How to push the right buttons and transform the nation
The people of Y2Knagar have justifiable scorn for their neighbours in Rickshawnagar. A woman, decked with jewellery, can walk alone at midnight in Y2Knagar without fear, they point out. The economy is growing at 20 per cent annually and the mouse-happy citizens are quick to support this claim by showing you impressive bar charts and pie charts on their computers. And look around, they urge you, can you see any rickshaws here?
But it wasnt always like this, though. Once, not very long ago, Y2Knagar was the fiefdom of Don Mogambo. He had Pandu Hawaldar in his pocket. The streets were deserted after sunset. There was no public transport worth the name. Only Mogambos henchmen, drunk and armed, frequented the night shows in the cinemas. The corporators of Y2Knagar Corporation would siphon off all the funds and, in return, would be invited to the lavish parties at Mogambos sprawling bungalow. The elected representative of Y2Knagar was Gabbar, Mogambos brother and heir-apparent.
I knew that I didnt stand a chance through electoral politics, Murali told me. He had returned from the US after selling two successful Internet start-ups, determined to make a difference. There were too many problems. People vote irrationally, for one. And even if I managed to win, what would I do? Id be a lone voice. No, I wanted to create a model that could work on the smallest of scales and which could be replicated by anyone else. A model that involved the people. Thats what I tried to do in Y2Knagar. What he did was to call a meeting. What he said still echoes in Y2Knagar.
People, said Murali, respond to incentives. Pandu looks the other way while your chain is being snatched because its worth thousand rupees to him. The trick is to give him something thats worth more than a thousand rupees to him.
Hang on, screamed a few voices. Are you saying that we have to give a thousand bucks to every Pandu? Every day? Every week? Every month? This is ridiculous!!
Relax, counselled Murali. Lets do some math. There are 150 policemen in this, our Y2Knagar. Now, we can assume that Mogambo gives each one of these Pandus Rs 1,000 every month. So, its worth Rs 1.5 lakh every month for Mogambo to have the policemen look the other way. But there are 50,000 earning members in Y2Knagar. To match Mogambo, each earning member should give Rs 3 every month, right? But Mogambo will raise his bid. But again, by how much?
We all know that Mogambo has to pay a lot of people, not just the Pandus. Lets say that at the end of it all he makes Rs 1 crore every year. Legally, he should pay a tax of Rs 33 lakh on this. Therefore, it doesnt make sense for him to spend more than Rs 33 lakh to defend his annual income of Rs 1 crore. If he spends more than that, then he is better off paying the tax. So, he can at best spend about Rs 3 lakh more per month in buying off the Pandus. This is a bit simplistic, explained Murali, because if he pays off all the extra Rs 3 lakh every month to the policemen, others in his pay, like the corporation workers, will get upset and demand more. So, he cant give it all to the policemen. But at the same time, if he doesnt pay them, he may not earn his annual income of Rs 1 crore. But for arguments sake, well assume that the policemen are worth about Rs 3 lakh extra every month to Mogambo. So Mogambo can bid up to Rs 3,000 per month for Pandu. Which means that each earning member of Y2Knagar should contribute Rs 9 every month towards the Pandu fund.
We can make it even more difficult for Mogambo. I propose, proposed Murali, that we dont give cash to Pandu and his ilk. Instead, we take care of his childrens schooling. The fees, the books, the uniforms, you know. Also, lets pay for the medicines of his family. Then we use some money to make the thana comfortable for Pandu. Repair it, give it a coat of distemper, put some nice partitions, have a carpet and throw in an air-conditioner, maybe. All this doesnt cost much really. We can use the rest of the money to hold a competition between the various thanas of Y2Knagar. Which area has the best law and order? Who is the best policeman? And we, the people, will decide.
The question is, is it worth Rs 9 every month to you that the streets of Y2Knagar are safe for your wives and daughters? And, by extension, if you include those responsible for the roads and water supply and also those responsible for the electricity, is it worth Rs 50 every month for you to have a model city?
Isnt this the job of the government, inquired a few voices. What else do we pay taxes for?
It doesnt take a rocket scientist to figure out that the government hasnt done anything till now and when last heard, wasnt planning to do anything either, retorted Murali. You can continue to live in these dismal conditions and hope that one day the government will come to your aid. Hope, however, is not a strategy. OK, here is my offer. I understand your reluctance and your cynicism. Since Ive made a pile in the US, Ill put my money where my mouth is. All the 50,000 earning members of Y2Knagar pay just Re 1 every month and Ill foot the rest of the bill.
What do you get, chorused the crowd, immediately suspicious of such altruism. Well, Ill make a deal with you guys. Starting one year from now, if there is any increase in your business, you give me 10 per cent of that increase. Is that a deal?
It evidently was, because soon Pandu was summoned by Mogambo.
