namo and #yuva4namo entering the fray. 

Graph 5

Feb 1 – Feb 15, 2014

The success of the campaign, recently, can be better measured if we compare the shares of the political parties in twitter conversations over the past 5 weeks, to that over the past two weeks. We looked at the former in the beginning with the AAP at 39%, the BJP at 33% and the Congress at 27%. Below, we have the same graph but for the time period of 1/02/14 to 15/02/14.

We see that the BJP’s share in conversations has increased significantly in comparison to the overall, with the BJP now at 43%, the AAP at 40% and the Congress lagging far behind at a mere 16%.

Graph 6

Feb 1 – Feb 15, 2014

AAP – The AAP may have brought about interesting changes by its mere entry, however, after coming to power it has been involved in a lot of controversies. As a result there has been some degree of disenchantment with the party.The AAP needs to tread carefully and make sure it does not lose out on the support base it created. We analysed the twitter conversations regarding AAP with reference to controversies that have cropped up over the past few months. We see that the handles that show up in such a scenario, do give some insight into a degree of disenchantment with the party. Handles that crop up are #aapdrama, #quitaap, #dharna, #aapinaction, #bhagodakejri, #gamblecrumbles and #anarchy. On the other hand support bases also exist, in the form of handles like #arvindatcii, #karntikaariaapgovt, #rilgasscam and #yokejriwalsobrave.

Graph 7

Jan 15 – Feb 15, 2014

The AAP will need to perform well and think its actions through wherever it is elected. It is possible that they may be more successful in their drive against corruption and changing the system just by practicing activisim politics, without actually forming the government. Being in power forces them to look at numerous issues they haven’t thought out. It also makes them more vulnerable to attack by other parties as they are direct competition. Spreading thin their resources in order to win seats all over the country can lead to a dilution in ideology as the more people join a movement, the more views join in as well. Starting a nation wide campaign in a few short months is tough task and may lead to errors of judgement, which the Media will definitely latch onto. This will be a decision to take for the AAP as it moves forward, how can it be more successful – through activist politics or by getting into mainstream politics and attempting to govern, leaving itself more vulnerable to risks. This will determine whether the AAP will be able to sustain itself as a credible national force which in turn will determine the way Indian Politics will go in the future.

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– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

Given the unprecedented growth and reach of social media, monitoring what a company is doing on social media channels and what the people are talking about its products and services, has a huge potential for competetive intelligence gathering.  The forecast for such monitoring and the consequent business potential, is without doubt exciting for any corporate. The case for increased usage of social media analytics is getting more compelling, with every passing day.

To this end, Orkash has put together this blog post, which is an amalgamation of figures and case studies.  If you are interested in competetive intelligence, simply read on.

Some Trends

A study was conducted by the Center of Marketing Research at the University of Massachussets, to identify how Fortune 500 companies are using Social Media, as part of their marketing and customer service strategies.  77 percent have active Twitter accounts and 70 percent have an active Facebook presence (both up by 4% compared to the previous year, 2012). These companies are not just promoting their products & services and creating a digital marketing campaign, but have identified Social Media for customer engagement, for example, as an effective means of interacting with disgruntled customers as well.

Further, HubSpot’s 2013 survey shows that Social Media produces almost double the marketing leads of trade shows, telemarketing, direct mail or PPC ( Pay Per Click, an internet advertising model).

Case Study 1 : Predicting Sales – Automobile Sector

Social Media analysis of the Indian automobile sector was undertaken. The activities of a well known international car manufacturer (Brand X) were monitored on various social media websites by usings ORKASH’s social media mining and analytics tool.  Over the course of a few days, various types of information were extracted from Facebook and Twitter pages. This included data extration on various metrics such as trends and demographics associated with the ‘Likes’ on Facebook pages of various brands, ‘mentions’ count of the car brand in social media conversations, influence networks of the top users, sentiment and comparative analysis of comments, location specific trends, etc. This was also done simultaneously for a rival car brand (Brand Y) to better understand the user sentiments related to various parameters, and the sales pattern.

sales-figure

Fig : Sales figures obtained from Open source

mentions-brand-x

Fig : Mentions on Facebook. This is an Orkash Technology output

A direct correlation between the sales figures and number of mentions was found on a month-on-month basis. However, at the time of the study (July 2013), sales figures till the month of May 2013 only were available, with the subsequent month figures awaited. The pattern of the sales could however be predicted since the social media activity, in terms of mention counts, for these months were already available. Once the sales data was released by the car manufacturer, it was found that the sales of Brand X increased in the same pattern as predicted by the Orkash tool – there existed a direct co-relation between the quantum of social media activity and sales. Such information is of tremendous value to business.

The snapshot below, obtained from the Orkash Clustering Engine technology, shows the grouping of important keywords and phrases associated with the brand, as they appear on social media platforms. For example, the specific problems, complaints and opinions on these issues, forms clusters based on the number of occurrences, showing the inter-connections. This kind of visual representation gives a comprehensive overview of the most common topics being discussed about a brand and the inter-relationship of these topics.

cluster-brand-x

Fig : A cluster identifying Brand X problem areas. Orkash Technology Output

The Orkash tool was also able to classify which of the negative comments were complaints, and further subdivide them into various categories like quality, post-sales service, customer service etc. The locations of the origin of these complaints, in terms of which dealership or workshop in which city had a recurring problem, could also be identified by the system. The information was retrieved through the contextual analysis of text and content of the comments.

Orkash technology

Fig : Orkash Technology Output

Case Study 2 : Competetive Public Engagement – London Olympics  

In the build up to the 2012 London Olympics, Adidas struck a reported £40 million three-tier sponsorship deal to be the official sponsors for the games and launched their #takethestage campaign. In a classic case of competitive garnering of mileage on social media, Nike quickly countered the Adidas campaign by creating an all new #findgreatness campaign.   Figures from Socialbaker’s CheerMeter revealed that between July 27 to August 2 there were over 16,000 tweets associating the keyword Olympic with Nike, while Adidas received 9,295 tweets in the same period. Adidas gained over 80,000 new Facebook fans during the Olympics compared to more than 166,000 for Nike. The biggest sporting event in the world was a great platform to showcase the brand and increase awareness, but, as the numbers suggest, the battle on Social media was won by Nike, even though it was Adidas that spent big bucks sponsoring the London Olympics.

Case Study 3: Response to Digital Marketing : Food and Beverages Sector

The Orkash Clustering Engine technology has emerged as a very powerful tool in identifying brand activities like promotional campaigns and events, upcoming products and accumulating user sentiments and producing clusters showing their interconnections. A representation of this sort enables the brand to quickly identify problem areas, apart from ascertaining the outcome of their marketing strategies. The screenshot below, of a popular Indian liquor brand, shows the clusters obtained from social media conversations, just after the launch of a digital campaign. Key phrases like ‘Global Beer’, ‘Just want to Drink’, ‘New Brews’, ‘High Prices’ have the largest clusters and the maximum connections. This information culled out from Social media, which happens to be the platform consumers first turn to, can be of huge value to companies producing consumer goods.

Digital Marketing

The Future of Social Media Analytics in India

With its huge ‘youth demogrpahics’ driving India towards becoming one of the biggest Social Media market in next couple of years, it is becoming increasingly essential for companies to not rely solely on traditional media for the purpose of deriving business  insights. The approach of mining information from Social Media pages and conversations and using analytics to create deep insights into the activities of the brand, the user perceptions and trends related to various parameters is increasingly becoming highly relevant.

Unlike many ‘first world’ markets, India has a huge social and cultural diversity that has a very significant impact on consumer behaviour and consumptions patterns. This makes social media analytics and intelligence collection even more relavant, but with the caveat that such analytics must take social, demographic and cultural context into consideration for meaningful trends and insights to be arrived at.

In conclusion, unlike global organizations, Orkash, being a 100% Indian company, understands the local issues and dynamics, which is supported by in-house existence of social, behavioural, political, analytical and technical subject matter experts. This enables us to develop the technology keeping the local context in mind.  Thus, social media analytics, customised to the Indian market, is what Orkash can deliver.

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– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

This blog post applies the concepts of game theory to Left Wing Extremism (Naxalism) in India. Game theory has gained importance in recent past in the study of unconventional conflicts. It is a tool for framing and analysing scenarios of strategic importance. The business world uses the principles of game theory to analyse and make competitive sense of strengths and weaknesses of the players involved for optimal decision making with respect to competetion, negotations and pricing strategies.  Corporations have been using this concept to model the mergers & acqusitions, price wars, trade union negotiations, divisional relationships, market dynamics, strikes, product launches etc. in order to make informed decisions and strategic moves.

A ‘Game’ derives its uniqueness from its rules and the way it is being played, be it a price war between two competitors or an unconventional conflict between the State and the insurgents.

To that end, extensive form of modelling has been used in this post to understand the dynamics and arrive at an equilibrium point for the left wing insurgency.

Political Angle – Arriving at Nash Equilibrium

It is understood that a politician will win an election if he aligns himself to the majority aspirations and brings about good governance. In LWE affected regions, the consensus among a proportion of the people is of an anti-State nature, with a belief that the Maoists would some day be instrumental in bringing prosperity to them. Confronted with such a situation, the plausible alternatives available to the politician in order to maximize their chances for wining the election are:

Naxal Political Payoff3

1. He/she aligns to the majority aspirations and therefore supports the Maoists/Naxals, either directly or indirectly (given that Maoism ideology has a large vote bank in the form of an existing support base), or

2. Over the long term, he undertakes developmental initiatives and works for the upliftment of the people to create a genuine support base amongst the masses. (For this to happen the politician has to compete against the support base of the Maoists/Naxals)

In the first scenario, the politician will likely reap the benefits of political allegiance immediately. In the second premise, the process is long-drawn and requires a commitment to the community. The politician has to, through his continuous efforts of bettering their lives, win over the people of the community in the LWE affected region. It is apparent that the first scenario offers the quickest results with the least efforts – the best and more efficient outcome for a politician solely interested in electoral victory.

