Rollingstone Revelations - Koshy's Blog

Outcome or Process, Choose One

2011-08-28T23:56:00.002+05:30

IT enabled Governance (ITeG) is gaining acceptance and momentum. The Electronic Service Delivery Bill now under consideration of the government is expected to give further thrust to e-enablement. With Aadhaar (unique id) getting better traction, Aadhaar integration in the service delivery also is providing stimulus in ITeG initiatives.

The complexity and challenges relating to the e-enablement vary across departments. On one end of the spectrum, the processes are quite mature and well defined, and computerization is primarily a means for improvement in productivity. On the other end of the spectrum, what is required is not just automation of existing processes, but a total transformation solution which involves significant process re-engineering, re-alignment of the role of various stakeholders which may also result in some stake holders role getting redundant or less important, innovative use of technology, phased implementation, continuous monitoring and many mid-course corrections.

In both cases Information Technology is a critical component; but often it is forgotten that IT is a means to an end and not and end in itself. I do not intend to discuss the other dimensions of ITeG in this post (take a look at ‘An amateur’s guide to e-Governance”). This note is about how the IT component is managed by government departments. Most government departments have limited in house skill to undertake these activities and therefore they outsource these to private sector service providers. Most of the IT service providers who take up these jobs of the System Integrators often do not have a total solution orientation or they are not capable to offer one. So they end up being suppliers to staff.

The predominant skill set for them is writing software for the specification given by the solution architects because our domestic software industry is often drunk with the $ from being technicians and cybercoolies and not architects and engineers. The user requirement study is "Tell me what exactly you want me to automate, I will program it" and not "Tell me what your dream is, we will work together on how technology can make it happen". So their approach is that of manpower provider than a solution provider. They don’t share the risk of a failed system (the limitation of liability clause adequately takes care of this) nor do the government comfortable to share the reward in the form of outcome based payments.

Often service providers influence how the RFP is made which ends up being an enquiry for supply of bodies than outcomes. So RFP gives more importance to the CV of the team instead of making them responsible for the outcome. Subsequently these contracts make the client to pay for rectifying the bugs in the programs and also make him spent for much more hardware than needed. Augmenting this problem is the purchase decision based on the lowest price quoted by the vendors. No proper matrices for measuring the outcome are defined and the department attempts to micromanage the CV, the attendance, hardware specification and so on. Then either the shoddy service providers takes the contract or the selected vendor develops shoddy solutions. That is the reason many ITeG don’t live up to the expectations.

When people are told exactly what and how to do something, they stop thinking for themselves-and they can't learn and grow. ~ unknown

Death by Power Point

2011-07-31T20:02:00.000+05:30

Couple of weeks back I attended a conference. As the key note speaker we had an expert from one of the top notch institutions in the world, who had recently relocated from London. As the topic was close to my heart, I parked myself in the front seat. The speaker had a distinct western accent as he had been out of the country for a long time.

As expected from any expert speaker today, he had a power point presentation to support his talk. The slides started moving one by one. Extremely colorful, quite complex diagrams with wide variety of shapes and colours linked and interlinked using arrows and lines flowing in and out and very densely packed text. Quite visually impressive!

Even front row, I found it difficult to read most of the text. The message that was expected to be understood from the various cubes, pyramids and animations were too complex for me to follow; especially when I attempted to follow the speech. The speaker expected me to quickly assimilate each slide in milliseconds and then connect it to the pearls of wisdom that came from his mouth.

The audio and the visuals were impressive; but, failed to communicate to the audience. This is a phenomenon that has become quite common these days. Power Point presentation is a killer utility that Computer revolution has contributed to the modern day manager. With more and more functionalities and features Power Point has become more important to corporate executives than even food and water. (The only other killer functionality that can beat this is the is ‘copy paste’ function)

A good Power Point presentation can be a powerful tool to make penetrating communications; especially in presentations. It can help the presenter as cue card to help in keeping a structured story line, it can pictorially present some difficult concepts, it can help the audience to quickly refer to the broader context of what is being presented so on and so forth

But overuse of the funky features is making this to a tool that kills effective communication. Power Point helps in building excellent visual presentations and diagrammatic representations.

The diagrams pie charts we use as a part of a written document can afford to be a bit complex and dense (though I would not recommend overdose of it). This is because the reader has the flexibility to read the text, look at the model, ruminate and go back to the text and the model again if he feels the need. In this case he sets the pace. Even when we provide an electronic copy of the presentation and the receiver can view it at his pace, we can afford to have some element of complexity.

But if we are using our PPT as a complement to our oral presentation we cannot afford such complex and dense slide show. If our presentation is to a small audience who are very much clued on to the topic we are presenting (say our department colleagues, our board, our client) we can get away with some of these gimmicks.

But if we are making a presentation to a larger audience then these colorful animations dampens the effectiveness of the presentation. Very often when we make presentations and the speeches to a large audience, the level to which most of the people are clued into the topic will be to a much lesser extent. In such circumstances, if we make our PPT and speech complex and heavy, it will fail to communicate though it may appear erudite. The complex slide deck will then become a distraction. Human beings cannot listen, read and assimilate complex messages in real time as his working memory have limited capacity and has limited duration, especially when it comes to new and novel information. The visuals could act as an intuitive complement; but, if it is anything more, it can be very frustrating and ineffective. What is worse is the presenter referring to the slides all the time taking away one of the most important component of oral presentation; the eye contact.

The new breed “MBA” varieties (I can vouch for that. I am one too) who are computer savvy (A very critical skill these days) get carried away by everything the computer can do without assessing how useful and how relevant they are in the context. The slide deck for them becomes a tool to intimidate, a means to prove how smart they are and not an aid to communicate and to relate. But in reality they become crutches to the speaker and not an aid to the audience. Should we consider banning power point presentation? Absolutely not; if we do that there will be many more (like consultants) to join Dodo as an extinct species.(don’t deny me my daily bread)

"If your words or images are not on point, making them dance in color won't make them relevant." - Edward Tufte Professor Emeritus, Yale University

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Don’t do me a favor; Grant me the right to demand

2011-07-10T22:17:00.002+05:30

Depository’s act of India provided for one of the highest level of service level commitments to the account holder. It required that the depository should indemnify any losses to the investors resulting out of negligence from its part or from the part of its agents namely depository participants. Thus it gave the account holders the right to demand safety of their investment. At the time of enactment of this act, when about 25% of all settlement in the stock market used to have problems associated with paper and there were innumerable instances of investors losing their investment on account of frauds relating to share certificate, this stringent service level requirement appeared utopian and impossible to sustain.

This put enormous pressure on the new depository that was set up, registrars who were hitherto not used to respecting investor’s right and the brokers and bankers who were used to service on good effort basis. This Damocles Sword ensured that systems, processes, checks, balances and audit trail are built and maintained to meet this service level. In the last 15 years since first depository was established, the market intermediaries managed to live up to this service level with practically insignificant instances of breaches which necessitated the service providers to pay up.

What did the magic was the right given by the act of parliament to demand a certain service level without being felt as if we are being offered a favour. In the recent past the government has extended this principle in a number of areas; right to information, right to food, right to education and right to electronic service delivery.

All these are attempts to empower the citizen. Right to Information which was the first of such initiatives has been there for some time. The results have been very encouraging. As more people get to be aware of this right and learn to exercise it, the pressure for performance will build up. It was heartening to see that even children are learning to use this powerful tool. I was impressed by the Class 8 student Kavana Kumar from Karnataka who used this tool to get the garbage dump next her school cleaned by the municipality. These may be anecdotal evidence as of now. But these have potential to grow to stronger tools. Similarly when we give the citizen the right to demand and not stand in supplication for what is due for him we are triggering a paradigm shift.

Instead of being armchair critics who bemoan the degeneration of the society and the level of corruption with little compunction in using the same means to push our own agenda, we need to learn how to use these tools to make a difference. We should also encourage and support enactment of more such laws placing rights into hands of the citizen/consumer, to bring in more service orientation; especially from the people in positions of power both in private and in public sector. Then may be we will learn the meaning of "service with a smile" if not a grimace:-)

Safeguarding the rights of others is the most noble and beautiful end of a human being.” Kahil Gibran

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Caveat Emptor ?

2011-06-27T08:02:00.000+05:30

ICICI bank was taken aback by the order of the IT secretary of Tamilnadu as the adjudicator under the Information Technology Act, when he directed the bank to pay Rs 12.85 lacs as the compensation to an Abu Dhabi based NRI for the loss suffered by him in a “Phishing Fraud” .

“Phishing” is a security risk that many computer users are getting to be familiar. In this case the account holder received an email that appeared genuine, which asked him to provide the use rid and password for his internet banking account to avoid his account getting closed. He parted with these details and he lost about Rs 7,00,000 from his account.

The bank took a view that the loss is on account of the carelessness of the account holder and refused any compensation as they had advised all account holders not to part with their userid and password to anybody. How could he be so irresponsible and give away his password and then claim that the bank should compensate him? But the adjudicator did not agree to this point of view.

This is an interesting dilemma for all entities like banks and depositories that provide online service to their clients. Where does their liability end for the loss suffered by their clients? Under what circumstances will they continue to be liable even if the loss was the outcome of a failure by the account holder?

Similar issues have been there with respect to offline transactions too. For example the loss suffered by credit card holders on account of misuse of their card details or loss of money from the bank account by fraudulent instructions.

One of the accepted doctrines in legal theory is that the entity that is best equipped to manage the risk should be liable to the loss arising out of such risk. This doctrine has been followed not just in online transaction. It has been used in fixing liability in terms of workplace accidents, accidents in amusement park and and so on.

For many this may look very unfair. Shouldn’t the responsibility of the service provider end when it has put in place risk containment measures and warned the users about the potential risks? Why should it bear the brunt of a fraud when ingenious souls manage to find a way around the protective walls?

There are studies comparing the incidents of banking frauds between the countries that placed the primary responsibility on the service provider and on the customer. These studies showed that when the legal structure supported the above doctrine the extent of fraud was much less. The service providers continuously upgraded their risk containment systems as they could not hide behind “fine prints” in the forms that they make their clients sign and the disclaimers that they publish. They cannot limit their risk with firewalls and dematerialized zones in their data centers. They have no option but innovative in saving their clients from their own foolishness. They are forced to look for patterns, trends, exceptions, track locations from where the transaction originate, raise alert when exceptions occur and so on. But if still a client is faced with a loss, he is compensated unless they can prove the customer connivance or involvement. We can’t just declare “Caveat Emptor”.

Risk mangment therefore becomes a managerial decision, may be more than technical solutions. (Read on Digital Security – Business, People and Economics for some more thoughts on this)

"Customers don't expect you to be perfect. They do expect you to fix things when they go wrong." Donald Porter, British Airways

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Matter of Right

2011-06-12T22:55:00.001+05:30

Government of India had put out a draft bill on Electronic Service Delivery (ESD) for public comments. The key features of this scheme are

i) Every department of the government should mandatorily make its service to citizen available through electronic mode.

ii) This ESD should be made operational within five years of enactment of this bill. Extension for another three years will be allowed if there are valid reasons for this delay.

iii) Within six months of enactnment of this bill, every department should publish the list of services which will come within the ESD commitment.

iv) As in the case of the Right to Information Act (RTI), the proposed ESD act provides for Commissions at center and state level to ensure that the expectation under the act is delivered and failure is met with punitive action.

This right for ESD proposed to be guaranteed under an act of the parliament can be seen as maturing of various e-Governance initiatives that the government has been taking in a variety of fields for more than a decade. India is considered to be a powerhouse in the field of ICT and we practically run the back-office operations for the whole world. With this, this should be an easy target. But is it?

World e-Government ranking undertaken by United Nations gives India a rank of 119 out of 192 countries it surveyed in 2010. As my friend Neel pointed out, “How come even after more than a decade of e-Gov initiatives at the highest level, we still want six months for all departments to publish the list of services they can make available electronically and we need five to eight years for this to be fructify?” Reasons are many; but the following appear to be the most fundamental of them.

i) Many of the e-Gov initiatives are computerization of existing operations of the departments, heavily accented to MIS reports for internal consumption and upword reporting.

ii) Processes were not fine-tuned with a citizen focus. Committed service levels or actual performance levels were seldom benchmarked or published

iii) Solution implementation was more activity based than outcome based. Often vendors saw their role as software developers or as hardware suppliers and not as service providers.

iv) More attention was given to the automation of front end without getting the back-end streamlined and automated. In many instances sufficient consideration was not given to building electronic repository of the records and masters or ensuring high data quality which are the foundation blocks for electronic service delivery.

This problem is not unique to government computerization efforts. In many private sector companies also the computerization took this route. To begin with computer was a perk and status symbol for the boss. Then it became a department initiative. It was much later an integrated corporate wide strategy got evolved in progressive companies.

Similarly, in government initially it started as a privilege for the big bosses. Then it became a department initiative left to the interest of the head of the department. Integrated service delivery is still a dream. (read on "India gets a CIO- Part II")

Now when we attempt to make electronic service delivery a matter of right we have to give more attention to the lacuna highlighted above else we will not be able to live up to our promise or the expectation of our citizens and the commissioners will end up inundated with grievances.

Picard: Come back! Make a difference!
Kirk: I take it the odds are against us and the situation’s grim.
Picard: You could say that.
Kirk: If Spock were here, he’d say that we are irrational, illlogical human beings for going on a mission like this... Sounds like fun!

-Star Trek: Generations
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Even Elephants Can Dance

2011-05-28T15:18:00.002+05:30

My friend Zakir Thomas is a revenue service officer; but he is more comfortable in developmental work than being an enforcement officer. At present he is the project director for Open Source Drug Discovery (OSDD) a unique initiative by Centre for Scientific and Industrial Research (CSIR) and is personally mentored by its DG, Dr. Samir Brahmachari.

Though concept of Opens Source development has been in practice for a long time (though not in this name), it has become quite popular with the advent of internet, more so with the availability of collaboration tools (now referred to as web 2.0) which has enabled communities across the globe to work on solutions to complex problems.

Internet itself is product of such collaboration and Linux, the Operating System, is one of the most known open sources software. There are hundreds and thousands of such initiatives out there today in a variety of fields. Sequencing of human genome can be seen outcome of such a participative effort. However, in fields like Pharma where the cost of research, testing and regulatory approval can be phenomenal, collaboration is considered suicidal. On account of such high cost Pharma companies have least interest in working on development of drugs for ailments which particularly affect the poor (TB, Malaria etc) or which affect few people are very limited. They are keener on development of drugs for lifestyle ailments like Blood Pressure and Coronary Diseases

It is in this area the model of open source development is attempting to play a role. Today there are only few such initiatives in the world like Tropical Drug Initiative (Participants from University of California Berkeley, Dukes University, University of Sydney), Institute of One World Health, TB Alliance etc.

OSDD initiated by CSIR is an initiative attempting to provide affordable health care to the developing world, presently focusing on development of drug for TB which today kills two people every three minutes in India. OSDD has taken of well with participation from about 4500 scientists/ students from 130 countries. It has completed mapping of TB bacteria genome a record time. It already has two molecules for TB in the pipeline. CSIR hopes that they will be able to bring out at least one drug for TB in the near future.

I asked Zac what has made this possible. “A few People with commitment and Tools that made collaboration possible” he replied. He introduced me to two fellow scientists who were with him then who is working from Institute of Genomics & Integrative Biology(IGIB). Sridher Sivasubbu is a PhD in fish genetics and Vinod Scaria a medical doctor who is equally comfortable with computers. Both of them are young and highly qualified to have picked up high paying jobs in private sector in India or abroad. But they have decided to dedicate at least few years of their life to this initiative. Their energy level, enthusiasm and commitment for bringing multidisciplinary skills through collaboration to develop better drug for TB is awe-inspiring.

There are more of such dedicated scientists across the labs who share this passion. Zac suggested that I read the book “Geek Nation” by Angela Saini in which she has dedicated an entire chapter (titled The impossible drug) on this collaborative effort of a number of committed professionals from multiple labs across India to find a cure for TB. (This book is worth reading as it gives an interesting perspective on the dream, hope and possibility of India becoming a scientific super power).

What OSDD has done is to make the platform available to for these professionals to collaborate among each other and with the best around the world who are willing to join. I hope that OSDD is able to build on this momentum and don’t get ossified to a white elephant when the pioneers move on.

It is a commendable achievement for a government institution to work on such revolutionary models. We see such islands of excellence in many parts of the government. What is unfortunate is that often there is no mechanism to sustain this momentum. When the pioneers move on there is no planned succession. Successors are not selected keeping in mind the requirement of such exceptional institutions; but following a process which is meant to manage routine operations. And that is the tragedy of governance we face often.

Elephants can dance; so long as we play the right music…

"It is the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed." - Charles Darwin

Related Readings

Competitive Advantage - A case for blogs and wikis

If wishes were horses

Dare to Differ

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“It is elementary my son” (humour)

2011-05-14T19:46:00.001+05:30

One of my friends mailed me this funny story. Once upon a time on a cold wintry morning a sparrow was out from his comfortable nest looking for few morsels to fill his stomach. It was too cold and the wind was so harsh, that the sparrow fell down almost frozen. He was lying there helpless. Then a bull passed by and pooed on him. The hot manure warmed the little sparrow and he felt very comfortable. He was happy and he started to sing. A cat heard the song and it found the sparrow relaxing in the warm poo and it pulled the sparrow out of the poo and ate him up.

There are four morals we learn from this story.

i) Those who shit on you may not be your enemies: In our life and career, there will be many instances when the action of somebody will harm, belittle or demean us. Very often it may not be intentional; but just coincidence or matter of his survival. If we look from the other person’s point of view, there may be extenuating circumstance if not genuine reason. Sometimes it could be their revenge or they could be absolute a--holes. Whatever be the reason we suffer and we feel hurt.

The important thing is that we need to survive this assault, this insult or this harm. If we get caught up in the anger and spent our time in planning for revenge, we waste our time, our effort and our health which otherwise could be channelized for towards more fruitful end.

If we are in a situation where we have to deal with with unadulterated a—holes, it is better to kick them out or get out from such a place. (The book “No Asshole Rule” by Robert I. Sutton makes an interesting reading on this topic)

On the other hand, if we hurt somebody (specially their ego) we need to keep in mind that most humans love to get back and take revenge. If we want to avoid escalation of this conflict, we should either try to patch up or make sure that we are not in the line of fire of they won’t dare to react :-).

ii) Those who take you out of shit may not be your friend. When we are down and out, many of our old friends may not take a second look at us. Then we come across somebody who is keen to deal with us. We feel thankful and obliged. May be they are good Samaritans; maybe they are trying to take advantage of our plight or weakness. Even if it is genuine good will, don’t overstay our welcome; else he may not remain our friend

We need assess the situation dispassionately. The temporary setback should not make us succumb to any deal. The failure or loss in one arena does not diminish our value in all spheres; there is no need to feel defensive and no need to negotiate from an area of weakness. We negotiate based on what we are good at and more so based on our faith in ourselves.

iii) When you are in deep shit, keep your mouth shut: Some of us are very trusting, which is very good if we mix it with prudence. When the chips are against us, we need to be more careful about what we share, what we complain about, what we cry out loud about, or what challenges we broadcast or whom we trust. Discretion becomes all the more critical or else we give us away.

iv) Eventhough it may provdie some comfort shit is still shit: Very often when we indulge in actions that are illegal, currupt, unfair or unscrupulous we may derive certain money, fame, pleasure and comfort. But if we decide to wallow in this shit, one day it is going to catch up. Remember the big cats know where to look for.
“I consider it a mark of great prudence in a man to abstain from threats or any contemptuous expressions, for neither of these weaken the enemy, but threats make him more cautious, and the other excites his hatred, and a desire to revenge himself” Niccolo Machiavelli

Taming the Corruption Tiger

2011-05-04T13:45:00.002+05:30

Corruption (‘private gain at public expense’) has always been a matter of concern for the mankind since time immemorial. Many people love to eliminate this completely; but this is a disease which we may never be able to eradicate totally.

We see wide disparity in the level of corruption across the countries. Transparency international undertakes an annual survey and publishes Corruption Perception Index (CPI) of countries. No single country has ever got the perfect score of 10. Only five countries out of 182 get score above nine, 23 above seven and 47 above 5. India with a score of 3.3 has a rank of 87 which falls in the middle.

One of the interesting revelations of the CPI is the strong correlation between human development, economic progress and CPI. Is it that the economic progress reduces the incentive for corruption or the low corruption facilitates economic progress? It is both. There is a strong mutual dependency between economic progress and CPI. Chile is one of the few countries that has managed to move from being a developing country to an almost developed country in the last few decades. Chile is also one of the very few developing countries with a high CPI score (7.2) giving it a rank of 21, which a level USA.

Corruption is a part of human nature. What can control it are the mechanisms in place to restrict it. The legal infrastructure and the strength of enforcement determine how easy it is to get away with corruption. (I don’t deny the influence of culture in corruption. But I strongly believe that this culture of corruption is not hardwired into the brain of certain class of people making them more corruption prone. Some people may find it easy in comparison to others to behave with less civic sense and in more socially unacceptable manner. Strong enforcement and an environment that is conducive can limit this cultural bias and bring about better discipline. Denmark today with a CPI score of 9.3 is the world topper. Remember the famous quote from Hamlet "there’s something rotten in the state of Denmark". Another example from home is the extent of cleanliness and efficiency Delhi metro has managed in its trains and stations which is significantly of higher degree compared to any other public utilities)

We in India have been struggling to manage this high level of corruption. The Anti Defection Law and the Right to Information (RTI) Act definitely help in this direction. The Jan Lokpal Bill has been struggling to get acceptance by the parliament for more than four decades (The recent high profile initiative by Anna Hazare of Civil Society was an attempt to force the government to take a definite action on this) We still don’t have a proper whistle blower protection act.

Legal enablement is definitely a necessary requirement; but, it is not a sufficient condition. Strong Judiciary can ensure justice; but, today we have a serious problem of a large number of pending cases blocking the judicial machinery. “Justice thus delayed is Justice denied”. RTI is an excellent tool to bring about transparency. But the resource constraints can prevent this from scaling up.

When we look at the disparity in the level of corruption across countries, the major differentiator is the extent of corruption and inefficiencies in the areas that affect day-to-day life of the citizens, whether it is to get some clearance, approval or certificate or to run their business. Corruption in high places and in areas with high stakes is the most difficult to control anywhere in the world. But if we manage the former, 90% of the irritant value may be removed for the society as a whole. When we take care of this petty corruption, it may also help to bring to open high-end corruption because the dealing hands have all the incentive to blow whistle as they do not benefit from corruption anymore and thus no more are they partners in crime.

Today the progress in information Technology provides us with significant opportunities to improve governance processes. IT enabled Governance (IteG) can help improve process efficiency, it can help in bringing about better transparency, it can measure performance efficiency and publish the same, it can provide analytical support for risk management, it can reduce leakage and so on which are all elements that can bring about improvement in governance and reduce opportunities for corruption.

It will also help easy outsourcing of service delivery without loss of control enabling government to focus on policy making and policy administration. The income Tax Department’s outsourcing of PAN issuance, the Ministry Company Affairs online initiative and the Ministry of External Affairs initiative of Passport Processing etc are examples of successful implementation of this model. In each of these case we have witnessed significant improvement in turnaround time and elimination of petty corruption.

The IT enabled Governance (ITeG) is still in its early stage. It was not so far away when we could observe the PCs in a typical government department placed at the boss’s cabin with secretary using this as a word processor. Those days are gone. But we still have a long way ahead. Even when a catalytic role is played by some central authorities, it is often limited to budgetary control by purse holders with limited appreciation of the larger role of technology enablement. This is akin to what happens in the corporate sector when the controller (Finance and Administration) is in the driver’s seat as far as computerisation is concerned. What we need is to evolve a nationwide strategy for ITeG and develop a framework for managing ITeG Projects with respect to people, process and technology.

The accomplice to the crime of corruption is frequently our own indifference ~ Bess Myerson

Related reading

Amateur’s tips on e-Governance
Give us the Facts
To be or not to be (Part 1) - The Art of Cooking
The art and ethics of lying - Part II

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Looking for “the One”? A Cynic’s Fantasy

2011-04-27T14:28:00.002+05:30

‘Matrix’ is one of my favorite science fiction movies. In this movie, most of the human beings live the life in a virtual reality (the matrix), while their bodies are used as an energy source by the machines that have conquered the earth. A few humans have managed to escape the matrix and build up a resistance movement to break the matrix. The ruling machine class will do everything within their power to suppress this resistance. The movie is about this conflict and confrontation for the right to be free and not be a just a tool for select few!

Sometimes when I look around, I feel that this movie Matrix, to a great extent portrays the real world. The driving force as well as the reason for the existence of ruling class of politicians and business men is Power and Money. The politics mostly focuses on creation of power and the business mostly focuses on creation of riches and they help each other with their specialization and they exchange Power for Money and Money for Power.

They control all the resources. They extract the resources and convert them to products for their comfort or to increase their wealth. The common man treated as nothing but another resource; labor in the production process, the slave at their beck & call and the customer for what they produce which is a way to increase their wealth. They play with their policies so that this large mass of living resource is pacified, subdued and remain docile. The movies, the games, the TV and the religion are all used as means to keep the common man in a state to stupor. Slowly and steadily higher proportion of wealth shifts to this ruling class.

Occasionally we see some making an attempt to better the life of the society at large, to treat common man more fairly, to enable inclusive growth, to stop over exploitation of the earth’s resources, to sustain the environment and to bring about peace and harmony. This initiative is immediately snubbed. Look at some of the recent examples; Anna Hazare and Bhushans of Civil Society, Mr Thomas, former CVC, Mr. G V Ramakrishna and C B Bhave, former chairman of SEBI, Mr Tharoor former Minister, Sanjiv Bhat the IPS officer from Gujarat who has decided to take a position, Sreedharan,cheif of Delhi Metro and a host of not so famous and not so recent examples can be picked from politics, bureaucracy and social service.

Although corruption, fraud, exploitation, murder and terrorism are common currencies used by many (or most?) among ruling classes (both in business and in politics) technical faults, minor errors in judgment and even fabricated stories are blown out of proportion and exploited to suppress those who try to make a difference. I don’t claim these people are completely devoid of any errors. No human beings are. But the difference is that they mostly strive for the good of the society without being driven only by private agenda, their intentions are mostly honorable and they try to do the right thing in their endeavors, .

Unlike in Matrix there is not going to be “the One” with superhuman abilities to save the world. The change can only come from small contribution from each one of us. We need to learn to differentiate between technical faults of those who mean good and shenanigans of those who work to maximize only their private interest. We need to support these few good men instead of indulging in self righteous criticisms about those who try or making excuses for our inaction. We need to support the former, pardon their occasional errors in judgment and support them to go forward and perform. And for this we need to learn few tricks from the ‘bad’. If we don’t learn to do this, there may be no hope in this battle. Take it or leave it…

"What is the reason? Soon the why and the reason are gone and all that matters is the feeling. This is the nature of the universe. We struggle against it, we fight to deny it; but it is of course a lie. Beneath our poised appearance we are completely out of control". Merv the Frenchman in Matrix Reloaded.

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Some Inconvenient Questions

2011-04-18T14:11:00.003+05:30

[I am a concerned citizen of the world. I worry about the doom that is projected for this mother earth on account of the irresponsibility of “we the people.” Recently I came across some contrarian thoughts in few books that I read (referred below) which raises some questions on the current popular thinking. I have attempted to draw attention to some highlights. Those interested can read up more.This may be a bit heretical but I believe it is worth being alive to these issues]

In 1798, an Austrian Monk Robert Thomas Malthus, who was also a political economist, predicted a gloomy future for the mankind because he believed that population would increase at geometric progression and the food supply would grow at arithmetic progression resulting in collapse of the mankind. In 1898 another eminent British scientist, Sir William Crookes, argued that unless nitrogen could be chemically fixed from air by some scientific process, the human race would not be able to feed itself from the land available. They were not being paranoid. Their predications were based on facts, based on scientific estimation of arable land, based on the prevailing productivity of land, based on availability of fertilizer and based on their estimation of population growth. [1]

In the same year (1898) delegates from across the globe gathered in New York for the first international urban planning conference. Their main cause of concern was management of horse manure which had exploded to un-manageable problem in all major cities of the world. In 1894 Times London had predicted that by 1950 every street in the city would be buried nine feet deep in horse manure. Somebody in New York predicted about the same time that by 1930 horse shit would rise to Manhattan’s third-storey windows. All policy efforts to mitigate the problem offered no solutions. Urban planning conference broke up in three days instead of the planned 10 day schedule. [2]

Within 15 years after Sir Crookes made his predication a German Scientist Bosch invented a technology for large scale production of inorganic nitrogen fertilizer. Today almost half of the nitrogen in our body would have passed through such a factory. The invention of internal combustion engine was the environmental savior. It managed within two decades to address the problem that was driving nations around the world nuts. They also released significant land for farming which was hitherto being used to feed the horse and other draught animals.[3]

These solutions to the society’s vexing problems were not found by means of depopulation of society or by policy directions that reduced travel and commerce. It came about from human ingenuity and innovation. The internal combustion engines improved mobility, revolutionized travel and agriculture and helped the mother earth to sustain seven billion people without falling into the Malthusian trap.

With the exploding usage of these IC engines, today we are faced with the negative externalities of greenhouse gases (incidentally the methane gas produced by the ruminating animals produce 50% more greenhouse impact than the transport sector!) from this technological magic and we are worried about future of our energy options and global warming. In the same way the urban planning conference on horse manure failed to produce results, the Copenhagen Summit on climatic control was unproductive. The reason was not lack of intention. But because the marginal cost of discipline is much more than the benefit; not just for individuals, but also for countries. Garett Halden has nicely explained this “tragedy of commons”; the problem of free riding.[4]

We have to have innovations to address this. Not just knee-jerk relations based of fads and fashions. The renewable energy sources today have not reached the level of scalability to solve the global energy problem. Many of them, on a total input-output ratio of energy spent and energy output is quite inefficient and often a net consumer of energy. Matt Ridley has pointed out this conundrum with an interesting analysis. “Today about 125 kwh per day is the average energy consumption of a British national. Let us assume that we managed to brig it downto100 kwh which is to be supported with 25% each from nuclear, wind and solar, 5% each from bio-fuel, wood, wave tide and hydro. Then there would be sixty nuclear power stations, wind farms would cover 10% of entire land, solar panels covering an area the size of Lincolnshire, eighteen Greater Londons growing bio-fuels, forty seven new forests growing fast rotation harvested timber, hundreds of miles of wave machines off the coast, huge tidal barrages in the Seven estuary and Strangford Lough and 25 times as many hydro dams in the rivers as there are today’ Still with frequent power cuts.” [5]

We need to incentivize and encourage game-changing innovations and not hope for altruistic actions by individuals and countries represented by their political masters or jump at everything that sound green or organic without analyzing its true cost and benefit. We cannot be carried away by such dreams and take retrograde steps of arresting economic growth that would do injustice to billions of global citizens who hope to share some part of the benefit of human progress, massive drives to bio-fuels that will reduce land under cultivation leading to food shortage or hijack more rain forests. If we take this path the cure we are attempting will end up being a bigger disaster.

