Archives for posts with tag: Toyota

Provoked by Justice Sotomoyer’s observation of dealing with her atypical “imposter syndrome”, in a recent Business Standard Op-Ed piece, Shyamal Majumdar writes, “The ‘imposter syndrome’ – Even high achievers often dismiss their success as some fluke or luck, and not the result of their own competence.”

This got me thinking. Internet based research revealed that, “The impostor syndrome, sometimes called impostor phenomenon or fraud syndrome, is a psychological phenomenon in which people are unable to internalize their accomplishments. Despite external evidence of their competence, those with the syndrome remain convinced that they are frauds and do not deserve the success they have achieved. Proof of success is dismissed as luck, timing, or as a result of deceiving others into thinking they are more intelligent and competent than they believe themselves to be.”

Imposter

Analyzing this wiki definition, I feel that at least partial description of “imposter syndrome” in the West is simply being realistic. After all, in my case I am sure what I am today is also a function of the bosses, colleagues and subordinates in the teams that I have worked in, as well as suppliers, customers and well-wishers in the extended environment. Thus, it is difficult to find a purely self-made individual. Hence, I believe that my success can be attributed to luck, fortune and timing.

I remember my days in Toyota, when our domestic market share in Japan in the segments we operated was increasing from 40 to 44 %, while Nissan’s was in decline. Sitting in the smoking corner during lunch, one of my colleagues made the observation that“managers and executives at Nissan are just like us, from the same classrooms of the same universities”.  In many cases, the choice between the two companies was made purely on geographical reasons, while choosing their office locations in Japan. Yet, one company is rising and the other is declining. Certainly, decisions taken by our seniors were instrumental in the current success and failure, rise or decline, but the fruits that WE were enjoying (or not, as in Nissan’s case) were more a matter of providence”.

Back then, my Toyota colleagues and I shared the perception that we were part of destiny.

lucky

I remember another instance of a junior, call him Taro for now, who joined us from one of the leading private universities in Japan, Keio. Being assigned to an operations group that was very busy with re-structuring, his seniors could not mentor him sufficiently. They just did not have enough time. His development as an executive dragged, until he was transferred to an administrative job. There, under appropriate mentorship he became like a fish taking to water. He was admired for his attention to detail, his confidence grew and he started commanding respect. Different circumstances, different results, same person. Taro would not internalize failure changing to success purely to his competence.

I dedicate my own competency development to being a function of luck, timing and hard work. What about you?

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The Schumpeter column in the recent Economist, “Mammon’s new monarchs” describes the emerging world consumer as king. It seems that Western companies are interested in knowing how to appeal to emerging world consumerism and compete with home-grown domestic rivals. Consultants from Boston Consulting Group (BCG) advise companies to jump in early. I agree that going in early can be useful, but according to my observations, this is not essential nor a panacea.

honda-city

Consider the automobiles industry – Honda started early in India, in 1998. Toyota started shortly afterwards in 2000. Their early start has certainly helped. Honda’s City and Toyota’s Innova enjoy stable market leadership in their respective segments. Though many thought Renault-Nissan to be a late entrant to India (over a decade later than Honda), given that automobile ownership is still at the lower tail of the S-curve, it still has potential to emerge a winner. Renault is already doing well with its Duster shining in the market this year.  The same applies with Volkswagen, which really kicked off with the Polo in 2010. So, coming in later, even a decade later can be okay. On the other hand, in the absence of quality offerings, coming in early is not a cure-all as Fiat has failed to learn in repeat attempts at conquering the market.

Similarly, in the appliances arena, Hitachi that started early in the upper end high quality air conditioner segment, continues to enjoy aspiration status. Panasonic that is just starting its big bang could yet do well. LG may have made early inroads, but eventually quality shall become the priority of the consumer. Already, at the “non-frugal” end LG finds it difficult to attract the well-to-do. Experience with air conditioners also demonstrates that starting early is fine, but quality is perhaps more important.

LG

My own feeling is that when deciding market entry into emerging Asian economies, companies shall do well to concentrate on two things. Firstly, they need to get the price point right and match local tastes, while matching the quality expectations. This is where Hyundai succeeded with Santro. The second point is to focus on a core competency. So, for example, Daimler Benz did well to first start with its Mercedes E-class, a core competency yet economically right for India. It’s A-class is only now being contemplated, over a decade later (the price point is no doubt more suitable, but not what Daimler is more commonly associated with).

