Be Relevant or … Part 2

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

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

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

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