“Our dilemma is that we hate change and love it at the same time; what we really want is for things to remain the same but get better.” Sydney J. Harris
Related Reading: Question of Existence
References
[1], [3],[5] The Rational Optimist, Matt Ridley
[2] From Horse Power to Horsepower, Eric Morris
[4] The Corruption Conundrum, V Raghunathan
Super Freakonomics, Steven D levitt & Stephen J Dubner
The Price of Everything, Eduardo Porter

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Give us the Facts

2011-04-10T13:35:00.001+05:30

When India got its independence in 1947 as an outcome of partition there was large scale migration across the India-Pakistan borders. From West Pakistan, more than 300,000 refugees (this does not include thousands who moved to Delhi, Mumbai etc.) migrated to eastern Punjab leaving behind about2.7 million hectares and they were looking for land to settle down and farm. As against this, the total land left behind by Muslims who migrated to Pakistan was only 1.9 million hectares. The government had a huge challenge of allocating land to these refugee farmers equitably.

Sardar Tarlok Singh of Indian Civil Service, as the director general of rehabilitation in this region, managed this process with clear and simple guidelines which were enforced pretty well. To address the variation in productivity of land across regions, he defined a ‘standard acre’ which was the area that could yield specified quantity of rice. To address the lesser area available for allotment compared to what was left behind, he introduced a ‘graded cut’. As per this each party received only a specified fraction of the land area left behind by them. This hair cut, administered in a stepped fashion, was lowest for smaller land holding and highest for the highest slab.

The biggest challenge was verifying the authenticity of the claims. He addressed the same through open assemblies of refugees from the same village. False claims were punished by reducing allocation and even imprisonment which were strictly enforced. He was able to make allotment of 250,000 properties within 18 months from March 1948, when he started collecting claim applications. [1] (Compare this with the efficiency of administration of various development schemes run by the government these days even with availability of more people and better technology.)

Thus the most difficult problem of verification of claims was addressed through transparency. Peer verification, social audits and village assemblies were mechanisms used by generations. But as the society got larger, government procedures more complex and often opaque and exception handling ad-hoc, various government approvals, benefits and programs became inefficient and avenues for misappropriation.

Right to Information Act (RTI) is a good beginning. But the resources available for this are so limited that it will be practically impossible to scale up the transparency drive. The resources get clogged in meaningless queries, which often is the intention of those raising the queries. RTI is a good tool to dig deeper; but not a tool that can scale up easily.

To give momentum to the march towards more transparency, we need to have a system in place that continuously publish time series data to be published by various government departments on its expenditures, programs, exceptions, benefits, sanctions and approvals. At present most of the information dissemination by various government departments is nothing more than a public relation exercises. There are certain departments in certain states taking excellent initiatives. But often they remain as individual effort which dies down after the initiator has left or remain as islands of excellence.

What is needed is an institutional framework for publishing granular data in electronic form that can be queried and analyzed. The progress in Information Technology and better connectivity make this eminently possible and affordable. Various agencies can then access this data and make observations and conclusions. Some people may make simple queries for clarifications. Some pope will undertake extensive analysis of the data to identify trends or patterns or to measure efficacy of various schemes. Transparency Portal of Brazil is an excellent example for such an initiative.

This may be inconvenient for many and such people will always try to object and raise excuses. Some try to hide behind so called ‘privacy issues’. I agree privacy is important. But privacy is for private matters. When it comes to most government expenditure and government benefits, the public has the right to know how this has been spent and who the recipients are. Sometimes we hide behind strategic and security concerns. Certain information may have to be always confidential. But some can be released after time delay. We have to be very selective when we classify information on the basis of such consideration and it should not be a means to obfuscate. We should have mechanisms in place that would dispassionately evaluate the sensistivity to classify information as confidential.

This is a trend that we see around the world. An interesting example is how the data relating to government support during the recent financial market crisis in USA has been released. The central bank and industry lobbies resisted tooth and nails releasing this data. In December 2010, Dodd-Frank financial law forced the central bank to release the data relating to trillions of dollars of loans it extended to the various banks under trouble. However, it did not release the details of the loans under the discount window. Supreme Court has now rejected the objection by the banking industry and has forced central bank to release this data also[2].

It makes sense for the government to have a coordinated effort with help of experts to study the functioning of each department and develop an institutional framework and a time bound plan for defining the scope of data release. Let us publish time series data at the most granular level; details of individuals and entities who receive any kind of government patronage, input, aid or subsidies given against the quality and quantity of their output, details of companies found to have been engaged in corrupt practices, details of fund transferred to each department and how it has been spent as so on. Mário Vinícius Claussen Spinelli, Secretary of Corruption Prevention and Strategic Information, Brazilian Office of the Comptroller General has beautifully described the Three Laws of Open Government Data:

• If it can’t be spidered or indexed, it doesn’t exist
• If it isn’t available in open and machine readable format, it can’t engage
• If a legal framework doesn’t allow it to be repurposed, it doesn’t empower

In the beginning there was nothing. God said, "Let there be light!" And there was light. There was still nothing, but you could see it a whole lot better. ~Ellen DeGeneres

[1] India after Gandhi, Ramachandra Guha
[2] Fed To Disclose Discount Window Crisis-Lending Data Thursday

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If wishes were horses…

2011-03-28T19:11:00.001+05:30

I recently read an interesting observation about growth prospects for India. During the first millennium AD, and even before, India was an evolved society. It had world class educational institutions (Nalanda, Taxila etc) which attracted students and scholars from around the world; it had world renowned commercial centers which had trade relationships with many continents, and it demonstrated leadership in area of philosophy, mathematics, literature and astronomy. It was the era of knowledge and reasoning.

The second millennium was the era of engineering and industrial revolution which practically bypassed India. The colonial suppression would have definitely contributed to this. But, as per the above article it was also a manifestation of how Indian brain is wired, which makes it more comfortable with knowledge and logic than technology and applied science.

The third millennium again is that of knowledge and learning, which are comfort areas for the Indian brain. In fact the planning commission in early 2000 had set up a task force under the chairmanship of Dy Chairman of Planning Commission to evolve strategies for becoming a knowledge superpower.

I don’t know how correct is this analysis with respect to the competitive edge of Indian society in this knowledge economy. But there can be no argument about the fact the key drivers for today’s growths are information and collaboration. The most important infrastructural requirements for these key drivers are connectivity to link people and capability to use the modern tools that facilitate information flow and collaboration.

Today India is acknowledged as a powerhouse in the area of Information Technology. We are the back end development center for the whole world. Graduates in every field of science, whether it is engineering, physics, chemistry and mathematics appear to be drifting to computer programming and many more into IT Enabled Services.

Therefore, it appears that we have the aptitude, the infrastructure and the human resources necessary in this most important field and we are well poised to build on this. But when we go a little deeper, we see some underlying weaknesses.

A global ICT index called “Connectivity Score Card” based on a Study created by Professor Leonard Waverman, London Business School, and economic consulting firm LECG, commissioned by Nokia Siemens Networks has been tracking the level of sophistication of ICT infrastructure across the world for last few years. It is a broad based matrix taking into account availability of infrastructure and usage & skills in the area of ICT among consumer, business and government sectors. This study has ranked countries which are segregated into two groups called innovation driven and resources driven as per the categorization of world economic forum. The former contains mostly developed economies and latter more of developing economies. India forms a part of the resource driven countries and with a score of 1,82 out of 10 it ranks 21 among 25. The only four countries which have ranks lower than India are Kenya, Nigeria, Bangladesh and Pakistan. Malaysia with a score of 7.14 has the top place among the resources driven econolmies.

What do we learn from this contradiction? We have outstanding strengths in the field of ICT which is one of the key requirements for a knowledge economy. But, this skills and strengths are concentrated in few Islands of excellence. Therefore, we need to have a focused strategy and attention (a little more than that gets wasted in telecom scams1) for wider availability of ICT infrastructure for us to exploit this opportunity. Somebody once asked Dr R A Mashelkar what would be his ultimate wish for India. He had no difficulty in responding quickly. “High quality connectivity to every citizen at affordable cost and skill to use it effortlessly and meaningfully.” Then, as Mat Ridley would say, ideas will have more sex and multiply.

The number one benefit of information technology is that it empowers people to do what they want to do. It lets people be creative. It lets people be productive. It lets people learn things they didn't think they could learn before, and so in a sense it is all about potential. Steve Ballmer

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Never Rode & Never Fell

2011-03-22T15:15:00.002+05:30

“If Thomas is corrupt, (I don’t want to defend him, let justice system decide) is there something wrong with what defines corruption in India. I can be wrong ....what do you think?” My friend Antony wrote to me.

I had read the news items regarding the controversy relating to appointment of Mr PJ Thomas as the Central Vigilance Commissioner (CVC). With the cursory reading of the news items I was under the impression that he could be one of the corrupt officers who had managed to slime his way to the prestigious post. I was taken aback by Antony’s mail.

I asked around. I talked to his college mates, his colleagues in the IAS and his family friends who knew him as a person. Everybody told me that he is a man of high integrity and a brilliant officer. I read the Supreme Court Judgment relating to the writ petition as to the legality of his appointment. This judgment was only about the legality of the appointment and does not in any way take a view on the merit of the Palmolein case which is pending in the court of Special Judge. As to what I have understood from my talks with the various people who are of the know of this case, though he got embroiled in this case when he was the secretary, Department of Food and Civil Supplies of Kerala State when the Palmolein controversy erupted, he may not have been beneficiary or may not have consciously abetted the controversial decision.

This questionable import of Palmolein took place in 1991. Subsequently in the last 20 years, this matter has been tossed around in legal and procedural wrangles without any decision. Instead of undertaking thorough investigation as to who erred in his judgment, or who was negligent or who was corrupt to fix responsibility and take necessary action, this case had become a political tool in the fight between two political parties and their leaders dragging the career of a few officers for few decades.

I am sure that it is this conviction that Mr Thomas is an honorable and capable person to take the role of CVC that prompted the Prime Minister and Home Minister to recommend his name for this post and not because they thought they have a pliable officer who would play by their tune.

I am not qualified to comment on the merit of the case. But in my mind, this case is a classic example of the perverse incentive that influences the decision making process of our bureaucracy. As Mr Thomas has observed in his petition “it is routine for officers in the discharge of their duties to have cases slapped against them, many of which are trumped up or politically motivated. In an environment where a bureaucrat bears the brunt of protests against governmental action, it is necessary that an objective view be taken of how officers function.”

Instead of taking such objective assessment of the process followed in decision making, if we find fault with the outcome of the decision with the benefit of hindsight, and we allow such matters to be enmeshed in legal wrangles without any conclusion for decades, we have a serious problem. Honest and good officers get penalized and tainted for their life for having taken a judgment call. This worry and concern often act as a deterrent to take a bold stand or to interpret the laws and procedures for the right cause without any private agenda. On the other hand the unscrupulous officers realize that the legal processes may get dragged for years without any result and in the meantime they can maximize their private interests and that of their political mentors.

If we don’t find ways to protect and support good officers we have no moral right to complain about the inaction of the bureaucrat. Take it or leave it ...!

It is the spirit and not the form of law that keeps justice alive. Earl Warren

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Paving the last mile

2011-03-15T19:16:00.000+05:30

My post “Last mile to the bottom of the pyramid” discussed how targeted delivery of subsidies and benefits can reduce leakage, improve efficiency of delivery and stimulate demand in the economy. In this post I discuss three critical components for targeted delivery.

Unique Identification: The first and foremost requirement for targeted delivery is unique identification of recipients. “Aadhar”, the biometric based unique identity for residents, addresses this issue. Especially, an infrastructure for verification of identity by matching the biometric signature (say finger print) of the recipient against the master database of UID effortlessly and cheaply from any part of the country would be an extremely powerful tool. This may sound like science fiction or a costly option for our country. Experts do point out that the current state of technology makes this quite feasible and affordable as we can have a standardized process for identity verification for variety of applications. With the increase in volume of usage, the cost would only drop further.

Enrollment of eligible person: The second component is the ability to filter out the individuals who are not eligible for specific subsidy or benefit. Today each agency that is responsible for providing an entitlement goes through extensive processes for enrolling eligible persons. If we take a deeper look, we can see that there are many common eligibility parameters for most of the entitlements. For example one or more indicators like age, sex, income, educational qualification etc are common for most of the subsidies and benefits. I agree that there are some efforts like BPL and APL list, differentiated ration cards etc in certain states which are attempts in this direction. But, there are hardly any agencies that have implemented an infrastructure using the power of modern technology to build and maintain such databases which can be easily accessed and referred to by other systems using a published standard interface.

If we are able to establish one or more entities that would build and maintain databases of individuals against their Unique Id (Aadhaar), various parameters which go into determination of entitlements, there will be tremendous efficiency gains and cost reduction in the process of enrollment. These databases should also have mechanism for reverse flow of information from the administering agencies which will help in continuous update of these parameters. These would be essentially utilities that focus on the IT enabled data management which help the implementation agencies to focus on policy administration.

Some people may point out that such integration of data is an intrusion into privacy. However, conceptually it is just like the credit bureaus like CIBIL that maintains credit history of individuals using data sourced from banks and financial institutions.

Distribution Channel for subsidies: The third critical component in targeted delivery is the distribution channel. As the various subsidies are provided by means of reduced price of products or service, there is a need to manage the distribution of these discounted products along with market priced products. If this movement is not strictly controlled and monitored there could be significant leakage. This would require each of the agencies to make significant investment and effort for this process control which often forces state management of distribution that sometime compromise quality of service.

One of the most efficient ways to address this is standardization of manner for delivering subsidized products. The highest level of standardization is when the subsidy is in the form of a money transfer. In this case the goods will move in market price and the eligible person will get the subsidy credited to a bank account which is easily accessible. In this way the process of benefit distribution is not product based but beneficiary based which can be same for variety of products or services from kerosene to education. The agency responsible can then plug into a standardized payment mechanism at very low cost. Further tweaking the eligibility condition will also require very little or no tweaking of payment system.

In this model the agency distributing the subsidy can focus on product/ service distribution. Moreover, there may not be any need to restrict such distribution through government controlled agencies and can be handled by a number of private and public service providers helping competition and resulting improvement in service quality. Government can focus on administration of eligibility and administration of the subsidy. This monetization of benefit can also leave the choice of how to use this entitlement to the beneficiary.

Criticism for this model is that the beneficiary may misuse the entitlement irresponsibly and the state will not be able to influence the behavior of the target audience. Even this can be addressed by mechanisms like transferring the subsidy to the account of lady of the house (It is a well researched fact that women of the house are normally more responsible with money. Similarly the better status of the Nair woman of Kerala who historically had the economic power on account of a matrilineal society could also support this) or dependent on compliance to certain conditions.

This can also be addressed by a minor tweak of payment system. In this case each of the subsidies can be treated as an entitlement credited to the account which can be used only against purchase of the prescribed service. As far as the payment system is considered it is very much like handling multicurrency accounts which is a well established process.

Tail piece: This post attempts to highlight the possibility of establishing two critical infrastructure utilities which in conjunction with the Aadhar can significantly improve the subsidy and social security administration. This cannot be achieved overnight. But it makes sense to give focused attention to the above as we have established Unique Id Authority of India.

In the end, it all comes to choices to turn stumbling blocks into stepping stones.Amber Frey

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Software and Hard choices

2011-03-09T07:30:00.003+05:30

In this world there are many countries which are endowed with natural resources. Some of them were content to extract these resources in its most basic form and sell and some countries built up industrial bases that add value to these natural resources. The latter prospered and the former often stagnated especially because this abundance in one area acted as a disincentive to growth in other areas. The stagnation might have happened when the resources ran out or more prices dropped or with falling demand or arrival of more competitive suppliers.

We have the potential for a somewhat similar problem in our software industry which is growing to be a significant sector of strength and opportunity for India. This could be on account of some factors that are holding us from rising above mediocrity. If we don’t address these, eventually we may end up paying price for this as a nation.

Demand Growth: There is an increasing acceptance for use of Information Technology in most sectors of economy in India; e-Governance, hospital administration, educational institutions, manufacturing industry banking and financial services. This offers huge potential for the IT industry. In India, our focus and strength is in application development more so in building bespoke applications and less in hardware and system software. This, in addition to the outsourcing opportunities for undertaking developments for international clients, creates a burgeoning demand for software industry in India.

Customer Awareness: However the in house appreciation among this large consuming sector within India is quite primitive and therefore unable to demand sophistication and quality from their vendors. On the other hand, a significant part of the our outsourcing contracts are for relatively low-end programming as per the solutions defined by in house CIO and his team or based on the solutions architectured by high-end international consulting companies. Thus there is very limited incentive among the programmers to worry about the performance of their output but encourages to focus on functionality and features.

Increase in Diversity: Fast paced introduction of new tools, more sophisticated databases, and diverse programming languages encourages the programmers to be familiar with this diversity than develop deeper expertise in any of the systems to extract the performance efficiency. The are happy to be "Jack of all trades but Master of none"

Leaping hardware technology: The hardware is progressing in sophistication so fast that it is reducing the cost for processing same volume. When shoddy system design and program quality put strain on performance with increase in volume, the developers recommend more iron. Since these new machines process more volumes, the senior management of customers the gets lulled by the apparent reduction in cost and ask few questions because in most other areas they are used to increase in cost with increase in volume.

Impact of IT cost: Major consuming industries for our software developers are manufacturing, financial services and government. For manufacturing IT costs as a factor of their total cost is relatively low. As they get their revenue from selling products (cars to drugs to chemicals to consumer durables and non-durables) their attention is more on the technology for making and selling their products. IT is seen as an enabling component or a fad and gets lesser attention on performance.

Similarly in Financial services with the revenue being a function of the value of transactions than the number of transactions they pay less attention in cost per transaction. In e-governance application also the situation is same with less attention to performance but more on functionalities.

Measurement of Performance Efficiency: In software industry, there hardly few good measures of performance efficiency that are widely used and fewer bench mark values against which performance can be measured; especially when it comes to cost per transaction. With nobody taking the ownership of the total solution, when problems occur, providers of each component like hardware, system software and networks point finger on each other. Even very few system integrators own the performance of the total solution, and but shift performance responsibly to the components. (Read “Learn to count- both Blessings and Failures” for some more thoughts on this)

So What?

The more discerning users for whom cost per transaction is critical like those of EBay, Google and Facebook have their own in house team whose focus is to squeeze out efficiency and reduce the cost and hardly few of our software service providers do any meaningful work for this high-end computing.or develop unique solution

There are many smart Indians in the development teams out there working on such solutions. But our domestic software industry is often drunk with the $ from being technicians and cybercoolies and not architects and engineers. The user requirement study is "Tell me what exactly you want met to automate, I will program it" and not "Tell me what your dream is, we will work together on how technology can make it happen"

But if there is a large demand for low and middle end computing should we not supply it to earn our dollars and be happy? Of course yes. What is the risk in this?

The transaction volume in our consuming industry is growing leaps and bounds. The shoddy designs will soon show its weakness in handling this ballooning volume. The users will ask for more performance. They will ask for sophisticated analytics, pattern recognition, trend analysis and statistical modeling with the goldmine of data that has been amassed. Then our conventional solution providers will have nothing to offer as against those companies who have given more attention to high-end computing and more sophisticated model building often having outsourced the run-of-the mill programming to us.

That is why in this time of plenty there is a need to invest in building high performance solutions, develop a culture of fine-tuning systems for performance, learn to offer solution to a client's problem and not just code what he ask for, develop capabilities for building models and so on. Even in our public policy we should start factoring this and shift the incentives from profits of software export to investment and profits from high-end products or solutions development for the global markets.

Talent without discipline is like an octopus on roller skates. There's plenty of movement, but you never know if it's going to be forward, backwards, or sideways.H. Jackson Brown, Jr.

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Last mile to the bottom of the pyramid

2011-03-01T12:05:00.000+05:30

Targeted drug delivery systems attempts to deliver drugs directly to the organs which are afflicted by disease or need repair. This improves drug delivery efficiency, reduces leakage and keeps the side effects to the minimum. The idea has been there for a long time; but, we had limitation of technology. Therefore we tried carpet bombing by injection to blood stream to take drug to affected area which caused enormous waste, failure to sufficiency penetrate to where it is needed the most and caused side effects to healthy parts of the body. Today advances in nano technology, advanced polymer chemistry and electronics engineering are coming together to revolutionize drug delivery system to make it more directed.

The same concept is applicable in social security systems too. Especially when we want to reach a helping hand to the needy in terms of subsidized food and fuel, health benefits, support for education and so on. In the absence of more effective means to address the last mile problem, we use carpet bombing here too. For example when we keep the price of kerosene low to help the poor, a large chunk of it is cornered by unscrupulous elements resulting in humongous loss to the exchequer and the needy is often denied what is promised to him. The same is the case of subsidies for many other products and services.

Today two silent developments are opening avenues to address this lacuna in a better fashion. The first one is the Aadhar project, which is attempting to identify each individual uniquely. This unique identity can help in reaching the benefits directly to the needy on a regular basis. The second critical component is the increased connectivity at affordable cost. Widely available connectivity specially using mobile technology has enormous potential for transforming the society in a variety of ways. When we marry the unique identification with reliable and affordable connectivity the impact can be truly astronomical.

Therefore our strategy for providing better data connectivity (whether as 2G, 3G or 4G) should be universal access that is practically free. I agree that we should avoid graft, corruption and nepotism in selection of service provider. Our approach for this selection and license charges to the service should not be to maximize short term revenue to the government but to reduce cost of access across the country. To avoid the service providers exploiting the low input cost, we can have mechanisms to regulate price or to share the revenue or other means which focuses on continuous cost reduction to the end consumer.

The benefit of mobile revolution in social transformation is obvious and there are many studies already undertaken to prove its impact in the poorer segment that today is learning to use this in a variety of applications. The fishermen of Kerala now use this to improve his yield and reduce wastage. Some village panchayats have found ways to use mobile phones to reduce domestic violence. (Whenever the drunken husband tries to beat up his wife she send an SOS to a specific number and then quickly and unobtrusively a group of women land up to the hut which acts as a deterrent to the drunken husband)

Our ability to reach such benefits to a large number of end consumers has another impact in the demand side of the economy. If we put more money to the hands of the rich (who are few in number) most of it goes to saving or spent abroad and so on. On the other hand when we put a little more money to a large number of poor people, most of it will go to consumption of food, cloth, shelter, consumer durables and non-durables, education and entertainment. This can have very significant impact to demand in the economy that will also protect us from over dependence of export which was one of the reasons for the eventual collapse of the East Asian miracle.

This increased purchasing power can be further leveraged if we can get the goods more cheaply with easier availability which is possible if we are able to bring in better efficiency in retail marketing and distribution infrastructure.

Although the policy makers are aware of each of the above areas, very often the vested interests with deep pockets are able to torpedo such initiatives often, with specious arguments and powerful lobbying. We see this in most of our policy making exercises including the annual budget. In this latest budget even though definite actions in these areas are limited, it is heartening to see that the Finance Minister is making an attempt. He has referred to strengthening the retail sector, ways to better farmer yield and reduce retail price by removing inefficiencies in distribution and also has established an inter-ministerial task force headed by Mr Nandan Nilekany to suggest means of directed subsidies to the intended intermediaries in the area of kerosene, LPG and fertilizers.

This a good start; and in comparison with the reduction in tax rate or permission given to the international investors in participate in Indian Mutual Funds or increase in FDI limit and so on which are more high profile policy changes, the impact of the abovementioned initiatives have unfathomable potential for strengthening our economy if we proceed forward from this baby steps keeping in mind that this is only a start.

“It has been said of the world's history hitherto that might makes right. It is for us and for our time to reverse the maxim, and to say that right makes might” Abraham Lincoln

To be or not to be - Part 8 'GET it Right or DO it Right ?'

2011-02-20T10:29:00.002+05:30

Managers can be classified into two broad types. Type 1 consists of managers who want to make things happen, who give priority to what is good for the organisation (not just in the short term), for whom private agenda is second priority, who is willing to give his best to the job, motivates and supports his team members,who is willing to take responsibility for his actions and who takes pride in what he creates for its relevance to the organisation and to the society Let us call him the “Doer”

Type 2 consists of those who like to put-in minimum effort for maximum glory, for whom private agenda is the top priority, who spends more time in massaging the ego of his boss, who sees his team as just a means for his end, who is happy to take credit but finds ways to shift blame for any failure and for whom the output is just a means to self beatification. Let us call him the “Passenger”

I agree that being Doer or Passenger is not a binary option. They are two ends of a continuum and we fall somewhere in between. We may also move left and right in or take position based on circumstance, stage of life and personal experience. In this post I have categorized them into two buckets with Doer being more than a 50% doer and vice versa.

Every organisation will have both doers and passengers. Doers give priority of what they contribute for the organisation and the passengers give priority for what they get for themselves. Doers often put their head down and focus on deliverables while passengers are on the look out for personal credits (In our school life also we would have seen these two types; those who burned the midnight oil to complete the project / assignment and those who were smart to ‘copy paste’)

The Doers are looking for continuous improvement, looking for ways to make things better, to find a better solution, to better serve the customer, thinking of ways to to empower the team and to strengthen the organisation so that it continuous to deliver even after they are gone.

The passengers are focused on maximisation of short-term glory which can be quickly monetized, on avoidance of problem, are too happy to maintain status quo and take no decisions. They don’t care what happens after they are gone.

Eventually in most organisations the passengers do grow faster than the doers because they are better at managing their environment and more than willing to sell their souls for a price.. End justifies the means with ‘end’ defined as maximising personal agenda. They are too happy to live off the hard work of the doers and smart in edging out the doers in due course.They graduate from passengers to pirates.

Eventually the passenger/ pirate ends up being in the driving seat and the doers leave. This is aided by supervising bodies who are happy to certify technical compliance than try to understand and act upon deeper issues and root causes. Then the passengers will maximise their private interests leading to long tern ruin of the organization. If the organisation is operating in less volatile industry it may live a little longer.

This is the real world and in this world which course should I take? If I can respect what I am then I should be a Doer, If I judge myself on the riches and glory that I have amassed, then it is better to be a passenger. The choice is mine and I will pay the price for the choice I make.This could be what we may term as the the conflict of pragmatism and idealism

‘Laws’ control the lesser man. ‘Right conduct’ controls the greater one. ~Chinese Proverb

“Half Full or Half Empty?”

2011-02-16T08:55:00.001+05:30

Most of the days when we open the newspaper early in the morning, the headlines that stare at us are that of some scam or the other. In the last few months we had Aadarsh Housing Society Scam, Common Wealth Game Scam, Telecom 2 G Scam, Illegal mining scam.

What do we read from this? One way to look at this is to feel disheartened that our society, government and bureaucracy is in a state of continuous degeneration and the world in general and our country in particular is on a slippery slope. A slope that is leading to moral disintegration and anarchy; a modern Sodom or Gomorrah awaiting fire of destruction from heaven!

Another way to look at this is that we have had such scams all these while and the increased activism by citizens, judiciary, and news papers supported by technology tools are help to unearth and unravel more of these. Better reach of news through print, television, internet, blogs, facebook and tweeter is helping better dissemination of these stories far and wide and make many of us aware and alive.

I believe the most powerful of all is the transparency and exposure that could help to bring about better social deterrent and citizen vigilance. This increased transparency could and is becoming some sort of a check to many and could bring about some sort of discipline and moderation in our society.

If we take a deeper look, most of the scams and injustice that will catch the attention of the wider press are those that are sensational and it involves political and bureaucratic elite, celebrities or because it is gory. But what affect the life of the majority are the corruption, callousness and lack of service orientation of the institutions that facilitate our day-to-day life. It could be getting a land title certificate, a birth and death certificate, paying our electricity bill, getting a mistake rectified in by Income Tax Assessment, getting a ration card and due ration against that card, treatment at a government hospital, getting complaint redressed by the police man and so on.

When it comes to areas where stakes are very high, the corruption or lobbying, which is often a sanitized version of corruption, often is there to influence decisions and policies. This happens in most places in the world. But many countries successfully manage to make the life comfortable for our day-to-day needs. This helps to reduce waste of time and gives peace of mind for the common man.

It is in these areas that we are quite backward compared to many others. Is it because we don’t pay the officers and employees a decent wage that they have to resort means of corruption? Is it because we don’t have proper checks and balance in service delivery that deters inefficiency and insensitiveness? Is it because service orientation is not a part of our culture? Or a combination of all?

Citizen activism and exposure can have a larger impact in this area. It is here that the technology tool can be a great support to each of us can play a role in building a social momentum. “I PAID A BRIBE.COM” is an excellent initiative in this direction. It accepts the fact that there are times we have not way except to pay our way through. It gives an option to anonymously present our experience. It also gives us an option to recognize instances where we could get work without bribe or when we got an opportunity to resist.

If a larger cross section of the society joins in such initiatives we will definitely see some results. We don’t have to give too much of our time nor do we have to inconvenience ourselves by being seen as a trouble maker or a whistle blower (which often is bad for the concerned though good for the society as a whole) or be a martyr. We don’t even have to take a moral stand of not paying a bribe to get what we want. We just have to anonymously share our experience and encourage our friends to do so. At the least it will help the next person to find out what the market rate (of bribe) for a service at a certain location. As an economist would say efficient price discovery!

“It is better to light a candle than curse the darkness” Unknown

Moon shot and Mouse trap

2011-02-08T14:08:00.000+05:30

Once upon a time a mouse decided to take a walk out of the burrow. As he came out of his burrow, he saw a lion lying there in the shade. His first instinct was to scram back into the burrow. For some reason he decided to stand there and take a look. The lion had just finished a sumptuous meal and was in a good mood. He called out to the mouse.

“Hello little mouse, what are you up to?”

“Oh! Just trying to see if I can have some fresh air” little mouse replied

“What is the big deal about fresh air? If you decide to come out of that hole you can always have as much of it”

“It is easy for you to say that. You are so big. So nothing can happen to you. But for me, I have to be very, very careful.”