Many people try to bring out a single point solution, such as “start early”. This pithy advice can result in disasters as the Fiat experience in India demonstrates. Instead, international business strategy needs to concentrate on what sells (the buyer’s desires), and what can be sold (the seller’s competency), which are perhaps more important to conquer the Asian consumer.

Last week I was invited to the Embassy of Japan in Delhi for the pre-launch reception of Suraj – The Rising Star. What is that? Exactly the question I asked my wife when she told me we were invited. Now I know the answer – it is the title of a cricket based cartoon, inspired by the Japanese baseball anime hit Kyojin no Hoshi (Star of the Giants) of yesteryears.

kyojin-no-hoshi

Many years ago when I was in Toyota, I was asked to review the Japanese program Oshin for possible sponsorship to telecast in India. Ambassador Sakutaro Tanino had been approached, because it seems that Oshin was run once, to popular acclaim, but could not finish as a series for lack of funds. Sponsorship for Oshin was never revived, but since my review work I have been convinced that quality Japanese programming could be well received by Indian audiences.

In my previous entrepreneurial business promoting Indo-Japanese cultural and business relations, I often shared opinion that it would be people to people contact that would get the two nations closer. There was talk even then, about 10 years ago of translating Japanese Manga (comics) to the vernacular. Now Kodansha, the Japanese publisher has made the localization happen, a fantastic leap for international business – who said you can’t make money out of culture.

Sarbjit Singh Chadha

Indian enka singer, Sarbjit Singh Chadha who was at the embassy reception told me, “Ashok, I used to follow the original Japanese cartoon when I lived in Japan. Believe me this will have wonderful lessons for Indian youth on the importance grit when facing life’s challenges. According to Colors, which will air the program, the series will present viewers an inspiring story of a young boy who dares to chase his cricketing dream.

Newly appointed Ambassador, Takeshi Yagi, was excited about this development in cultural exchange. Talking to Itochu’s honcho in Delhi, Mr. Ichiro Shimizu, I learnt that the original series featuring the Giants was popular in his days. He is in his 50’s. Alas, contemporary Japanese youth that has moved from TV to smartphones for entertainment does not get that some education he complained. Fortunately, a vast majority of Indian youth still access television. Moreover, since it is a remake, I hope that they have additionally adapted it for smartphone viewing.

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Actress Karishma Kapoor who was at the reception said she will make sure that her son who is a budding two and a half year old cricketer shall watch from 10 AM every Sunday. I, too, plan to be in front of the box on 23rd December when it debuts. Time will tell if I am able to sacrifice my golf every Sunday. 10 AM also clashes with my son’s karate class – perhaps its time to invest in a recording device.

アショク アシタ

I read recently in the Economic Times that Unilever finds innovations that have marked its growth in India, are now more relevant than ever, in recession hit parts of the world such as Europe.

As the Unilever CEO, Paul Polman, has rightly mentioned, “Learnings” from India such as lower price points for products in smaller packages or sachets, is gaining acceptance in the European market, poverty has returned as the local economies continue to reel under recession.”

It is transferability of such learnings that makes knowledge of international business practices so valuable. I remember my time in Toyota where we applied our learnings from implementation of kaizen principles for just-in-time (JIT) logistics across countries. Thus, Oman could benefit from learnings from Poland, and in turn teach a lesson (or two) to Australia and South Africa.

According to the newspaper, Paulman, also highlighted the success of the affordable water purifying product, Pureit.The product entirely developed in India, is now being sold by Unilever in at least 15 other countries, where according to him, it has become a popular brand. “

This reminded me of the concept of “reverse innovation” that was popularized by GE. Why is it called reverse? Previously, innovation occurred in developed markets, and products were sold across the globe. However, those markets are now saturated, or even in decline as Unilever is discovering. Undiscovered markets lie in populous emerging markets like, China, India and Indonesia. Thus, there is profit to be made by innovating for these markets. And, what sells here can also be sold in the fast-becoming-poor markets of the developed world. Learning frugal engineering has become so important that Carlos Ghosn of Nissan Renault invested USD 1 billion for starting a greenfield factory in India.