Now, assuming that two major politicians contest an election, the outcome can be predicted by modeling the situation through the Game Theory. If both politician A and B don’t align with extremists and instead undertake initiatives and set good examples of governance to generate a genuine support base amongst the masses, then either may win the election. They have equal chances. However, it is promoting prosperity and development over the long term and is better for society as a whole. Thus, they both get a positive payoff each, from this situation, and the total of their payoffs is the maximum in this scenario – signifying the Best Possible Outcome for society as a whole. We depict this with the payoffs “A:8, B:8”.

Alternatively, if one politician aligns with the extremists while the other doesn’t (A aligns B doesn’t OR B aligns A doesn’t) then the politician who aligns with them, will win the election in this short run. This is the maximum possible payoff a politician can get as he definitely wins the election, and a better option for the individual than the earlier one (A:8, B:*) described above. The politician who does not align with the extremists is sure to lose the election. Thus, he gets the lowest possible payoff, in this scenario. We depict these payoffs as below:

If A aligns and B doesn’t – A:10, B:0

If B aligns and A doesn’t – A:0, B:10

As we can see, neither of these scenarios are best for society as a whole.

The last scenario we must look at is if both politicians decide to align with the extremists. In this case again both politicians have equal chances of winning the election. However, the important point to note is that this scenario does not lead to prosperity and development in that society. Thus the total of the payoffs of both politicians in such a situation would be less than that in the Best Possible Outcome case. We call this the ‘No Regrets Option’ since neither politician can feel regret for not having played to the interest of the majority to attempt to win. We depict this by the payoffs A:5, B:5.

Now, to predict what is likely to happen we must compare these scenarios and look at what decisions the politicians are likely to make.

In India, the primary goal is election victory, while good governance and development initiatives are unfortunately secondary goals. A major driver that creates this situation is that cast and community act as a dominant force in vote banks alignments, and the divison in vote banks resulting from three to four way election contests (two national parties and one or two regional parties being in the electoral fray in most constituencies). As a consequence governance based politics has increasingly emerges as  a lower priority. Electoral victory – a short term goal, becomes the priority, forcing the political system to align with the supporters of predominant ideology that can add to the vote banks – here, LWE.

The same is depicted in terms of the payoffs of each politician in different scenarios. No matter what Politician B does, A gets a higher payoff by aligning with extremists (If B aligns – 5>0 for A, If B does not align – 10>8 for A; so A will always choose to align). The same is true vice versa that no matter what A does, B gets a higher payoff by aligning with the extremists (If A aligns – 5>0 for B, If A does not align – 10>8 for B; so B will always choose to align). Thus, with both parties interested in maximizing their own well being, they both come to the scenario where both align with the extremists. This is the ‘No Regrets Option’ and is the Nash Equilibrium of this game.

This is why we see the political system attempting to align with the supporters of the predominant ideology of a region, so that it can add to their vote banks.

Operational Angle – Playing the Game – Changing the Rules from Sequential to One time

Politicians are the key players in the Game being played by the State (the counter insugent) and the anti-State extremists (the insurgent). This has emerged as a sequential game – with one party winning at the times when the momentary strength of the other party is weakened. Each party may take turns in winning the game (or temporarily emerging as the dominat player) since both believe that they would be the ultimate winner they continue to play numerous cycles of this sequential game. However, as a result the sequential game is a long-drawn-out and process which would likely hurt resources – both human and financial. Changing the way the game is being played, from sequential play (repetitive game of strike and counter strike) to a one-time game would probably yield more results. Thus the ‘surge operations’ in Iraq and the Greyhounds’ counter insurgency operations in Andhra Pradesh do prove a point here. Insurgency affected regions can be  generally saturated with large number of troops for area domination and population/territory denial to insurgents to bring about a situation conducive for better governance, and  while at the same time relatively smaller numbers of special forces are used in ‘strike role’ to cause attrition on the insurgents.

However, it is to be noted that tactical operations are only a means to achieve a safe environment that facilitates the restoration of the functioning of the civil administrative machinery. The surge operations need to immediately be followed by developmental programs and the creation of employment opportunities for the local populace which would bring about economic prosperity in the region and hinder any possible future extremist infusion and propogation of extremist ideologies.

In a seprate study we have calculated the quantum of resources and budgets needed (including the force levels for the counter-insurgency grid in LWE affected districts), and the capacity building and timelines that it would entail. Suffice here is to say that this would require a minimum of five year plan to just create the required resources and capcity building, and that the resources needed are large scale.

Winning the Game – Creation of a Counter-Narrative for Changing the ‘RULES of the GAME’

Owing to the current nature of law and order management in the Indian state being pre-dominantly an incident response system, the administrative machinery and law enforcement agencies typically focus more on the zones affected by violent forms of extremism.  While certainly effective to some extent, this may not be the most appropriate manner in which to eliminate the extremist movement in its entirety. In order to avoid a possible revival of the movement, the support bases need to be dismantled, as these will otherwise remain fertile grounds for germination of the underlying protest movement of the insurgency.

A community welfare based approach, especially in the peripheral zones, counters the predominant one that has been propounded by the extremists in LWE affected regions – that of State apathy and indifference. The creation, adoption and implementation of a   counter narrative in the affected and surrounding areas would be best experienced through governmental initiatives that facilitate economic prosperity and development.

Case of Northern Ireland

The outside-in devlopmental approach tends to change the Rules of the Sequential Game. It invades, weakens and breaks the support base for the extremist movement, destabilising their hold on the population. It will encourage the groups within the local communities to gradually align themselves and their resources with economic growth and development, which in turn assists the State in its counterinsurgency operations and in quelling any future onset of extremism in the area.

The British counterinsurgency experience in the Northern Ireland insurgency (as also the Greyhounds’ example in Andhra Pradesh state) is a worthy example in the study of the effectiveness of adopting a counter narrative approach to defeat the extremist movement. Through a revamp of their operational tactics from a full-fledged military onslaught to an inclusive community based approach, United Kingdom achieved greater success in margenalising the Northern Ireland secessionist movement propounded by the Provisional Irish Republic Army (IRA).

Conclusion

The tackling of LWE mandates a multifarious approach, focussing on development and security related interventions. The Politicain’s role remains the key. It is the Politician that can set the agenda for the governance and developmental angle to be the pre-dominant form of counter insurgency. This would need to delve into a host of forces at play (in the Game), inter alia, unemployment, poverty, land acquisition, forced displacement, distress migration, propaganda etc. Security related intervention will encompass police organisational structures, equipment, specialised knowledge of terrain, intelligence and a host of other measures for community oriented policing. In pursuing these twin approaches, we need to change the underlying drivers of the insurgency, i.e the Rules of the Game; use of game theory based modeling and maangment can shed light on underlying dynamics and sharpen the decisions, which can be a game changer in tackling LWE.

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– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

The strategic importance of Iran’s Chabahar port is as a viable alternative land route to Afghanistan bypassing Pakistan. However, more significant is its potential as a new trade route to Central Asia’s minerals and markets of Afghanistan, Turkmenistan, Uzbekistan, Kazakhstan and other Central Asian countries east of the Caspian Sea.
(The article first appeared on South Asia Monitor China sniffs around Chabahar: Will India get its act right? ). 

Recent news of China’s offer to Iran to upgrade the Chabahar port on the Persian  Gulf (72 km west of Gwadar port in Pakistan that is also formally under Chinese control), has once again stepped up pressure on the Indian government to act quickly and decisively in investing in Chabahar.

Several other reasons, besides countering Chinese dominance, have been cited: inter alia access to Afghanistan bypassing Pakistan, role in ending Iranian isolation and facilitating US-Iran rapprochement.

However, this article argues that knee jerk reactions to disparate geo-strategic events and rhetoric are not fruitful in this case. Utility of a port is as good as the logistic linkages that connect it to major areas of influence, markets and investment destinations, infrastructure in and from the port, and most importantly, a clear strategy on how connecting areas are to be used.

And in this context the Indian establishment is making the same mistakes with idea of Chabahar that it has repeated over and over again in the region – lack of a long term geo-strategic plan. The question is not whether India needs to invest in Chabahar or not, the geo-political and energy security stakes for not upgrading are too high. What needs to be asked is the purpose of this exercise, and work backwards for formulating decisions on developing infrastructure, engagement with stakeholders and addressing challenges that exist.

Without a clear plan on how and for what Chabahar is to be used the idea will fall into oblivion like many of India’s other initiatives, including the International North South Trade Corridor (that begins from Bandar Abbas port in Iran and via three separate routes connects to Europe)

Challenges to developing Chabahar Port

Significant challenges exist on the side of all stakeholders, which have to be systematically addressed as part of the broad strategy of developing Chabahar.

Feasibility of Logistical linkages

Despite its strategic location as an invaluable access point not only to Afghanistan, but also to Central Asia, Russia and Europe there is no evidence that traffic has actually increased in Chabahar, or significant investments pumped in. This has raised questions about the logistical linkages from and to Chabahar, including quality of connecting road and rail links, ease of traffic movement, toll and border custom structures and support infrastructure.

Most major road routes at the moment run from Chabahar to northern Iran close to the Afghanistan border and then enter Afghanistan (through either Zaranj in south western Afghanistan and then connect to Highway A77 to Kabul and Qandahar or through north western Herat province), Uzbekistan (via Afghanistan’s Herat province to Tashkent) and Tajikistan (via Turkmenistan). Several alignments on these roads are disjointed and not wide enough to allow movement of big trucks and trailers. Around major cities like Mashhad (north eastern Iran) and Zahedan (east Iran) , significant improvements have taken place, however overall quality of roads requires major investments. In addition, three major rail routes have been proposed in the area that will connect to Herat, network links from Bandar-Abbas and to Central Asian countries.