“My life is a misery. I have to be always on the lookout for the cats, the dogs the foxes and all such creatures who are trying to make a meal out of me” The little mouse continued.

“Oh! Is that all? The solution is very simple” The lion replied

“Really? Please oh king; please tell me what to do”

“Just become as big as me” The lion replied.

“But how is it possible?”The mouse asked

“That is for you to figure out. I am the king, I only make policy decisions” Lion replied

***

“I believe this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth. No single space project in this period will be more impressive to mankind, or more important for the long-range exploration of space, and none will be so difficult or expensive to accomplish." President John F. Kennedy declared in his speech to U.S. Congress, May 25, 1961.

“We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.” Later he described so about this audacious goal at a speech in Rice University, Houston.

In 1969 Luis Armstrong walked on the moon.

***

What is the difference between the above two stories other than that one is a made up story (not by me) and the other is a true story.

Both were tough challenges and ambitious goals. The first one was set by a leader without thinking through the competence of his team, what is realistically possible with the resource available; a wishful thinking.

The second one was founded on understanding on what could be achievable, supported with the right kind of resource allocation, and total commitment by the leader.

We see samples of both among our corporate leadership. Some set whimsical challenges for the team based purely on bravado or the latest management fad. Then they squeeze the team hoping that this pressure, threat and fear will deliver results.

Some set the goals founded on what the team is best at, what can give them a dream to strive for and then give them the necessary resources and training, induct complementary talent, give a free hand to deliver and extend them a hand of support when they hesitate.

This I suppose is the mark of a visionary leader. And the wisdom to see this difference is what we need to pray for.

''There is a wide difference between true courage and a mere contempt of life.'' Unknown

Bureaucracy – Nature or Nurture ?

2011-02-01T10:44:00.000+05:30

One of my good friends is a senior civil servant. As he joined government service straight from the college and his career experience was only in the government sector. He is a very diligent officer and likes to give his best to the assignments at hand. He is familiar with the general public complaint about government servants that they are bureaucratic, slow, process oriented than result oriented, corrupt, insensitive and so on in contrast to the private sector which is result oriented, quick on their feet, nimble and innovative. The difference portrayed is often that of hellhole and heaven.

Recently he had an opportunity to work in a team, which consisted of civil servants and veterans from private sector, offering a public service. He was excited about the opportunity to work in such a dynamic team which combined best of both worlds, working for a common purpose, to make a meaningful contribution to the society. He looked forward to working in a place which mixes the divergent ideas and culture. In this post I take a peep into one of the interesting observation by my friend regarding the working style of people from both sides of the divide.

As per my friend, he experienced very similar bureaucratic tendencies even among the representatives of the private sector. “What is the big difference that you guys talk about?” he asked me. He confessed that he may have been expecting magic or may have had excessive expectation from the experts from private sector.

My take on this is as follows. In private sector creative and entrepreneurial people set up new companies and new businesses. They get a team to work with them to implement these enterprises. As the companies get bigger, more of the managers and the employees that join the team are normally risk-averse and are happy to do what they are told to do. Some organizations maintain the dynamism and have dynamic growth while the others settle down to maintenance mode.(Read “Be Relevant or Perish – Part II for some more thoughts on this)

In government too we see similar pattern. Outstanding and dynamic officers set up new departments, new organizations, new services or new ideas. Then they move out and maintenance managers take over.

In both cases, when the organizations get to be under the control of managers and administrators comfortable with ‘status quo’ the service level deteriorates and the organization becomes moribund. The big difference is that in private sector, the competition and limited entry barrier for new ideas, may force the dinosaurs to extinction and new and vibrant companies will eventually take over. (Unless they are sort of utility companies existing as natural or legal monopolies).

But in government sector neither the moribund institutions or departments die nor new departments are created in competition with the existing ones. (Have you heard of competition for police, registrar of companies, pollution control board, land registration department etc?). This could lead to eventual degeneration in service quality. Sometimes a new dynamic officer comes in for a stint and situation improves till he lasts. The cycle goes on.

As far as the public is concerned their experience shows that they have to deal with a large cross section of non-performing government departments which frustrates them in their day-to-day life; both for normal living and in their business ventures. They have no other option or competing choices. On the other hand, when they deal with private sector service providers they have different service providers, which give them a choice, freedom to demand service and walk out if they are unhappy. (There are many cases where the private sector can get away with shoddy service levels).

So in the end what drive this divergent behavior? Nature or Nurture? When it comes to risk taking every human being lie somewhere in a continuum with extreme risk averseness on one end and extreme risk taking on the other end. Risk averseness come out of our basic survival instinct of the human ape. As we progressed the survival has grown to encompass survival in the society, protecting our economic security, pride, career, acceptance and so on. Risk taking comes out of the other dimension of survival that tries to find new opportunities for food, a mate and position which in the modern society also takes the form of riches, social standing, prestige and so on.

Majority of people are risk averse in nature and their actions are determined by this need to reduce uncertainty, what in corporate circle refer to as CYA (Cover You’re A…). Such people try to play by the letter of the law, make no judgment calls, or tilt the apple cart. This means that it is in the nature of most of the human beings to build up rigid, straight jacketed restrictive systems. On the other hand there are some who are very comfortable in challenging the status quo. They try to venture to road less travelled and create environment that encourages many to follow. This means it is also a matter of nurture.

The companies, institutions and society need both; a healthy ecosystem that safeguard its citizens from excessive uncertainties in social and economic spheres at the same time encourage and support innovation and risk taking, The challenge for the leadership is to find this healthy balance with the right mixture of rules, norms and incentives.

"Great minds discuss ideas. Average minds discuss events. Small minds discuss people." Eleanor Roosevelt

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Be Relevant or … Part 2

2011-01-24T21:27:00.003+05:30

In Part 1 of this post we discussed about the intellectual obsolescence of individuals if they fail to keep themselves relevant. Such obsolescence is applicable not only to individuals; but also to organizations and companies.

Most often companies and organizations get started by people who are visionaries, who have exciting new ideas, who are willing to take risks and who are willing struggle to see their dreams coming to fruition. They get a team of people who share their passion to work on these. Once they succeed, some of these organizations consciously build processes to ensure that they upgrade their knowledge base, encourage their people to actively participate in this knowledge build up and infuse newer ideas and newer talents so that they don’t become obsolete in the changing world. They place their best people on their biggest opportunities and not on their biggest problems as Jim Collins observed his bestselling book “Good to Great”. They move from Good to Great and enjoy enviable corporate longevity.

Many organizations after their initial success forget about this need for continuous upgrade. They get caught up in their current competencies and current success and their focus shifts to defending their current turfs. Their priorities are maximizing short term benefits and comforts and they get excited with unproductive corporate rituals that do not create value for the clients and thus to the organizations. Jack Welch and Lou Gerstner have explained about their experience on corporate bureaucracy in established and successful companies like GE and IBM and how it stifled the growth and innovation even to the extent of brining the organization to near extinction. As the famous adage goes the ‘Barbarians at the gate will walk in and dominate the board rooms’. Those who cannot feel comfortable with this leave and those who are happy to maintain status quo get to be the majority. Quoting Jim Collins again; “Most companies build their bureaucratic rules to manage the small percentage of wrong people on the bus, which in turn drives away the right people on the bus, which then increases the percentage of wrong people on the bus, which increases the need for more bureaucracy to compensate for incompetence and lack of discipline, which then further drives the right people away, and so forth.” (Good to Great, P. 121).

When this happens, the value creation suffers and organization becomes internally focused; focused on a variety of processes and rituals creating lots of paperwork that keeps everybody busy, that gives reason to pat each other’s shoulders irrespective of creation of new growth opportunities for the company. Product innovation and service upgrades stop and secretarial, legal and bureaucratic trapeze come to the forefront. Internal debates cease to be on ideas; but on gossip about events and people.

This is the reason the mortality rate of companies is quite high. I am not referring to the almost 90% mortality of the start-ups within one year of their launch; but of companies which have successfully established and performed at least for a decade. Look around, successful companies which have sustained their success or even survived for 25 years are very few anywhere in the world. A Business week article has pointed out that "The average life expectancy of a multinational corporation-Fortune 500 or its equivalent-is between 40 and 50 years. This figure is based on most surveys of corporate births and deaths. A full one-third of the companies listed in the 1970 Fortune 500, for instance, had vanished by 1983-acquired, merged, or broken to pieces.Human beings have learned to survive, on aver-age, for 75 years or more, but there are very few companies that are that old and flourishing" [1] And that is why companies and organizations have to have a conscious strategy to address this".

The world we have created is a product of our thinking; it cannot be changed without changing our thinking. Albert Einstein

[1] http://www.businessweek.com/chapter/degeus.htm

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Be Relevant or Perish

2011-01-18T08:31:00.001+05:30

I remember a story by Somerset Maugham. I don’t remember the details, only the outline. This is the story about a gentleman, let us call him George, who at the age of 45 decided to call it a day from his active career and worldly responsibilities to truly enjoy the remaining part of his life. He was not married and had no immediate family to worry about. He was not a very rich man either. So he put all his saving in a pension plan, which would give him an annuity for 25 years. He planned his annuity in such a way that the payment would run out when he turned 70. He claimed that if he was still alive after the last annuity payment, he would end his life too. For the next 25 years he had a very pleasant and enjoyable life; but, he was still a healthy man when the last cheque arrived. He did not have the guts to end his life and had had to struggle to for his life after that.

This is an extreme case. But we see variations of this around us, among people and among organizations. Some are outcome of conscious decisions, some are outcome of irresponsible planning and some are outcome of circumstances.

Many people do save for their retirement. The nest egg they build up may give certain payout which is quite comfortable. But the saving they have is invested in a fashion that the assets no more appreciate and therefore the regular cash flow remains the same in absolute terms. With the kind of longevity we enjoy these days, many would live for 20 to 30 years post retirement. As the times goes, even with a moderate inflation, the buying power of the regular cash flow diminishes, and on the other side the expenses increase; especially on account of health related costs. By then there are no more avenues for new income opportunities as we are outdated and or incapacitated.

Many of us are familiar about this possibility and plan for this. But there is yet another facet of our life where we often forget about gradual obsolescence. It is about our competence and skill sets. We study hard and acquire skills and qualifications as youngsters. Then we get into a career or profession or business, based on the skills and expertise we have built. Once we are on a job or profession some of us fail to continue with the discipline of investing in ourselves; in updating our skills sets or familiarizing with new developments in our domain or acquiring new skill sets. We get caught up in our immediate and urgent demands of our job, our family and our social obligations. This is specially so for those who have managed to get placed in government jobs or other organizations which are large and stable and need lots of people to handle routine activities. In other words, an organization where uncertainty related to sustenance is low. We get caught up in pushing papers, bureaucratic maneuvers and window dressing; actions that don’t build the business or build people.

Over a period of time, our relevance diminishes gradually. New blood comes in with new skills and new ideas. We get passed over for newer challenges and newer opportunities or even promotions. (Unless we are in an organization which is already dominated by such people in which case we can be a part of the decaying organization and hope that it doesn’t go under before we retire!) As we go up the ladder, the positions and opportunities are limited and competition gets tougher. Unless we can prove that we are the best for the job, we are overlooked. We feel that we are not compensated or given credit for our past achievements. We forget that new opportunities are based on our relevance for future demands and not for past performance.

On the other hand some of us continuously build on our strengths so that our past experience complements our new skills and capabilities we acquire and together they are still relevant to the world around. We don’t deep freeze our brain but try to keep it still active and inquisitive. Those of us who have consciously worked on this dimension go onto see their value appreciating with time and till such time our health permits we continue to be in demand for what we can deliver and not what we have delivered. (Then we will be in the fortunate position to choose whether or how to monetize or enjoy this value.)

“I dread the word success. To have succeeded is to have finished one’s goal in life. Like the Male Spider that gets eaten up once it succeeds in its courtship. I like the world of continuous becoming. With a goal in front and not behind” Barnard Shaw

Dare to Differ

2011-01-11T21:06:00.003+05:30

In his famous book “Wisdom of the Crowds” James Surowieky has brilliantly explained how a number of average people can pool their collective wisdom to make outstanding estimations, decisions and predictions, better than what many brilliant people achieve individually. He does not claim that this is a magic solution. Neither does he claim that if zillion monkeys are given typewriters, possibly we will see the complete works of Shakespeare. (If that was the case we should be seeing at least one at www!). He is making a point that if we find a method for pooling together inputs from a large number of independent individuals with divergent views, then there could be many questions where the crowd would can come up with better results.[1]

Nature has also endowed such skills and processes to harness collective wisdom of agents who are individually endowed with limited knowledge and skill to build brilliant solutions. The way ants forage for food, the way bees select locations for their new hive, the way termites build mounts with weather control systems using natural energy with the sophistication that human beings have not yet achieved, are a few examples of how nature uses the wisdom of the crowds [2]

Democratic process we use in election of government, price discovery of goods and services in the markets and exchanges where various assets are traded among a large cross section of participating agents are examples how humans harness this wisdom of the crowds.

There are a few critical requirements for achieving meaningful results from large groups. They are: (i) diversity of knowledge of participants (ii) independence exercised by the agents (iii) mechanisms to pool this divergence; that bring about unimaginable solutions.

In the animal kingdom of ants and bees, this divergence and independence is hardwired. Human beings are also capable for this divergence; however there are many contexts and environmental conditions where this fails and the crowd or mob behaviour set in; where divergence fails and the group follows some crazy bubbles, fads or madness. (There are examples of such mob behaviour also among animals when nature uses this to trim overcrowding)

We have seen this in market bubbles, we have seen this in the similarity of strategies used my multiple fund managers, we have seen this in mob violence and so on. This depends on the context and the environment. Sometimes this is also misused by political leaders to serve their purpose.

Not just bee colonies or exchanges can benefit from the wisdom of the crowds, companies can also benefit by building environment that encourage diversity and dissent. Many company leaderships and bureaucracies don’t nurture environment for such dissent. The hierarchical structure and the feudal culture often suppress dissent, insecurity of the leaders encourages sycophancy and misguided sense of loyalty promotes conformance. Dissent is often equated to disloyalty to the organisation whereas it could be an expression of true loyalty. As Howerd Zinn observed; “Dissent is the highest form of patriotism”

Orson Welles has expressed this with a very interesting, rather cynical, example in his book ‘The Third man’: “In Italy for thirty years under the Borgias they had warfare, terror murder and bloodshed. But they produced Michelangelo, Leonardo da Vinci and the renaissance. In Switzerland they had brotherly love; they had five hundred years of democracy and peace. And what did they produce? The cuckoo clock!” [3]

This is not to suggest that the companies should encourage violence and conflicts. But it is essential to encourage diversity, dissent and competition for good ideas, if we plan to build performing teams. Very often in the normal corporate settings this does not occur naturally unless leaders actively encourage and incentivize such behaviour.

“Loyalty to the country always. Loyalty to the government when it deserves it” Mark Twain

1. Wisdom of Crowds, James Surowieky
2. Smart Swarm, Peter Miller
3. The Ape in the corner office. Richard Conniff

Break the silos

2011-01-03T17:57:00.001+05:30

I understand that one of the primary missions of Google is to organise world’s information. As a part of this dream it embarked on a project of scanning books and creating a digital library as early as 2001. It approached this dream in a systematic fashion. It worked on strengthening the technology for speedy and efficient scanning, it interfaced relentlessly with the libraries to give it access to their treasures and it established infrastructure to handle this volume. It also had to address legal issues relating to copy rights.

Although they had proceeded quite ahead, even by 2006, they were still far short of their ultimate dream of having a large number of books in their digital library. This was not yet sure place to hit upon the scanned images of many books we are looking for. So in 2007 it came up with an innovation. It added to its book search a means to link all publically available information about any books from various sources like online library catalogues, web references on books, book reviews and a host of such sources which had rich information about any books.

They really did not have to wait till 2007 to launch this innovation. They had most of this information available with them as early as 2004. It is just that the team of Google book search did not get the idea to look at the other division in their own company and make their project more meaningful. Once they linked all these silos the outcome is truly marvellous. {1}

Today, if you want to know about practically any book, the best place to search is Google Books. If it is not available in the list of scanned books, we still can get a lot of information about the book we are searching for. As they have huge cache of scanned books, we can even search from these scanned books, on the basis of key words. A truly brilliant functionality!

We learn some lessons from this little story.

Silos within: One of the core strengths of Google as a company is encouragement they give and the environment they create for people with diverse skills and from diverse teams to interact with each other. That is one reason though late, such a solution evolved. Even then the solution which in retrospect looks so obvious did not evolve overnight.

But in many organisations we see silos; the silos that don’t talk to each other, the silos created and protected by leaders who lack vision; the silos maintained by insecurity; the silos encouraged by Tuglaks who believe in ‘divide and rule’. These silos then become sinks for innovation where status quo becomes the norm.

Cross Pollination: If there are mechanisms in place to inter-connect silos, if not break them, the benefit that we can mange would be beyond imaginations. We will find learning from one group which solved a problem, giving ideas, and generating new solutions to the problems in another area.

In his book “Future of Management” Garry Hamel has discussed the key ingredients that are required for longevity of organisation and institutions. One of the five key factors he has discussed is the contribution of diversity of knowledge, culture, ideas, and expertise present in any group.

Passion and Commitment: In any team, company and organisations there are two kinds of people.

(i) Those who are there only for a salary. They come to office, do what is required of them to do, to the extent they can get away with, they react to emergencies and problems more in the nature of blaming somebody or to cover their derriere than to find a solution. Their priorities are driven by what makes then look good and what their bosses are excited about than what is important for the organisation. They keep looking at the clock for the closing time; their leaves are planned for their convenience with no regard for organisational challenges.

(ii) Those who share the dream, the vision and are passionately committed to and involved in what they are part of. They have in the back of their mind, processes running looking for new ideas and new solutions from everything they read, see or come across. They behave almost like young men/ girls who have been smitten and are constantly looking for ways to please their loved ones. Their priorities are driven by what can make a difference to the team/ project/ company / organisation they belong to and how they can make the life better for their clients. When they are so passionately involved they are able to crack insurmountable problems. It is this phenomenon that is expressed in the famous quote from Alchemist “If you believe in something the whole world will conspire to make it happen for you”.

These learning are relevant for any organisation whether private or public. Any organisation that attempts to break down silos, encourage cross pollination of ideas and instil commitment and passion will see emergence of unique solutions, killer applications and exciting products that elevates them to new heights. Those who fail in these are destined to have a place in the history a place they will share with dinosaurs.

There are three ways of dealing with difference: domination, compromise, and integration. By domination only one side gets what it wants; by compromise neither side gets what it wants; by integration we find a way by which both sides may get what they wish.- Mary Parker Follett

[1]Planet Google, Randall Stross

“Are you being watched?”

2010-12-27T14:09:00.001+05:30

Radia tapes controversy is about the tapping of tele-conversations of Nira Radia by the informant agencies, the celebrated lobbyist had with a cross section of powerful people from industry, politics, press and a host of other power brokers. This incident has raised a host of questions.

Is it right to tap private conversations? We can say that when there is serious suspicion about possible legal violations, the law enforcing bodies have the right to eavesdrop to help them in their enforcement or to protect the sovereignty of the country. On the other hand how do we ensure that this right is not misused for political gains and industrial espionage? What kind or processes do we put in place to ensure that this is not a means to suppress dissent and democratic processes?

Then the next question is whether it was right to have leaked this information to public domain? These were not private conversations or business secrets or even some escapades which have no social relevance except for satisfying the voyeuristic inclinations of a perverted few. These were conspiracies by people in power, to defraud the public. Don’t the public have a right to know?

The ‘wiki leaks’ has established a forum for the whistle blowers to bring to light conspiracies, corruption and machinations of very powerful people which otherwise would not have been possible because of possible repercussions. It has got kudos and criticisms.
‘The organization won a number of awards, including The Economist's New Media Award in 2008 and Amnesty International's UK Media Award in 2009. In 2010, the New York City Daily News listed WikiLeaks first among websites "that could totally change the news", and Julian Assange was named the Readers' Choice for TIME's Person of the Year in 2010. Supporters of Wikileaks in the media have commended it for exposing state and corporate secrets, increasing transparency, supporting freedom of the press, and enhancing democratic discourse while challenging powerful institutions. At the same time, several U.S. government officials have criticized WikiLeaks for exposing classified information, harming national security, and compromising international diplomacy.[Human right organizations such as Amnesty International criticized WikiLeaks for not adequately redacting the names of civilians working with the U.S. military. Some journalists have criticized the lack of editorial discretion when releasing thousands of documents at once and without sufficient analysis. Among negative public reactions in the United States, people have characterized the organization as irresponsible, immoral, and illegal.’ [1]

Incidences like this and revelations of this magnitude were once only occasional occurrences. But the progress in technology has gradually been chipping away the concept of privacy and secrecy the way we are familiar.

The ubiquitous availability of electronic communication and electronic recordings are giving a different dimension to private conversations. I am not talking about spying which is still considered illegal (except if it is by the authorities who have the right to do so) I am talking about stronger evidences that can reveal the truth about what transpired in a meeting where you and I were present.

For example, although oral contracts always were recognized by law, it was often difficult to prove the validity of the contract. We addressed this by having more people to participate our discussions who could act as witnesses. But even then it was your word against mine. So in critical meetings we started the practice of signed minutes. But this again had the limitation of doctored minutes, ingenuity of the minute writer and limitation of human memory or event the minutes getting lost. It also could not capture the nuances of the conversations which are discernable only when we listen to the way dialogues were delivered. Now the technology provides us with tools to have voice notes, voice minutes and even video notes. It is perfectly legal and even moral if you are not eves dropping or if you are not sharing it with those who are not meant to have access to it. It is ‘the true minutes of meeting’ that can better represent the truth.

Earlier paper documents could vanish could not be traced and would have been too painful to track. But today the mails and files are stored for eternity at very low cost and computer can help us to trace and track these with ease based on key words, dates and so on.

More and more of our friends are going online and share photos and videos of events where we were a part. More people are going to blog about us, more people are going to study, dissect and publish opinion about what we do. We have limited control over these. The higher we go, the more publically relevant what we do, the more open is going to be our acts of commission and omission.

Wiki leaks and the likes of it are going to make whistle blowing easier. Legal enablement of the right to information reduces our ability to hide and obfuscate under official secrets act. Cheaper storage, stronger searches, powerful algorithm to match and generate profiles will make it easier for anybody to obtain a much better understanding of what we are and what we do. As the Economist observed in an article, Wiki Gaga, “Such freedom may test the limits of democracy, in which rights to speech are balanced by duties to privacy and security” [2]

All these are nudging us to change the way we talk and behave. Be more honest in our dealing and more truthful or at least careful in our uttering and behaviour. Bluffing our way through is not the obvious option any more. When we mess up, remember it may not remain a secret all the time. On the other hand we must also learn to be less judgemental about human follies often revealed out of context in the digital world and learn to forget and forgive

As Jeffrey Rosen, a law professor at George Washington University has pointed ‘Our character, ultimately, can’t be judged by strangers on the basis of our Facebook or Google profiles; it can be judged by only those who know us and have time to evaluate our strengths and weaknesses, face to face and in context, with insight and understanding. In the meantime, as all of us stumble over the challenges of living in a world without forgetting, we need to learn new forms of empathy, new ways of defining ourselves without reference to what others say about us and new ways of forgiving one another for the digital trails that will follow us forever.’[3]

I am not making any value judgement of whether this is right or wrong. I am only pointing out that we are moving towards a more open society and whether we like it or not there is a pretty high chance that what we thought to be confidential may not remain so and we have no option. (Read up “Privacy Fantasies” for some futuristic thoughts on this topic)

“You already have zero privacy - get over it” Scott McNealy, Cofounder of SUN Micro System

1. http://en.wikipedia.org/wiki/WikiLeaks
2. http://www.economist.com/node/16335810
3. The Web Means the End of Forgetting. The New York Times (http://www.nytimes.com/2010/07/25/magazine/25privacy-t2.html?_r=1)

My first love

2010-12-20T12:12:00.000+05:30

Once upon a time there was a kid who, like most of us, feared examinations. So he prayed to god to give him a magic pen that could help him answer all the questions correctly in any exam.

One day in his dream a fairy came to him. She promised to grant him one wish. Promptly he asked the fairy for a magic pen. The fairy took him to a big palace and told him that there is a magic pen in a chamber deep inside that palace.

“I cannot take you all the way in. You have to pass through seven gates and each one is guarded by a scary ogre.” The fairy told him

He walked to the first gate and as predicted the ogre was there.

“If you want to pass through this gate, you need to answer three questions” The ogre told him in a booming voice.

The ogre asked him the questions and he had no idea about any of them. (The ogre did not allow life lines or dial a friend option).

“If you want to try again, look behind you, there is an almirah full of books, read them and you will get all the answers” the ogre told him

He sat there for days and read all the books and when the ogre asked him questions he was ready with all the answers. This was repeated at all the seven gates and finally after many many days he reached the inner room.

He was excited. He looked around for the treasure ‘the magic pen’. The room looked empty. He was sad and felt cheated. He wanted to hit the fairy who took him for a ride. He started crying. Suddenly the old fairy was with him.

“Why did you let me down?” he screamed

“I have not let you down my boy. You don’t need a magic pen any more. You can take any pen to write the exams. The magic is in your head” The fairy replied softly. She had a little twinkle in her eyes

This story that I read as a little boy left an indelible image in my mind. I believe it is this story that set me up with my first love “BOOKS”. All through the years my love for books has only grown and each one of them has added one more ‘magic’ into my mind.

When I observed the rapid growth of internet and the power of Google, initially I felt that it was time to say good bye to my first love. If I have any questions, the answers are a ‘Google search’ away.

Then I realised that Google has not yet reached the level where it can ask the right questions for me, though it can help me to find the right answer. Not only that, it makes this answer available to anybody, from anywhere in the world at really no cost. The information and knowledge is no more restricted to the privileged few who can afford. But now I need to be even more knowledgeable to know what questions to ask and I need new ideas to make a difference. The ‘written word’ is still one of the few triggers that can help me in this.

Technology has now added more options, I can read e-books and articles from the net, from the kindle, I can review from the net what I want to read, I can get summaries of big fat books that would distil the wisdom for me, my friends and the virtual communities could share their opinion with me on what I intend to read and the audio books help me to fall asleep imbibing the ‘spoken word’ without disturbing my kid or my wife with the reading light.

With all these I have only got closer to my first love these days and not drift away...

“The books that help you the most are those which make you think the most.” Theodore Parker

Note. There are still millions around the world who do not have access to this magic of written words or the access to the net. This is one area in which a small contribution can serve many generations. I have been very impressed by work done by ‘Room to Read’ and I believe this truly is one of the most admirable charities in today’s world.

Fire in the belly

2010-12-13T18:38:00.002+05:30

Over the weekend I was at IIT Kanpur. I was there to talk to students who had come from the best engineering schools across India to participate in the Asian leg of the annual Intercollegiate Programming Competition. The top team from India will be selected to participate in the world finals which will have about 80 teams selected from about 60 centers across the world.

I spent some time talking to the judges who have been associated with this event a number of times. One of them was a young lecturer from Bangladesh who had reached the finals twice.
The profs told me that in the world competition the top ten places are always bagged by the teams from Russia and China. The best performance from the teams from India ever was a rank of 29.

“How come India which is supposed to be a powerhouse of software development does not fare well?” I asked

“The Chinese kids do a lot of preparation. The colleges give them enormous support. In fact I understand that they even give really good team members relaxed schedule to complete their other curriculum schedules” one of the faculty explained.

I found it quite familiar. We hear similar stories about the focused development support institutions and government provide for development of international competitiveness in different fields including sports in countries like China and Russia. We also need to build such national priorities and support systems to see our competitiveness boosting.

“But then how do you explain the kids from Bangladesh doing better than Indian kids”

“That is a different dimension of performance. These kids are full of passion and are desperate to prove to the world that they are good” The Professor explained.

“With the IT Industry booming, our kids are sure of the job opening irrespective of their academic performance. So they don’t want to put in the hard work needed to be even to participate in the world finals; forget being the world champions.”

“In the Asian leg, practically no teams from IITs ever reach the top positions in the recent past. It is the students from the institute from the next rung that end up in the top 10. In fact the team from Indonesia & IIIT Hyderabad topped this year.” the Prof continued.

“I agree. The inner passion to demonstrate our software credentials helped leaders like Moorthy, Nandan, Bagchi, Soota and their team to slog it out and build large software powerhouses from India. Our kids have it easy these days!”

I remembered what my good friend Ajay had explained to me as a possible contributing reason why Jewish race has managed to win more than 175 Nobel prices though they form a very small proportion of global population. They had been exposed to multiple occasions of severe persecution and they were pushed to their limits for survival. This trial by fire could be one of the reason for their outstanding performance in various fields.

It is a well understood fact that whether it is in sports, computer programming or business one of the key essentials for success is ‘fire in the belly’, a ‘burning desire’ to make a mark. It is of equal importance at the top, at the bottom and in between. If the top dog has no ambition to build, his team will also settle down and relax. If the top dog has ambition but he fails to build a team that share his dream then too the results will be limited. When any organisation get to be dominated by people who have retired in their hearts, it will be the beginning of the end.

And that is the challenge that any leadership faces..

“If you ask people to reach, to think creatively, and produce extraordinary results, they usually will. Too often in our modern world they are simply not asked” John Wood, Founder, Room to Read

To be or Not to be: Part 6 - The Larger Good ?

2010-12-06T19:14:00.001+05:30

I was about 18 years old and I used to be a very active member of a youth group in our area. We had a great bunch of talented guys and girls in this group and we used to have lots of fun cooking up interesting stuff together.

Once we decided to organise a cultural evening; an evening of drama, songs and dance for us to perform and show-off. I was the secretary of the group and played an active role in organising the program. I wanted to use this as an opportunity to get wider participation from the youngsters in the area. So I invited them to participate in the event. Among them there was a girl who was very talented, good looking and a bit arrogant who had never actively participated in our earlier programs except for occasional guest appearances. (Let us call her Monica) I asked her to participate in our cultural evening and she agreed. (May be she could not resist my charm!) She volunteered to be the Master of Ceremonies (MC). She sat through the rehearsals to get a good idea of the various programs, helped us to organise them in a creative sequence and worked out nice introductions for each item which was developed with quite a lot or research to include nice quotes and humorous quips. I was really impressed by the work she did.