I suspect, eventually, as this becomes the mainstream model, the “reverse” will then be dropped from the nomenclature.

It was interesting to read recently that Honda is planning to review its product strategies for the Indian market. Though third-placed in the Japanese car market, as a global player it is actually second to Toyota in the Japanese manufacturers rankings. However, in India Honda as a brand has been at a distant seventh, despite being here for nearly 17 years.

Even as of now, Honda is considering only a revamp of its product line-up, which does not seem enough as a survival/winning strategy in the Indian context. A recent McKinsey Quarterly reports that to succeed in the complete Indian market and not merely its niches, international companies will have to learn to do business the Indian way, rather than simply imposing global business models and practices on the local market. The scorecard suggesting techniques to win in India, gives out seven pointers that need to be taken care of. Alas, Honda as a brand has failed to live up to the scorecard.

In international business, Brand India is associated with affordable products and good global managers. According to the newspaper report, Honda is just now delving into affordable products in the form of the smaller diesel options, but what they really need to address is the “scaled down in terms of function but even more aggressively lower priced” cars. Honda requires an understanding of the needs of Indian consumers and should customize itself accordingly.

Many multinational companies have hired Indians visibly into their executive board, not only to gain goodwill among the Indian market but also have understanding of natives and the exact market pulse. They are the people who have grown up in India and have better experience about the market. In the auto industry, market leader Suzuki of Japan has Indian R C Bhargava as its Chairman. Japanese giant Toyota has hired veteran Sandeep Singh and others on their board. Deputy Managing Director Sandeep has been with Toyota for years leaving briefly for stints with Mahindra and later JCB. He has helped the company get a better insight of the market and has helped Toyota place them better in the market. Newer vehicles will have only a limited impact on Honda’s business here, until the company manages to get a grip on the consumer pulse.

My own limited experience about Honda leads me to believe they are arrogant. There are two types of foreign companies that try and win in India. The Honda-type believe that they can conquer using their global strategies and global experience by “teaching the natives”, while the others are companies that try and learn from the natives and address the needs of the natives. They get the idea that Brand India (or any market different from the highly developed countries) has to be dealt in a separate way than the global market. Again contrast with Toyota: While Honda is severing relations with the local partners it entered the market with, Toyota have retained Vikram Kirloskar as Vice Chairman even though Kirloskar group has now only about one per cent share in Toyota Kirloskar Motor. While Honda is keen to remove vestiges of its local flavor, Toyota chooses to accentuate its belonging to society. What a contrast!

Arrogant companies will not succeed in India. Adaptation to the Indian consumer’s demand for innovative, low-cost delivery systems and high value for money products is a “must”. Invading companies learn this over time – some sooner than others. Of course, some just remain unsuccessful and have good basis to complain about corruption and difficulty of doing business in India 🙂

Just last week, I was making my travel arrangements for a trip to Mumbai. To find the right flight as per the timing of my visit, I first logged into the travel portal Yatra.com. Here, I noticed that the “budget flights” Jet Konnect, from the Jet Airways wing was priced higher than Jet Airways, the full services provider. Both Jet Konnect and Jet Airways carry the 9W code. Due to these discrepancies, my own preferences have recently has changed to Indigo (6E), and I wasn’t too perturbed about this. However, I mentioned this to my colleague and came to know that he too has been noticing this of late and has changed his preference to Indigo.

As I have been increasingly hearing about the growing preference of Indigo, this small incident got me thinking about how hard it is to stay on the top in international business. Though, Jet Airways is primarily a domestic route airline, with a few international routes, it is the main private airline whose tickets can be purchased from outside India. Thus, an international businessman in Europe planning a trip to India can make his booking conveniently on Jet as part of his British Airways or Lufthansa or other European airline itinerary.

Additionally, since the late nineties, Jet Airways has built itself as the leading brand in India’s domestic travel. It seems to me they decided to milk that brand name in the name of cost efficiency, a few years ago. Hence, they introduced their “budget” wing Jet Konnect

Pricing it essentially at the same level as the full service wing, they stripped value-adds such as blankets and newspapers and started to charge for catering services. Travelers who boarded for the Jet experience were shocked, but Jet could claim that Jet Konnect is their “budget” wing. Jet Airways still has a few flights on the full service, but instead of raising standards on Jet Konnect, they are now stripping away standards on the so called full service, removing refreshments on demand and so on.