Two hurdles arise in this regard:

From the Iranian quarter, the most important challenge exists in their ability to complete proposed rail and road links and upgrade infrastructure in the region, given the paucity of financial investments, due to US and EU imposed sanctions.

Second,  no clear mapping of logistical and security challenges has been done on the ground on the route connecting to Afghanistan and Central Asia, including the reign of local ‘warlords’ in the region, crime, extortion and militancy.

The curious challenge of Afghanistan

Notwithstanding multiplicity of intentions, Afghanistan remains central to India’s lean towards Chabahar and is a key stakeholder for development of all proposed connecting infrastructure.

In this regard, another significant challenge to the development of Chabahar, lies in strong ‘alternate power centers’ that exist within the Afghan establishment and have a stake in ensuring that the route through Pakistan’s Karachi port remains viable.

Second, the uncertain situation in Afghanistan post the withdrawal of US troops also indicates that India must proceed with caution. As much as Indian pro-active involvement is required to stabilize the region, one of the most important reason for developing Chabahar, remains commercial and investment potential. Like the ‘Wait and watch’ attitude of the Chinese in the Aynak (in Logar province) copper mines where almost no mining activity has commenced, even though it was awarded in 2007 and several other infrastructure projects, India needs to see where the balance of power tilts post 2014. Exploitation of rich mineral deposits in north and central Afghanistan, including Hajigak (iron ore mines in Bamiyan, where India’s Iron and Steel Consortium has won mining rights), can only be viable with the support of the Afghan government, whose legitimacy is uncertain at the moment.

Absence of strategic planning by India

The last challenge for India centres on an absence of strategic planning on how Afghanistan and Central Asian markets and investment opportunities are to be tapped. Separate plans will have to be drawn out for strategic purpose of both International North South Trade Corridor and Chabahar and logistic linkages, since India has emerged as a prime player in both these initiatives. The plan is to use Bandar Abbas as a gateway to economic relations with larger Commonwealth of Independent States and Europe and Chabahar for Afghanistan and Central Asia. However, little planning has been done on capitalization of trade and investment opportunities, barriers that exist and political negotiation strategy in these countries.

A blueprint also needs to be made about how the US establishment will be tackled over proposed massive investments by India into the Iranian infrastructure. And here India has the potential to play a strategic game – a) by reducing US’s dependence on Pakistan for supply routes, and b) creating ‘economic stakes’ for Iran to be drawn out of isolation and integrated with transnational commercial activities.

Balancing out the Odds

Notwithstanding the challenges to development of Chabahar port and logistic linkages that have been highlighted above, the aim of this piece is not to question the Indian decision to invest in Chabahar, but rather to suggest steps that can help make an informed decision. Strategically, development of Chabahar can be a ‘Game Changer’ for all those involved:

For India, it can give access to new markets and investment opportunities, securing the hydrocarbon supplies. For Iran, it will inject much needed resources into the economy – whether in the form of cash or creation of infrastructure and help the regime in integrating with the global commercial activities. For Afghanistan, access to an alternative warm water port can help reduce dependence on Pakistan’s Karachi port and give a boost to investments in the country.

And for the US, an alternative logistics route can open up that bypasses Pakistan, thus reducing dependence of US and NATO forces on Pakistani establishment. In addition, the trade and transport movement that this will unleash has the power to create ‘economic stakes of stability’ for Iran.

However, certain operational, logistical and security related questions will determine ‘How, When and in what way’ should these investments be made by India. A Four-Step Approach is proposed:

Step 1: On-ground visits and surveys must be undertaken on priority to understand the operational, logistical and security feasibility of the port and which logistic linkages should be developed. Combining sophisticated technology tools like Geographic Information System, Intelligence and Risk Management Systems etc with pro-active ‘on-ground’ intelligence can help in determining the nature and timing of investments.

Step 2: A Return on Investment must be calculated for investments in Chabahar – centering on geo-political stability and energy security on the one hand, but also trade and investment feasibility.  For this, India must get right its strategic vision for the region, including its export and investment model in Afghanistan and Central Asia, access to hydrocarbon resources and how a network of pipelines, roadways and railways can help further its vision.

Step 3: It is necessary to understanding all relevant stakeholders, their motivations and especially where the balance of power is likely to tilt in Afghanistan.

Step 4: Formulation of a strategy to negotiate with the US and other Western powers. The biggest challenge for engaging with Iran remains the US intolerance of any country engaging in commercial relations with Iran. India has rightly played the card of access to Afghanistan as the sine-qua-non of their interest in Chabahar to get a US bye-in. The Indian diplomacy will have to work overtime to ensure more such strategic initiatives.

Conclusion:

Development of Chabahar and its logistic linkages presents a unique opportunity to India to strengthen its geo-strategic hold in Afghanistan, Iran and Central Asia, to secure its supplies of energy, to boost trade and investment and play a counter to Pakistan and China. However, the capitalization of this potential will require careful planning – strategic, operational and commercial.

In addition, the ground level operational questions will have to be in the framework of India’s broad strategic vision in the region: Trade and Investment, Geo-political and Energy security and Ripple effect for creation of additional infrastructure – pipelines, highways and railways.

 

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  •  The New Companies Bill makes it mandatory for companies to earmark atleast 2 percent of their average net profits for the preceding three financial years, for implementing a Corporate social responsibility (CSR) strategy.
  • The bill is applicable to companies with a net worth of Rs. 500 crore or more, a turnover of Rs 1,000 crore or more and a net profit of Rs 5 crore or more during any financial year.
  • Thus the bill makes it compulsory to not just earmark the funds but also form a CSR committee (of board members consisting 3 or more directors out of which atleast one is an independent director), formulate a CSR policy , allocate the amount to different activities and monitor the implementation from time to time. Further, the CSR policy is to be disclosed on the company website.
  • With regard to implementation, only project based investments, and not mere donations, will be accepted as CSR which involve innovative social inventions/initiatives that factor in hazards, risks and vulnerabilities. Baselines surveys, social impact assessment and meticulous evaluation including documentation is mandatory along with training and re orientation of the staff.
  • The CSR amount unused/unlapsed in a particular year will be carried forward to the following year. CSR budget itself hence is non lapsable.
  • With regard to failure to spend the requisite amount, the bill states that the company shall have to provide sufficient reasons for not spending the allocated CSR budget. While no specific penalties are contemplated in the Bill with respect to CSR, sections 450 and 451, provide for general penalties for flouting the rules and repeat offences.
  • An estimated 2,500 companies fall into this “mandatory” CSR-reporting category.
  • CSR activities in the first year would be between Rs. 9,000 crore and Rs. 10,000 crore spent in social welfare.

Implications for the Companies

The new bill has two important provisions with regard to CSR. The first is that the board is mandated to ensure that the company will spend on the CSR.

Second being that they have to give an explanation regarding the spending. So, effectively although there is no mandatory obligation on the company, but a responsibility is cast upon the board members.An explanation that is unsatisfactory can empower the regulator to question the roles and duties of the directors making it not just a provision on paper but an obligation on the board, which they may not be able to get away from easily.

The idea has also been to make the spending transparent and more than just ad hoc philanthropy. By mandating a CSR team, with 3 directors including one Independent Director, a CSR strategy, ensuring implementation and monitoring of results are all in the direction of pushing companies to develop a management level approach by targeting operational risk mitigation through CSR, as an effective tool. They may be further propelled to understand ground realities, leading to an amalgamation of stakeholder interests with the company’s long term goals. This will be an optimal concept, enhancing welfare of all the concerned entities.

CSR Strategy
Central Tenets of a CSR Strategy

Challenges Ahead

  • The first and most important challenge is that of political pressure by local politicians especially for PSU’s to spend in their constituencies. The mandatory spending and the essential baseline suveys along with social impact assessment will lose its meaning if the initiatives cant be directed in areas which need them the most with regard to mitigation of operating risks.
  • Another concern is that a mandatory spending is nothing but tax. Hence, mandatory CSR increases the country’s already high corporate tax, implicitly. It stands at 32.5% which itself is higher than the global average of 24.09 %. The figure for other countries, China, Vietnam and Indonasia stand at 25%. Thailand and Turkey are at 20%, South Africa 28% and Nigeria at 30%. Increase in the corporate tax may hamper the country’s ranking as an investment destination, leaving India at a competitive disadvantage in the global marketplace.
  • An added issue is the monetization of the Returns on Investment (ROI) for the company’s initiatives. This is because CSR based initiatives may have a huge gestation period and so calculating returns on investments like scholarships for deprived sections or benefit to the environment by adoption of cleaner fuels etc. may be lengthy propositions.
  • Companies may be forced to do some reshuffling within the organization which could lead to diversion of its manpower away from the core activities. Because of lack of expertise, this will further pave way for CSR consulting in huge proportions. Hence, the process of empanelment of expert agencies into the CSR framework of an organization, must be eased.
  • Finally, though the Companies bill is a great step forward, efforts must be made to clear the haze around the kind of activities that may be taken up by companies under CSR to prevent the initiative from getting mired by emergence of corruption with companies trying to ‘greenwash’ their profitable activities under the garb of CSR.
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– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

Owing to its unique geo- climatic conditions, India’s has high vulnerabilities posed by national disasters such as floods, droughts, cyclones, earthquakes and landslides. According to a Ministry of Home Affairs report, about 60 % of the landmass in India is prone to earthquakes, 12 % is prone to floods; about 8% of the total area is prone to cyclones.

Large scale disasters typically warrant two stages of response. An initial stage of information collation which enables emergence of an accurate picture, on the scale and geographic spread of the disaster. Thereafter, the stage of critical co-ordination between various state/private agencies, to provide rescue and relief.  Building blocks for the needed technology architecture is depicted in the picture below.