On the day of the program, we practiced the whole day and late in the afternoon I went home, had a bath, put on nice clothes and returned to the venue. Then a delegation of few guys from our group who were part of many of the main items for the day, like drama, skit and group songs, approached me.

“We don’t want Monica to be the MC today” Their leader told me.

“Why? She has put in a lot of efforts for this and has done a fabulous job” I replied.

“We don’t care. If she is the MC we will not participate in any programs today”, retorted their leader.

“But you should have expressed your concern earlier. Not at the last moment”

“Nothing doing, it is our decision now”.

I tried my level best to persuade them; begged, pleaded, appealed to their sense of right and wrong and tried to call their bluff. No luck.

If I didn’t heed to their demand many of the items of the day would be cancelled. Many youngsters (in addition to the few who led the anti Monica rebellion) who were part of these programs would be devastated. Also, with the star items cancelled the program would be turn out to be a flop.

On the flip side, if I did heed to their demand, it would be unfair to Monica who had put in so much of effort to knit up a wonderful story line for introductions. Not just that, without the MC, the punch of the program would also be lost; unless I convince her to sacrifice for the greater good, share the story line and get somebody else to do the MC Job.

We can argue the merit of each of these options. Sacrifice many for one? Or Sacrifice one for many? It was double bind, a Morton’s fork; I was stuck between the devil and the deep blue sea.

We face these kinds of dilemmas in our day to day work. Take a few examples; (i) A client comes to us with a complaint. The mistake is ours; but it will be difficult for him to fix it on us. If we accept his demand, there is a cost to the company and one of our colleagues could be in trouble. (Recently Toyota had to go through a similar kind of situation) (ii) We made a goof up in our work. It is easy to bury the mistake and our role in it; but the company will have to pay the price. (iii) We want to push some of our agenda; but one colleague could stand in our way. Should we try to get him out of the company?

Some of us have a simple rule. Choose the option that serves our purpose the most. Some of us want to do what is right. Even this distinction is often blurred and contextual. There are two important factors that will determine whether and when we will compromise doing the right thing. It is the balance between the stakes involved and the strength of our moral conviction in the particular case.

Then what is that could leverage our moral conviction? May be the habit that we develop (Our parents, teachers and Society helped us to develop) would encourage us to choose the right thing most of the times. As Aristotle observed “Moral excellence comes about as a result of habit. We become just by doing just acts, temperate by doing temperate acts, brave by doing brave acts”. If we develop this habit, we will at the least try to reflect for a moment what is right instead of just what we want. When more people think in this manner most of the time, we will have a civilized society.

Sometimes it is difficult to identify what is right. The reasons tell us one and the conviction the other. From time immemorial the thinking man has tried to find a method to figure this out. Mythologies address this question extensively. Yet do we have the answer? When we get “the answer” to this question, I think we will become one with the god; attain the “true nirvana”

Till then it is a search, and that is what we call life ...

About morals, I know only that what is moral is what you feel good after and what is immoral is what you feel bad after. Ernest Hemingway

100th Milestone Part II - Learning

2010-11-29T18:28:00.002+05:30

Continued from last week.. My experience in blogging

My enterprise of writing a weekly blog has helped me enormously. Most importantly it taught me the meaning of the quote “If there is a will there is a way”

It has also taught me the discipline of thinking through issues and doing some research. Normally many thoughts and ideas drift through our mind. But when I sit down to consolidate my thoughts as a post, it helps me to focus and get a better hang on the related issues, it questions some of my assumptions and it forces me to take a position which I am not afraid to share.

Some of what I write are original. Some are new ways of presenting an idea or thought, some are sharing of experience and some are remixes of interesting stuff. The postings I like best are based on my experience. They also frustrate me the most, because it is quite an arduous task to remove the characters and the context to distil the learning. Nevertheless, it is fun. There are of course occasions when I long to reproduce the incidences and the context in ‘as is’ format, which would have been much more hilarious. But then my good senses prevail and I postpone them for my post retirement entertainment :-)

I realized that taking a position in public (not in front of a few people whom we know) is scary for many reasons.

(i) When I articulate my stand in a few written words, it may not succeed in communicating what I meant. (may be my failure in communication)
(ii) As I try layered writing which helps the reader find a meaning in their context, sometimes some people read a meaning that I never imagined. Especially some creative minds may work overtime in coming out with divergent interpretations
(iii) Sometimes the underlying meaning touch some sensitive heart (especially if is perceived to be rubbing them the wrong way) and could bring about a violent reaction. This is specially the case when I write about public policy or governance.

I have realized that these are the risks I should I accept if I decide to publish my thoughts. But I do believe that it is the right of every reader to interpret anything that he reads and to react or respond as he chooses. I cannot and should not complain..Like Voltaire remarked " I don't agree with what he says; but I will defend to death his right to say so"

Writing my blog has been an enriching experience because it improves my articulation, the feedback I get from smart people extends my horizon of learning, it gives me an idea of how different people react to the same stuff and most importantly it forces me to think.

After every posting I am filled with trepidation on how it is going to be received. How many people will read it and how many will like it. The tracker tells me that on an average there are 150 to 200 clicks for each of my posts which come from all over the world. Half the readers are from India and another quarter from US. I get readers from UK, Denmark, Korea, China, Australia, Italy, Singapore, Hong Kong, Germany, Austria and so on. It really makes me feel good and encourages me to continue with my initiative.

Another great benefit of this venture is that it has helped me to be aware and familiar with the new options evolving in communication technologies and social media. I look at the new blog features, figure out new gadgets to be attached, experiment with social media and viral marketing options. It has also given me lots of new friends who are willing to share their ideas.

Some of my friends who have been reading my posts on a regular basis have been nudging me to consolidate all my blogs to a book. The idea excites me. Two things are holding me back. (i) I am scared (ii) I seem to have very little time to take up this project. But now I feel confident to take a public position again. This confidence arises from the partnership that has been promised by one of my old time friends Sankarankutty, who is well read, has a good writing style and has a sophisticated taste for artistic expression; complementing what I have and don't have.

As most things about life this too is a journey...

There are high spots in all of our lives and most of them have come about through encouragement from someone else. I don't care how great, how famous or successful a man or woman may be, each hungers for applause. - GEORGE MATTHEW ADAMS

100th Milestone- Part 1 - The Journey Begins

2010-11-23T07:23:00.001+05:30

This is the 100th post in this blog. Therefore I decided to share my experience in blogging; how it started, how it progressed, the learning from this venture and how I hope it will proceed. I decided to post this as I got a feedback from many of my friends that they would like to attempt this and they are curious about how a lazy guy like me got around to doing it.

I had been nurturing for a while a dream of developing an ability to write some sensible stuff that others would find interesting and/or meaningful and eventually be acknowledged as a writer. But, I could never get around to sit down and write though there have been times when I felt that the ideas that flitted across my mind were worth sharing. I felt too lazy and gave excuses to myself why I could not find the time.

Any writer, beginner or an authority, would need an avenue to express his creation and share the same. In the good old days we were limited in this opportunity and only a few could find the avenue either in book publishing or in placing articles in any publications. It was practically impossible for an individual to share his written expressions to a wider audience without this support.

The World Wide Web and particularly the social media like blog have changed all this. This has given an ability to all of us to publish at practically no cost. So a couple of year’s back I decided that I would setup a blog. But I still would not get started. I convinced myself that this was because of my busy schedule. I had to find a way to ensure that this doesn’t end up being an abortive enthusiasm for a project that that I would not sustain. To put pressure on myself, I announced to the whole world (my friends, relatives, colleagues, acquaintances et al) that I would post at least one article every week. The fact that there were enough friends who used to loudly wonder (maybe to tease me) when I delayed a few days made sure that I lived up to my commitment.

The next challenge was to come up with an idea every week on which I could pen 500 to 700 words and put it out there for everybody to see; especially since many of my friends who read my blog were brilliant people who mostly gave an honest feedback on how they felt. This has also exposed me to the different tastes of different people. When a particular posting was liked very much by some people, others had a different opinion. Among all the feedback I get, the one that still scares me is the feedback from Dr. Indira Rajaraman, my teacher from my IIM days. She is still a teacher and gives her feedback within 24 hours after I post and would comment on content, style and even spelling. I feel proud whenever she has no correction to point out.

I got some caveats from my friends when I started this blog. (i) It will bare to the world my thinking and make me predictable. (ii) On account of the kind of work I do, I may offend somebody with what I write. (iii) If to avoid being controversial I don’t share my experience the stuff I write may get to be quite mundane. Therefore I decided on some ground rules.

(i) I will not write anything about the work I am doing. If there are any lessons from my experience that are worth sharing, I will remove the incident and people, distil the lesson and share in a layered format that will help the readers to understand the learning in their life's context. In many such attempts that I made on layered writing, I got feedback from variety of people on how they found it very relevant in their context

(ii) I will acknowledge contributions and ideas from others including the stuff I read. I won’t stoop to plagiarism.

(iii) I will try to be honest in what I write and I will avoid reference to a person except if he is public figure and there is something worth sharing about him.

To be continued....

“A journey of a thousand miles begins with a single step” – Lao Tzu

To be or not to be-Part V; Moral Choices

2010-11-15T20:17:00.002+05:30

I knew a few drops of whisky could hit my senses and make my head go around. But recently I was, in a matter of few hours, exposed to two extremes of justice and morality and the experience was enough to make me dizzy.

It started with me spending some time with a person whom I describe as the Bhishma because of his stature, his acute sense of right and wrong, his confidence and willingness to stand up for what is right and his strategic acumen . We spent some time discussing about challenges we face if we decide to take positions which could rock the boat or force some change.

On the way back home from the meeting I was reading the book “The idea of justice” by Amartya Sen. The discussion with Bhishma still alive in my mind, I was able to better appreciate what he meant in his heavy and erudite style when he explains “It is fair to assume that Parisians would not have stormed the Bastille, Gandhi would not have challenged the empire on which the sun used not to set, Martin Luther King would not have fought white supremacy in ‘the land of the free and the home of the brave’, without their sense of manifest injustices that could be overcome. They were not trying to achieve a perfectly just world (even if there were any agreement on what that would be like), but they did want to remove clear injustices to the extent they could.”

The various facets of this thought were floating in my mind and I was trying to relate the same to the challenges that we face on our day-to-day life. I came back home and decided to relax a bit with some light humour and put on the old serial “Yes Minister” which portrays the blunt reality of the world; the world of political expediency, horse trading, empire building and corruption. Particularly, in the context of what I was discussing and reading during the day the contrast was striking.

“Being in a cabinet minister is a complex business Annie. So many conflicting considerations” Said Minister Hacker

“Like whether to do the right thing or the wrong thing?” Asked his wife Annie

“I must tell you about government. You must always try to do the right thing. But you must try never to get caught doing the right thing, because doing right is wrong.” Hacker continued.

“The thing about the government is principle. The thing about principle is you must never rock the boat. Because if you do all the little consciousness will fall out”

“You must always follow your conscience; but you must know where you are going. So you can’t follow your conscience; because it may not be going the way you are going.”

I could not stop laughing. I felt totally spaced out; sort of intoxication of mind. It reminded me of the conflicts we face between our intentions and compulsions, the challenges of wanting to do the right thing and the need to be ‘pragmatic’, the difference between profits and exploitation, being a responsible corporate citizen and maximising the shareholder value at any cost.

These are questions for which it is difficult to find the right answer. These are issues for which we have to make our own choices. The collective total of the choices each of us makes will determine where our society is going. But, if we wait for the other person to take the lead, it is going to be a long wait.The thought expressed by Immanuel Kant “Bringing reason to the world becomes the enterprise of morality rather than metaphysics, and the work as well as the hope of humanity” (quoted by Dr Amartya Sen in his book “The Idea of Justice) makes this point much more elegantly.

“Expecting the world to treat you fairly because you are a good person is little like expecting a bull not to attack you because you are a vegetarian” Dennis Wholey

Soul for Sale

2010-11-09T23:35:00.003+05:30

Last week I had a chance to spend few hours with an elderly gentleman and his wife. He is more than 70, still tall and handsome with an extremely winsome smile and an unending repertoire of jokes that he could crack at opportune moments. His wife who is above 60 is full of charm that made it abundantly clear that age can never quite conquer her spirit.

I was able to nudge him into telling his story which turned out to be so captivating that I even forgot to refill my glass.

“I have been always a lucky man” he started off.

“Being the youngest in a big family I enjoyed lot of love and affection and I learned to cherish and value them at a young age though it broke the bread to smaller helpings”

“My father was not a rich man, but with his powerful personality he was able to imbibe in me a strong sense of right and wrong and compassion for fellow living beings”

“When I finished my graduation, I came over to this big city of Mumbai in search of a job. After I finished my interview and was walking along, I saw the board of this professional institution and I decided to walk-in and enquire”

“As luck would have it, the guy whom I started to talk was from my native state and he explained to me everything about how to apply for an admission.”

“I tried hard and got myself an admission; the only problem was how to fund my studies.”

“But I was lucky to get some part time job that I could do before I went to school and after I finished my school”

“Then I started my practice and I realised that one of the key essentials for making lots of money was the skill to fix deals with the various approving authorities”

“I had decided in my life that I will never pay a single penny as bribe even to a policeman on the street”

“For me success was not making lots of money; but making sufficient money and a having a sound sleep”

“I did not have too many needs and I had a wonderful wife who was totally undemanding and utterly dependable”

He looked at his wife and the smile they exchanged had the same intensity of affection that one would sometimes see in a newlywed couple.

“I got many assignments where I could perform without greasing palms”

“I was even an active member of Rotary and even it’s President. I might have been the only member who came for the meeting in a bus as I could not afford a car. I did not find it any demeaning and my many of my fellow members were willing to accept me for what I am worth as a human being”

“When I got two adorable children, my wife left the job she had, to give them a home though the budget did get tighter”

“I have always been quite lucky. Couple of weeks back, with no apparent reason I went for a medical check up and was diagnosed with cancer. It is one of the least harmful varieties and it appears that it is in quite an early stage”

I have narrated only excerpts of his story. I realised that he was not particularly lucky or unlucky. There was nothing unusual or extraordinary about his story. It is just that he was clear in his mind about his priorities, what he considered as success and the price he was willing to pay. He had the usual mix of sorrow and happiness, moments of stress and moments of exhilaration that all of us experience. What made the difference was the equanimity with which he took it all. Looking for the brighter side to be content and lighter side to laugh, looking for opportunities to extend a helping hand. I think this richness of spirit that ran through his life was what made it a spellbinding story; more exciting than the dizzying heights of prominence his son has achieved!

Take a look at the madness that goes around. The definitions of success, lies we are willing to perpetuate and the games we play; Aadarsh housing society, Common Wealth Games, financial skulduggery of our bankers, weapons of mass destruction, unending conflicts at Palestine, WorldCom, Enron, Anderson and Satyam, 9-11, 26-11 the list goes on. We have no qualms in selling our souls for 30 pieces of silver.

For what will it profit a man if he gains the whole world and forfeits his soul? Or what shall a man give in return for his soul? Bible

Quadrants of Success

2010-11-01T19:00:00.002+05:30

I recently read a new book by R Gopalakrishnan. It is titled “When the Penny Drops: Learning, What’s Not Taught”. It is a very interesting book in which he shares many of his experiences and his insights of what makes a successful leader. I liked one particular framework he has presented in this book to understand the challenges for leaders. I have tried to use this framework to take a deeper look into managing uncertainty which I had discussed in my earlier postings “Scaling Up, The Art of the Impossible” Part1 and Part II

As can be seen from the diagram, a four quadrant matrix is used to understand the challenges in managing uncertainty. These quadrants are defined on the basis of the ability to identify problems and solve them. One axis is the level of uncertainty relating to problems and the other axis is the level or uncertainty relating to solutions.

In our early stages of career we are normally in the first quadrant. In this quadrant, the necessary ingredient for success is a good repository of knowledge, skills, techniques and tools; i.e. domain knowledge, standard operating procedures, standards, tricks, tips and tools. What we need is to dance as per specific tune; we should know the steps and we should know the tune. In this level, the level of uncertainty is quite low.

From there we graduate to the second quadrant. In this quadrant we graduate to the next level of uncertainty. We strengthen our problem solving skills and we develop an aptitude and skill to undertake root cause analysis. Once we are able to identify the problem, we apply the appropriate tools to solve them. The requirements at this stage are analytical skills and deductive capability. We figure out what type of dance the crowd like and then we perform the same.

From here we move to the third quadrant. At this stage we are move to the realm of pushing the envelope of knowledge. We take up assignments wherein we need to figure out solutions for problems which have been haunting us for a long time. We should have deep inquisitiveness and enjoy innovation. Learn to handle the frustrations of experimentations, learn to persist on a path and learn to discard an idea on which we have invested heavily when it has hit a dead end. We conceive and develop a new dance style.

The Ultimate Challenge is in the fourth quadrant; the quadrant of a leader. Here as a starting point we need to have a vision, a dream of where we are trying to go. The daring to “where no man has ever gone before” as Capt Kirk would say. The problems are unknown and the solutions are not there. It is a embarking on a search with reasonable clarity of the shape of the dream. A big picture idea of the geography of the space we are operating. We have to try to solve an array of possible problems that we need to address. We need to learn to get things done from people on whom we have no control or direct influence. Here we don’t know who our audience is going to be and we don’t know what kind of dance they may like. (For some tips and tricks on this read on Hitchhiker’s guide to Corporate Galaxy Part 1 and Part 2 )

The famous serenity prayer describes the strengths we need at the second, third and fourth quadrant brilliantly. In the second quadrant of uncertainty we need to have “serenity to understand the things that we cannot change”, in the third quadrant we need the “courage to change the things we can” and in the fourth quadrant we need the “wisdom to know the difference”

In any organisations we need people in each quadrant and we need processes to address the needs of each quadrant. We also need skills to identify the growth path for each employee that will address his skill and comfort for a quadrant. Some may never move out of the first quadrant and only few can ever perform in the fourth quadrant. We need to have appropriate transition strategies across quadrants including when to anchor person in a quadrant.

For any organisation to sustain and grow it will have to have at its helm few people who are comfortable and capable to be in the fourth quadrant. One of the primary reasons for organisations decay is their failure to have such leaders.

“You see things; and you say, 'Why?' But I dream things that never were; and I say, 'Why not?'” George Bernard Shaw

Games in Perspective

2010-10-22T20:20:00.005+05:30

With 38 gold medals, India came up second, just behind Australia, in the Commonwealth Games that was held in October 2010. "Delhi has delivered. The competitions went well, and it was a comfortable, satisfactory experience," said Commonwealth Games Federation President Michael Fennell regarding India's performance as a host.. Both are commendable achievements for India. But, this high profile event also brings to the forefront some lessons worth pondering about.

Last minute heroism: “We have this great Indian culture of doing everything at the last minute. Whether it is marriage or anything else, but we do end up doing it well,” quipped Indian Union Minister S Jaipal Reddy. This is a culture we appear to be developing from our childhood. The school and college folklore is about those 'cats' who managed to 'crack' the exams without studying, attending classes or doing projects. Planned and systematic effort with commitment to milestones are often seen as weaknesses even in workplace. Last minute rush and 'touch-and-go" finish are perceived as mark of genius and heroism. What we often forget are the wasteful efforts, avoidable expenditure, possible risk and unwarranted tension for the participants and last minute compromises that result on account of such heroics.

There can be no doubt that one of the contributors of the astronomical cost overrun associated with CWG could also have been this last minute heroism. It was not just the cost; there was terrible loss in reputation for India in the world stage which almost led to boycott of the games by many nations.

Blatant Corruption: There are serious concerns of financial bungling and corruption; not just incompetence, but willful malpractices. I don’t think this financial mis-handling is an exception. The team that was put in place to manage the games cannot be in any way more in-efficient or more corrupt than the leaders of many other large projects. The prime difference in this case is that it was a very high profile event (or that some were unlucky to get caught?). It again highlights the need to have more transparency and better accountability in public expenditure. A vision as a country we need to aspire for is a vision to improve our rating in corruption index and not just increase in medal tally.

It is heartening to note that some actions are being taken to identify the culprits. I hope this will not end up as temporary eyewash.

Sensational Journalism: The press played a remarkable role in bringing to public attention the bungling and corruption that took place. But often the press gets carried away and give gossips, exaggerations, innuendos and aspersions more importance than it deserves and fails to place facts in perspective. Looking through the press reports and TV coverage up till the opening ceremony, I got a feeling that we have messed up the games so badly that it would be a total failure and a national shame.

But what I saw in the TV, what I read in the press and the narration of those who witnessed and experienced the conduct of the games gave a comfort that the implementation had a certain quality that we can feel proud of. The medal tally could also be an expression of a resurgent India. First time in history we came second, ahead of England.and Canada

The news reports focused more on the warts and putrefying sores with practically no reference to anything positive till the games opened. I agree, it is important to play the role of a whistle blower but it is also important to recognize the efforts of many officers, laborers, volunteers and athletes who gave their wholehearted best with no malice in their hearts.

This again is nothing unique about CWG. What sells in media both in press and in TV is sensationalism and it has become the fashion. A sense of balance or willingness to place facts in perspective seems to be losing its glamour and a yellow hue appear to getting more popular.

“Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.” Marcus Aurelius

Aadhaar – The First Milestone

2010-10-14T19:26:00.001+05:30

“Aadhaar” Unique Id (UID) for Indian residents was inaugurated by the Prime Minister of India on September 29 2010 at Nandurbar District of Maharashtra at a function which was attended by a large contingent of political bigwigs including Ms. Sonai Gandhi, Chief Minister of Maharashtra, Mr. Ashok Chavan, his deputy Mr. Chhagan Bhujbal and the UID chief Mr. Nandan Nilekani.

This ceremony sent out two messages. Firstly it demonstrates that we have been able to keep the promise of rolling out of this project within 18 months. Secondly, by commencing this project at Tembhali in Maharashtra State which is a tribal village, it shows our commitment that we intend to give focus to the poorer segment who today suffers the most on account of lack of broadly acceptable identity.

Aadhaar is a new tool which could find multiple applications in a variety of areas. It can help to prevent ghost claimants, repeated claimants and proxy claimants of various benefits offered by governmental and aid agencies which in turn can reduce leakage. It can also help to give direct benefit to deserving candidates instead of carpet bombing of benefits which is often cornered by unscrupulous people.

But, this does not mean it is a panacea for all problems; even for the problem related to targeted social protection measures. It just means that we have a stronger tool which if properly employed can significantly reduce leakage and improve targeted delivery. UIDAI has come out with papers on how the UIDAI can be of help in different fields. Some of these ideas will fructify and some will not. But there is no doubt that such a tool can be truly transformational. The transformation we have seen in financial markets, especially in capital market on account of sensible use of technology to improve efficiencies and reduce fraud have helped us to become one the best settlement infrastructure in the world from one of the worst in the world in less than a decade.

We see in the press, from the so called intelligentsia the concerns on the cost –benefit balance of this initiative and issues of privacy. Sometime it appears to me as issues blowm out of proportion. Aadhaar is not unique in the world. Many other countries have already attempted this exercise. America has been using Social Security Number as a unique id for it residents. What is unique about our Aadhaar is the magnitude of challenge of issuing a unique id to a billion people and using the technology and processes to prevent duplicates or keep it to absolute minimum.

Nobody is claiming that the Aadhaar project can eliminate duplicates to absolute zero. But I have confidence that if properly implemented, technology and processes are available that can keep uniqueness to such high levels that no other methods can match. With such powerful identity verification tool, a large number of agencies providing services to millions of peoples, (banks, ration shops, insurance companies etc, etc) can save enormous cost of identity verification.

Other concern is about privacy. Let us look at this a little more deeply. Aadhaar takes only very few demographic details (name, gender, date of birth, address, parent’s name, etc ) along with biometric details. In a true sense, it need have taken only biometric details of an individual and it could have issued a unique number. But today’s level of technology needs few more fields for exception handling and more importantly the users of this identity has not reached the level of technology sophistication to map each of its clients on the basis of only a number with biometric mapping. Therefore, Aadhaar requires few critical demographic details.

The list of demographic data insisted at the time of issuance of Aadhaar is so general and is even less than the details taken for KYC verifications by most services providers. There is practically nothing in there that can be used for racial profiling or such measures. The UIDAI act is specifically providing for the same.

Aadhaar does not make this information available to anybody even for verification. Its verification service is limited to a “Yes/ No” response to an enquiry of whether a biometrical reading (finger print) taken from a person and the Aadhaar claimed by that person matches with the Aadhaar database. This does not compromise any private data.

Next concern is that once this number is widely prevalent among various service providers, it will be easy to integrate these data to develop total profile of people. If profiling is a concern or to be prevented fighting Aadhaar is not the solution. Today most service providers have so much of personal information like name, date of birth, even cell number which is sufficient to map one person among the multiple data bases with the current level of technology. What Aadhaar prevents is the ability of one person faking multiple identities among multiple service providers. I don’t think this is a right we need to offer to any person or protect.Though it sounds a bit harsh, the opinion expressed by Richard Posner, (Judge and legal expert from USA) has raises an interesting point. “As a social good, I think privacy is greatly overrated because privacy basically means concealment. People conceal things in order to fool other people about them. They want to appear healthier than they are, smarter, more honest and so forth.”

If we are concerned about misuse of profiling we need to establish legal frameworks that will prohibit such actions, we need to have mechanism to protect those who blow the whistle on violations and we need to have rules on the extent to which data can be shared across agencies. There is no point in preventing issuance of UID which comes with a host of other merits. It is barking up the wrong tree. But, it is fashionable to fight the establishment which I think is one of the strengths of a democratic society; with so many people barking at so many trees some may just hit the target!

“When it comes to privacy and accountability, people always demand the former for themselves and the latter for everyone else.” David Brin - American science-fiction writer b.1950

Read Also

Privacy Fantasies

Why no one cares about privacy anymore

Privacy Fantasies

2010-10-05T20:29:00.002+05:30

The technological leap in integration of varied sources of data raises a number of questions on privacy. I have attempted a time travel of 200 years into the future to take a look at these concerns. I would consider that the 200 year time period that I have given for these developments could be an over estimation than an under estimation.

New Delhi, January 15th, 2210: The Society is grappling to come in terms with the impact of the recent invention and proliferation of the Mind X-Ray Vision (Mind –X); a tool that helps us to read and feel with ease the thoughts and feeling of people around. The ultimate tool for transparency; its impact on human relationships, family lives, corporate strategies and matters of governance is unimaginable.

For a society that for years has progressed with the right, option and capability for privacy of thoughts and fantasies, this new invention is a totally disruptive development. A person who can wear this tool like a watch in his arm can now read the array of emotions that passes through minds of the person with whom he is now conversing. No more suspense about what he is thinking; of whether he is happy, sad, suspicious or is aroused. It is no more a matter of guessing.

A truly scary and a loss of control for some and a feeling of freedom and power for the other! It could allow us to be honest about our feelings and misgivings or it could make us self-conscious about what bubbles at the bottom of our heart.

The strategies for competition can no more be built on secrecy, obscurity or obfuscation but based on open manoeuvres. It is no more a game of poker; but a game of chess.

Isn’t this the next transition in the long journey to transparency? Some years ago we got the gadget that could search googols of digital information to find the answers to a question that popped up in our mind and transmit the answer back to our brain. The googols of information also contained sufficient information about each of us from the day we were born that there was practically no private life. This was possible with the tremendous growth of internet, Google and Social Networking in early 21st century.

In a way we have come full circle from the small village life we spent few thousands of years ago where there was practically no secret and everybody knew everything about everybody else in the village. The world has become one big village.

The worries and concerns on the Mind-X reminds me about the privacy concerns that were out there when the internet, Google and then Face book became popular laying bare the information that were once considered private. It was a scary proposition then. With the exploding computing power and the sophistication of the data mining tools, it became practically possible to develop individual profiles with publically available databases. The government with its right to access more confidential data had much more detailed data.

It taught us not to be judgemental about another person based on few incidences of indiscretion and accept the fact that most people become responsible over a period of time. It has also taught us on how to be more sensible in our conduct and how we publish it. There were worries that this increased transparency could be misused by the government and its agencies. There were also incidences of such events. Then many of these transgressions also became matter of public knowledge. But then we learned to address these issues. It brought about stronger checks and balances on how such interlinked data could be used even by the government.

Similar sentiments were expressed when photography became popular in late 19th century. Louis Brandies, one of the most renowned legal experts who also was a justice in the supreme court of United States and his partner Samuel Warren discussed snapshot photography, a (then) recent innovation in journalism that allowed newspapers to publish photographs and statements of individuals without obtaining their consent. They argued that private individuals were being continually injured and that the practice weakened the "moral standards of society as a whole” {1}

But then, can we protect privacy by arresting the growth of technology? Can we stop the usage and proliferation of new technologies for the benefit of our society because it can also be used to harm it? Tools are nothing but tools and it is for us decide how to use it. If we want a government that is fair, we need to elect one and we need be willing to play an active role in making it one. We also have to strengthen the governance structures and its oversight in how the information is used. If we are concerned about our reputation, we have to learn how we manage it.

We can’t fight an idea whose time has come. Mind You, Mind-X is here to stay!

"Sunlight is the best disinfectant." — William O Douglas

{1} Source Wikipedia

“Rule of Law”

2010-10-01T15:09:00.001+05:30

“Vendor Lock-in” is a major concern for any buyer, especially if the product/ service procured is of high value and has long-term implication on future procurement. The concern is quite natural and justified because if the product/ technology has locked-in the buyer, it is quite possible that the seller could use this dependency to extract more than what is fair.

There are quite a lot of discussions on this topic and there are quite a lot of strategies that try to address this. The mirror image of this is the “buyer- squeeze”. In this case the buyer who has significant market power can use the market power to squeeze the vendor to extent that he really may really bleed to death. (take a look at "Market Power & Relationships" for a discussion on Market Power in interpersonal relationships)

Different companies address this problem in different fashion. Some try to avoid over dependency on single buyers; some try to build in strong contracts and so on. One of the most difficult buyers in this respect can be government; especially because of the buying power and the plea of executive necessity. If the legal structure is not sufficiently evolved this risk can be quite high. This is very critical when we are exporting products or services abroad.

Indian law in this aspect has established quite a strong principle on this matter. Our law makers have appreciated that if this issue is not addressed properly, some executives, with short-term view could use this plea of executive necessity to drive his personal agenda and this in long term would discourage availability of high-quality service providers from both within the country and abroad to deal with the government.