As a result, people like my colleague and I now find airlines like Indigo more attractive. I suspect that half that battle was won by Indigo’s diligence keeping a young fleet etc. However, the remaining half was of the battle was lost by Jet, lulled by loss of competition from Kingfisher and Air India. It will be interesting to see if Indigo can remain on top; the challenge to do so will be tough.

In a similar vein, ITC Hotels that was one of three leading chains in India is also now showing signs of decline. Recently, there was a booking at one of their hotels through a travel agent. Later, when the hotel recognized the name of the expected guest, the Relationship Manager (or Sales Assistant) informed the travel agent that they would not honor the booking because the expected guest had previously stayed at the hotel at a higher rate.

This incident reminds me about roadside mango sellers in Delhi, who charge according to how they perceive the customers’ potential to pay. For example, if you approach in slippers, they may ask for Rs. 50/kg. But, if they see the potential customer stepping out of a chauffeur driven car the rate increases to Rs. 60/kg or more. They charge money according to the customer’s ability to pay. Despite the variable prices, the roadside vendor does not go back on the agreed price once the deal is struck, and this is important in the realm of international business too; honoring commitments. ITC Hotels should not compare itself to roadside mango sellers of Delhi, but, if it must, it should adopt their positive qualities too and retain commitments made.

As per the HBR (Harvard Business Review) blog piece – “Staying on Top Image

, Mancur Olson has suggested that the actions taken by Jet or ITC could lead to the classic corporate stall. Here, the companies are becoming captive to their own success and are facing vulnerability to low-cost rivals. They are probably in crunch of innovative ideas that could lead them out of it.

Lee Kuan Yew, Prime Minister of Singapore was visiting India last week. He talked about how difficult the business environment is in India. It does not help that even leading businesses such as Jet Airways and ITC Hotels do not keep up their end of the social contract. This is a primary Corporate Social Responsibility (CSR) and no amount of separate CSR programs can hide their fundamental shortcomings, as was proven in the famed Satyam scandal a few years ago.

My own former company Toyota allowed quality sag and was bashed (disproportionately, in my opinion) in American media a few years ago. This resulted in drastic drop of sales. I read recently that Toyota is now poised to gain World No. 1 spot after many years. I wish my friends and former colleagues the very best.

My message: Getting to the top is tough; staying there is tougher. Hence, maintain your social contracts to remain the leader.

Recently, Yamaha announced that it would make the cheapest ever bike in India for $500. This, along with other similar observations in the Indian market on the relentless pursuit for lower prices in the realm of B2B marketing, has convinced me that frugal manufacturing has now become a mainstay for the Indian market for years to come.

I was involved in such a process at Toyota as early as 1997, way before the term frugal manufacturing itself was coined by Carlos Ghosn of Nissan-Renault in 2006 on the Indian context. He was impressed by Indian engineers’ ability to innovate cost-effectively and quickly under severe resource constraints. More recently, other European companies such as Alten Group and Faurecia also announced the establishment of R&D centers in India – perhaps a confirmation of the sign of the times?

An important aspect of frugal manufacturing for India is to create good enough products that offer high value for money. Thus, it is not only about low cost but about meeting the Indian customers’ seemingly paradoxical expectations of “cheap and best”. Thus, Tata Nano could not succeed simply because of its low price. I have ridden in the car and it seems perfectly fine. However, for some reason it has failed to satisfy the desired perception level of high value for money.

Frugal engineering can be seen as a continuation of Value Analysis/ Value Engineering that became popular even at Toyota of the eighties and nineties. One important question that needs to be asked is, “Do customers value all the current features”? Even before Carlos Ghosn coined the term, I remember being involved at Toyota in such value analysis when bringing in the old Indonesian Kijang into the Indian market in 2000 christened as the Qualis. The car became the market leader in its segment because of the perceived value for money, despite its outdated design by both, international as well as domestic standards. We were well aware of the design considerations, but were also aware that the Indian consumer is also highly pragmatic, recognizing value for money.

