February 2020

Christopher Wood, global head of equity strategy at Jefferies has maintained a ‘reduced overweight’ rating on India in his ex-Japan portfolio for long-only investors. The rating comes after the presentation of the Union Budget on February 1, which according to him, lacked measures to prop-up the economy.

Despite the introduction of optional personal income-tax (I-T) structure that lowered rates and took away most exemptions and deductions that individual taxpayers could avail, including that for life insurance products, Wood remains bullish on the Indian insurance sector.

“Amidst the relative lack of urgency on economic policy, a cynic might wonder whether the Modi government might have decided to concentrate primarily on its social ‘majoritarian’ policy, which is popular with the Hindu majority. Hopefully, this is not the case though it is clearly a growing risk, most particularly given the lack of credible

The business world is masterful in the art of financial analysis — slicing and dicing balance sheets, stock performance charts, and profit-and-loss statements into dozens of arcane metrics (Omega ratio, anyone?) to assess a company’s performance, unlock hidden potential, and spot pockets of strengths and weaknesses.

I’d like to propose another metric: a company’s dysfunction tax.

There’s no need to reach for your calculator just yet, as the basic idea is pretty simple: For every dollar of revenue that your company brings in, figure out how many cents are being frittered away to cover the cost of dysfunction — the self-inflicted wounds of bad strategy, poor execution, and ineffective communication, among other things, within your organization. The hard part, of course, is knowing how to value the impact.

To set a baseline, let’s assume your company is paying some level of dysfunction tax, given that anytime you bring a bunch