Disaster Management

Overcoming Opaqueness

Studies have shown that in most disasters a bulk of relief material and response capabilities invariably reside within or near the disaster zone, however, invariably reaches the victims with a time lag. Reason is that the opaqueness induced by  disaster is overwhelming, almost like the ‘Fog of War’ experienced during intense military operations. Lots of information and data exists but is unearthed only with time, by which time an earthquake ( for example)  has resulted in large scale fires and then may easily mutate into an epidemic due to shortage of clean drinking water.  Break down of law and order and attendant crimes may further delay the emergence of an accurate assessment of the disaster.

Hence, given the certainty in paucity of accurate information post disaster, the rapid creation of robust communication grids, and command and control network remains the existential challenge post a disaster. Core of such a structure needs to be an integrated net centric platform for operations planning, sourcing collective intelligence/ data, contingency planning, managing the deployment and redeployment of rescue, relief and rehabilitation, to enable a faster and efficient response to disasters.

In this context, Social Media is a versatile mean for information exchange.  Take the case of Uttarakhand floods. Many Facebook pages  became a crucial source of information. Even Twitter proved to be pretty helpful as the hashtags like #UttarakhandHelp were on the top of the trending topic list. It is also estimated that Rs 18 Crore was collected through online medium towards Prime Minister’s relief fund for Uttarakhand disaster relief, based on efforts over social media.

Most importantly, social media creates an adhoc community of ‘first responders’ who initiate and spread information and awareness, that mitigates loss of life and property. Their response is not restricted by knowledge of distress frequencies on HF /VHF or by government telephone/fax numbers.  An instant “ Stranded at Balaipur in front of State Bank building.Water gushing. Grim chances”, is enough for any twitter follower or FB friend to get into the rescue act or reach out to emergency services.

Situational Awareness

During the Thailand floods of 2011, social media had surpassed every other means of communication as a source of information. The floods were perhaps the country’s worst disasters, wherein flooding which commenced in July, lasted until December. Over 13 million people were impacted, with more than 800 deaths, with an estimate of $45 billion in terms of economic damage. As per the study titled ‘Role of Twitter during a natural disaster: Case study of 2011 Thai Flood’ , the tweets of Thai flood were classified into 5 categories:

  • Situational Announcements/ Alerts: Tweets about up-to-date situational and location-based information related to the flood such as water levels, traffic conditions and road conditions in certain areas
  • Support Announcements: Tweets about free parking availability, free emergency survival kits distribution and free consulting services for home repair, etc.
  • Requests for Assistance: Tweets requesting rescue and any types of aid; such as food, water, medical supplies, volunteers or transportation.
  • Requests for Information: Tweets including general inquiries related to the flood and flood relief such as inquiries for telephone numbers of relevant authorities, regarding the current situation in specific locations and about flood damage compensation.
  • Other: Tweets including all other messages, such as comments, complaints and opinions.

Orkash Technology

Snapshot of ORKASH Technology

Indeed, social media is rapidly evolving due to collaboration between technology and human behaviour. Virtual associations, information sharing and grass-roots rendezvous are empowering individuals during disasters, aiding rescue and relief in an unexpected manner.

Hurricane Sandy which struck the east coast of US in end October 2012, was one of the most voilent natural disasters to strike the North American continent.  Prior and during this mega Hurricane, nicknamed “Superstorm Sandy” , Twitter and Facebook were used extensively by individuals, agencies and utility companies,  to relay information, share evacuation advisories and provide updates on the storm.

Mobilising Public Resources

Even before Hurricane Sandy, New York city’s social media presence attracted 3 million followers across more than 300 city accounts on Facebook, Twitter, Tumblr etc. In addition to managing NYC.gov, the city maintains numerous channels, including Facebook pages, Flickr, Google+, Tumblr, Twitter (in both English and Spanish) and YouTube. Right through the response and recovery phases of Sandy, these platforms provided the city with the means to share information in various formats, thus proving that henceforth social media would be a crucial cog in any disaster management initiative.

Inevitably, social media also became a source for rumours. Information was verified and rumours were dispelled via a variety of tools. As a case in point, when false reports and images began circulating of New York Stock Exchange being under three feet of water, first responder agencies such as the New York City Fire Department posted messages on Twitter and other social media sites to correct misinformation.

Hurricane Sandy

As per data derived from the website www.emergencymgmt.com, the Red Cross pulled more than 2 million posts for review during Hurricane Sandy, choosing specific keyword searches relevant to Red Cross services, such as shelter and emotional support. Thirty-one digital volunteers responded to 2,386 of the reviewed posts. About 229 posts were sent to mass care teams, and 88 resulted in a change in action on ground operations.

Apps and Open Sourced Applications

The American Red Cross also offered a Hurricane App for both iPhone and Android device users to assist in individual recovery.

In fact, Apps are open sourced solutions are being tailor made for disaster management solutions. On the fully interactive Google map, geographical information related to the flooding submitted by official sources and users is aggregated in location pinpoints. During the Uttarakhand floods, Google launched a ‘Person finder’, a portal, where people could type the name of the missing person and through its immense database, Google did the matching and threw up co-relating results.

Without doubt, the challenges confronting Disaster Management in India can get a fillip with use of technology. However, many of the repetitive shortcomings experienced have been linked to organisational structure and multi agency coordination. Take the hypothetical case of a localised earthquake. Chances are that part of cellular network will survive the disaster and harnessing it in the immediate aftermath of the disaster will remain crucial.  However, mobile telecom towers can always be inducted from neighbouring regions not impacted by the disaster. For this action to take place in an expeditious manner, database/ templates of mobile infrastructure would need to be available on a Command and Control portal. Similarly, the locations of hospitals/nursing homes, including their stock of emergency medicines, can be part of the database.

ORKASH’s Integrated Disaster Management and Command & Control Solution has a Social Media Intelligence Module that greatly improves the efficiency of crises management. The solution encompasses Social Media monitoring and mining to improve the situational awareness of crisis managers and by facilitating the bidirectional communication between the public and the emergency managers.

Use of technology allows the processing of large amounts of data, therefore enabling us to collect unbiased conversations from social media (Twitter, Facebook), broadcast media (radio, TV), mobile technologies and citizens directly. In addition, the exchange of information between citizens and emergency managers, or the facilitation of communication between citizens using the know-how gathered, will allow for a timely and effective actuation of people on site. This could be for purposes like additional data collection, organizing help or simply asking people to stay away from a problem area. Coincidentally, the introduction of new structured communication channels takes load off the traditional command & control centre, thereby reducing overload situations during crises. It also helps various government and non-government agencies involved in the disaster response effort to create rapid and flexible channels of communications and information exchange using Social Media networks.

This solution innovates in technological, sociological, ethical and operational aspects and validates its findings by conducting field exercises with emergency management organizations to leverage the increasingly significant role of new communication media in crisis and disaster management and define guidelines and solutions to encourage and valorise the communication between police/law enforcement/first responders and the public, using social media.

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– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

Social media has become a catalyst for civil mass movements and social unrest across the world. This includes upheaval in Tunisia and Egypt, Iranian election protests, disturbances to law and order across India in response to Delhi gang rape case in December 2012, Anna Hazare anti-corruption movement in India, the 2011 riots in London, etc. The list goes on.

This proliferation of Social media, especially through the ubiquitous mobile phone, coupled with bursting population in urban areas, poses an unprecedented challenge as well as an opportunity for Law Enforcement agencies across the world. Social media provides a powerful communication platform for organising protest and civil unrest; but on the other hand it can give government and police agencies with the means for real time intelligence, and, more importantly, the ability to intimately understand the ‘pulse and mood’ of the people; for example their reason for discontent and the underlying societal stress points of a community group. Social media also has a tremendous potential for creating accountability and governance transparency through ‘virtual’ non-intrusive partnerships between the police and the local communities.

Public Partnership for Policing – Boston Bombing

Take the case of the recent Boston Marathon terror bombing. Unlike the last time the continental United States was attacked, (11 Sep 2001, when social media sites like Facebook and Twitter were not even conceptualized), this time in Boston the social media platforms became a shared public repository for video and photos from the scene, with the people at large, as a result, becoming an active participant in the search for the terror perpetrators.

Consequently, the two plotters became the “target” for the social media communities, and not just a headline in the media. The FBI then decided to release photos of the alternative key suspects that they had identified. It is highly probable that FBI would have held on to the photos a bit longer and not actively engaged the public in the search, if the online narrative on social media was not running so fast and furious. Preemptive release of their photos by the FBI, and due pressure by the demand for instant information in the social media world, forced the terror suspects to move earlier than they had intended, forcing them into a series of mistakes.

In addition, during the three-day lockdown of Boston, over 80,000 people turned to smart phone apps, the Internet, and any available radio listening device to follow along with the Boston Police scanner. Consequently, the most trending hash tag on Twitter was #BostonPoliceScanner. All this resulted in an unparalleled public-police collaboration, as the Police advised most Bostonians to stay indoors, the social media became the medium for the resident communities to coordinate the city-wide lockdown as police went about ‘hunting’ the terror suspects. Residential communities followed instructions of the police and also spread the word on social media. Thus what emerged was a Public Partnership for Policing, underpinned on voluntary and community ownership.

Predictive Intelligence – London Riots

For the Law enforcement agencies, social media analytics can quickly pick up intelligence on high-risk behavior. This was demonstrated during London riots of 2011. After an initial lag, the London Metropolitan Police reportedly used social media data to predict occurrence of riots in specific localities. The algorithm was based on following logic flow. Geographic clusters of mobile phones were identified on a real time basis, using location data provided by Telecom operators. The mobile concentration were indicative of a mob or a crowd assembling at specific location. The cluster was then analyzed to rule out occurrences like a traffic jam or a large party/social gathering which could also result in concentration of mobiles in an area. Thereafter, the inter communication pattern between the mobiles in the concentrated area was studied. For example, within a traffic jam the inter- communication would be very low but high in case of a mob with malicious intent where the mob-leaders were found using twitter to organize the mob.