The judgment by Justice P N Bhagvati who has served as the Chief Justice of India has addressed this matter lucidly in Motilal Sugar Mills case (AIR 1979 SC 621). I have quoted some parts of his judgment for the sheer beauty, brilliance and clarity of this judgment. "The law may therefore now be taken to be settled as a result of this decision that where the Government makes a promise knowing or intending that it would be acted on by the promises and, in fact, the promisee, acting in reliance on it, alters his position the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution”

He has further elaborated, “Why should the government not be held to a high "standard of rectangular rectitude while dealing with its citizens"? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the government to repudiate even its contractual obligations, but let it be said to the eternal glory of this court, this doctrine was emphatically negatived in the, Indo-Afghan Agencies case and the supremacy of the rule of law was established. It was laid down by this Court that the government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action."

When we try to understand the strength of the rule of law of any country, the existence and enforcement of such fair dealing by government in any contractual relationship is an excellent indicator.

Power tends to corrupt, and absolute power corrupts absolutely. Lord Acton

Take it or leave it

2010-09-20T15:27:00.003+05:30

“How do you expect us to fly as you fly?” came another voice. “You are special and gifted and divine, above other birds.”
“Touched him with a wingtip! Brought him to life! The Son of the Great Gull!”
“No! He denies it! He’s a devil! DEVIL! Come to break the Flock!”
- Jonathan Livingston Seagull

Shashi Tharoor had right credentials for being in the external affairs ministry. Well educated, excellent experience in the field of international diplomacy, an outstanding orator, a thinker, and well connected among the senior political and administrative circles across the world. However, the self righteous middle class and the many among the self serving media together were too eager to pillory him for his ‘cattle class” remark and were happy to pull him down for his IPL imbroglio.

C. B. Bhave is the most qualified to hold the position of SEBI Chairman today and he takes his job very seriously. The enforcement record of SEBI under his leadership in the last three years has been outstanding in comparison to its past performance. The initiatives he took in with respect to the mutual fund industry and the insurance industry have been acknowledged as beneficial for the investors at large. But there are many out there who strongly believe that his ‘tough cop’ style is not what we need in a regulator.

If we look around, we can see many such examples of ‘A few Good Men’ being crucified. When a regular human being like each of us, takes pride in his public responsibility and works hard to do justice to what he is expected to do, there are hardly few who will support him. We seem to be unable to tolerate him for his sense of purpose, his sense of integrity, his initiative in doing the right thing. We are looking for one apparent mistake from his part, one controversy, or one remark, to belittle him if not condemn him.

Why are we so eager to see him flounder? Why are we too happy to see him fail? Why don’t we want him to succeed? Because if he does, then we have no excuse for our inaction; we have no excuse for our failures; we have no excuse for not even trying.

On the other hand, we are willing to tolerate unscrupulous elements in their positions of power, whether in Politics, Bureaucracy, Business or even Academics. The more unscrupulous they are, the more our tolerance. We are willing to extol that iota of good deed that he does as an excuse for our support or at least tolerance of him. We find it easy to elect Phulan Devi and Haji Mastan (I am sure we can think of better living examples around us) to power than to support and encourage honest and clean officers in their endeavours.

Why? Because he is not one of us; he is an exception, an outlier, an aberration. Our middle class morality can satisfy our self righteousness by dissecting his corruption, fraud and self serving behaviours and attribute his success to his shenanigans. We secretly hope that being on his right side would help us in our own little scams when it is convenient to us.

If we want to try to make a difference we are faced with limited options. Be ready to be called a Devil or God. Or be ready to be shot down by own kith and kin. The more pioneering our initiatives and/ or more change it brings to the existing order more vicious will be the rejection. But we have to keep trying because it is through the sacrifices of a few that social transformation is nurtured; albeit very very slowly.

“Don’t be harsh on them, Fletcher Seagull. In casting you out, the other gulls have only hurt themselves, and one day they will know this, and one day they will see what you see .Forgive them, and help them to understand.” Jonathan Livingston Seagull by Richard Bach

The post represents my personal opinion and not that of any organisations or people with whom I am associated.

“Nothing Succeeds like Success”

2010-09-13T16:39:00.001+05:30

After we got our independence in 1947, we decided to pursue a mixed economy, established a strong planning infrastructure that encouraged public sector to lead the way in investment in key sectors. We protected our industry against competition from abroad by import restrictions and high tariffs and against competition from within by restrictive licensing policies and MRTP act.

Our country as a leader of the Non Alignment Movement (NAM) attempted to play a major role in international politics. But unfortunately this movement had as its members mostly underdeveloped and developing countries with little stature in the global political or economic landscape. Moreover, many of them for their own benefit found it difficult to be truly neutral and had mild or strong alignment with one or the other great powers. In this way the influence of NAM and India was not that significant through this avenue.

Thus for sometime post independence, we seemingly had nothing important to offer to the world at large and were therefore almost in isolation. In the mid eighties slowly and early nineties surely, our economy started to open up. Our Industries were not gobbled up by the Multi National Corporations as many feared. We demonstrated an ability to sustain an impressive growth of economy. Our markets were looking attractive; we realised that we had competitive advantage in many key fields; India became a country which could no longer be ignored.

Our President got one of the best welcomes when she visited UK last year. She was invited to stay in the palace with the queen. Four professors from Wharton visited and studied Indian Management practices and they have published a book called the “India Way”. As per Harvard Business Review “The authors explain how these innovations work within Indian companies, identifying those likely to remain indigenous and those that can be adapted to the Western context. With its in-depth analysis and research, The India Way offers valuable insights for all managers seeking to strengthen their organization's performance.”

As per another review “this book closely examines what Indian managers do differently and how their management innovations work, which of these innovations could be transferable to the Western context and ultimately how this new management model could one day modify or even supplant the old.”

Something like a management practice could not have evolved overnight. It would have been around for a long time. But, we now see a much elevated interest across the world for many things ‘Indian’. In fact, we have won more beauty contests since our economy has opened up in early nineties. Why this interest now? It is because we have become relevant.

Ours is a young and growing economy; our markets are large and more open; there are fairly strong institutions in many sectors. Today on the foundation of a stronger economy we are in a better position to get attention, to be heard and to influence; much more than any visionary or intellectual leaders could do as the head of a pauper state.

If we want to make a difference, as a country, a company or as an individual, we have to first establish our relevance in areas which are important to our target audience. The more importance or apparent importance we can project, the more influence we can exert. The relevance could be as a customer, as critical supplier, as a policy maker, as a fixer. as reference, as financier or a strong alley. But there has to be relevance.

This is not a prescription; but just an observation. This is not a value statement; but an expression of realisation. This is not peddling of a panacea; but sharing a reality of life. This may be the “Mathew Effect” that sociologist Robert K Merton propounded and made popular by Malcolm Gladwell in his book “Outliers”. It is left to us to interpret and act on this in a way that makes sense to each of us.

For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away. — Matthew 25:29

In God’s Company (humour)

2010-09-07T23:16:00.000+05:30

Recently I came across an interesting story a friend forwarded to me; a story about a tailor who fell in love with a princess. Let us call him Sawant. He was smitten so badly that he would not eat properly and he could not sleep well. He shared his desire and desperation with his friend who was a chariot maker.

He suggested a way out. The chariot maker built a chariot that looks like the chariot used by Vishnu the God. Then Sawant dressed up like Vishnu and landed up at the private garden of the princess. Innocent girl that she was, she fell for the story and believed that Vishnu was in love with her. There started a relationship which they continued for many days. Gradually, one of the maids came across some signs of this secret affair. They informed the king. The king accosted the princess. She told him the truth of her affair with Vishnu.

The king was sceptical and hopeful. Next time when Vishnu visited, the princess was not alone; the king was there too. He wanted proof. So he asked the Vishnu for to help him defeat the Chakravarty (the king of kings). Sawant was in a fix. He realised that he is dead either way. If he tells the truth the king will kill him and if he goes to fight the war, he will be killed. He decided to die in the war.

He took a small army from the king and proceeded to a war with the chakravarty dressed up like Vishnu on his chariot. The story of this Vishnu had also reached the heaven. The gods met up with Vishnu and discussed about the public relations disaster of the duplicate Vishnu losing the war. So they decided to support the tailor boy.

With the support from heaven, the Sawant won the war. The king was happy and the princess was happy. Then our hero shared his desire to take human form and live with the princess. He warned the king that as he had taken the human form he might not be able to perform such miracles anymore. The king agreed happily and our hero and the princess lived happily ever after. (May be the tailor needs more appreciation for the ‘ever after’ bit more than the war that he won!!)

The fairy tale has an interesting lesson. This lesson is almost universal and is applicable in politics, in corporate, in religion and in bureaucracy. The rule is that when we attempt some crazy or ambitious ideas make sure that the interest of some ‘powerful gods’ are aligned with ours! How well this alignment is and how powerful our god is will determine the extent and strength of the support we can garner. The corollary is that when you and I compete and both of us have our gods supporting us then what matters become which god is more powerful.

“Success is about actively shaping the game you play, not just playing the game you find.” Adam Brandenburger & Barry Nalebuff

"Candle in the wind"

2010-08-30T13:14:00.002+05:30

There has been lots of debate in the media and in private conversations about the recent threefold increase in salary of the Members of Parliament. Most of the reactions were negative and supported by some variations of the following arguments. There are millions of poor people in India and therefore the leaders of these poor people need not be paid so much. Or the politicians are corrupt and make pot full of money; so why pay them more salary.

Even if we add the various perks that the MPs enjoy (excluding the value of housing) the cost to country of an MP compared to the cost to company of senior executives in private sector is still low. A trillion dollar economy growing at the rate of more than 8% per year, can afford to pay its senior management who takes decisions relating to billions of dollars so much. Same is true for the bureaucracy too. In fact, if we pay decent salaries we remove some of the disincentive for good, qualified and capable people to be willing to take up this challenge.

The other discouraging factor that acts as a disincentive is the cost of standing for an election. It is quite a large investment. If one is not personally rich or cannot raise black capital, it is practically impossible for him or her to stand for election. We should think about ways in which funding support can be made available for capable people to afford this cost. May be the state can reimburse the election expenditure up to certain limits for candidates who manage to get certain percentage of votes. May be we can allow companies or industry association to setup funds in a transparent manner to support such candidates.

Today a large majority of the MPs come from very rich background because only they can afford the cost. If we find ways to encourage more honest people to take up this line of profession by paying them decent salaries and helping them to afford the cost of election we may be able to get a larger percentage of such people in the mix. (I am not that naive to think that this magic solution will lead to a legislature full of angels. I am only hoping that we could find ways and means to get some more voices of reason and some more minds with commitment to the cause, to walk into the den of thieves, to build some checks and balances and to enable better decision making at the highest level)

We also need to establish processes and tools to bring about better transparency in expenditure, more directed welfare measures and citizen initiatives to expose incidences of corruption and fraud. The initiative by Janaagraha a Bangalore based NGO, along with Raghu who was a senior civil servant for about quarter of a century in setting up a portal aptly named “I Paid A Bribe” is an excellent example of citizen initiative that offers busy people to participate in a quick and easy way and to play a meaningful role. The vision of this initiative as explained by the team is as follows.

“IpaidABribe.com is Janaagraha’s unique initiative to tackle corruption by harnessing the collective energy of citizens. You can report on the nature, number, pattern, types, location, frequency and values of actual corrupt acts on this website. Your reports will, perhaps for the first time, provide a snapshot of bribes occurring across your city. We will use them to argue for improving governance systems and procedures, tightening law enforcement and regulation and thereby reduce the scope for corruption in obtaining services from the government.

We invite you to register any recent or old bribes you have paid. Please tell us if you resisted a demand for a bribe, or did not have to pay a bribe, because of a new procedure or an honest official who helped you. We do not ask for your name or phone details, so feel free to report on the formats provided”.

I believe that if each of us who make sanctimonious remarks about the level of corruption and fraud around us (especially after a glass of single malt) can spend few moments to support such initiatives we can experience some improvement in our society.

I believe that every right implies a responsibility; every opportunity, an obligation; every possession, a duty. ~John D. Rockefeller, Jr.

“Lead us not to temptation”

2010-08-24T11:33:00.000+05:30

“Marshmallow Experiment” is an amazing study conducted by Walter Mischel, a professor of psychology at Stanford University in the late sixties. This study attempted to evaluate the ability of four year old children to delay their gratification. The children were called to a room and were offered a piece of marshmallow. They were told that they could eat it immediately or if they were willing to wait till the researcher came back in a few minutes, they could have two pieces.

Some kids ate the marshmallows immediately, some waited for few seconds and few of them could wait more than 15 minutes for the researcher to return so that they could claim their prize for delaying their gratification. Walter was trying to study the mental process of this delayed gratification. After a few years, he attempted to track the performance of these children to see if there was any correlation between ability to delay gratification and their subsequent performance. The results were exceedingly surprising. He observed a very high degree of correlation between self control and performance parameters, including SAT scores. This and the related studies have shown that performance was more dependent on self control than IQ.

It does not mean that self control is an inborn trait and cannot be learned and improved upon. There were children in the original sample, who had shown poor self control as children but grew up to have high degree of self control. (Look up this excellent article which discusses this issue in detail)

Let us take this learning to an adult, rather corporate context. Most of our jobs places two kinds of demands on us. These can be described as maintenance roles and developmental roles. Maintenance roles are usually clearly defined, they need immediate attention, the results are immediately visible and no doubt they are urgent. Developmental roles less defined, results are uncertain, results take long time to materialize and often not urgent.

Some of us let ourselves to be caught up with these urgent matters day in and day out. We practically have no time even to breathe. We have hundreds of reasons why we cannot take up any developmental activities now; whether it is reading up on related subjects, taking up a process re-engineering exercise, experimenting with a new technology tool or even finding some time to build relationships.

On the other hand, some of us will find, rather cheat, some time from our busy schedule to take up some assignments or experiments which may not be in the radar of priorities. An idea has caught our attention and we are willing to chug away at it; finding few free moments from our busy schedules. We are not sure what will come out of it. But we know we are searching for a possible tool, working on an idea that in the long run could make a difference.

If we look around we will see that most of the time people who have build something substantial, made a difference and provided visionary leadership are those who had the determination to see beyond what is urgent and willing to search for and toil for ways to make a difference. This also is nothing but a matter of self control. That may be why “Lead us not to temptation” is a key element in the Lord’s Prayer.

“There is an eagle in me that wants to soar, and there is a hippopotamus in me that wants to wallow in the mud” -- Carl Sandburg, American Writer, Editor, and Poet

Conquering that fear

2010-08-18T21:50:00.002+05:30

It was bright and sunny. The sea was calm but slightly wavy with a nice light breeze. The single seater laser (dinghy class) sail boat which I was sailing was cruising along smoothly . The open sea and the calming breeze always had a mesmerising charm and made me feel one with nature. Suddenly the wind started picking up speed. My boat too responded like a stallion that has been spurred. With the adrenaline rush I felt that I was on the top of the world. Nothing seemed to matter other than the feeling of speed, power and control as the boat raced forward skipping up and down the waves.

I was practically horizontal with my torso jutting out of the boat with the sheet (the line that controls the sail) in one hand and tiller (that controls the rudder) in the other hand. Suddenly the wind shifted. I was taken unawares and the boat turned turtle. This happens occasionally when we sail a little boat; nothing to worry about. There is a simple way to turn it around; a matter of technique than strength.

I had already jumped into the water and was hovering around the boat enjoying the waves. Then I tried to turn the boat over. Suddenly I had a severe catch in my shoulder muscle. I could not move my right hand. I realised that I was in trouble. Tried some work around; but, nothing would help. I just could not move my right hand and it was hurting badly. I hung on to the boat and decided to wait it out. The wind was getting harder blowing away from the land and I was drifting into the sea farther and farther.

This happened, when I was based in Jakarta for couple of years. . I always loved the sea and sailing was my passion. When I realised that there was a sailing club not so far away (about 150 km) from home. I was excited. I immediately signed up and used to visit the club at least twice a month. I would for the weekend and sail about four to five hours both the days. I enjoyed the experience thoroughly.

Now as I was drifting deep into the sea with one hand almost paralysed, the realisation dawned on to me that I could be in deep trouble. Minutes were ticking away. There were no boats to be seen anywhere near. . As it was lunch time all the other sailors were back on shore for their lunch or siesta. I started to feel scared; scared at the prospect that I may not return alive. A watery grave appeared a distinct possibility. There was nothing that I could do except pray for divine intervention.

Faces of that little girl who follows me calling me dada, her mother, my mother, my friends; all started fleeting in front of my eyes. Each minute felt like an hour. I felt the energy draining out of my body. I hung on there with a faith that there is somebody who looks after me and without his wish nothing will happen.

I closed my eyes and tried to relax. It was almost an hour since my boat had capsized. Then suddenly I heard the roar of a motor boat. I thought that I might be dreaming. I opened my eyes and looked around, and there it was; the rescue boat looking for me. Oh! What a relief.

They reached near me. I was too tired even to climb into the boat. They had to drag me in. I lay in the boat thanking my luck and the supreme intervention. When I reached the shore I had to be practically carried out to the hammock. Liz told me as she was relaxing at the shore she had a uneasy feeling that something was wrong. So she looked far and could see no mast. She told the rescue team that I may be in trouble. They told her that as I was a good sailor so there was no need to worry. They felt that I might have gone around a small island nearby and that is why the mast could not be seen. But she insisted that they take a look; and that saved my life.

I had a cool drink and lay down for an hour. Then I decided that I had to go out for one more trip immediately. I knew if I don’t do that then, the last memory in my mind would be the scary experience and I could permanently give up my confidence to be out in the sea.

I got up and walked to the boat. My wife and friends thought I was mad and enjoined me that I desist from this. But I got into the boat, went back to the same spot where I was drifting helplessly for an hour.

Then I returned. . I knew I had conquered one fear. The lesson stayed back in my mind. One way to overcome the fear is to try the experience once again (so long as it is repeatable).

Courage is not the absence of fear, but rather the judgement that something else is more important than fear. Ambrose Redmoon

A leap of faith

2010-08-09T13:58:00.000+05:30

Karna is a character from Mahabharata. He was the son of Kunti, the eldest brother of Pandavas. (As he was born before Kunti was married, he was abandoned as a child and only few people knew of his true parenthood) He was a better archer and warrior than Arjuna, the hero of the Pandava clan. But unfortunately he had a curse on him. On account of this curse, he would lose his faculties and forget his skills when he desperately needs them in a matter of life and death. If we explain this curse in common terms, we can say that though Karna was better skilled, when it came to performance under stress, he was not as good as Arjun..

In real life we come across people who suffer from this Karna complex. When faced with an emergency they freeze over; forget what they are supposed to do and can’t remember what they have learned. They break-down under stress.

In some professions like flying and fire fighting where risk is physical, the importance of performance under stress is well-appreciated and there are various training programs to strengthen this skill. But in many of the normal managerial decisions where the risk is not physical, not immediate and difficult to map to the decisions taken, the importance of this factor is often not properly acknowledged. In these roles we look for experience, intelligence, skills and knowledge; but often fail to recognize the skill for of decision making under stress.

This can be disastrous; especially because most often the risk faced in the managerial roles is psychological and not physical and we don’t realize how such stress can affect the quality of our decisions. Even when we recognize the effect of stress on our health, we ignore how poor decisions that are detrimental to the organisations may be taken on account of that.

Our schools don’t train us on this (in fact these days, we mollycoddle our children so much and we try hard to remove any element of stress they face that they could grow-up expecting fairy godmother to make their life easy), our selection processes do not measure the candidate’s ability to perform under stress and our induction programs and organisational trainings do not teach this either. The priority is given only to skill, knowledge and experience.

Most people will buckle under stress at certain level and behave irrationally or take irrational decisions. The threshold will vary from person to person. At higher levels of responsibility we need people with a higher threshold level. We need to recognize this factor as a critical element in leadership development. This is important because whether in a fire-line or company venue, making quality leadership decisions under conditions of stress and ambiguous authority is not a natural capacity. [1] Natural human reaction in times of risk is ‘fight or flight’. Training and practice can help us to override this natural reaction after due consideration of alternatives, probabilities and resources.

But training cannot guarantee how we will react. It is also a question of how we are made up. That is why we have to be careful in our selection process for assignments that have high element of stress, to ensure that the candidate is tested for this trait.

Very often the organisations do not give due importance to this when they promote people to positions of power and make their selection primarily based on skill, experience or even seniority. The worst case is when elevate a brilliant mind with a very low threshold for stress. When they are faced with stress they get scared and they don’t want to admit it. They get irrational and they don’t realise it. As they are quite bright and articulate they will use these skills to rationalise, argue and even bulldoze with a set of specious arguments , make up all kinds of theories and put forward a collection of highly improbable eventualities; all to run away from taking a decision and owning it up.

They do not want to take any risk, will not take timely decision, set up umpteen committees, surround them with a variety of consultants with high pedigree and take everybody for a merry go around. Their subordinates will be intimidated and colleagues will get frustrated. Eventually the team turns out to be a collection of technicians and clerks with no imagination or creativity.

Organisations will have to be conscious of this critical skill. It has to form a part of our recruitment, part of training and part of performance evaluation. Especially when we select people for leadership positions we need to find ways to judge the threshold stress level at which they will start losing their rationality.

Two roads diverged in a wood, and I... I took the one less traveled by, and that has made all the difference."~ Robert Frost

Reference: [1] Developing Leaders for Decision Making Under Stress: Wildland firefighters in the South Canyon Fire and Its Aftermath.
MICHAEL USEEM, Wharton School, University of Pennsylvania; JAMES COOK, U.S. Forest Service and National Interagency Fire Center ; LARRY SUTTON, U.S. Bureau of Land Management and National Interagency Fire Center

“Monkey and Me”

2010-08-04T20:09:00.004+05:30

I was surprised when I read in National Geographic.Com that “A comparison of Clint's genetic blueprints with that of the human genome shows that our closest living relatives share 96 percent of our DNA. The number of genetic differences between humans and chimps is ten times smaller than that between mice and rats.”

With such few percentage point differences, see what we have managed to achieve in comparison with our simian cousins! We have built cities, cars and aeroplanes and have walked on moon while our cousins are still hanging from trees. Truly remarkable.

Then recently I came across a book written by Mr.Richard Conniff titled “The ape in the corner office”. This book provides a nice exposition on the similarity between the behaviour of apes and human beings. The focus of this book is more on the human behaviour in corporate setting.

The strategies we use to establish our ‘alpha’ status, grovelling and flattery we employ to get our way, the fights we have and how we makeup, how we use language to groom our colleagues and our bosses; all appear to be the same what our ancestors have been employing for millions of years. Just that the scientific progress helped us to have better and diverse tools for innovative implementation of these strategies!!.

Look at the way the Chimpanzees establish their pecking order and the alpha status. It is not just based on brute force. It is derived from a combination of the leadership skill, courage to take decision, strength of the network and also cunning and political manoeuvring; just like human organisations. The relative proportion of each element may vary. When the proportion skews more towards cunning there is a higher chance for group disintegration.

Many scientists have pointed in spite of all the scientific progress, the source of our base emotions and insecurities have not changed for millions of years. Now it has dawned on me that it is not just with respect to genes that we are 96% apes, many of us in our behaviour and inner desires resemble our ancestors more than we think we do!

Therefore, when we learn to look deep and understand the base emotions and inner drives that provoke us to act in certain fashion we may be able to have a better control on ourselves. This understanding could also help us in our relationships as it might give us a perspective on how the other person could react or why the other person reacted in certain manner.

“We are just an advanced breed of monkeys on a minor planet of a very average star. But we can understand the Universe. That makes us something very special.” Stephen Hawking

Competitive Advantage - A case for blogs and wikis

2010-07-26T17:41:00.000+05:30

Mat Ridley in his seminal article “Humans: Why They Triumphed” has put forward an interesting argument that the dramatic progress of Homo sapiens in the recent past is not primarily on account of the increasing size of brain or dramatic increase in human intelligence. But, it has been achieved by the collective intelligence of the society arising out of continuous exchange of ideas. We have managed to build on what others have built. Sir Isaac Newton also expressed this view when he said “If I have seen further, it is only by standing on the shoulders of giants”

The progress in commutation and in communication has enlarged opportunities for people of different culture and experience to contact each other and to exchange their ideas. This has further accelerated the rate of progress. As Mr Ridley expressed brilliantly “The process of cumulative innovation that has doubled life span, cut child mortality by three-quarters and multiplied per capita income nine fold - world-wide - in little more than a century, is driven by ideas having sex”

Books, Radio, TV and even internet (web 1.0) while helping to distribute thoughts and ideas across very long distance, enabled mostly one way interaction; sort of broadcast. Email brought about fast and cheap two way communication and it exploded opportunities for human collaboration.

The recent innovation in Information technology (web 2.0 also supported by progress in mobile technologies) has brought about dramatic changes in communication by making it “two-way” enabling seamless collaboration.

Very often these tools for two-way collaboration like face book, twitter, wiki and blogs are seen by many as either as geeky or as non-serious pastime, juvenile indulgence or even waste of time. Therefore many companies and organisations prohibit access to such tools as they see these as risky distractions.

As these tools are seen as such distractions, the senior management is not giving due attention to how these concepts can alter the way we work and alter the way we collaborate. With so little interest (or so high ignorance), we are unable to harness the power of these tools.

The study by American Sociologist Mark S. Granovetter on the Strength of weak ties is quite relevant in this context. According to this study, for most people their network friends with whom they enjoy strong relationship is quite small, limited and almost culturally and intellectually incestuous in nature. Therefore it is the weak ties between groups enable us to collaborate with a more divergent set of people.

It is in this area that collaboration tools like blogs, wikis and social networks offer powerful, intuitive and convenient means. It can help us to build larger network of strong ties and build and maintain a larger network of weak ties. Wikis help in collaborative developments, Face book kind of tools helps to keep the links with a large number of friends.

Many organisations have woken up to these challenges and have established innovative ways of harnessing the power of this collaboration. The book published by Andrew McAfee, Principle Research Scientist at MIT’s Center for digital business titled Enterprise 2.0, the new collaborative tools for your organisations provides excellent insights to why and how on these tools and it is worth reading. I have drawn on the insights from this book to write this post.

At present this is relatively a new concept and not widely adopted. Therefore, those who can exploit this early will be able to build significant competitive advantage. Once this idea gets commoditized and becomes the norm for most of the players, the extent of competitive differentiation possible with this may come down.

‘If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.’ — George Bernard Shaw

Of being “True and Fair”

2010-07-20T13:12:00.000+05:30

When an audit firm undertakes audit of financial performance of a company, the seasoned partner attempts to make a judgement on how well the financial statement represents the financial health of the company and the financial integrity of the management. Some years ago he made this judgement not based on compliance to a set of rules and standards but also on a variety of factors which, based on his experience, helped him to make a true and fair judgement.

There have been many instances of compromises to the spirit of the audit and many unscrupulous managers and auditors connived to hide information and to defraud the shareholders and or the government. This kind of degeneration forced the profession to come up with more and more standards and rules. The pendulum swung the other way with auditors focussing primarily on compliance to rules. The management learned the trick of demonstrating technical compliance and auditors were happy to play along.

The perils attached to this are now getting evident and there is a serious discussion among the accounting professionals that there is a need to find a balance. A sensible balance of using both rules and principles to judge whether the statements are indeed ‘true and fair’ with focus shifting more to principles.

Similar swings have also been witnessed in a variety of areas which require checks and balances. We moved to rule based regulation and we are now swinging back to principle based regulation. As the UK Financial Services Authority has portrayed “Principle based regulation – focussing on the outcomes that matters”.

Even the perception regarding the role of company board is undergoing a change. Its primary role is not only to protect the interests of the absent shareholders, but also to act as a guide and a sounding board for setting the strategic direction of the company.

Such shifts in disciplining methods are not just in the governance models of corporate and regulators. We see it in educational institutions and even family lives. In earlier era the parenting role included strict discipline of rules, timetables and targets; there was friendship and authority. The schools also followed almost regimental structures. Then there has been shift where the role of the teacher and even that of the parents have become primarily advisory in nature. This shift is quite predominant in western cultures. The safeguards that were built to restrict parental abuse and cruel treatment by teachers are now being misused. We see similar ideas being propounded in India too.

The society in now paying the price and there is a great deal of concern on the falling standards of education and falling standards of discipline and value system. I found the thought expressed by Michael R LeGualt in his book ‘Think” relevant in this context. “It seems clear that in setting out to be mainly the child’s friend or self esteem coach a parent is surrendering his or her most important role in shaping child’s values and character-that of mentor, guide and authority”

Such pendulum swings remind us of the need for strengthening the values right from the childhood and the need for a balanced approach instead of carrying any solution or idea to its ridiculous extent. This will be possible only if we have regulators and legislatures who have the vision to build clean institutions and the courage to stand up for what they believe is right. This is often available only in ‘limited edition’. When we see such leadership, it is our role to support them.

“Character is doing the right thing when nobody's looking. There are too many people who think that the only thing that's right is to get by, and the only thing that's wrong is to get caught.” ~J.C. Watts

Octopus Paul and his run of luck

2010-07-12T14:49:00.002+05:30

Octopus Paul has added an additional element of excitement to the football mania that the world cup has unleashed. Even though I am not such an enthusiast of football, I still ask how Paul’s prediction has fared. It has added another topic of conversation, another exciting piece of trivia.

Do I believe that there is something divine or mystical about Paul? No, I don’t. Is there anything special about Paul? Yes he is one lucky fellow who has managed to get four out of six predictions in the Euro cup 2008. In this world cup the eight out of eight correct he has managed had a probability of success of 1/ 256. Now we have parrot Mani and the Indian Louse and many more in this game.

Not as lucky as the guy who gets a first price in lottery with few million contestants or even the boy who tops in IIT entrance exams with a million aspirants.

If he was a human being, there would have been books written by him and or on him about his theories on how to predict successful football teams.

He would be a bigger hit if he could repeat his luck in capital market. In fact we often see some lucky players who have run up such lucky streaks for some time and many of them have surely written their books.

This is true of most of what happens in our life. The number of variables that affect most of the outcomes, (whether it is in picking a stock, or in diagnosing an ailment or in choosing a job option) in long term or short term is way too large and complex for anyone to master.

What we can do when we specialise in a field, or work on a project is to get a better idea of the factors that may have a very high probability and or high impact on the outcome and then proceed.

Ceteris Paribas (everything else being equal), the success of one person from a pool of equally capable individual, is just plain luck. So when we improve our skill and knowledge, we improve the probability for a favourable outcome; almost like loading a dice.