Looking the other way would be betraying my neighbours who take care of my children, Pandu asserted morally. Hey, what about the money I give you every month, demanded Mogambo. I bet they cover much more than the fees of your children. True, replied Pandu, but the people are taking care of me for doing the right thing. You take care of me for doing the wrong thing. Besides, Im not scared of being caught while helping you. And yes, I might as well add that last evening I won the award for the second best policeman for the month, which carried a cash prize of Rs 50,000. Thats how much youve paid me in the last four years. And Im not even putting a monetary value to the public ovation I got and the way it made me feel. People respond to incentives, Mogambo, philosophised Pandu. You know it only too well. You gave me the incentive to do your bidding. Now I have a higher incentive for not doing your bidding.
Soon, strange things started happening. Chain-snatching became a lost art. Roads became smooth and well-lit. Taps and bulbs were no longer optional accessories, they id what they were meant to. Word got around that it was a safe and comfortable place. People started investing in Y2Knagar. Factories sprang up. New jobs got created. Salaries went up. People could spend more. New shops opened up. The restaurant industry boomed, along with entertainment. Things got so good that Mogambo decided to visit the district magistrate.
No dice, Mogambo, said the DM. You must be on drugs! How can you expect me to help you? Two new cars, offered Mogambo. The DM smiled. Mogambo decided to up the stakes. Two new cars and Rs 1 lakh a month. And a house, he added.
Youre wasting your breath, said the DM. For one thing, I dont think your business can justify such an investment any longer. More importantly, yesterday the people of Y2Knagar, my brethren, gave me an offer I couldnt refuse. I suggest that you shift your base to Rickshawnagar immediately.
It has been close to five years since that landmark town meeting but the people still remember it with awe. It was the night we discovered our power, the owner of a disco told me. I can still feel the adrenaline that ran through me; the excitement of having hit upon a bold idea. It was like scoring a goal with less than 45 seconds left.
We knew, he said, that sooner or later Mogambo would appeal to the district administration. After all, he feeds them money, which they feed to those higher up. And a crackdown on the citizens initiative was inevitable. Well, not exactly a Tiananmen Square but something more subtle and equally effective. We had gathered to figure out a solution.
Every single citizen of Y2Knagar attended the meeting, logging on to citizens.net. Various options were considered and discarded. Till someone typed in the old battlecry of Y2Knagar: people respond to incentives. Why should we not give an incentive to the administration? Why not indeed? Rapidly, various ideas started coalescing into what became the asop programme: The Administration Stock Option Plan.
We had calculated the gross district product (GDP) over the last five years, explained an eighteen-year-old fashion designer. During the Mogambo era, it had been growing at a negative rate of about 3 per cent. However, after the citizens offensive, it has begun growing at a positive 7 per cent. We took this data, met the various arms of the administration and gave them a simple proposal. Pump up the GDP by another 5 to 12 per cent and you all will get 10 per cent of the incremental increase. Raise the GDP growth to 20 per cent and youll get 20 per cent of the incremental growth between 12 and 20 per cent. In cash. Tax-free. Legally. Personal money. As your reward for helping the economy grow and making life better for all of us. Your performance bonus. The dividend on your stock option. We explained the numbers to them. On a GDP of Rs 1,000 crore, a 7 per cent rise would be Rs 70 crore and a 12 per cent increase would be Rs 120 crore. They would get 10 per cent of the Rs 50 crore differential, which works out to Rs 5 crore. If they pushed hard and hit the 20 per cent mark, they would get the Rs 5 crore as well as an additional Rs 16 crore. Now these numbers are non-trivial. They have lots of zeroes in them. They were not earning even a fraction of this number in underhand dealings.
People respond to incentives, explained the DM to me. So did we.
The Y2Knagar bureaucracy and officials went into overdrive. They sought out all the dusty, forgotten reports of committees past. They studied the civic models of successful cities of the present. And they started implementing them.
In a few years, the GDP of Y2Knagar was galloping. Soon, the local administration could afford to do what the citizens had been doing all this while; take care of its officials and its police force in a humane, dignified way. But the citizens continued to hold the contests and the prize money kept doubling every year.
With the fat year-end bonuses came the realisation that they could have been fatter if there were fewer people to share with. The Y2K administration started downsizing with a vengeance. Rightsizing, they claimed. The economy was growing more than enough to absorb everyone who had to leave the administration. Simultaneously, there was a radical drive to attract the best talent Y2Knagar had to offer into joining the administration. Do you want to spend the rest of your life selling soaps or do you want to change Y2Knagar was the slogan. The compensation and benefits offered matched the best in the industry.
Im told that next week a team from Rickshawnagar is visiting Y2Knagar to see how they can replicate the model.
( Aditya Jha is the director of strategic marketing at Aditi Corp,
a world leader in Net-based customer service solutions.
This piece comes out of a discussion with his friend
Ashutosh Roy (founder of WhoWhere.com) one December evening in Silicon Valley. )