Once such a trend was identified, the ‘sentiment analysis’ of tweets within this mobile phone cluster helped ascertain use of ‘emotionally enraged or incensed’ language, and determine the ring leaders through identification of key nodes in the communication patterns of the identified mobile phone cluster. Thus, such pattern analysis gave an early warning of potential mob violence and the real-time state of the crowd’s/mob’s state of group psychology. Counter actions in such a scenario can include jamming of mobile phones of key influencers and pre-emptive arrests of the mob leaders, and more informed redeployment of Police resources for pre-emptive incident response.

Nirbhaya Rape Protests, Delhi

The unprecedented protests and social upheaval following the Nirbhaya gang rape in New Delhi, on 16 December 2012, was triggered in a large measure due to social media. As a representative example, Sikha (name changed), 19 years, was at Jantar Mantar monument on December 25 protesting against Nirbhaya’s brutal rape when Delhi Police swooped down, rounded her up along with other agitators and took them to the Parliament Street police station. Sikha fired tweet after tweet even as she was bundled into a police van. She went on broadcasting to the world all that was happening around her. “Illegally being held here at Parliament St Police Station Delhi w/ 15 other women. Terrified, pls RT,” she tweeted. It worked. In a flash, more than 1,700 people retweeted her SOS tweet. Social media analytics indicate that the message reached over two hundred thousand people and resulted in a sympathy wave leading to even greater protestors’ crowds.

As the protests escalated across the country, water cannons, baton charges, and tear gas were quick to be deployed on the streets, especially in New Delhi. In hindsight, pre-emptive intelligence picked up from social media could have helped mitigate or prevent such a volatile outcome. Most importantly, the sentiments and opinionsbeing expressed on social media could have provided the police with insights intoemotional and psychological stress points driving the protestors – the most importantfactor that the police agencies need to know to prevent escalation of the violence and to de-escalate such a situation.

Orkash Technology

The above screenshot of ORKASH Socia Media Intelligence Platform identifies  the geographic clusters of tweets when Nirbhaya rape case protests were in progress in Delhi in December 12. Further, this technology enables detailed automated analysis of the sentiments and behavioral aspects of the tweet contents, which indicated build up of resentment and fury in the protesting crowds, giving timely indication of the transformation of some segments of the crowd into a mob, and their psychological state.

This kind of analytics and data mining of social media feeds, however, requires a complex architiecture of unstructured-data mining tools, hardware and services, (and policy controls) in the form of a Social Media Intelligence platform because of the large amounts of data to be analysed in real time. This also needs a Data Sciences approach to sentiment and behavioral analysis of the comments and traffic patterns, and temporal analysis about anticipated events. None of these are easy or readily available technologies in the current state of things!

Community Engagement for Law and Order

A recent research report has established that nearly 45% of the 100 million plus Indian web users, most of them from urban areas, connect on social media to discuss politics and social issues. Only Arab countries scored higher than India on this account. Thus, any and every Indian state agency that is a stakeholder in the Law and Order domain will need to build up expertise on analyzing social media inputs, for this is an excellent platform for listening to community and public voices. As in other countries, it is a fact that urban India resides in high density pockets. These are invariably social or ethnic clusters in large cities, underpinned further by religious/regional/linguistic/community identities.

The young population in lower-income pockets of large cities are often defined by squalor and depravity of ‘urban ghettos’, and are forced to reconcile their dreams with their economic and social reality, which often makes them susceptible to crime, drugs, radicalization and even terrorism. The RWA’s (Resident Welfare Associations) or local community leaders in such pockets are an ideal channel for the Police to tap into, and grasp, the human angle context to crime and its prevention dynamics. However, such community policing is through traditional physical interface due to perceptions of intrusion or trust. In such situations, social media accords an ideal forum for the Police to engage with the ‘Mohalla’ or local community populace without an ‘intrusive’ forward presence. This has been done fairly successfully by the Police in UK in its policing programs for vulnerable community groups.

Various police forces across the world have set up a social media monitoring facilities. These “Social Media Labs” monitor the likes of Facebook, Twitter, Google+ and other prominent social media platforms to measure changes in mass moods and track matters concerning public law and order. Police teams across the globe are also keeping a vigil on widely discussed and trending topics, in order to tie social media and criminality together. The NYPD (New York Police Department) has a program to mine social media for information about “troublesome house parties, gang showdowns and other potential mayhem”, and so has Mumbai Police recently created a Social Media lab.

Future Challenges & Opportunities

The perennial challenge for any Police department is that the amount of data covered by social media posts, updates, and tweets, will be next to impossible to monitor using traditional technology. This requires large scale infrastructure and Big Data scale of mining and analytics for textual unstructured data alongwith automated cognitive and temporal analysis. ORKASH (www.orkash.com), alongwith the likes of IBM (the Watson project), is amongst a handful of companies worldwide with the technology to do so. Of course, the inevitable dilemma surrounds the issue of privacy. Without a warrant, what information should law enforcement be able to access? Where is the line to be drawn insofar as digital intrusion is concerned? In potentially life-threatening situations, should social networking sites provide information and personal details? Though such questions may remain unanswered in the near future, the peril would be greater if they remain unasked.

Police forces have regularly received a “shot fired” message via Twitter and suspicious person reports on Facebook. Additionally, in large scale disasters scenarios, e.g. earthquakes or large terror strike, Social Media can be used for seeking and arriving at ‘situational awareness’ and optimising the incident response efforts of emergency services in the rapidly changing and confusing scenario of a disaster. More about this in our next blog post.

In conclusion, in a manner similar to beat-patrols, the Police forces will need to patrol the virtual world of social media. Be it for ‘connecting’ with the people, community-police partnerships, demonstrating presence, picking up incidental information or analyzing the conversations for pre-emptive intelligence, social media accords an unprecedented opportunity.

The accompanying snapshots illustrate the Social Media Intelligence solution developed by ORKASH Labs. They can be customized for specific Policing requirements.

Assam Roits Final

This snapshot depicts network linkages generated form ORKASH’s Social Media Intelligence platform. The graph above reveals linkages between various twitter handles commenting on the Assam riots and the User IDs (blurred out) involved in spreading rumors and   provocative  content targeted at  one particular community in cities like Bangalore and Pune, which then led to exodus of people of North-eastern origin from these cities. Font size of the handle indicates its significance in terms of influence. 

 

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by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

ORKASH’s operational risk management work for greenfield industrial projects represents over 40 man years of primary source research and field work covering the entire life-cycle of  projects from pre-feasibility stage to post production.

Our  findings from these assignments show a strong evidence that  well planned and systematically designed corporate social responsibility / sustainability  strategies can act as powerful risk mitigation means, particularly in sectors such as mining, oil & gas, infrastructure, power, manufacturing, etc. Projects in these sectors tend to have  a large impact area footprint and project affected population (PAP). It is important to note that due to delicate socio-economic dynamics of ethnic, rural, tribal and marginalized indigenous communities, such projects in majority of cases tend to be extremely intrusive on the local communities and the local environment. Such local communities invariably have a high reliance on  land, forests,  and local resources (such as water), both economically as well as for the foundation of the social structure of the community. The rate of rejection of large projects by local communities is therefore high.

ORKASH Labs has extensively used CSR activities for risk management for large greenfield projects, particularly where the project affected communities consisted of tribal and rural agrarian populations. By using CSR as means for sustainable socio-economic development of local communities, and by making these communities empowered stakeholders in  such development, ORKASH has evolved a robust methodology for mitigating project risk and at the same time enabling sustainable development at the grass-root level beyond the Projects in question. This is in strong contrast to the prevalent approach where CSR activities are still viewed as ‘philanthropic acts’ or attempts to garner general goodwill in society by corporates. In the latter approach, we find that even when a few companies, poised against socio-political and socio-economic risks for their projects,  have attempted to use CSR as a risk mitigation measure, their rate of failure and rejection from the affected communities has been  high.

The research findings as represented in this paper have emerged from numerous projects undertaken by ORKASH team members as part of our consulting assignments, and  provide a framework for evaluating and designing CSR strategies to be used as a strategic risk mitigation tool for large industrial greenfield projects. We identify the key components for devising CSR based risk controls, and a set of key risk indicators based on the extensive field research and experience of consultation on a fairly large number of such projects in India and south Asia.

This risk mitigation/management approach entails a careful selection of CSR initiatives, management of stakeholders, a well designed strategic communication plan, as well as monitoring and feedback mechanisms to identify possible risk triggers in the local community and the local environment. Further, the timing of investment in CSR is a crucial determinant of the success of the overall strategy for project related risk management.

This paper also provides a 5 point framework for evaluation of CSR based risk controls in order to mitigate socio-political and socio-economic risk exposure of greenfield projects in  sectors such as mining, oil & gas, infrastructure, power, manufacturing, etc. We find strong evidence to support the argument  for a bottom up approach to CSR strategies. At the outset, two kinds of risks have been identified, one originating from the companies own operations (i.e. the project), and those originating from the location (i.e. the locational risks originating for such diverse factors as terrain/geography, local demographics, social and cultural dynamics, security factors, interplay of various influences and local and external stakeholders, etc.).  The second part of this paper provides a set of practical tips to support corporate decisions on timing of investment in CSR, nature of CSR activities and scale of CSR intervention. Finally, it is argued that a set of triggers, various stakeholders and Key Risk Indicators should be monitored in order to pre-empt risks and take corrective measures.

Mapping the Risks

Operational risks for any large industrial or extractive sector project may be divided in two categories – i) risks originating from companies operations, and ii) location specific risks that arise either due to geographical, demographic, social/cultural, economic, or political factors existing in the location.