On the reverse, when we lose in spite of the excellent preparation we have made or the skills we posses, it could be just being plain unlucky.

The religious minded will ascribe this as the wish of god or fate.

I am not questioning the existence of god, but reminding that even god would want us to be prepared and to exercise our choice (“It is for me to choose”) and not put the blame on him!

We can’t do anything about the genes we are born with or the environment we are born into. But, we can try to improve the probability of successful outcomes by enhancing our expertise, network and resources.

“Luck Favours the Prepared” Louis Pasteur

Sleeping with the enemy

2010-07-05T21:59:00.001+05:30

Human beings are social animals. We have friends and we have enemies. They are nothing but two sides of the same coin; often changing from one form to another based on context or on situation.

What drives our enmity to somebody? The two key factors that influence this are Desire and Pride. Desire on one extreme could be the greed for more and more and on the other extreme it could be the need for self preservation, protection of what we hold precious or demanding what is due. Similarly, pride on one extreme could be the bloated ego or on the other extreme could be defending our dignity.

When we have a conflict with another person about something we desire, or when he hurts our pride in some fashion he becomes our enemy.

The degree of conflict or the stakes associated in this conflict will also determine the intensity of our hostility. If we are fighting for a large material benefit or preservation of our dignity and honour we may even fight harder.

Enmity is also contextual and situational. When Sachin and Jayasurya are playing for India and Sri Lanka they are competing and they are enemies during the game. But when they are playing for Mumbai Indians they are friends. May be in private life they would be friends. Similarly, if I am working with one Mutual Fund, I will be fighting and in competition with other Mutual Funds; maybe I will even try a few tricks to make my competition look not good enough. But when all the mutual funds are fighting with the insurance industry or we are lobbying with the regulator, we are all friends. Mukesh and Anil Ambani may have been fighting with each other to further the interest of their companies and also their personal pride.

That is why sometime the enemy of our enemy becomes our friend. Remember the famous quote from Mr Bush, the past president of America. “You are either my friend or my enemy”.

It is also person dependent. Some people are more tolerant about desire and conflicts associated with it; some people are more accommodating about hurt to their ego so long as there is a material benefit.

When we deal with people, whether in business or in friendship, we need to develop a skill to assess how they would react if and when there is a conflict with respect to either their desire or their pride. We need to also be sensitive to how the reaction would differ as per the situation, the people present or the stakes involved.

If the other person is very greedy, he may use any means to get what he wants or on the other hand we may be able to buy him at a price. If the other person is very proud and hot-headed, it may not be a good idea to needle his pride.

We have to also factor in how powerful, the person with whom we have a conflict is. The more powerful we are, in relation with the other person, we have a better handle. But we need to keep in mind, that the power is determined by not just what he possess or what his position is; but, also by what he perceives that he has to lose. That is why one suicide bomber, can inflict more damage than a battalion of regular soldiers.

“In a war, just or unjust, in the end nobody wins”

“Vanity my favourite sin”

2010-06-28T19:11:00.001+05:30

Nuremberg trials are a series of military tribunals held by the allied forces who won the Second World War. These trials were held to prosecute members of political and military leadership of the Nazi Germany for their crime against humanity. In most of these cases, they were being prosecuted for what they did, for their obedience to their superior’s commands as expected from a disciplined officer of any organisation, more so of the armed forces. Therefore, a certain set of principals had been evolved to determine what constitutes war crime. These principals called the ‘Nuremberg Principles’ had been created by the International Law Commission of the United Nations.

It is now accepted at a philosophical level, that when we act as per the directions of the superiors, we also have the moral responsibility to assess the fairness of the actions and express our dissent when those actions are against the larger interest of the society.

The issues associated with ‘blind following of the order from the superior officer’ are not just a concern in military actions. We face it in our day-to-day life as an officer of the government or even of commercial entities. It is practically difficult for many of us to act on a moral choice to “blow the whistle” as the potential retribution of such action could have an adverse impact in our personal life.

In many cases, the individuals who have questioned the actions of their superiors have been harassed and had to suffer significant damage to their life and career. This include dismissal from job, coming in the way of he getting alternate employment, tarnishing his image so on and so forth.

Society has been trying to evolve legal structures to protect and encourage citizens to ‘blow the whistle’ when they come across un-ethical or fraudulent actions and to give them the right to demand information that could elicit truth.

The listing agreement between the stock exchanges and the companies has a provision (though still non -mandatory) that all listed companies should have a published ‘whistle blower policy’ for employees to report instances of unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy.

The “Right to Information Act” tries to provide a strong tool in the hands of the citizen to demand access to information regarding the actions of the government.

This legal enablement has helped to bring about more transparency in administration and corporate governance. One of the main criticisms against these provisions is that many a time these are misused to further private agenda, inter-personal conflicts or even to clog the pipes of the administrative machinery.

In spite of all these, India is still rated high on corruption both in private and government sector. The tag line of an article written by Mohan Murti (former Europe Director, CII, and lives in Cologne, Germany) in Business Line titled “Is the nation in a coma?” reads “Europeans believe that Indian leaders are too blinded by new wealth and deceit to comprehend that the day will come when the have-nots will hit the streets”

Corruption is not just with respect to monetary returns for favours dispensed or deviation from law; it is also applicable to the actions of commission and omission by the so called clean and honest people, that pander to their needs of ego satisfaction, self glorification and just plain megalomania. As John Milton played by Al Pacino in the award winning movie quips “Vanity definitely my favourite Sin”. And un-ethical actions that satisfy this vanity is equally despicable as the actions that layers the pocket.

While continuous evolvement of the legal framework can help the cleansing process, each us has a responsibility; the responsibility to act ethically and to question ethical violations (especially the ones which are technically and may be even legally correct) that hinders the path to building a cleaner society that respects decency and fair play more than the smell of greenbacks and self edification.

“Nearly all men can stand adversity, but if you want to test a man's character, give him power”. Abraham Lincoln

You don’t get rich if the government prints more money

2010-06-21T18:49:00.000+05:30

This is the season when the board examination results (for class 10 and 12) are declared. Many schools with 100% pass rate, thousands of students with more than 90% marks and there is excitement all around. It feels nice to join the celebrations. I also read that a child who got 98% in class 10 could not get admission for the course she wanted in the college she preferred.

But then I can’t help having some contrarian thoughts. Normally, when an examination paper is set there is a sort of algorithm that is used. 50 to 60% questions check the basic level of learning of the topics, 20 to 25% check a little deeper understanding and the remaining evaluate the ability to apply the learning in practical applications and/or the ability to interpret.

When students prepare for the exams, those who just want to pass can afford cursory studies and those who want to do well will have to work harder. The results will more or less be able to differentiate quality and hard work.

Then everybody will not get good marks. But does it really matter? What matters for the admission to next level are, either marks in the board exams or scores in the qualifying entrance examination. If it is the former, then it is not the absolute marks but the relative marks that will determine. If lots of people get 99% cut off marks for admission to the next level may be 97% and if only few get 99% then the cut off could be 80% and so on.

If the admission is on the basis of entrance examination, what is critical is the depth of understanding. Here preparation for a difficult board examination may really help in the preparation for the entrance examination.

Today in India we are seeing competition among the various academic boards (CBSE, ICSE, State Boards and so on) in giving more marks to more students more than strengthening the learning process; sort of academic inflation.

If I use an example from economics, the country cannot make every citizen richer by printing money and distributing. It has to strengthen health, education and infrastructure, it has to provide guaranteed titles to property, it has to ensure rule of law, and it has to empower people to build on this.

If there are lots of aspirants who don’t get admission on account of poor marks, the solution cannot be found by giving everybody more marks. The solution is to have more colleges. Dilution of standards and liberal valuation just provides temporary elation and is almost like a peg of good whisky!

True education is what remains after one has forgotten everything he learned in school.
- Albert Einstein

Question of Existence

2010-06-14T19:33:00.000+05:30

We humans are part of a giant living system. We are unique, independent, and self contained; but we are also part of the whole and have no existence in isolation. Take a handful of mud from the top soil of a river bank. Is it live? Ask a farmer. He will tell you that it is bustling with life. From micro-organism that we can’t see to insects, to worms! Does it have a collective property? Yes it has. It is fertile. As a combination of those millions of creatures that goes about its routine it becomes a fertile block. Devoid of these teeming life forms, this same mud would be dead.

Look at our human body. Ask a doctor! He will tell you that our various body parts are swamped with multitude of micro-organisms and without them there, we would not survive. If by some magic we manage to get rid of them, we can no longer sustain.

Sometimes some of the organisms mutate and grow too fast or virulent that it destroys the balance. Then the nature has its own way to contain and curtail and bring the balance back.

Our mother earth too, with multitudes of creatures, collectively makes a living system. Though often we see ourselves, fallaciously, as masters of this planet, we are nothing but one of the component that sustains her (or that is sustained by her). In the recent past, we humans have been multiplying too fast and turning virulent to the detriment of our environment, threatening its balance and our own survival.

We humans are endowed with intelligence to understand and we are also way up the chain of enlightenment that we can observe and realise the consequences of our actions.

We have two choices. Learn to discipline this run away plundering or let nature come at us with a heavy hand.

Let us look at our life from a different perspective. All through the past few thousand centuries some men, to some extent attempted and managed to be in synch with the nature and understand, appreciate and connect with the big picture of cosmos. From this connection they shared their insights as Bible, Vedas, Upanishads, Khuran, etc; the windows to this cosmic force and a tool for our spiritual linkage. We have seen, that in spite of rational thinking and scientific progress these truths still remain and sustain, though the rationalist may point out the conflicts and disconnects.

With a large majority of human beings being restricted by this rationalist way of thinking, the link that human beings have with the ‘cosmic truth’ appears to be getting weaker and weaker and the progress in our spiritual maturing appears to have been arrested.

From both perspectives, it appears that unless we realise our irresponsible exploitation of our ‘mother ship’ earth and unless we try to re-synch with the cosmic forces, the nature will soon hit “ctl, alt, del”.

“It is not that science and religion are in conflict; it is just that science is too young to understand” Unknown

“Beg to differ”

2010-06-07T14:46:00.003+05:30

Some of my friends are pilots. One of them once explained to me an interesting point of view. According to him, planes are primarily designed to fly and not to land as most of the time it is up in the air and flying. Therefore, landing can be seen as a managed crash. That is why more accidents have happened during landings and take-off than during cruise.

In a similar fashion, most large organisations particularly bureaucracies, are designed to maintain status quo. One of the primary considerations of such design is to have policies, procedures, rules and conventions that are not adventurous and try to prevent misuse and misappropriations. Such excessively straight-jacketed organisations limit opportunities for human innovation and initiative. Adding on to this is the status quo bias (1) which is inherent in most human beings, and this encourages these organisations to resist change intensely.

For these reasons, transformation that is a game changer becomes a difficult challenge to pull through. However, occasionally when we get a leader (or a team) who wants to make things happen and who has the courage to manoeuvre around the hurdles that is an inherent characteristic of bureaucracies (whether public or private sector), then we witness transformations in its true sense.

Whenever such a combination of stars comes together, we should work in overdrive and try to achieve a level which is irrevocable. If we manage to reach this level, we can be reasonably confident that the transformation will be long lasting if not permanent. This is because even to screw -up something there has to be people with courage and initiative.

One of the conflicts that we often face, especially in social/ public leadership, is the choice we are forced to make between the leaders who deliver and the leaders who are good an honest. This is because the probability of the good and honest leader being a courageous leader who delivers is often not so high. The good often get caught within the technicalities and interpretation and focus only on doing things right and not doing the right things.

I am sure all of us will have number examples on this to share. One of the incidents narrated by Capt Gopinath in his biography stands as an excellent example and is entertaining by being so ludicrous.

When he first acquired fixed wing aircrafts for Air Deccan, he and his senior colleagues went with their family to take possession of the aircraft. Their first port of call in India was Mumbai. He was proceeding from Mumbai to Bengaluru next day morning. His aircraft was allowed to park in a far end of the airport and none of the passengers and pilots were allowed to come in to terminal as the customs formalities of clearing the aircraft was to take place in Bengaluru. The aircraft had no fully functional toilets and all the passengers including women and children and the pilots had to go behind the bushes in the airport to answer to the call of nature. This was in spite pleading to allow ladies to use at least the toilets in the terminal.

So much for doing things right. On the other hand the greedy and selfish leaders may put their might behind honourable causes (if you present the right incentive to them) at least because it offers them good public relations. The information available in public domain about what happened in case of IPL is an interesting case in point.

So the second best choice for the society is to have a few of such elements playing some key roles. If we also have a process in place to contain and discipline such innovations we may be better off than merely having leaders who just try to maintain status quo.

Is this the challenge of democracy?

"The status quo is the only solution that cannot be vetoed," Clark Kerr

(1) Read up some more on Status Quo Bias

View more presentations from Russell James.

“What an idea Sirjee”

2010-05-31T20:53:00.003+05:30

We often face situations in which we have to give advice to others; it could to our friends, relatives, colleagues or professional associates. Sometimes it is free advice because we want to help or sometimes it is a part of our professional duty.

We undertake this role with varying degrees of involvement. The stronger our bond with the other person and/or stronger our concern and interest (sometimes private agenda) in the matter under consideration, the higher would be our involvement.

However, the one thing we often forget is that, when we give advice our role is just that; to give advice and present a strong supporting rationale behind our advice. Then we should to leave it to the other person to take his call.

But what often happens is that once we give our advice, we develop certain expectations. Expectation about acknowledgment of our contribution, expectation about the credit for our advice or expectation about the pleasure of seeing the advice being given heed to. We want to hear them exclaiming “what an idea sirjee” like the idea cellular advertisement. If none of these happens we feel disappointed. We may also get upset and irritated. In some extremes, the irritation starts showing in the way we deal with that person. Very often we would refuse to give any further advice.

In such situations, we often end up being the loser in the whole transaction, because it has made us unhappy. A better idea will be to treat this process as a learning exercise. The other person has presented us with a problem and we got an opportunity to study it without being affected by it, see it in a different perspective and make a valid contribution. Take it as a case study and see how it adds value to us.

If the other person follows our advice, we get a chance to test our hypothesis or theory or strategy. If he doesn't, and follows another course, then also we get a chance to learn. If it turns out well, we learn a new way of approaching the problem. If not, we may get a chance to do an autopsy and learn what not to do. Itcould also teach us something about why the other person did not accept our advice. May be he got a better advice. May be when all factors were considered he had to take a different course of action. May be our advice was not good enough. May be we could not give enough confidence to the other person. May be he is not so bright, may be he has some other agenda!

We looked at how to give advice. Now, let us also take a look at how to take advice. There are times when we get advice from another person. Sometimes we may actually pay somebody to get an advice.

Even here we may fall in the trap of proving our point or feeling satisfied by comparing with other person to see how smart we are. Here again it is better to take the opportunity to listen and learn.

We should present our problem/ concern/ issue to the other person whom we have requested for an advice. Then we should let him, rather make him speak. There is no point in trying to prove to the other person our smartness or biasing his thoughts. Listen. I know a person who call experts to his office after paying them a fee and then spend the whole time propounding his ideas. There no point in being insecure or insensitive.

We should also be able to look at the advice given to us with an open mind, and evaluate it in its own merit. At this point we should avoid being clouded by our biases, fears and preferences. Only then can we take the full benefit of the advice. The higher we go up in our career or more power is associated with our position higher the risk of falling into this trap.

I don’t deny some advice is not worth pursuing. Finally it is our call any way.

“Advice is seldom welcome, and those who need it the most, like it the least.” Lord Chesterfield

To be or not to be –IV: Challenges of Regulation

2010-05-25T11:01:00.008+05:30

I remember the two bullies who studied with me in high school. They intimidated poor souls like me quite often; had no shame in forcefully taking nice goodies from our lunch boxes, flick our chocolates, force us to let them copy from our assignments and what not. Absolute rascals; but they were good athletes. They bought honour to the school in every district and state championships and so they were darlings of the faculty. Every once in a while they got caught for their transgressions; will get few raps on the knuckles, may be few days of suspension and then they were back in action. I am sure many of you would have had similar experiences.

I remembered these bullies when I was reading comments by Hank Paulson (US treasury secretary July 2006- Jan 2009) in 2006. “If you look at the recent history, there is a disturbance in the capital market every four to eight years; savings and loan crisis in the late ‘80s and early ‘90s, the bond market blow up of 1994 and the crisis that began in Asia in 1997 and continued with Russia’s default on its debt in 1998. I was convinced that we were due for another disruption” (Referred in his book “On the brink”). He was proved right within few months.

The same book also refers to a remark by John Mack CEO of Morgan Stanley in 2008 on the cause of the melt down. “Greed, leverage and lax investor standards; we took conditions for granted and we as an industry lost discipline”

This is not just the cause of 2008 melt down; it is the cause of many melt downs. Such behaviour appears to be normal in this line of business. Take a look the civil case filed by Securities and Exchange Commission (SEC) against Goldman Sachs in April 2010 charging ‘fraudulent misconduct’. This is not just an isolated incident as we can see from the following.

“NASD fines Citi, Merrill, Morgan Stanley $250,000 each” The America's Intelligence Wire July 19, 2004” (i)

“On June 6, 2007, the NASD announced more than $15 million in fines and restitution against Citigroup Global Markets, Inc., to settle charges related to misleading documents and inadequate disclosure in retirement seminars and meetings for BellSouth Corp. employees in North Carolina and South Carolina.” (ii)

“Merrill Lynch & Company said yesterday that it would pay $100 million in penalties to New York and other states and change the way it pays stock analysts to end an investigation that its chairman said had damaged the firm's reputation. “ (iii)

Citigroup Inc. agreed to pay a $70 million fine for practices in its Baltimore consumer finance unit, including raising the cost of loans to poor and credit-starved customers by requiring them to have unnecessary cosigners” (iv)

“Morgan Stanley, the second-largest U.S. securities firm by market value, was fined $10 million by the Securities and Exchange Commission because it failed to guard against insider trading for at least eight years. The fine was the biggest ever for a violation of surveillance rule” (v)

These are just a few samples. Do a Google search with the word ‘fine’ along with the name of any of the large investment banker; you will be surprised at the frequency of serious transgressions which are not just fines on technical violation but fines on substantive charges. We will wonder aloud “Will we ever learn?”

Compounding such practices is the frequent roll out of complex financial products which are often too complex for the investors to understand. Hank Paulson’s (who has been the CEO of Goldman Sachs before taking over as the Treasury Secretary) reference on the proliferation of product innovation is quite blunt on this. “In theory this was all to the good. But there was a dark side. The market became opaque as structured products grew increasingly complex and difficult to understand even for sophisticated investors”

This is why we need innovative regulation to match with the innovations in market place. In his blog post on regulating the new financial sector, Prof. Willam Buiter has given a very interesting suggestion “the same rigour used by US FDA for pharma and medical products should be insisted for introduction of financial products to broader market does not look out of place in the context of the recent history”.

We also need to think innovation in the checks and balances that we build in the system. Quoting Paulson again; “The regulatory structure, organised around traditional business lines had not begun to keep up with the evolution of the markets”.... it had led to counterproductive competition among regulators, wasteful duplication in some areas and gaping holes in others”

We in India have few important lessons to learn from all these.

To prevent run-away innovation that is rash and irresponsible, we need to put in place the right regulatory establishment to avoid the same kind of mistakes that has been laid bare in front of us. If we expect responsible behaviour and self regulation collectively from the guys running financial markets we are asking too much. We have not seen such industry wide responsible behaviour anywhere in the world.

Regulation does not mean micro-management of day-to-day functioning. Regulator’s role is to set the rules of the game and keep a watch whether the players are playing as per the rules. He also has to keep a look at the impact of changing structure of the game and modify the rules. If I give an example, the rules of T20 is not exactly the same as in the case of test cricket though both are cricket. To make this possible the regulators will have to be able to attract people who have the right experience, the right domain knowledge and most importantly the right attitude who can establish appropriate processes and use the modern technology tools and match or better industry strengths. This is the challenge of governance.

One of the major suggestions on regulation we often hear is to curtail all innovations; I don’t agree with this. We have enormous potential for modernising the markets with innovative products. If we say that we will be insulated from the turmoil on account of lack of market sophistication, we are not being very bright. It is like saying that I never fell because I never rode. A sophisticated market is a prerequisite for growth. In this journey we will make mistakes; and these mistakes will trigger better controls and that is the democratic process of growth. To go into hibernation is not the solution. Look at our favourite sport, cricket; from leisurely five day test matches we have progressed to one day internationals and now to 20 over matches keeping pace with our life. Notwithstanding, the controversy of IPL, the innovations have only improved the game on multiple dimensions.

“ We should and can have a structure that is designed for the world we live in, one that is more flexible, one that can better adapt to change, one that will allow us to more effectively deal with the inevitable market disruptions and one that will better protect investors and consumers.” Hank Paulson

(i) http://www.accessmylibrary.com/coms2/summary_0286-22046900_ITM
(ii) http://en.wikipedia.org/wiki/Citigroup
(iii) May 2002, New York times http://www.nytimes.com/2002/05/22/business/100-million-fine-for-merrill-lynch.html
(iv) Washington Post, 2004
(v) Bloomberg 2006

Scaling up: The Art of the Impossible - Part II

2010-05-17T13:23:00.005+05:30

In Part I of this post, I had set the context for understanding uncertainty and its impact. Part II looks specifically at uncertainty and scale-up.

Generally we give a lot of attention to business uncertainty, but seldom do we give sufficient attention to operational uncertainty that is faced by the team members on their day work. Managing such operational uncertainty therefore is a very critical factor when we attempt to scale up any operation or any business.

Normally the core team that set up any operation or business successfully will consist of highly motivated, highly skilled, high performance individuals who are comfortable in decision making under uncertainty. Once the operations are on steam and ready to scale up we need to work with a different set of people. We cannot afford to have the same calibre people when the operation is scaled-up. It is not just a question of financial affordability; such people will not survive long in a regular operational environment. They are normally impatient lot and in constant search for new dreams.

Therefore we have to have processes to get work with ordinary, risk averse, simple people who want to be led. As Lee Iacocca pointed out “if you are a brilliant person you may be able to do the work of 30 people; but if you are a brilliant leader who can get work out of 1000 ordinary people and then you achieve much more”

One of the major weaknesses of normal people is their inability or discomfort to take decision under uncertainty. They need clear algorithm on how to address each eventuality. In the absence of such clear standard operating procedures (SOP), many people avoid taking decisions or become inefficient in taking decisions. In this case they are almost like computer software that hangs in the absence of sub routines to handle all cases. As in the case of elegant computer programs, the SOPs should have dependable error handling, clear exception reporting and escalation rules in place for un-programmed cases. Otherwise system hangs or misbehaves. Only then we can scale –up with “Intel people” like Google scale up with “Intel boxes”

We have to accept the reality that the vast majority of people need clear delineation of tasks to help them achieve maximum productivity. As Chris Argyris observes in the article ‘Empowerment: The Emperor’s New Clothes’ published in Harvard Business Review “Both research and practice indicate that the best results of reengineering occur when the jobs are rigorously specified and not when individuals are left to define them”

The first thing we need to do in our endeavour to reduce uncertainty is to map organizational goals to group deliverables and break down group deliverables preferably up to the individual level. Once the deliverables are broken down, then we should try to develop standard operating procedure or business rules for as many cases as possible. This has to be a continuous process and there should be process in place to continuously identify cases where SOPs or business rules are developed.

One of the risks when we have processes that depend on SOPs heavily is that the people get to be process oriented instead of result oriented. This is one of the major weaknesses of bureaucracy. It is here that we need to teach human beings to also use his human intelligence and not to behave like computer programs. We should clearly teach each person and team to appreciate what the SOPs are trying to achieve as results. We should empower the process owners to innovate and improvise on the SOPs when there are exceptions. Here again we should try to provide boundary conditions within which they have to flexibility. This will reduce uncertainty even with flexibility.

On the other hand we should also work towards helping people to learn the art of being comfortable under uncertainty because human beings who can make sensible judgement under uncertainty are key assets in any team. Although genetic trait influences this skill quite a lot, this is still a skill that can be strengthened by training and support.

We should also have a way to identify and encourage people who are adept at this skill. Most importantly we should ensure that people who rise up to leadership are the people who can handle uncertainty and also who can reduce uncertainty for their team. It is here that many organisations fail. They get impressed by people who have delivered excellent results based on their skill and knowledge in situations or functions where ambient uncertainty is low. Then we promote them to levels where they have to mange uncertainty which are outside their domain of expertise. This happens very often with respect to technical people. Then these poor souls (smart engineers, doctors, lawyers, accountants) like fish out of water fail and the whole team suffers.

When we develop our scale-up strategies this is one dimension we forget and we focus on everything else like process, technology, people, finance and so on. We have to include operational uncertainty management as a key dimension with which we qualify our scale-up strategies. Else the best of strategies will fail on account of minds that freeze under uncertain outcomes.

Beyond all this theory lie commitment, conviction and faith that is beautifully described in alchemist “If you believe in something the whole world will conspire to make it happen for you”.

“Nothing great has ever been achieved except by those who dared believe that something inside them was superior to circumstances.” Bruce Barton

Scaling up;The Art of the Impossible - Part I

2010-05-12T17:38:00.003+05:30

There is one thing certain in our life; and that is uncertainty. Uncertainty about of life, our future, our family; everything in our life is uncertain. Most people are not comfortable to deal with uncertainty. But we have learned to accept such uncertainties on which we have absolutely no control, with certain amount of equanimity. Sometimes some of us try to reduce uncertainty about our future by visiting an astrologer, palm reader, so on and so forth. Linda Goodman and her ilk have made fortunes for themselves by exploiting this fear of uncertainty.

When it comes to areas where we have some control, like education, career, wealth etc, we are more uncomfortable with uncertainty. One of the primary reasons why we go to colleges and acquire degrees is to reduce uncertainty in our life. When we take up employment in a company instead of starting our own, we are trying to reduce uncertainty because the company has taken many of the key decisions with respect to the line of business, technology, product, process etc and we form a part of the team in implementing the strategies that have already been decided. Even in this case there may be still high level uncertainty as we go up in the ladder and/ or if we have direct business responsibility. When we take up a career in government we are still reducing uncertainty, as normally there is very limited systemic compulsion for results (as against process compliance) in many of the bureaucratic positions. (But there are many bureaucrats who try to do justice to their inner compulsion to make a difference)

I once did an experiment with a large group of my colleagues as a part of our internal training program. I gave three problems to all the participants and asked them to choose one problem they would take up to solve. The first problem was long, it had quite a lot of brute force computation to do; but the algorithm was sort of clear. The second problem was a logical puzzle. In this case the end result was quite measurable; it was evident that there would be an algorithm to solve, though the algorithm was not clear. The third problem had no clear algorithm or no one right answer. Most of the people chose problem 1, and only few chose problem 3. This kind of result will be common among most of the people.

There is one thing certain about uncertainty; that the success of any idea or project or company or organization is highly dependent on how we manage uncertainty for ourselves and for our teams.

To be continued ....

Certainty is the mother of quiet and repose, and uncertainty the cause of variance and contentions. Edward Coke

It is for me to choose

2010-05-03T16:07:00.002+05:30

“It was my fate”, “It was destined to happen” are comments we often hear when something unexpected happens. Such comments suggest that we are a part of a giant puppet show in which things happen as per a supreme design and we have no control on what happens. Usually, such thoughts console us when things go wrong; because the failure was not on account of our shortcoming, not on account of our irresponsible behaviour, not on account of the evil deeds of some, but because it was ‘so destined’.

On the other hand, most of our formal social systems like the legal system, the education system and the performance evaluation system are administered on the basis that we have the complete capability and freedom to choose our (re)actions and behaviour. If we break the law, we can’t escape the penalty claiming that it was destined. This is sort of a paradox; the mental balance propped by our faith in fate and will of a supreme force and the social balance supported by a structure that assumes rational choice by every human being. In our day-to-day life we often vacillate between these two extremes.

I decided to think through a bit and take a view that could guide the way I interpret events and act upon them. I agree with the brilliant one line summary by Jawaharlal Nehru; “Life is like a game of cards. The hand you are dealt is determinism; the way you play it is freewill.”

We live in a totally inter-connected world. What we do out of our freewill could set off a series of chain reactions like what happens on the snooker board. Sometimes we get the shot right and the outcome is as predicted. Very often the chain reactions we trigger bring about a new order on the board which we never imagined; as expressed by the butterfly effect, based on chaos theory, made popular by the paper by Philip Merilees titled “Does the flap of a butterfly’s wings in Brazil set off a tornado in Texas?”

Some crazy kid decides to take his car for a spin. It was his free will. I happened to be in his way and got hit; it was my destiny. I survive with two artificial limbs; it is my destiny. I now have two choices. I can try to live on and find happiness in spite of my broken leg or can spent the life cursing the crazy kid and live a life of regret despair. Here I need to exercise my freewill.

This framework of freewill helps me to appreciate the fact that even though I have the freewill to choose, the options available to me are outcomes of a large number of factors on which I have no control and sometime the choice that we take makes it possible to predict how things turnout. It also teaches me that the freewill to choose does not guarantee any outcome; but I am still responsible for the choice.

How I exercise my freewill is also dependent on my mental makeup and strength. If I let myself to grow up without taking responsibility of my action then I may not be able to exercise freewill to the extent that is needed in any occasion. From this point of view freewill needs to be nurtured consciously and worked upon.

We can build up this skill as we build on our muscles. There could be limit on our ability to build on various skills; which could be on account of our DNA structure. But as we have to exercise regularly to develop a healthy body, we have to work on to strengthen how we react to what happens around us.

One of the true marks of achievement in life is the way we master this art of exercising our choice.

“The annoying thing about believing in free will and individual responsibility is the difficulty of finding somebody to blame our problems on." P. J. O'Rourke

Regulation of Innovation and Innovative Regulation

2010-04-25T22:50:00.002+05:30

“In 1898, delegates from across the globe gathered in New York City for the world’s first international urban planning conference. One topic dominated the discussion. It was not housing, land use, economic development, or infrastructure. The delegates were driven to desperation by horse manure. The situation seemed dire. In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure.” (From Horse Power to Horsepower -Eric Morris)

Domestication of horse has been one of the key contributors of human progress; as it provided logistics support for business, leisure, pleasure and even conquests. We are good at building on and exploiting anything that would maximise our private benefits that sooner than later the negative externalities start taking a toll to the society at large; what the economists call the tragedy of the commons.

This happened in case of Horse Power too. With exponential growth in horse drawn logistics, by the end of 19th century accidents, pollution, and health hazards associated with horse was scary and appeared un-controllable.