In their HBR blog “Frugal Innovation: Lessons from Carlos Ghosn, CEO, Renault-Nissan” the authors Navi  Radjou et al rightly point out Ghosn’s effective policies of tapping partners in emerging markets and sending top management to emerging markets. In a kind of reinforcing coincidence, a recent McKinsey report titled “How MNCs Can Win in India” also emphasized the importance of top management visit to India and the need scale up via deals and partnerships. The authors of the McKinsey report Vimal Choudhary et al recommend a formula: Commit to products that have 30% less functionality and that cost 50–70% less without compromising quality.

Despite the battle at the upper end between German giants Audi, BMW, Mercedes the proverbial wisdom has it that the fortune is at the bottom of the pyramid. There is no doubt that people at the bottom of the pyramid want value for money. Hence, Frugal engineering is the new mantra in international business for making money in emerging markets.

Earlier this month I had the chance to travel back to Japan on home leave. My youngest son is very keen about Ninjas and on his insistence we went to Ninja Mura (= Ninja Village) in central Japan. Though initially I went along as the chauffer, but gradually I became more and more engaged as a learner in this beautiful journey.

It seems there are a couple of Ninja Muras in central Japan. The one we went to was in Iga city in Mie Prefecture, known more for its beef than Ninjas. It is less than two hours’ drive from Nagoya, the home of Toyota and Mitsubishi’s manufacturing.

Ninja and ninjutsu (the art of the ninja, which is not a martial art)have become a part of the English lexicon. Appearing all the time on TV, in movies and cartoons, they are an established part of Japanese imagery now. I realized how little I knew about this element of Japan, and now I am able to share much more.

The Ninja Mura is a museum about the ninjas, with live demonstrations of their art, ninjutsu. The Ninja were agents of espionage and stealth hired by warring factions to gain intelligence about the activities of their enemies, and sometimes to assassinate them.

The interesting thing for me though was the fact that apparently ninjutsu originated in India. Yes, that is right. According to the museum, “those roots are found in the art of warfare that began around 4000 B.C. in Indian culture, was passed to the Chinese mainland, and around the 6th century, passed through the Korean peninsula and crossed over to Japan.”

The other interesting fact about the ninjas that also corroborates this India origin theory is the fact that ninjas were vegetarian. Yes, they were the vegetarian exceptions in the land of exceptional beef. For health, ninja avoided meat, fish, dairy foods and sugars in favor of a diet centered on whole-grain rice and vegetables. It seems they avoided meat and other foods that might lead to body odor to avoid being detected when sneaking or hiding.

There are so many more interesting pieces of information that are far better experienced than reduced to the written world, for example, my sons enjoyed throwing the shurikens (ninja stars). The younger one dressed up as a ninja and was even inspired to design his own ninja house once he grows up! We also saw revolving walls, trick doors, safe compartments, etc.

My second son and youngest son with a Ninja at the demonstration ground – The wood wall shows embedded Ninja Stars

The inspirational Ninja Mura can be enjoyed as a day trip from Nagoya or Osaka, though from Tokyo, I would combine it on a journey on the way to Kyoto, etc.

I came across an article on the website of Times of India, “What’s on the to-do list of expat CEOs in India”, which discussed the Dos and Don’ts of expatriate CEOs in the Indian market. The article made an interesting read and also initiated an argument between my Indian self and my global self on the abilities of Indian managers in the global scenario and the need of an expat CEO, especially considering the recent Adidas/ Reebok fracas. Being a part of the current international business environment, it really intrigued my Indian self to the extent of questioning my Global self on these stances taken by MNCs driving on the road to success in the Indian market.

The conversation begins:

Indian Ashok: Does the Indian market really require an expat head?

Global Ashok: India as a huge market base comes with its own pros and cons. It is a part of the new growing world and a marketing strategy that has worked with others countries, might not work here. Every company/MNC planning to enter the Indian realms has to come up with a marketing strategy and road map exclusive for this country. Hiring an expat CEO or an Indian manager is a part of the same.

Indian Ashok: Is Maruti’s decision as an evolved company, to replace its Indian MD with a senior Japanese professional representative of a newer marketing strategy?

Global Ashok: Maruti/MUL replaced its Indian MD, Jagdish Khattar, by Japanese Shinzo Nakanishi. The step, it seems, was initiated to ensure that the company has a better leverage at its Japanese Head Office. Khattar played his role to establish the trust factor in the Indian audiences/customers and replacing him with a Japanese member was required for that cross-border coordination. In a masterstroke, Maruti brought back R C Bhargava as Chairman to retain communication with the Indian interface. Maruti is a perfect example of a company evolving leadership strategy as it matures in the marketplace.