 

RoadblocksMegaGreenfieldIndustrialProjects

Social Risk Manifestation – The Stalled Projects

Risks originating from companies’ own operations Each entity, be it an individual or a company, causes certain degree of impact  to the society and the environment in which it functions. Socio-political and socio-economic risks often originate as a direct consequence of the companies operational requirements. Land acquisition, for example, is one of the biggest hurdles for large Greenfield projects in countries like India. A large number of  private industrial projects had either been abandoned or stalled due to failed attempts of land acquisition in India (Kakani et. al. 2008[1]). Similarly, depletion of ground water is a major issue for companies having water intensive production process. Risks arising due to the Business activity could include:

  • Land Acquisition, Displacements (Relocation & Rehabilitation)
  • Depletion of shared resources (water, grazing land, forest resources etc)
  • Environmental concerns, pollution and health concerns emerging as a consequence of pollution.
  • Intrusion due to migrant labour
  • Cultural and Political stresses

Locational Risks Certain risks, specific to the project location, which may often be seen as external to the company, can significantly impact its operations and perceptions. In a water scarcity region for example, depletion of shared water resources are likely to become a much bigger threat and a cause for inter community stress and community vs company stress than it would be in other places. Likewise, mining or blasting in a landslide prone region, or employing migrant labour in an area with high unemployment rate, become bigger existential risks for the company, not necessarily because the company operates unethically or violates any norms, but because the location itself offers pre-existing stress points. In emerging markets especially, many other locational risks could exist like internal conflicts or extremist movements, resource constraints, excessive social and economic disparities etc. Thus such potential risks need to be understood and factored in, before designing the CSR strategies. A few of them are discussed below:

  • Economic vulnerability and lack of social security: Emerging economies, like India,  have a  lack of social security. Project affected community groups, which most often consist of indigenous communities at the very bottom of economic and social structures,  are faced with high level of risks resulting from land acquisition, livelihood challenges and  and lack of alternate employability. Thus, ownership of land and access to permanent job opportunities are the only means for a secure livelihood for majority of families in such communities. Any insecurity to this effect easily manifests itself in the form of highly aggressive social behavior, social unrest and opposition to the project.
  • Dynamics in a diverse society: Inter-community, inter-caste and inter-religious dynamics in India/ south Asia are often misunderstood or underestimated. Interestingly, social or political risks may arise from what may appear to be logical, well planned and sound business decisions. In a multi-caste, multi-ethnic society like India, for example, the decision to employ skilled labour could very well mean employing more migrant labour, especially if the plant or mining site is located in a rural or tribal region. This practical business decision is easily be viewed by the indigenous population as a discriminatory one, where more jobs are created for the migrant populations while the natives remain less privileged and unemployed. This risk can be effectively overcome if the CSR activities of the company adopts targeted sustainable development programs to create better livelihood options for the native population. These alongwith leverage of  project related investments in development of local infrastructure and roads etc for ease of dual use by local communities are powerful risk mitigation options. Therefore the CSR strategy must be designed in a manner that it incorporates such factors and level out such imbalances caused due to inter-community interactions and project’s adverse socio-economic impact on local communities.
  • Community Perceptions based on prior experiences: Even if requisite permissions and clearances are obtained and ethical operations are ensured by the company, social risks may continue to exist due to experiential perceptions and vulnerabilities within the local community. The community perceptions in these locations are based on their prior negative experiences, which are not easy to change. Several scholars who studied the impact of industrial development and development induced displacement, have found that large populations became worse off after being displaced due to land acquisition or by sharing community resources with industrial units [Fernandes 2007; Mahapatra 1999; Pandey 1998]. Such instances have a long lasting impact on not only the affected populations but the neighboring areas as well. These locations therefore present a bigger challenge for the company, which, has to not only tackle the actual issue, but also the negative perceptions and notions of the community.
  • Risks created by third party stakeholders and political influences: Paul Brass [Theft of an Idol, 1997] demonstrates the strength of regional political networks and sub-national authoritarian groups within small cities and rural areas, that are capable of manufacturing collective violence even in the absence of pre-existing hatred or discontent. This phenomenon of ‘manufactured riots’ in a top down fashion by political parties or influential groups for their own vested interests, indicates the power that  such ‘stakeholder’ groupings can wield. This was evidently demonstrated in Singur where farmers vehemently opposed the Land acquisition attempts for the Tata Nano Plant. However, soon after the Tata’s announced that they would relocate, a large group of farmers actually admitted that they were misled by politicians [http://timesofindia.indiatimes.com/india/Singur-reversed-Now-farmers-seek-govt-help-to-sell-land/articleshow/5764866.cms]. Managing the political and other third party stakeholders and understanding their motivations is hence critical from a risk management perspective.

RiskIntMonitoringParameters

Risk Monitoring Parameters

CSR activities as a tool for Risk Mitigation

The pertinent question that must be answered here, why is CSR such an important tool for Risk management? But before we attempt to answer this question, we should look at our options deal with socio-political risks. ‘If not CSR, then what?’ If a community refuses to sell their land, share their water resources, or disrupts operations through other forms of forced lockout protests etc, then the available options with the business organisations are actually very few. One option is to rely on state support and police forces, which are neither dependable nor capable of managing such crisis. The failure of both these machineries in handling such disputes is well documented in a number of cases in India. (Singur and Nandigram in West Bengal, Vedanta Aluminium in Lanjigarh, Orissa, Utkal in Kashipur, Orissa are among a few). Moreover, community protests are mostly based on genuine issues, thus use of coercive tactics is not only a violation of human rights and grossly unjustified, but also practically unadvisable since it only aggravates the problem.

Furthermore, government decisions’ rest with the politicians who are in turn elected on the basis of community support. Thus, depending solely on government or police would mean being at the mercy of politicians giving them room to manipulate. Direct support base formed through community intervention is therefore a mutually beneficial and effective mechanism for companies to deal with socio-political risks in the long run. Business strategies for resettlement and rehabilitation have focused largely on financial compensation models which have neither found acceptance nor support of the affected communities. This is primarily because financial compensation given as a onetime payment does not offset the loss of livelihood easily. CSR can provide a solution to such livelihood problems. But, while in theory an emphasis on CSR finds easy acceptance; in practice, most managers are often forced to stand at odds with academicians and activists regarding the scale and extent of investments.

Managers have to perform the challenging task of striking a balance between community interests and business interests of the company. Despite considerable effort in academic literature to establish the reliable relationship between CSR and financial performance, the evidence remains mixed at best [see Chochran and Wood, 1984; Pava and Krausz, 1996]. Where CSR and business interests readily associate, decisions become easy. But wherever they conflict, theory and practice may find it difficult to reconcile, thus leaving the managers to tread a difficult double edged sword. Although it may never be possible to avoid risks entirely, “rational decision-making requires, a clear and quantitative way of expressing risk so that it can be properly weighed, along with all other costs and benefits, in the decision process[Kaplan and Garrick, 1981]. Thus, if we are able to define the risks, controls and triggers appropriately, it would also be possible to quantitatively measure the risks and the effectiveness of CSR controls.

Companies face three key challenges: risk measurement, risk management and embedding risk management within their businesses. Developing key risk indicators, (KRIs), corresponding key control indicators (KCI) and key performance indicators (KPIs) for companies to report risk management performance could help in overcoming these challenges. A few practical guidelines for designing CSR strategies for the purpose of risk mitigation are provided below.

Model for CSR planning and identification of risks (Who should design the strategy?)

Centrally engineered CSR frameworks using a top down approach often result in a total disconnect with the local community and lack a grass root level understanding of the issues.  CSR initiatives must first attempt to minimize and address the damage caused by the companies’ own operations (such as dust management during earth-moving phase of construction, which adversely impacts pollination in crops and therefore no or little agricultural yield in many sq kms around a project site), thereby also minimizing the consequent risks. These risks are unlikely to be common for all of their industrial facilities, thus the key controls that cater to these risks can only be evolved from grass-root field surveys. An overarching strategy that identifies the primary issues, risks, and guidelines on controls may therefore be formulated centrally only to the extent of laying down the management approach and priorities

A centralized strategy is  not able to cater to locational and third party stakeholder risks. Thus, identification of beneficiaries, scale of CSR engagement needed and model for implementation, and communication plan must be specific to a plant or location and should be decided at the local  level. Though, the risk management teams of the company must constantly be aware of the locational risks and vulnerabilities created by third party stakeholders, addressing them directly may not always be viable.  Moreover, third party stakeholder risks are more likely to manifest when issues on account of companies own operation remain unaddressed. Thus if the CSR strategies of the company are able to successfully tackle risks originating from the company’s project (e.g. land acquisition or utilization of local water resources), own products or production process, the other risks may automatically become latent. Evolving Sustainable CSR Models

Choosing a balanced set of activities:

The overall CSR strategy should ideally be balanced on two dimensions – internal and external balance, and long term vs. short term balance.

a. Internal and External Balance: Internal CSR encompasses management of internal stakeholders like work safety and health concerns of employees, adapting to changing environment, dealership schemes and benefits; as well as management of impact on environment through internal measures like treatment of toxic wastes, reduction of dependence on shared resources etc. External aspects of CSR would involve initiatives with the local communities, government, business partners and other stakeholders. StakeholderAnalysis Three kinds of CSR activities have been identified, these include ‘community involvement’, ‘socially responsible production processes’ and socially responsible employee relations’ (Moon 2002)[2]. The overall CSR strategy must attempt to integrate components of all the three.

b. Balance between Sustainable Development activities and General Goodwill initiatives The overall CSR strategy must attempt to balance long term and short term initiatives. Some companies spend enormously on events, donations and advertisements that are meant to generate goodwill in society. They are however, often get rejected as PR or advertising gimmicks by the community since no positive impact is seen on ground. The actual benefit to each individual remains significantly low. On the contrary, companies that undertake long term initiatives are often get restricted to very small number of beneficiaries and are unable to change broader perceptions. Moreover, they often find that community expectations keep rising, and the company does not find business sense in meeting such growing expectations. Thus a balanced mix that combines sustainable development initiatives for a certain set of targeted beneficiaries (especially project impacted persons), with general goodwill activities for a larger set of people is considered ideal for mitigating business risks, and building a strong ethical corporate branding. Scopeof OpRiskMgmtActivities

Table 1: Long Term vs Short Term CSR
Sustainable Development Activities General Goodwill activities (Short event based programs)
Public memory is short for long term activities. They are often forgotten or taken for granted. Higher recall value. Regular PR opportunities
Reaches only a limited number of targeted beneficiaries Can reach a much wider number of beneficiaries
Communities get accustomed and begin to demand more. (Escalating Community Expectations[3]) It is often seen as an eye-wash. Does not bring any substantial long term benefit to the community.
Create several opportunities for general goodwill activities as well
Eg: Employment or livelihood based initiatives, housing, education, etc Eg: Health camps, scholarships, awards, donations etc

The choice of sustainable development activities should be made considering two factors:

Nature of impact: The CSR activity should directly address the nature of risk created by their business activity. For example, if the operations of a company affect the water supply of a village, then the CSR activity must provide suitable alternatives for the same. Where as an impact on the livelihood can be offset by targeted CSR strategies that cater to employment generation.  