Then came internal combustion engines that were much less polluting (even the methane produced by horse manure is eight times more potent than CO2 from automobiles as a greenhouse gas) less accident prone, much faster and more powerful. But by the end of 20th century this saviour has grown to a monster that is ready to savour its creator as it has proliferated to almost unsustainable levels.

The same is true for most of the human innovations. In financial services the time taken for an innovation of graduate to a Frankenstein has been quite low.

For examples derivatives have been developed as a tool for hedging risk. It has grown to be an instrument not infrequently used to structure products with the sole intention of profiting from the unsuspecting investors. Credit Default Swaps and Securitisation of debt instruments contributed enormously to the maturing of debt markets and helped better resource allocation. But this was also taken to its ridiculous extent that in most cases there was nobody who really cared or owned up responsibility to assess the true cost and risks associated with the underlying assets. The recent indictment of Goldman Sachs is an example of such unfair practices.

Does it mean that we need to curtail innovations? The answer is no. It is these innovations that ensured that the Malthusian theory has turned out to be an imaginary fear and the standard of living of a significant majority of human beings across the globe is hundreds of times better than the best the select few enjoyed even a few decades ago.

But as the time goes, products of these innovations reach such gargantuan proportions with very high impact on the well being of the society especially in a ‘flat world’ as described by Thomas Friedman. With large segment of wealth under the control of few large entities who are ‘too big to fail’, the difficulty of reining their run-way exploitation of their innovations gets to be even more difficult.

Addressing these is one of the key challenges for any government. Towards this goal, firstly we need to support strong regulations and stronger regulators who do not fall prey to their megalomaniacal instincts and try to micro-manage or centrally control; but who have the intellectual capability to analyse issues to identify key levers for action, recognize practices that exploit the common investors and curtail them, have courage to take strong and often unpopular decisions, can make the institutions who screw-up to pay-up and has moral strength not to be influenced by money, power or influence and at the same time is capable to encourage and get out of the way of innovations that are game changers. The stand taken by SEBI recently with respect to Unit Linked Insurance Policies (ULIP) which is a mutual fund masquerading as insurance is an excellent case in point on the constructive role the regulator can play.

Secondly we need to enable, encourage and empower disruptive technologies, processes and products that solve problems that are critical to survival of humanity. Especially since the existing interest groups who have heavily invested in the old system will work overtime to prevent success of these innovations. For example the oil industry will be happy to ensure that till the last drop of oil is left, human beings are addicted to it and are willing to pay more and more for the less and less that is drilled or excavated out. We experienced similar resistance from custodians and registrars when we were setting up a depository for Indian Capital Market.

The governments have a major role to play here too. They have to support, encourage, fund and place enabling provisions so that innovations are allowed to take root and reach a critical mass. Only then these disruptive technologies, products and processes can manage to break the status-quo and establish better, cleaner, more efficient solutions to problems that appear to make human race a run way experiment that is ready to destroy the mother earth as we know today.

That is why the two principal challenges for the day are Regulation of Innovation and Innovative Regulation

"It has yet to be proven that intelligence has any survival value." — Arthur C. Clarke

To be or Not to be – Part III - Tharoor’s Dilemma

2010-04-19T14:57:00.005+05:30

After eleven months in the office, Shahi Tharoor has stepped down from the post of Minister of State for External Affairs. Everybody knows the reason. It was not his ability to perform that cost him the post. He, instead of being an asset in the parliament for the ruling party, became a liability on account of the way he has conducted himself on a few occasions.

I don’t believe that he was corrupt, I don’t know whether his ‘transgression’ compared to the standards of some of the politicians are anything extraordinary, I don’t know whether compared to the loot of public finance that many in the ruling class perpetrate, Tharoor benefitted in any financial sense; though the there are questions on the nature of sweat that paid for certain equity.

For a seasoned diplomat with decades of experience in international diplomacy his failure is that he forgot an age old dictum; “Caesar’s wife has to be above suspicion”. Natural question is whether all our “Caesars' wives are above suspicion”

There is one big difference here. Tharoor was trying to muscle into a club, banking on a different skill set and preaching a different value system. On the basis of these credentials he had managed to take an express elevator to the position of power and influence in Indian politics. It has caused jealousy pangs among many who had been waiting in the wings for years, it has caused concerns among some established veterans about the changes propounded by people like him, it has caused worries that the apple cart is tilting. It was natural that the empire would strike back.

When he embarked on such a challenge he should have been a bit more careful; especially when he was yet to establish a strong support base who would have stood up for him. He should have shown more discretion and tried to avoid anything that could be misconstrued as pushing private agendas.

Now he has two choices. Work on building the support base and fight on the position of strength. Or join the club on their terms. This is standard operating procedure for any new entrant at the top. Or he can decide to retire and take up less risky hobbies like sky diving...

“Serious sport has nothing to do with fair play. It is bound up with hatred, jealousy, boastfulness, disregard of all rules and sadistic pleasure in witnessing violence. In other words, it is war minus the shooting". George Orwell.

Politics could be more demanding than any serious sport.

One good reason to blog

2010-04-11T18:04:00.003+05:30

When I took to writing a blog, two of my friends had strong reservations. One is a senior banker who believes that he is more an economist (he apparently reads quite a number of books on economics and spends a lot of time in the hallowed company of economists) and other an economist by training, thoughts and deeds. They came to a conclusion that I should avoid attempting this venture. The reason, my academic credentials on economics are not good enough to write on topics like public policy or management of financial services which have relation with economics. I completely agree with them about my academic credentials in economics.

This conflict of academic elitism and managerial pragmatism is a reality of life. Many academics tend to take the path of extreme specialisation that they are incapable to grapple with multi-disciplinary challenges of real world. They hide themselves in specialised jargon and restrictive logic of “ceteris paribus” that while much of what they say are sensible, it fails to make sense to those who are expected to act on it. In fact many of these academic high priests behave as if it is below their dignity to articulate their theories in a manner the common man (even an educated manager) can understand. Some of them seem to think that the world is made up of only rational economic agents analysing myriad decision variables in real-time leading to best possible outcome. Such elitism is still tolerable in music, literature, drama etc But in applied sciences like economics, management etc., unless it connects with the practitioners it will fail to have real value except to satisfy a few ego trips

If they don’t find a way to reach across to the guy who is expected to practice the theories they propound, how can they expect those thoughts to be more widely accepted? If they don’t find a way to fathom the life and challenges of the practitioners, how can they evolve solutions that are acceptable? If they don’t understand the inner fears, insecurities and private agendas and work around them, how can they implement policies that are game changers?

On the other hand the managers and administrators hide their laziness to be up-to-date and unwillingness to think-through, under their complaints on impracticability of the academic thoughts. They are happy with the networking dinners, what the various vendors and interest groups are keen to convince them or their boss’s whims. The more ‘professional manager’ or the more senior in the bureaucratic ladder they are, the more intransigent and intellectually sterile they make themselves. Quick results at whatever cost instead of institution building become the norm than an exception.

Our educational institutions, even the elite ones, fail to bridge this chasm to any meaningful extent. Our schools focus primarily on the ability to memorise and regurgitate answers to a bank of potential questions that may come for the exams. The colleges follow the same route too and the kids forget everything the moment the exams are over because the focus is more on marks than on what is learned. We can’t blame them as none of the teachings are contextual and most fail to demonstrate any relevance. Then the schools and colleges become just tools to attain a degree which itself is nothing but a pre-requisite to open many doors.

My blog is my attempt to address this conflict within me; the conflict between practical compulsions and theoretical possibilities. The blog for me is not a log of my private life laid bare to the public voyeurism as a means of keeping in touch. It is a tool that forces me to work on a thought and think-through its nuances for a few hours; crossing the ‘t’s and dotting the ‘i’s, which helps to bring some more clarity in my mind. It also throws open, to peer scrutiny, criticism and appreciation, my interpretations and how I use this learning (or the lack of it) and interpretations in tackling day-to-day challenges.

When I get your comments or thoughts or experiences on related issues, (I get many private mails in response to my postings and it appears that many are not comfortable to take a public position, may be eventually they will) it could offer another avenue,for both of us, to benefit from the “wisdom of the crowds” at very little cost. Some academicians willing to skim through these ramblings may also get some ideas on how to “win and influence” the guys in the trenches.

The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn. ALVIN TOFFLER

It doesn’t make sense

2010-04-05T21:44:00.010+05:30

The newspapers these days have almost a daily coverage on Sania Mirza’s marriage to Shoaib Mallik, the Pakistan cricketer. It is a celebrity wedding and there is controversy; so newspapers have a right to capitalise on this. It is a matter of circulation and profits for them.

Why should there be such controversy? Isn’t it their personal choice 'whom to marry'? The controversy is because she is marrying a Pakistani and anything related to Pakistan is paranoia these days. (The feelings are mutual)

I remember an incident that was narrated by one of my friends narrated. He is the country head of a multinational IT firm in India. He had a technical expert coming over for a project and he was by roots a Pakistani though he has never been to Pakistan as his father had migrated to US. It took an enormous effort to get the visa cleared. Then the local police insisted that he could not move out of the hotel room, except to attend office. They posted two police men outside his hotel room. This young lad had to be in this state of house (hotel) arrest for almost a month. Almost at the end of his project, he decided to go for a picnic with his friends for a drive out.

He sent an SMS to the local Police Superintend as he could not get him on phone. Within an hour the matter became a security emergency and quite a lot of harassment to his local sponsors and him. He had to be packed out of the country within a day!

It is true that both countries are not on good terms and forces of destabilisation are at work everywhere. We agree that we need to be careful that 26/11 is not repeated.

But does it mean that we have to have these extreme reaction in anything related with Pakistan and vice versa? There is no reason why Sania is not allowed a visa to visit the hometown of her would be fiancé and there was no sense it kicking up the controversy on the participation of Pakistani Cricketers in IPL.

Doesn’t it make sense to keep the tension low and encourage better interaction between both the countries without dilution of security controls? For example we have very strict verification process when we issue a passport. But, on the basis of the standing of the person (which is clearly defined and traceable) who issues a testimony there is of course a relaxation.

This is not an exception based on nepotism but an exceptional process of risk mitigation. If we find that such exceptional process can help more avenues for healthy interaction and such exceptions don't affect security concerns, we should try to encourage it. This can only help to strengthen both the countries.

Let us also ask ourselves some hard questions on the underlying causes of this mutual distrust. Don’t factors like religious intolerance, political expediency, attempt to distract public attention, machinations of a variety of interest groups and the self interest of the arms lobby contribute to this sustained tension?

Some of us need to rise above these biases, to build up a voice of reason, a voice of tolerance and a voice of compromise if we have to see a de-escalation of tension at the border and deep in our hearts. May be we need a few more marriages like that of Sania and Shoaib, some more train rides like the one Vajpayee initiated and a lot more cricket. The idea is to allow more opportunities for active engagement and more occasions to come together as human beings; sharing joy and sorrow. It is then that we can bring about disarmament of minds. But it is worth it.

“Unless both sides win, no agreement can be permanent.” ~ Jimmy Carter

Your slip is showing - Humour

2010-03-30T13:48:00.004+05:30

Once upon a time there was a king and one day into his court walked in a man who was almost blind and looked quite frail. He wanted an audience with the king and as the king was in a good mood he relented. He asked the king

“Lord will you give me a job in your court?”

The king was flabbergasted. He asked him,

“What is that you have that makes you worthy of my court?”

‘My lord I can touch anything and anybody and judge its worth”

“Ha! I don’t need anybody’s help to make such judgements. I am the king and I know what to do. But I am in a good mood today and I am allowing you to stay in the barracks. You can have rice and lentils every day.”

After that, the king just forgot about the whole incident. Our blind friend was not asked for any advice. Days went by. One day a merchant came to the king’s court. He had a magnificent horse to sell. The horse looked royal and trotted with majesty. The king couldn’t take his eyes off and was willing to pay anything to buy it. Then the minister reminded the king.

“Let us ask the blind man what he thinks.”

The blind man was summoned. He touched the horse. Then he commented.

“Lord, this horse is majestic. But he has a major flaw. Take him for a long ride. He won’t last”

The horse was taken for a long ride and the blind man was proved right. The King was happy. He ordered that the blind man be treated to a feast.

Time went by. Then one day a jeweller came to the king’s court. He had some exquisite jewellery. The king was almost ready to pay the ridiculous price the trader demanded. However, the minister again suggested that the blind man be called.

He came, touched and commented.

“Look at this angle, you can notice a blemish”.

Again the King saved lots of money. He ordered that the blind man be treated to a great meal again.

Then the king had a wild thought. He turned to the blind man and asked.

“Touch me and tell me what my worth is”

“I don’t need to touch you Lord. You are son of a cook”

“What nonsense!!!” The king roared. “Don’t you know I am the king?”

“ Yes my lord, I know you are the king”

The king called him into his anteroom and confided.

“Yes, I am really the son the cook at the queen mother’s father’s court. I was adopted by the king when the king lost his son. But then how did you know? It was a well kept secret”

“Don’t feel offended my lord. Your actions revealed your worth. When I first came and offered my services, you could not even appreciate what I could do for you. Then it was just your whim that you agreed to call me for opinion when the horse trader and the jeweller visited you; that too on the advice of the minister. I saved you lot of money. But what you offered me in return was more food!”

“You never could recognise what difference my skills could make to your life. You are so full of yourself. Your response showed lack of depth in your thinking and vision; you had to be the son of the cook. Even though you have reached the position of a king, you have not managed to shake out your insecurities and rise up in your stature to match your position. In your heart you are still the son of a cook.” (आप तो बावर्ची के बेटे हो l आपकी औकात इतनी ही है )

This is a story narrated by one of my friends. Learning from the story?

We may often come across actions that are totally irrational, irresponsible or just plain stupid. Action by people who have not matured in their thinking, their vision, their ability to appreciate the way the world around them is changing, the way the business and governance is being transformed and the way the customer expectations are metamorphosing.

What are our options?

i) Tolerate them; They may not mean any harm; it is just that they are not capable of anything better. Don’t fret! Learn to deal with these bozos. There are lots of them around. This learning may be critical for a healthy heart and a sane mind.

ii) Contain them: When we have to assign people to critical positions, spend some effort to assess whether they are capable to assume the responsibility. Great cooks don’t make great kings.

iii) Work around them: Sometime they may become big stumbling blocks. Rational discussions won’t cut ice with them. You have to have strategies to work around them.

Do read “Hitchhiker’s guide to corporate galaxy Part 1 and Part 2 for survival kit.

“Just like swine disdains pearls and asses prefer thistles, so is eloquence wasted upon the ignorant and culture unavailing to the uncouth” Unknown

India Gets a CIO – Part II

2010-03-23T19:37:00.002+05:30

Soon after the advent of computer, many progressive companies started to use it to improve their data tracking and transaction processing. To begin with, only a few innovative companies took the lead. However, in the last couple of decades we have witnessed a wider proliferation and it is still expanding.

Most of the companies followed a predictable path. At first PCs were installed at the desks of the “Big Man” who often did not know how to use it. One of his trusted assistants made use of the computer in some limited fashion; often as a substitute for typewriters. Then some computer savvy youngsters who joined the company convinced their bosses to introduce computers in their functional areas. Often it was some readymade accounting software or some bespoke applications developed by a small software development company run by a friend. Then a Manager (earlier called the EDP manger now called VP (systems)) joined the firm bringing more sophistication in the hardware and software used.

Even at this stage the computerisation was patchy and driven independently by functional / regional satraps with divergent hardware, operating systems and databases. Very often the transfer/ resignation of the individual who was the driving force of this localised computerisation lead to a quick degeneration. Then the VP(systems) with the support of CFO attempted some integration. This integration was limited to some budgetary control, supervision and common procurement strategy.

Eventually the organisation got a CIO who helped the senior manger to see IT as a strategic tool and help the organisation to develop an IT foundation and a framework that would help to bring about a business transformation.

Today, we see many companies at various stages of this transition. But many of the progressive companies have already reached the highest level of sophistication that is described above.

The IT enabled Governance (ITeG) is still in its early stage. It was not so far away when we could observe the PCs in a typical government department placed at the boss’s cabin with secretary using this as a word processor. Those days are gone. But we still have a long way ahead. Even when a catalytic role is played by some central authorities, it is often limited to budgetary control by purse holders with limited appreciation of the larger role of technology enablement. This is akin to what happens in the corporate sector when the controller (Finance and Administration) is in the driver’s seat as far as computerisation is concerned

The top echelons of both the legislature and administration appear to have caught on to the significant role IT can play and the need to have technology visioning rather than technology administration. The establishment of Technology Advisory Group for Unique Projects (TAGUP) is a welcome move in this direction and a strong message.

I believe that the limited set of critical projects brought under the purview of TAGUP is quite significant from the governance perspective. GST implementation and Tax Information Network (TIN) on revenue side and Expenditure Information Network (EIN) on the expenditure side complemented with UID (which can play a critical role in streamlining the outreach to needy) can be a game changer transformation in governance.

This can help to evolve a nationwide strategy for ITeG and develop a framework for managing ITeG Projects with respect to people, process and technology.

History of technology is replete with advances that first met wide opposition, later found acceptance and finally were widely regarded as having being inevitable all along!!- unknown

Service with a smile

2010-03-16T22:38:00.006+05:30

Sometime ago I was travelling to Delhi from Mumbai. As I had a meeting early on a Monday Morning, I decided to take the evening flight on Sunday even though it conflicted with my Sunday siesta and dinner with family. I was to take a 5.30 pm Kingfisher. Being a disciplined person, I was at the counter one hour before and I was informed that the flight was going to be delayed.

Unlike the normal practice, the airline had not sent any SMS intimation of the delay and I was really upset. I wanted to shout but kept quiet as I had learned to accept such callous behaviour from most of the service providers here.

The girl at the counter (I think her name was Chaitali) asked me to wait for a minute and went off somewhere. Within a minute she came running and told me that she has tied up with Air India and had got me a seat on the flight that was scheduled to leave immediately. She took my bag and ran to the Air India counter, finished the formalities, and helped me board the flight. I could reach Delhi in time to spend some time with my mother before she slept.

Compare this with the experience I had in January on one of my return flight from Delhi on Jet airways. That was the day when there was a terrible fog. We boarded the flight which was already one and a half hour late and had to wait inside the plane for another about three hours. Then they decided to cancel the flight and we were asked to deplane. We asked them what arrangements were made and no crew member could give us any guidance.

We reached the terminal. There was such chaos. No boards, no announcements and a long queue to reach the few operating counters. I waited for an hour and could get no assistance. One of my friends who was travelling on the same flight arranged for a car and a hotel booking with the help of his local office. The next day I got no SMS/ telephone update on what to do and I could not get anybody on the phone either. I decided to land up at the airport in the afternoon and finally managed to get a seat in a flight that took off in the evening at seven. I reached home 24 hours late of which 14 hours were spent in the plane/ airport. (Apparently, the Kingfisher flight that was supposed to take off with the Jet airways flight was also cancelled; but managed to take off late at night on the same day.

In both these cases the disruption of service was outside the control of the airline. But the response of both airlines (at least the officers who handled the situation) was different. Although such disruptions are very rare, in airlines business, these are situation that can be anticipated and planned for.

Jet airways could have made a difference by just being helpful. They could have made arrangement to provide the instruction by the crew in the plane. The announcement could have been as simple as (i) Those who have a place to stay in Delhi may leave their contact number at the counter and go home and if any of them needed help to get a cab they could contact the ground staff at a special counter and (ii) those who had no place to stay in Delhi could contact ground staff to get help for overnight accommodation. They should have just arranged two special counters to handle these at the terminal and there would have been no crowd shouting. The next day, depending on the weather, they could have arranged to call those who left the contact number and update them on when they could travel.

In the first case Kingfisher had enabled a junior officer to take an exceptional decision and had motivated her to take pride in taking such decisions. (I hope it was not just a one-off decision by the ground hostess who felt sympathy for my distress or who was impressed by my handsome face:- )) I believe such empowerment and encouragement (may be incentivising) would go a long way in improving the service delivery.

Very often many service providers do fail miserably in such nuances of customer service. At best their focus is limited to delivering the functionalities that they have charged for and service quality is often seen as a favour being extended. The more the monopoly power of the service provider, the worse is the service quality.

One way all of us can contribute is to demand for service quality and be bold to protest when it is screwed-up.

Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.DONALD PORTER. Courtesy http://www.customerservicepoint.com

Note: I have used two anecdotal experiences that I had to make a point. This does not mean that the experiences I had with Jet and Kingfisher necessarily represent their customer service practices.

“Barbarians at the gate”

2010-03-09T16:12:00.004+05:30

‘Barbarians at the gate’ is a book by Bryan Burrough and John Helyar. It tells the story of the largest Leveraged Buyout in the late eighties. I liked the book and the title. It triggered some thoughts about barbarians, at or inside the gate of institutions, who may eventually zap the life and vigour of these organizations and turn them to zombies. The whole train of thought got triggered when I was reading "Too big to fail" a book by Andrew Ross Sorkin which is the ball-by-ball account of the recent mayhem in the Wall Street that spilled to all the Main Streets in the world. This book has been described as the heir to "Barbarians at the Gate" by Financial Times.

Organisations succeed and grow when they are built and/or headed by visionaries who can dream up or recognize processes, products, technologies or services that make sense and also have the ability to implement and scale these dreams. But if the organisations don’t have a process to ensure that there is a culture and succession plan that will ensure that they continue to bring to the helm such visionary leaders, gamesters and bureaucrats will rise up to fill the vacuum. Then the organisational decay sets in.

It is easy to recognise this decay when it has already manifested in the form of dissatisfied customers, loss in market share, dropping profitability and so on. However the seed of such decay could have kicked-in even when apparently everything is hunky-dory. And it is very difficult to recognize it then. Some of the early symptoms that go unnoticed till it is very late are discussed here.

Form gets priority over substance

One of the early weaknesses that can be observed with these brain dead captains is the focus on ‘process for process sake’ instead of the processes being used as a tool to manage and grow the business. The bean counters, corporate secretaries and legal eagles who have very little appreciation of the nuances of business take over.

The atmosphere so created, stifles innovation and initiative, business leaders leave and clerks and paper pushers rule the roost.

Business strategy gets driven by corporate secretaries.

Structuring and restructuring of companyto consolidate power and meet private agenda of the management becomes the priority. Sometimes this gets driven by the unholy alliance of some shareholders and the management who then works towards maximizing their self interest. The interests of the organisation, its people, customers and its shareholders at large get compromised. It can become a vicious cycle with both the management and the interested shareholders believing that what they do is for the good of the company.

The people become pawns.

People instead of being utilised as resources that drive the business and who are to be nurtured, become pawns to be shuffled around on private whims and fancies of management.

People are controlled with their weaknesses, follies, mistakes and insecurities and not enabled and encouraged. Then they fail to earn loyalty from the ranks.

“I, me, myself”

The top managers spend lots of time in office to push their private agendas and priorities ranging from managing their finances for activities of their clubs, children’s projects, their admission etc. The priorities of the organisation gets back seat.

This acts as a downer for the working class. Listen to the gossips at the water cooler and we can judge the respect the top managers command.

Moral decay

In this stage of degeneration, decisions are driven by greed;private bonus and benefits get to have priority even at the cost of long term survival. It is this moral decay that drove Wall Street to develop products and deals that turned toxic for the whole financial markets around the world. Enron, WorldCom, Satyam, Arthur Anderson, Lehman, AIG episodes are monuments of this moral decay in the recent history. Many more are around; it is just that they have not been caught.

Some organisations don’t recognise these early warnings and act upon them, and that is one of the reasons why the corporate longevity is not so high.

"I searched the whole world for a bad mind, never found one
Looked into myself, found the worst of all" - Unknown

India gets a CIO

2010-02-27T12:37:00.004+05:30

“Who said Elephants can’t dance” is a book written by Louis Gerstner the CEO who turned around IBM, the ailing giant that it was in 1992. I am sure many of us feel the same about India. We used to have a growth rate of around 3% that was termed as the Hindu rate of growth. That is history, and we are now demonstrating to the world that Indian Elephants can dance too.

One of the key strengths that any country, corporate or individual needs to compete in this new world is strength in Information and Communication Technology. And it is an area India has clearly demonstrated comfort among a broad cross section of the society. Today we have a booming IT industry ranging from cottage industries to International Giants. But we have not yet capitalised on this strength in strengthening our governance Infrastructure on a national scale.

We have patches of brilliant executions across the country. The modernisation spearheaded by NSDL and NSE with support from SEBI has catapulted the Indian capital market to world standards. There are many other examples like the bhoomi project in Karnataka, VAT computerisation in Kerala, and many more. The tragedy is that this learning is almost quarantined and has not yet formed a part of the DNA of governance. The concern is not just this isolation, there is significant duplication of efforts and investments which benefits the vendors more than the users.

For example GST is one of the most critical national initiatives India is embarking on. The empowered committee after protracted deliberations has brought out a Discussion Paper on GST on November 2009. The Finance Minster has announced that the target for implementation will be 2011, revised from the original target of 2010. A project of such magnitude and transaction intensity can and will succeed only with the help of a powerful ICT infrastructure. But we hardly see sufficient focus on issues of computerisation in all these discourses and deliberations. Each of the interested parties and states are on their own trip and trying to push their own agenda.

What we need now is to establish a framework and guidelines to facilitate IT enabled Governance (ITeG) on a national scale . The Government has woken up to this challenge. It has asked Nandan Nilekani, the Chairman of Unique Identity Authority Of India (UIDAI) to head a newly constituted Technical Advisory Group for Unique Projects (TAGUP). This is a welcome development and can surely contribute towards integration of the divergent initiatives that are going around (often in circles).

I remember attending a party soon after Nandan was appointed as the chairman of UIDAI (read up It Made Sense – 3; Nandan and the Unique ID*). I made a remark that it looked like we have a CIO for government. One investment bankers based in London who was attending this party quipped “I have now one more story to sell India”

But the remark looked a bit preposterous at that point of time. Today it is a reality. I have been keenly watching the development of UIDAI. There appears to be a clear strategy that it is following. The concept note was world class. The RFP that has recently come out for application development can be easily termed as one of the top quality RFP brought out by any government agency. He has also managed to bring together a world class talent pool to support him.

India looks good, India looks corporate, and India has now has a CIO...Read it aloud, it sounds nice and almost musical

“Part of the inhumanity of the computer is that, once it is competently programmed and working smoothly, it is completely honest.” Isaac Asimov

The art and ethics of lying - Part II

2010-02-22T21:05:00.005+05:30

My posting on “The art and ethics of lying” evoked quite a few responses; some as comments in the blog and some as emails. The two comments given below are thought provoking.

“Thought the rule was not ‘Don’t lie’ but ‘Don’t get caught?’ (by others or by self-guilt) Ethics is an essential compass - a needle towards north, but - but true north is slightly different on Earth?” Sajan

“I think you carry the thread too far. Saying "I bluffed" does not mean that I will do the things that you cite later in the paragraph. When I am talking with you on a contract, do not my morals require me to be responsible, (loyal, even) to the party I represent? So I say "If you do not accept my final offer, we will walk away". I might e bluffing, and this is a lie; but do I own no debt to my colleagues to get them the best deal from you? This need not be a slippery slope (Once we allow in western music, we will end up with...).” Sanjeev Gupta (ghane)

I did not mean that it is always possible to live by the commandment “Thou shall not Lie.” There could be occasions when lying is fair and even necessary. Let us take an extreme example to make a point. Consider that you are standing at a junction and a person comes running totally scared and he runs along the right fork at the junction. After few minutes you see a thug coming running with a gun and he asks you which way the first person went. You may prefer to lie to save a life. There may be less dramatic reasons where lying is the right thing to do.

As Machiavelli argues in ‘The Prince’ “A man who wishes to profess goodness at all times will come to ruin among so many who are not so good. Hence it is necessary for a prince who wishes to maintain his position to learn how not to be good and to use this knowledge or not according to necessity”. A desi corollary is “the Good may often bear the fruit of the Bad”

Then there is the question of business ethics that Sanjeev has raised. Business in that sense is like poker. It requires strategies and posture that could be termed as lies in the normal sense. But that is how poker and business are played. But poker and business have their own set of rules. So in this case being good is about playing as per the rules of the game.

Game theorists will point out that reciprocal altruism, (generous tit-for-tat) which while showing a friendly face to the world will not want us to be exploited, is the most sensible strategy for survival.

But what is more reprehensible is when you become the follower of Shakuni and take pride in the rigged dice game where the balance between rational self interest and selfishness tilts as per convenience. It is then that the lies get to be amoral.

As Laurie Calhoun noted in his article The Problem of “Dirty Hands” and Corrupt Leadership “In thinking about this issue, it is important to distinguish self-serving opportunists from those who suffer corruption through their sincere efforts to govern well. Self-serving opportunists often rationalize their dubious measures to themselves through self-deceptive references to ‘the good of the whole,’ claiming that group loyalty demands moral sacrifice or that ‘the end justifies the means.’”

Such rationalisation could become a slippery slope. Especially if we start to justify in relative terms, drawing examples of errors and omissions that we see around particularly that of people who are held in high esteem. In this world of seven billion human beings, who by design are not perfect, there would be statistically significant sample for aberrant behaviours from all walks of life.

That is the message that comes from the story of Yudhishtira’s chariot settling down to the ground when he lies. It reminds us that while we may have a justification of an ‘extenuating circumstance” a deceit is still a deceit.

So while it may not be humanly possible or even unnecessary to strive for absolute truth and justice, it could still an ideal, a ‘guiding star’ (concepts like ‘six sigma’ and ‘ethics in business’ are examples of attempts to represent absolute ideals which many may never reach) so that when we are faced with moral conflicts we could attempt not to justify our selfish acts in relation to the ‘immorality and injustice we see around’.

“We are all in the gutter. But some of us are looking at the stars” Oscar Wilde

Few Good Men

2010-02-16T19:17:00.003+05:30

Recently there were couple of accidents in the construction site of Delhi Metro. There has been much hue and cry demanding the blood of senior officers. Criticism and accusations were part of daily news. I was surprised at such negative media attention on an organisation that in my mind is an icon of national pride.

I “Googled” for some facts. Since the construction work started in 1998 there have been a few accidents in at the Metro construction sites. But the incidences have been very few and except one or two instances these were minor. Even by international standards the accident history of Delhi Metro Rail Corporation (DMRC) related to its construction activities is quite low. On the other hand in the last eight years of operation of the Phase 1, there has been not a single accident in its operations.