Indian Ashok: In that case, why when there are companies with two or more heads representing the same section – one of them always seems to be an expatriate?

Global Ashok: Depending on the stage of its evolution and based on the strategy to meet business targets, a company might want to hire an expat Manager with more global experience and try to groom their local team to adapt to that corporate DNA. Many Japanese companies in India, from Toyota to Honda to Hitachi, have an expat head because the Indian managers have still not developed that global corporate DNA. However, some Japanese companies like the logistics leader Nittsu decided as a matter of strategy to hire an Indian to lead the company. Senior Japanese were appointed as segundos to ensure that the local flavour remained in harmony with the global.An expat head may well be removed when the MNC gets more comfortable and evolved in the new market.

When business was not moving fast enough due to Head Office resistance, GE brought in a senior person from USA and stationed him in India. The head was entrusted with the agenda of influencing Head Office business units to enter the market.

The above examples demonstrate that bringing an expat is purely dependent on what the company needs to do to grow in the market.

Indian Ashok: Do you really believe there is a trust factor involved in hiring expatriates for any company entering a new market (especially Indian market)?

Global Ashok: Keeping expat heads does also bring in the trust factor. Any company might want to start their work with people they already know and whose abilities they have seen over a period of time. Each company comes with a unique work culture and expat heads seem to be well aware of that. An expat CEO might align the subsidiary company in a better way to its parent.

Indian Ashok: Does keeping an international head bring in the idea of a better watch or supervision for the parent HQ?

Global Ashok: Yes, that’s another good aspect of keeping expat heads – it offers better supervision. An expat head might give out a signal of the subsidiary company to be under close supervision of its parent. There would be regular sharing of reports in a way that the parent would have a better understanding of the overall scenario. Of course this is not necessary, as the Nittsu example reveals.

Indian Ashok: Okay, I understand now that “Leadership is not about nationality but about business targets”. It is more about the company, its strategy and growth plans rather than an individual leader or their nationality. Hiring an expat CEO or an Indian head can only be decided as per the requirements of an organization and their level of evolution. And, now I think I can sleep with a clear mind.

Recently, Toyota sponsored a pan India golf tournament. Assocham, one of the Indian industry bodies also has an annual Japan-India corporate golf competition. Many leading newspapers and business magazines also get involved. Apparently, Golf seems to be the lubricant of international business.

We normally associate Japan with sushi but the uber corporate Japan can be better associated with golf. At least in India, it seems to be the only recreation that most Japanese enjoy.

When I was younger, I never imagined that I would play golf one day. My college’s golf course was used more for late night walks discussing philosophy rather than the actual game. Later, when I joined Toyota, my father-in-law encouraged me to join golf, but it did not seem like an alluring thought back then. I assumed it to be an old man’s sport. However, after some years, my boss in Hitachi managed to convince me that I ought to play the game for business reasons.

Initially, golf turned out to be tougher than I had imagined. Connecting ball to stick is not as easy as when seen on TV. A friend of mine, Pankaj, got me out on the golf course and from then on there was no looking back.

In Delhi’s concrete jungle, the manicured greens at Qutab are a refreshing feast for the eyes. I competing against myself brought out the old sportsman in me, trying to do better than before. A double bogey is good, a bogey is satisfying, a par is something to talk about and with a birdie – the caddies get a treat! Eagles on the course are just as rare as they are in Delhi’s skies.

Going out with customers creates a healthy bonding. Strictly speaking, I haven’t concluded any deals on the course, but spending so much time on the course and thereafter on the 19th hole does enhance friendship.  I do find it more enjoyable working with friends.

In addition to the joy of natural beauty and socializing, I also find the kilometres walked to be a good exercise. Depending on post-golf action the calorie count may eventually be neutralized, but whenever I resist the temptation it does work in my favour.  It reduces my fat, it increases my stamina and it improves my concentration. Though, I have a long way to go in terms of score improvement, I convince myself that with every extra shot I hit I get extra exercise!

I’ll be back on the Golf course from mid-June, I promise.

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