Scale of Impact: The scale of the impact on project affected persons/community may be measured in terms of number of people impacted and the extent of social and economic impact on each individual (for example negative impact on local water resources can be converted into dollar/rupee cost in terms of agricultural yield impacted). The scale of the CSR activity (as well as alternative livelihood models and opportunities to be created) should be at the least equivalent to offset the negative impact in order to diffuse the risks. Thus, the number of project impacted persons should more or less equate to the number of beneficiaries from the CSR activities and the extent of negative impact should also be offset by extent of benefit through the CSR led sustainable development and alternate livelihood activity. In addition, companies should also seek the engagement of employees, contractors and sub-contractors. As the group, these put company policy into action. Employees in particular have considerable influence over the outcome of CSR effort. Where possible, staff should be given to opportunity to provide input into decisions relating to CSR policies and programs. In addition, companies should clearly communicate the reasons behind CSR effort, including the anticipated benefits from the perspective of the community, the organization and, where applicable, employees themselves. In cases where staff have a clear understanding of the reasons behind CSR policies and programs, and are provided the opportunity to provide input into decision making, they are more likely to apply CSR policy in a diligent manner. They are also more likely to participate actively in specific CSR programs.  

Choosing appropriate CSR models: The effectiveness of CSR is highly dependent on the degree to which it is embedded in the Business Operations of the company. The CSR model is usually chosen on the basis of level of investment and engagement that the company intends to employ. But the model used, is a key determinant in ensuring that the objectives of CSR are actualized on ground at the operational level. A number of CSR models have been tried by companies in India, each having its own pros and cons. Table 2, presented below, gives a short overview of a few of them.

Table 2: Comparative assessment of CSR models
CSR Model Advantages Disadvantages
Direct community engagement programs.
  • Direct interaction between the company and the community.
  • No intermediary.
  • Limited scope for Misinformation
  • No Diversification of Risk
  • Huge manpower/teams needed within the company.
  • Lack of previous community presence could create vulnerabilities and difficulty in dealing with the community.
  • Might conflict with interests of NGO’s and other stakeholders.
  • Have to confront escalating expectations
Partnership with NGO’s
  • Diversification of risks related to CSR projects
  • Field support teams
  • Sound understanding of local dynamics
  • Previous community presence may be advantageous.
  • Credit sharing. Often complete credit gets transferred to the NGO’s
  • Not much direct interaction with the community unless conscious effort is made
  • Association with the NGO implies image branding of the company by way of association
Village Self Help Groups or Community based Cooperatives
  • Can become self sustaining democratic units
  • Can cater to ‘Escalating Community Expectations’ by encouraging a sense of ownership within the community.
  • Require good amount of training and honing of skills.
  • Gestation lags of the CSR Project could be longer.
  • There may be a lack of persons with entrepreneurial abilities within the community.
Facilitation and tie ups with Government Welfare Schemes
  • Lesser investments may be needed
  • Bureaucratic set up is slow and less efficient.
  • Greater chances of corruption
  • Monitoring and evaluation may not be under corporate control.
  • Not necessarily accepted as a corporate initiative.

Timing of Investments

Socio-political risks inevitably originate as issues amongst the project impacted communities. These are then ‘liberally’ leveraged by various stakeholders, including vested interests, resulting in a ‘fog’ surrounding genuine issues and the exploitive forces (such as the local land mafia-politico nexus) at play.

Identification of the triggers and timely investment could prevent them from escalating beyond manageable limits. A simple rule may be formulated in this regard. “Investment in CSR should precede actualisation of the risk”. There is usually a time-lag between the emergence (in latent form) and escalation (actualisation) of risks. Duration of this time lag depends on a number of factors like political activity, severity of the issue and nature of risk.

Risks related to land acquisition for example would escalate a lot earlier and faster (e.g. a project invariably results in rapid escalation of land prices) than those connected with shared resources. Investments made prior to the establishment of the manufacturing plant are likely to act as much better confidence building measures, and thus limit the scope for exploitation at the hands of the politicians or activist groups. Moreover, direct interaction of the company with the affected communities helps eliminate the spread of misinformation. Though many businesses may argue that investment in CSR before the project Breaks Even is against the interest of their shareholders; a strong counter argument can be built against it, considering their long term interests. Many projects that fizzle out due to social risks, in fact lead to much greater losses for their shareholders. Strategic use of CSR may prevent such a situation, thus in high risk projects, there is substantial justification for an early investment in CSR. Similarly, large multi-national companies, capable of making early investments in CSR without much strain on the corporate resources, must attempt to do so, especially because multinational companies are always easier symbolic targets by virtue of being well known brands. Furthermore, if community issues relate to the livelihood or sustenance, the consequent socio-political risks are significantly high. Thus investments must be made with a proportionate sense of urgency. A large number of companies wait until their business operations begin, or at times until they break-even, before any they make any substantial investments in CSR activities. For projects with lower risks, this may be admissible. But for high risk projects this delay could be fatal since it inevitably leads to skepticism and insecurity in the community which is further fueled by activist groups as well as local politicians.

Risk = [Threat (Stakeholders + Issue)] X (Vulnerability)[Kytle and Ruggie, 2005]

Risk can be viewed as a function of the ‘inherent vulnerability’, and the ‘Threat’ emerging from the community (Kytle and Ruggie 2005). When the vulnerability of the company is low, it would have a higher propensity to deal with external threats thus the overall consequent risk would be low. Table 3, provided below, enlists the different stages of a business cycle and a CSR cycle respectively.

Table 3: Seven stages of Business cycle and CSR cycle
Business Project Stages: CSR Project stages:
  • Project Conception and planning
  • Feasibility studies and Risk Assessment for the Business.
  • Preliminary engagement with the community and identification of local stakeholders.
  • Construction and establishment of the Business Unit.
  • Operations
  • Project breaks even/ sustained profits.
  • Monitoring and Evaluation
  • Development of CSR strategies
  • Feasibility and Risk Assessment for CSR Projects
  • Opening of Communication channels with the community and formulating a support base
  • Commissioning, training and establishment of the CSR project
  • Operations
  • Decommissioning (in case of self sustaining models)
  • Monitoring and Evaluation

The first few stages of planning and feasibility studies involve minimum persons on the field. Thus, the disruption within the community and adjustments are minimal. However, during stage 3 and stage 4 of the business cycle, the number of ‘feet on ground’ increase manifold. At this stage the company identifies local stakeholders and the construction and operations, the projects vulnerability is the highest. This is also the time when massive adjustments have to be made within the community. Thus, threat is also at its highest at this stage of the business cycle. In order to diffuse the risk, the company must have amassed a body of well-wishers within the community before it enters Stage 3 of its project. (Note: Business Stages 3-4 could overlap or have an interchangeable sequence depending on the companies business strategy.) CSR provides a mechanism for amassing this body of well-wishers as well as reducing the threat from the community. Therefore, if the substantial investments in CSR precede stage 3 of the business cycle, the risk could be reduced substantially. The risk equation for risk management can therefore be modified as:

Risk = [Threat (Stakeholders + Issue)] X (Vulnerability)            

——————————————————————–  

                                               CSR Controls

Graph 1 shows the trends of business risk corresponding to the different CSR project stages. During the construction and establishment of the business unit (stage 4 of the business cycle), if CSR projects are already operational (stage 5 of the CSR cycle), then the overall business risk could be reduced from A to B. For a high risk project, this reduction could bring it to a manageable level (Rm) and prevent it from escalating beyond control.

Graph 1:Business Risk corresponding to different stages of the project cycle

Graph1

The pattern and degree of escalation of risks with time would also differ slightly based on the kind of risks. For example, risks associated with depleting water table would peak after the business operations have commenced and its impact is felt by the community. This trend is clearly visible if one looks at the protests against Coca cola in India, where the community reactions began after 2 years of the establishment of the plant on each respective location. For high risk projects, as depicted in Graph 2, the risk is likely to escalate further with time, as third party stakeholders like politicians or media get involved. The original Business cycle (B0) is directly proportional to the associated risks. However, if the CSR strategies are initiated at the initial stages of the project, then it is possible to move from B0 to B1 or B2 depending on how much has been accomplished on account of the CSR initiatives. However, if the investments are made in CSR at a later stage when the risk is already escalated, (as shown by C2) then it would have negligible impact in terms of risk mitigation.