I agree that we cannot condone accidents and we need to expose inefficiencies, failures and corruption in all public projects. When I read through the press coverage on the recent accidents at DMRC construction sites, I almost got a feeling that it is one of the most poorly managed projects.

But the reality is that this is one of the few institutions that our country can be proud of from the point of its magnitude, scope, design, implementation, operations and maintenance. Name any area the score is superlative. It has been spearheaded by a man who has proved himself multiple times in projects of such scale and national importance which has been widely acclaimed around the world.

We don’t need to treat such people and institutions like Gods and close our eyes when they make mistakes. But when we present these cases we should place these in proper perspective. Very often we see these cases blown out of proportion whereas the incidences which need true and sustained exposure are buried so fast.

The reasons for this phenomenon are many. The real scams get buried because media may have been bought over with the financial and political muscle of the perpetrators. Lack of support to genuine organisations and genuine people have many underlying reasons. The corrupt don’t want ‘the clean’ to succeed or deliver. The ‘good’ believes that only his goodness is the authentic variety. Then we have the “Indian Crab syndrome” which cannot stand the other guy rising above mediocrity. We are happy to pull him/ her down. Recently I was talking to a person who was instrumental in establishing and nurturing an institution of national importance. He confided to me that he was surprised at the extent of anger (not just jealousy) that the success of his institution had evoked.

We recently witnessed this kind of failure when practically very few took a public position to support Shahrukh Khan when there was a backlash against his remark about allowing Pakistani Cricket players to play in IPL. We have seen many more such examples of unwarranted allegations and criticisms; Sound bites on RK Pachauri, CB Bhave, Shashi Taroor etc are examples of this.

There is nothing new in this other than a suggestion that there is a need to stand up and support those few good men who try to make a difference. If you are too scared to open your mouth, at least try to take a position as a group.

"First they came for the unions, but I didn't speak up because I wasn't union. Then they came for the communists, but I didn't speak up because I wasn't a communist. Then they came for the Jews, but I didn't speak up because I was Protestant. And then they came for me, and there was no one left to speak up."

- Reverend Martin Niemoller a German Lutheran monk who was arrested by the Gestapo in 1937

The art and ethics of lying

2010-02-10T20:54:00.005+05:30

“Ashwathama is dead” replied Yudhishtira.

He also mumbled under his breath “May be a man or an animal”. (अश्वत्थामा हतो नरो व कुंजरो व”)

Drona the Commander in Chief of the Kauravas and also the teacher of both Kauravas and Pandavas who obviously heard only the first part of Yudhishitira’s reply was devastated believing that his son Ashwadhama was no more. He laid down his arms and then he was killed by Draupadi’s brother.

In the story of Mahabharata, Pandava’s are the good guys and Kaurava’s are the bad ones. The war and destruction of Kurukshetra was primarily caused by greed and intransigence of Kauravas.

In this war of good and evil Pandava’s had to use deceit a few times. Although many would sympathise with these strategies, none of the parties who implemented these were proud of this. After Yudhishtira lied (first time in his life) about the death of Ashvathama, his chariot which was always few inches above the ground, settled down to earth. Each of the players was filled with remorse at the deceits that they had to use disguised as strategies.

Their use of these strategies was more and exception to regain what the Pandavas lost to on account of the treachery of Duryodhana and his cohorts.

Today in the jungle of governance (of both corporate and the country) we see the use of treachery as a strategy to achieve one’s end. Shakuni’s deceit is packaged and sold as the strategy of Krishna.

We see many who proudly boast “I bluffed” with a gleam in their eyes that shows how smart they feel. It then becomes a part of their nature to say white lies or to palm out concoctions of facts, suitably laced with lies to suit their convenience. They will use this strategy to get what they want or to destroy whoever comes in their way. They will work on the insecurities of their colleagues and egg them on to make mistakes. They have no shame to take credit of others achievement and will feel no compunction to exploit. They, like the renowned Tuglak, will work towards fomenting discord in their team so that they can promote their agenda without opposition. They will stand in the frontlines of the temples and front benches of churches.

These are not strategies to achieve a larger goal; but a means to further their private agendas. If you have to survive in this modern jungle, the easy way out is to join the gang.

But if you have little scruples left and you are not yet ready for ‘vanaprasta’ (ie; be the monk who sold his Ferrari), then you need to learn to recognises these seekers of self interest to have your own strategies for survival.

It is going to be a difficult task because in this endeavour you are going to be mostly alone, because the ‘good guys’ seldom co-operate or stand-up for their fellow ‘goods’ unlike the ‘bad’ . (Take a look at my earlier posting "To be or not to be (Part 2) – Of Good being Bad" for some thoughts on this)

Otherwise you should be lucky enough to have ‘Krishna’ (the God) as your charioteer and/ or you should be willing to redefine in your heart what you mean by victory.

"Let the lie come into the world, even dominate the world, but not through me......
Writers and artists can do something more: they can vanquish the lie.......
Once the lie has been dispersed, the nakedness of violence will be revealed in all its repulsiveness, and then violence, become decrepit, will come crashing down" Aleksandr Isayevich Solzhenitsy, Winner of Nobel Prize in Literature in 1970

Modicum of Truth

2010-02-01T20:33:00.004+05:30

“Encounter Killing” is a familiar term for most of us. It refers to extra judicial killing of gangsters and terrorists who are a menace to the society. In its most benign form is used as a substitute for the slow and often ineffective judicial process of conviction that fails to deter the guilty. But it is also used as a means to eliminate dissent in many parts of the world.

It is claimed to have been beneficial in controlling the underworld and terrorism in some parts of India. As these are mostly extra-judicial and staged operations, they arouse quite a lot of controversy particularly from the human rights activists. In many cases the specialists who have been nurtured for this role have graduated to roles where extra-judicial means becomes more a norm than an exception and used as shortcut, a means to promote private agenda and a way to settle disputes.

The practice of using such un-lawful means and building and encouraging individuals and organisations that have no respect for the process of law is not an invention of Indian Police or of modern times. It has been / is being practiced by corporations, ministries and even nations.

Bindran wala of Punjab was nurtured initially by our political process. Similarly Taliban was supported by US as a counter to Russian influence in Afghanistan. Look around we will be able to see many more examples.

We see many bureaucrats in our administration who are also nurtured, supported and used by their political bosses willing to adopt any means to further their agenda. We see examples of such encounter specialists even in business organisations who are used and encouraged for quick results not necessarily with physical violence.

In certain circumstances there may be a justification to cultivate a “Rambo” and use his service. Often these Rambos are brilliant people who might give outstanding results especially when not restricted by conventional restraints that are meant to safeguard the justice.

But we need to keep in mind that it is a dangerous experiment to be used in only rare occasions and with extreme caution. Otherwise it may be addictive. For the sake of expediency we take the easy road and then it may become difficult to put a stop and restrain the Rambo. Especially when they are giving us results. Accountability and safeguards get subverted in the altar of quick results.

It becomes even more dangerous if we allow such specialists to rise up to leadership positions with the same disregard for ordinary people and conventional processes.

It is equally or more important to prevent a situation where we need to resort to such extra-constitutional measures.

The question on the balance between intentions, actions and consequences has always confounded statesmen, philosophers, religious leaders and the common man. Pragmatic view often tilts towards the philosophy of “end justifies the means” with less attention in evaluation of the fairness of ‘means’ and reasonableness of ‘end’

It is here that we need to appreciate the true import of the serenity prayer

“Lord, grant me the serenity to accept the things that I cannot change; the courage to change the things that I can; and the wisdom to know the difference.” .. Reinhold Niebuhr

No Man is an Island..

2010-01-26T20:35:00.002+05:30

Many of us invest in capital market and each of us may follow different investment strategies. Some of us are long term investors and some are short term traders. But these are not discrete choices but two extremes of a continuum. Therefore most of us, on the basis of our risk aptitude, will lie somewhere in between. Whatever be our investment profile our primary reason for our investments is return.

When we invest, we carry out lot of research, fundamental or technical, friendly tips or even ‘insider news’, to maximize our return. Whatever type and extent of research we carry out, we know that all our investments will not give us positive return all the time. If we are good and/ or lucky a large chunk of assets in our portfolio will give us positive returns often enough or some of them will give us extraordinary return occasionally. It is this uncertainty that we try to address when we acquire a diversified portfolio of assets, which on aggregate has a higher probability for offering positive returns.

Some people don’t have the stomach to take this uncertainty and therefore they keep away from the world of investment. When they consciously keep away from the risk they also give away the potential return associated with it. There is no asset that can give total guarantee of return all the time and risk goes hand in hand with any asset.

In the same way our circle of friends or our network of contacts can also be seen as a portfolio of assets. Some of them are worth long-term investment some are worth short term; but, it definitely makes sense to have a diversified portfolio to be built and nurtured.

One may say that this is a very materialistic way of looking at relationships. It will be so only if we define returns in absolute material form. If we include everything that a friendship brings, whether material or spiritual or emotional or just plain cherishing of companionship into the ambit of our model, then this model is a good way to understand and appreciate our portfolio of friends and contacts.

We can seldom get friends or business partners who will always match with our thinking, preferences, beliefs or whims and fancies. There are times some of them will ‘let us down’ beyond our imagination.

What is our response to this? Do we take a position that ‘we cannot trust anybody’ and keep away from relationships as much as possible? If we do so, we will be losers. We miss the opportunity to experience and cherish a variety of wonderful people who may sometime share happiness, sadness and prosperity with us.

Sometimes we overreact to some incidences in which a person has behaved in an unfair/ unethical / disloyal fashion. Do we jump to conclusions on the basis of one/ few incidence (s)? If we do, it may not be a good idea or may not be fair. One missed dividend or one bad quarter cannot be a good enough reason to dump an asset.

It is the reality of life that we need to have a diversified portfolio, whether it is of people or whether it is of material possession. We need to develop a sensitiveness to judge the kind of assets we are comfortable with and what kind of portfolio we need to keep for different proposes; as friends to share our happiness and sorrow and as partners in our professional dealing to strengthen our collective offering.

One of the most critical qualities of people who make things happen and / or is at peace with themselves is their ability to nurture a strong portfolio of friends / contacts (the ‘end’ each of them seek is different; but. there is a commonality in ‘means’ from this point of view). Politically savvy may even have large ‘trading portfolio’ too (a portfolio they churn and trade :-) ).

We need to accept that at best we can expect 80% co-operation from 80% friends at any time. This is only 64% co-operation on a steady state, which is just more than half the time. We need to learn to build on this to go forward. Especially if we are involved in public service, then our skill in identifying areas of common interest with a wide cross section of people becomes a key determinant of success.

I agree, like in capital market, there may be some assets which may be better to shun. But mind you they are a minority, and often contextual and if you are smart and or lucky even they pay a dividend sometimes which may at worst a ‘lesson for life’

“No man is an island, entire of itself; every man is a piece of the continent, a part of the main; if a clod be washed away by the sea, Europe is the less......” John Donne, 1620

It pays to be nice; but you pay ?

2010-01-21T09:57:00.005+05:30

My friends always used to make fun of me that very often I display a grumpy countenance. One day we were all on a tour and we chatted about this trait during dinner. So next day when I got up I decided that I am going to be show a pleasant face.

I was taking a flight back to Mumbai that day. I gave the taxi driver one of the most charming smiles that I could. He smiled back too. We had quite a lot of small talk on the way. When I finished my drive and was paying him, I smiled again. Suddenly with the best smile he could offer, he asked me. “Sir, this is the ‘bonny’ for the day, give me an extra 50”. After this exchange of smiles and pleasantries, how could I ruin it for Rs 50?

I was now in the airport, and after check-in I proceeded to the security. I smiled also at the policeman while being frisked. Initially he had a quizzical look at my attempt of bonhomie. Then after frisking was complete and as I was moving out, he coughed and muttered. “Sir, how about giving me something for a coffee?”

“It pays to be nice, but you pay..”

What does it mean? Does it mean that being nice, friendly and polite mean being weak?

Not necessarily, though very often people perceive it that way and many people try to take advantage of it. That is why sometimes people in power and in a position of being a ‘giver’ normally try to keep a very ‘aloof’ expression.

On the other hand this aloofness could be a mask to hide your inability to be assertive. Assertive about what is right, what is fair, what is due and so on. (The aloofness could also be a ploy for extracting something from the client, or satisfying ego trip or when the service provider doesn’t care and is only doing a job. This is out of scope of this discussion)

In my opinion this aloofness though an effective tool, it is not the best tool for overcoming your weakness in being assertive. Imagine how nice you feel if the doctor who treats you, the policeman who attend to your complaint and the bank teller who services you are also pleasant.

Once I was travelling from LA to Washington on a winter morning. Though it was Christmas season it was a gloomy day. The weather was bad and the aircraft was being tossed up and down. Many of the passengers including my daughter and I were feeling very sick and ready to throw up. The PA system came live and I expected either the monotone of a digital voice or a human being sounding digital making a safety announcement as per the federal regulations. But the captain came online. He had a terrific sense of humour and talked over the PA system for almost five minutes. Of course he made the safety announcement. But it was interspersed with humorous interludes on the season and the weather. It was really soothing and lifted up the mood of all the passengers who were down and moody in the gloomy weather.

I remember a similar experience in a difference context. I fainted in the office and was taken to the hospital. They wired me up and put me through a battery of tests. It was not a pleasant experience and I was generally tensed. The doctors were efficient going about their job with precision. But I was still on the edge, though they had given me a general clearance. I later visited another doctor for a second opinion. This doctor was a different kettle of fish. More than the second opinion and the treatment he suggested, his comforting chat made me feel much better, confident and helped me to recover faster.

But this is one aspect often forgotten; especially in public service. Even many organisations which try to ‘take care of’ this aspect in their client service department fail to address at many places. One of the areas many people fail very often is at the reception counter and with the secretaries of the big bosses. Their rude behaviour often makes the visitors feel so insulted and irritable and the guests are made as if they are being given a big favour (unless of course the guest is a VIP). Mostly the visitors will never mention this. But that doesn’t mean that they never felt bad.

A service, when laced with a smile and/ or a nice word, can double the value of what you offer at no extra cost. This may make the recipient feel respected and may even make his day. This is all the more important when we are serving the public at large. Then we have to accept that we are expected to serve and not just rule like the old feudal lords.

May be I am asking too much

Matter of Honour

2010-01-10T20:03:00.004+05:30

“Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master's happiness!” The Bible

What is the primary role of a Stock Exchange?

It is to provide liquidity for the stocks. It managed this liquidity by having processes in place that enabled thousands of transactions every hour which has now increased to millions per hour with the help of technology. To manage this rate of transactions, even the settlement of trade (fund against security sold and security against funds provided) is made an asynchronous activity (i.e. settled later).

When trading and settlement are asynchronous, there could be risk to both the buyer and the seller; the risk of counter party walking out of the transaction leaving you high and dry. When we have long chains of multiple transactions intertwined and interlinked, such counter party risk will have a domino effect and lead to market failure. This could dissuade many potential investors from participating in the market which ultimately affect liquidity. This used to be the case in Indian capital market before NSE was established with its sophisticated mechanisms for managing the risk. There is margin payment to take away incentive to default; there is a clearing corporation to provide counter party guarantee and so on and so forth.

These risk management measures have significantly contributed to market expansion. The level of trade has increased more than 100 times. Today Indian Capital Market is rated to be one of the best in the world in terms of institutional infrastructure on account of this strong risk management capability.

This is relevant and critical in every human interaction. Every day we deal with a number of people (costumers, suppliers, service providers, regulators, bankers etc) and we agree and commit on certain deliveries between us. Your supplier promises delivery of input materials based on which you have committed delivery to your client for next week. The finance manager has promised to complete the project review by today evening to help you submit the final report to the board tomorrow. The tailor has agreed to deliver the new dress you have ordered for your child. A number of deals and deliveries.

Like in the case of capital markets, the chain of commitments and deliverables are linked to multiple levels and any failure in any level could have cascading effects.

Some people are very reliable in their delivery and even if an unfortunate delay happens they give advance warning helping us to reschedule our plans and our deliverables in an orderly fashion. Some cannot ever honour their commitments. Very often people don’t appreciate the importance of this chain reaction and the need to be reliable.

Let us look at how this affects you and how you should manage this in your daily life.

One of the critical components of professional success is how reliable you are on your commitments. If you are not able to do deliver a promise you should not commit. If you commit and you are unable to meet it, please give advance warning.

When you reduce the risk of dealing with you, then there are more people willing and interested to deal with you. The demand for and liquidity of your offerings increases. On the other hand if you are not a reliable partner, then however capable you are or however useful your products or services are, the demand will be much less than the potential. This reliability factor is critical for your growth and as you go higher it becomes one of the key parameters on which your clients, subordinates and friends decide to deal with you.

On the other hand when you are at the receiving end you need to learn to judge the reliability of person you are dealing with. If you are not dealing with a person who is not reliable, then you need to have mechanisms to incentivise or force reliability.

In fact in your professional life your reliability and that of your partners (colleagues/ service providers / subordinates / bosses) is one of the most critical ingredients that will determine what you achieve.

Contracts, Service Level Agreements, Penalty Clauses etc are tools to manage reliability. As in the case of relationships, your market power (the power you can exert on the giver) can influence the reliability you will be able to command from your partners. But there is no substitute for the age old value of “Pride in Your Commitments”

A trip to the Deep Waters

2009-12-26T20:03:00.021+05:30

This is my annual travelogue. Last one was on a trek to Sumatra, Indonesia. This time it is my diving expedition! Read to share with the excitement of scuba diving....

The Charm of the Seas

I was always crazy about the sea. Her charm is almost mesmerizing; the cool breeze moist with salty vapours has a magical touch to soothe the mind and rejuvenate the body. When I was in Jakarta I got an opportunity to take up sailing and I jumped at it with all my heart. I used to explore the open seas in a single seater dinghy sail boat (laser) for hours together, sometimes drifting in light wind and sometimes clipping in tight winds. It gave a feeling of high and a feeling of calm, a two-in-one package from the Mother Nature.

I also joined my friends on their diving trips; but restricted myself to snorkelling around a few of the coral islands. It offered a glimpse to the world under the choppy waves, a wonderland with brilliant colours, shapes and textures. The coral reef with its wild hues and out-of-the-world designs had a vibrancy of its own. Schools of fishes with scintillating colours dancing around beckoned me to their world and I was convinced that I should take up scuba diving to be one with them for a few minutes and not limit to a birds-eye view from the top.

I decided that I would take up scuba diving only after my daughter was old enough to join me. And I was ready to wait. When she was twelve, though I was not actively looking around in Mumbai for a dive trainer, I bumped into Jurgen Van Duffel, a certified dive instructor, and I immediately signed up for Isabella and me. (His outfit is suitably named The Life Aquatic with Lacadives)

He is quite passionate about his profession and takes his role as an instructor quite seriously. He delivered a five hour lecture cum demonstration and then gave us a 300 page book which covered quite a lot of theoretical foundation on diving. This included what equipment to use, what are the best practices to follow, how to take care of the risks of air embolism, nitrogen narcosis, oxygen narcosis, decompression sickness, and the discipline and etiquette under the sea. He made it clear that we should go down as visitors and not as plunderers and the colourful artifacts are only to see and not to borrow for our sitting room.

Then he took us to a swimming pool and taught us how to handle the equipment and the made us practice various exercises that we are expected to be familiar with to handle occasional emergencies; what to do if I run out of air, what to do if the air supply cable (the regulator) comes off, how to handle a cramp, how to take of and put on the total dive gear in the sea both at the surface and down under. He made us do this in the pool and told us that we should repeat this in the sea, for him to be convinced that we were good enough to be let loose in open water. In many of the exercises which needed a flexible body, Isabella did better than I! And she was mighty thrilled about it.

Initially we planned to go to the Andamans or Mali or even Indonesia for the dive certification. Then we decided to complete the certification somewhere near and then go to the far away locations as pros :- )

Jurgen promised me that Murudeswar near Mangalore was a good place to start. So we started our annual Christmas holidays there.

Where history and Fables meet

A three hour drive from Mangalore airport brought us to RNS Residency which is the best hotel in Murudeswar. It is situated on a cliff overlooking the sea with most of the rooms offering a brilliant view of the sea. You can sit at the balcony sipping coffee and stare at the vast expanse of the open sea.

Murudeswar is another name of Lord Shiva (the Hindu God) and as per mythology it considered to be the place where the cloth covering the ‘atmalinga’ fell after Ravana the demon king of Ramayana flung it upon his realization that he had been cheated by the Gods [1]. Therefore this is one of the five holy places of Shiva.

The temple is situated on ‘Kanduka Hills’ surrounded on the three sides by Arabian Sea. The temple complex has the world’s largest Shiva idol (123 ft/ 37 mt) and a 20 storied tower (Raj Gopura which is 249 ft tall is supposed to be the world’s tallest Gupura).

The idol of the meditating Siva with a brilliant silver body and the golden snake around his neck gets sunlight all through the day, giving it a brilliant sparkle. The sculptors from Shimoga have captured the divine serenity of Shiva’s face very well.

A new fear to conquer

We were filled with anticipation about our first real dive and apprehension about how we could manage. Both father and daughter showed off how cool we felt; but the fear in our eyes was almost palpable.

The dive spot was near Netrani island about one and a half hour boat ride (about 20 kms) from the mainland. It is also called the ‘Pigeon Island”. The adjacent island is used by Indian Navy for target practice and one may see empty shells around Netrani too. Jurgen told me that in his previous trip he managed to see some unexploded torpedoes.

Netrani is a coral island and there are many exotic and endangered marine lives around. Out of the nine grouper fish species identified at the island, Cheilinus undulates (Humphead wrasse) was endangered and Rhincodon typus (whale shark) vulnerable. Netrani Island, which boasts two types of coral reefs, also has seven seaweed species, 12 jelly fish species, six sponge species, 92 finfish species, 17 crab species, four lobster species and three sea snake species, among others [2].

This island looks like an upturned boat from far and the steep cliff all around gives it the appearance of an imposing fort when you are near it.

Rawat who runs the local dive shop Dreamz Diving got all the necessary dive permits from the local police (After 26/11 there is strict requirement of permits for any diving or snorkelling in these locations).We loaded up our gear into a fisherman’s boat and started out to the dive spot at around 9 am. The sea was really choppy and the boat was getting tossed around. By the time we reached the dive spot, Isabella was really sea sick and surprisingly (considering the fact that I used to sail a lot) my stomach was also churning. We anchored near the island and the waves were really harsh. We decided to kit up in the water and jumped into the sea.

The waves were so high that at one point I saw the sick, puzzled and uneasy face of Isabella with strong traces of fear, when she was lifted up by a wave more than 5 feet high. With some difficulty and lot of help from Jurgen and Rawat both of us got into our diving gear. We were being thrown around like empty coconut shells. I threw up whatever was left in my stomach. I was thankful that I did it before I went down with the regulator in my mouth (Jurgen comforted me that the regulator is designed to allow the diver to vomit, if needed, without taking the regulator out; what a relief I should say!)

This also was un-nerving experience for Isa and she was shaken. But still she was ready to proceed. I went down first, slowly holding on to the line to about seven metres and waited for Isa to come down with Jurgen.

I was quite nervous and also worried about Isa. After about 25 minutes, Jurgen came down with the bad news. Isa appeared to have an infection in the ear that was hindering her equalization process as she descended and she had to abandon her dive.

I climbed back to the boat and found her sprawled in the bottom like a withering flower. So we abandoned the dive plan for the day. The sea was still rough and I had to reach out of the boat and vomit again. We were now on the way back to the hotel, dejected and almost wondering whether it was really our cup of tea.

We were tired and pooped and crashed out completely the whole afternoon; of course after a sumptuous lunch from Naveen restaurant which is the only decent non-vegetarian joint in town. This also belongs to RN Shetty who owns practically everything in town from hotel to hospital to school to colleges and the temple.

Anyway I decided to take written exam for my certification and the fact that I scored 90% was a morale booster; the only one for the day.

The next day morning we decided that Isa was still not ready for the plunge (ear problem) and I decided to do it alone. The weather was beautiful and the sea was calm. I did not want anything to deny me the excitement.

So I swallowed a tablet to prevent sea sickness.

We kitted up in the boat to avoid any waste of time and by the time we anchored we were ready for a back-flip, though I was a bit apprehensive about a back-flip fully kitted.

I released the air from the BCD and we were slowly sinking and Jurgen guided me down to eight meters and then lead me forward initially holding my hand. I was uncomfortable and not sure of the uncertain surrounding. Jurgen had promised that all the tests would only be in the next dive and helped me to get comfortable slowly.

With some trial and error, I got my neutral buoyancy right and drifted forward. The feeling of weightlessness with perfect buoyancy gave a heady feeling. I stopped being hassled and started feeling snug and secure in this new surroundings.

I started experimenting with this new freedom of multidirectional mobility; up, down, right, left, vertical, horizontal; a near approximation to zero G. Wow! Now that I was sure that I could survive and not too conscious about the apparatus that was strapped around me, I looked around to cherish the dazzling colours and varied shapes dancing, prancing and serenading around me, offering one of the best private performances; a one of a kind choreography of life that bring more variations than any maestro can dream of.

Then the pressure gauge reminded us that this was not our home turf and we needed get back to the boat for our air supply. I had almost started feeling at home here. Although the dive site was

next to the island, it was not possible to land there as there was no sandy beach; just an imposing wall of rock.

After the lunch, (consisting of a few biscuits and some juice) we were ready for the next dip. Jurgen wanted me to first finish my exercise before we drifted. I could do them all OK and then we moved forward with Jurgen leading the way. I was feeling quite at ease with buoyancy under control and was managing the dive quite well.

We moved along and the sight around was really beautiful. The rock structure around the island which at times formed meandering passages with rocky sidewalls was quite impressive; and offered a feeling of adventure. The fishes did not appear to be scared but were happy to move out of the way. Then came an angel fish to the centre stage like a prima donna; absolutely unconcerned

about the human company (or was she performing for the humans?). She did an aweso

me dance, flipping and flopping against the granite background that I was convinced that she had witnessed the shooting for ‘Blue Hindi movie’ or ‘Kites’ down under and watched the Bollywood models in action! This dive too lasted for about 50 minutes.

We saw a variety of fishes including Moray Eel, Parrot Fish, Snappers, Trigger Fish, Angel Fish, Butterfly Fish, Trevally and Puffer Fish. All these names and species were Greek and Latin for me and Jurgen gave me a crash course on nature appreciation. The fauna was great though flora was not much; at least where I have been. We also saw some patches of coral. (The diving enthusiasts may read a better written dive report by a more seasoned diver giving much better details)

I missed having Isa with me after all the extensive planning and she was heartbroken too. We promised ourselves to venture again in near future to make up for what we missed.

Winding Down with Water Sports

We decided to stay for a day more at Murudeswar after the dive to relax and enjoy the beautiful seashore. The sea was quite calm and shallow for quite a distance. The beaches were nice and sandy. There were a few jet skies and two inflatable bumper boats tied to a speed boat that tugged these bumpers quite fast on top of the waves. The boatman was good and made the whole ride quite exciting like a roller coaster with both the floats flinging all around and bumping into each other.

Isabella and I enjoyed this very much and kept going back to them. We also went for a ride in the boat to a small island nearby called honeymoon island. We were not lucky, like most of the tourists, to see any dolphins which were supposed to be there. Anand the operator of these rides was quite an enterprising person and was sharing with me his dreams of how he planned to make that place more interesting.

Adios to Murudaswar

The drive back to Mangalore airport with Ganesh our driver explaining the stories about everything on the way was an experience in itself. For a long stretch NH 17 passes between Arabian Sea and Souparnika River. We stopped at the roadside at Marawante where on one side of the road is the sea and on the other side the river. A boatman appeared from nowhere and offered to take us for a ride in the river and show us Padukone village , the native place of the famous Prakash Padukone. now more famous as the father of Deepika Padukone a noted Film Actress.

We stopped at the beach resort Turtle Bay which is about 110 Kms from Mangalore. Quite a nice place, with 14 cottages and pristine private beach and offers a variety of water sports including diving are. I met with Abraham Chacko who owns this place and realised that we were neighbours in Kerala. World is really a small place.

He has been here for about 20 years and enjoys life in sync with nature. The resort also offers exposure to yoga and appears to be a wonderful retreat. The food was quite tasty and was value for money.

Back to Mangalore Airport to take us to Kochi for our one week whirlwind tour to enjoy what the ‘God’s own country” can offer.

The only question Isabella and I have in our mind is, “when is our next dive trip?”

Reference

[1] The history of the Murudeshwara temple dates back to the period of Ramayana. Legend says that Ravana (the Lanka King), prayed Lord Shiva in a strong devotion to attain immortality by getting the AtmaLinga. Atma Linga is the divine Lingam of Shiva that gains immortality to the Hindu Gods. As a result of the worship by Ravana, Lord Shiva appeared before him and asked him for a boon. Ravana requested the AtmaLinga as his boon. Lord Shiva agreed to give him the boon but on a condition that the AtmaLinga should never be kept on the ground. It is believed that if the AtmaLinga was placed on the ground, all the powers would return to Lord Shiva. Ravana started back on his journey to Lanka with the AtmaLinga.

However, Sage Narada realized that Ravana may obtain immortality and create ruin on earth with the AtmaLinga. He approached Lord Ganesh to help him. When Ravana neared Gokarna, Lord Vishnu blocked the sun and made it as dusk. Ravana wanted to perform his evening rituals. He was worried because the AtmaLinga was in his hands and he would not be able to do his rituals. At that moment, Lord Ganesh came near him in the mask of a Brahmin boy. Ravana requested him to keep the AtmaLinga until he performed the rituals. He told the boy not to place it on the ground. But Lord Ganesh fixed a deal with him. He said he would call Ravana thrice, and if Ravana did not return, he would place the AtmaLinga on the ground. As decided, Ravana could not return all of a sudden and Ganesh placed the Atma-Linga on the ground. The angered Ravana tried to pull up the AtmaLinga and destroy it but failed. He threw the holder of the linga to a place called Sajjeshwara which is 23 miles away and the lid of the case to a place called Gunavanthe (earlier known as Guneshwara) and Dhareshwara, 10-12 miles away. At last, he threw the cloth covering the AtmaLinga to a place called Mrideshwara in Kanduka Hill (Kanduka-Giri). Mrideshwara is later renamed as Murudeshwara.

Source: http://www.hindudevotionalblog.com/2009/05/murudeshwar-shiva-temple-karnataka.html

[2]Source Govind D. Belgaumkar, reporting in Hindu May 25, 2008