Graph 2: Timing of CSR strategies to reduce Business risks [This graph is hypothesis driven, drawn on the basis of field experiences and analysis of case studies. It needs to be corroborated with statistical and empirical evidence]

Graph2

Communication Strategies

The success of a CSR strategy as a measure for risk mitigation, depends to a very large extent on the manner and timing of engagement with the local community.[6] One critical aspect of a communication plan is the identification of the degree of engagement needed with different stakeholders and its respective timing thereof. Involving stakeholders and the community at large during different stages of the business project, tends to eliminate skepticism and sentiments of alienation. However, circulation of excess information could easily lend itself to misuse and sabotage by individuals or organizations having vested interests. Crisis Communication strategies used by companies during high risk projects, often involve a high level of secrecy and lack of communication. This results in a vacuum which makes it easier to manipulate perceptions and breed insecurity or anger within the community.

Thus, while information security is necessary, communication voids are undesirable. Managers need to identify segments of society that have direct influence viz a viz those wielding indirect or insignificant influence on the community. They also need to understand the motivations and leanings of each entity. Such communication strategies are usually project and location specific. Though certain generic rules may apply, communication plans should largely be based on an in-depth understanding of the different personalities, organizations and their influence patterns within a project area. The communities of interest may broadly be divided among the following categories:

  • Migrant communities
  • Indigenous Communities
  • Village Panchayats
  • District Administration (Collector, Revenue Officer, etc)
  • NGO’s (Developmental orientation, Activist Orientation)
  • Local Politicians
  • Media/ Journalists

Each of these communities may be further divided into subgroups. For example, some NGO’s would have a developmental orientation with greater emphasis on constructive and participatory field projects, while others may be activism oriented with greater emphasis on organizing protests and collective political action. Similarly, among local populations there would be project impacted persons and others. The manner and extent of communication with each entity should ideally be different and an outcome of a planned strategy rather than incidental exchanges. Greater the extent or depth of mapping of influences and motivation, better is the communication plan likely to be. The chart below demonstrates a communication plan of a hypothetical village where the Village Panchayat and Local politicians wield significantly high degree of influence on the locals. The migrant population is small and non-influential and the local government officers have moderate or low influence. Since the influence of the panchayat is high, the degree of engagement with the panchayat is much greater. Moreover, in the initial stages there is minimal engagement with the media and local politicians. The engagement with local politicians is in fact kept low throughout the project cycle, despite their high influence because they are likely to have vested interests and ulterior motives. However, such generalizations may not be accurate, thus it is important to have further detailing of sub-groups and individual personalities.

The chart below provides an indicative template for designing the communication model.

Graph3

Note: Kakani et.al (2008) studied the patterns of communication and community engagement of private companies during land acquisition for projects in India. Their research demonstrates a very strong connect between the communication plan of a company and the success of their project. Companies that engaged with local politicians and middlemen at the planning stage had much lesser success rate than those which engaged with the village communities directly before involving any middlemen. Further, involving the media at the initial stages also tended to increase the risk of failure. While their study was limited to land acquisition, it has much wider implications in understanding the patterns of community engagement. 

Risk Triggers and Key Indicators In its latent form risk could exist for fairly long periods without any hint of activism or protests. Its latency poses a challenge for the company to identify or assess the risks. However, there are a number of indicators and triggers that seem to correspond with sudden escalation of risk from its latent to active form. In the operational risk framework, trigger is normally defined as ‘symptoms and warning signs that indicate whether a risk is becoming a near-certain event and a contingency plan/response plan should be implemented’. A few ‘scale up factors’ that act like propellants in aggravating a crisis, and thus require monitoring as likely triggers, may be identified as follows: ‘Communication void’ in the early stages of the project (Eg: stage 1-2 of the business cycle); involvement and mishandling by police forces; pre or post election activism; high unemployment or sudden increase in unemployment due to migration, seasonal availability of agricultural labour; Water shortages or crop failure due to bad monsoon.

Conclusion: Milton Freedman (1970) argued that the only social responsibility of a Business is to increase its profits.[7] Ironically however, in case of high risk projects, even for generating profits and ensuring business continuity, CSR becomes incredibly important. Moreover, the CSR strategies need to be driven by genuine intent towards the community for them to be effective. A large number of companies still view CSR as a burden or drain on profits. Thus, they retain a minimalistic view of CSR, attempting to minimize their investment or ‘perceived loss of shareholder profits’ through CSR. For a large number of companies CSR is nothing more than a buzzword that must be a part of their boardroom vocabulary and public image. Critics of CSR argue that corporations derive more benefit from their social activities than the community they claim to benefit. Thus corporate philanthropy is often condemned for being driven by ulterior motives. In fact, many companies do tend to be driven purely by their own personal gains while designing CSR strategies. But greater social good and community benefit is not a key driver for many companies. From tax saving, to image building; they derive several benefits to at least project a willingness and favourable attitude towards CSR.

Some mining companies for example, show mandatory rehabilitation and resettlement costs as expenditure on CSR. When a government regulation on land acquisition stipulates the minimum necessary requirements for a rehabilitation policy, it must not and cannot be counted as a Corporate Social Responsibility. Undoubtedly, CSR activities can bring an enormous amount of benefit to the companies in the form of image building, advertising and diffusion of pressure groups. But what is wrong with it being a win-win situation, with the company and the community benefiting equally? A community would hardly ever reject benefits merely because they are also advantageous to another group. The problems arise when companies fail to admit to their own gains and instead try to project CSR as a philanthropic activity rather than a measure for risk mitigation. It is this fallacy that creates skepticism within the community. In many cases the benefits to society are in fact not even sufficient to outweigh the losses caused due to the company’s operations. In such situations, a facade of philanthropy is easily rejected by communities and in fact increases the risks. Moreover, such dichotomies create room for exploitation and manipulation by third party stakeholders like politicians and social activists.

Thus incorporating CSR within the Operational risk framework is an ideal way of devising mutually beneficial solutions for the company as well as society. This paper provides a framework for evaluating and designing such strategies. It identifies the key components for devising CSR controls, and a set of key risk indicators. ORKASH’s further work includes benchmarking, establishing comparable standards as well as devising key performance indicators to quantitatively evaluate the effectiveness CSR as a risk mitigation tool.

 

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– by ORKASH Labs, Copyright: ORKASH Services Pvt Ltd

 Telangana Tweets

There seems to be a quiet but tectonic shift happening in how future election campaigns would be conducted in India. Social media is at the centre of this shift, just as the TV and its local language news channels have emerged as the change catalyst for what issues gather the political storm for the masses in state after state, week after week.

Political parties are beginning to realize the influence of the social media; the recent Gujarat elections saw major use of facebook, twitter and You Tube. Using this medium to understand the issues that influence voters is increasingly significant for the politicians. A recent report published by IRIS and IAMAI highlights the social media trends which are truly unprecedented in political contests.   Facebook, Twitter, Google + and You Tube seem to be the frontrunners in this battle.  There are some compelling statistics and trends that indicate this. Read on…  

With a three or four way vote split in most constituencies, between the two national and at least two regional parties, the victory margins will continue to remain narrow. Mini-swings in vote banks of 3 to 4 % incresgingly decide the winner, and this is where the influence of social media, particularly in urban constituencies where the penetration of social media and Internet is higher, becomes a very significant factor. Reports indicate that 160 out of 543 seats of the Lok Sabha in 2014 general elections will be heavily influenced by social media. These are constituencies where 10% of the voting population uses Facebook, or where the number of Facebook users is higher than the winning candidate’s margin of victory at the last election.

Though Internet penetration in India continues to remain low, it is estimated that out of a population of 1.2 billion, around 150 million people in India are online active users of the various social media and email platforms (71 million Facebook users and 20 million Twitter account holders). Each of these acts as a socio-political influencer on three to five adults on an average.  This makes the size of the social media influence networks to be a minimum of 300 million voters, not a small number at all. Add this figure to the other 25 million NRIs (with voting rights, which don’t get exercised) who remain connected to India mainly through the social media, and exercise major influence in the voting patterns of their relatives and families back in India. Well, the arguments keeps getting stronger, just as the users of social media are rapidly increasing!  What also sets us apart is that the average ‘Argumentative’ Indian (in the words of the Nobel Prize winning Indian economist Amartya Sen) social media user is a prolific commentator on political matters.

The Indian electorate has never been younger.  Between  2004  and  2009,  the  voting  population increased  from  670  million  to  720  million. The number is expected to further increase to 800 million by the time the country goes to the polls. In such a case, a greater number of voters will be of 25 years or younger. This age profile of new voters coincides with those among the population who tend to ‘live and breathe’ social media, accessing it almost every hour of their day, 7 days a week.

With the increase of political campaigns and processes being conducted through SMS campaigns and audio/video campaign through mobiles telephones, it is clear that technology is enabling an unprecedented empowerment and engagement of the ‘aam aadmi’ for expressing political opinions.

It is well known that both the colossal protests of 2012 (Anti corruption movement by Anna Hazare and outrage following Nirbhaya gang rape case) were channelized through the social media.  It is recollected that government machinery in India had come to a standstill and the events garnered immense national and global headlines, and got the common man involved. Such events prognosticate the emergence of what we call the C–governance or citizen led governance in India. Not just the political parties, even the government is beginning to experience the impact of social media.

The accompanying screen shots shows the output of  ORKASH’s social media intelligence and network analytics platform, for the impact of the Telangana movement, which has the potential to snowball onto a political crisis in Andhra Pradesh. It reveals the linkages of Telangana as a topic on social media with political organizations and figures. In a social media visualization format, the pie chart elucidates the user analysis with reflection of top social media influencers on the issue.  In fact, these screen shots only ‘scratch the surface’ of the kind of analysis a social media intelligence platform can do.

In a nutshell, Social media revolution in the Indian political space is real, tangible and accelerating.  More in the next post on this blog.

 Telangana NtwrkGrph

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