At What Cost

All of us will agree that Result orientation and Reliability are two critical attributes of a valuable executive in any organization. These are of as important as his/her domain knowledge. Most successful and sought after executives are very high in these two attributes.  Let us call these twin attributes R&R (not Rest and Recreation of the army variety.) Although we value those who are high on R&R there are cases when these essential attributes can turn out to be the poison within that contribute to organizational decay. Let us try to understand this a little more in detail. 

Result orientation describes how a person goes about executing his work, his logic of prioritization and his problem solving.  Result oriented people will focus on the outcome expected. They do not get bogged down by the constraints and difficulties. They also do not allow themselves to be caught up with procedural cobwebs. If there is a roadblock, they will find a work around. If there is a limitation they will find an alternative. If they are confronted with a procedural Gordian knot, they will find a sword to slice it away.

Reliability is highly correlated to result orientation. But it also has some different flavor. This also portrays how he relates to the members of the team and/or other stakeholders.  It is about how a person can be depended to do what is expected of him or what he has committed. When we ask a reliable person do something, you can be sure that he will give an honest feedback on if it can be done by him, and by when. Once he commits you don’t need to follow-up. If he is faced by a problem that he can’t solve, he will let you know in time. He will also give you an assessment of the impact of what is being executed among various stakeholders.

Some exhibit R&R in all/ most of their dealings. Some of them exhibit these qualities more to their subordinates. We can term this as downward orientation. They are those who look after their team. Such people can be sure to be bosses who are admired and adored. As they rise up to in their career they turn out to be leaders who can take their team along. But some time they fail to keep their bosses in good humor their growth may get stunted; especially if their bosses are insecure by nature.

Some exhibit it more to their colleagues. This can be termed as horizontal orientation. They are excellent peers you can have. They are normally very popular in the office and office parties.

Some others are resourceful and reliable for their bosses. They have upward orientation. They are bosses favorites. They are much clued onto what their bosses want. Especially they are alive to factors that irritate their bosses and they will find ways to solve them and they are alive to their bosses weaknesses. They become almost indispensable for their bosses.

But this last variety while they are excellent in what they do may end up being poison to their organizations; especially if they don’t have respect their colleagues and are not sensitive to their preferences and concerns. They may run roughshod with their colleagues and subordinates to give what their bosses want. When boss give a guideline of his preference, normally they expect the implementing person to assess and field reality and optimize the implementation plan. But purely upward oriented R&R completely disregard constraints/ concerns and aspirations of the team. They are almost  like bulldogs. Very often others will not complain to avoid being termed a whiner.  

We need to be very careful with such people. Because, silently they vitiate the environment they belong. Because they are very useful they become our favourites, we praise them too much because they deliver. If we are not alive to such insensitive behavior we may end up over promoting them. But this will breed resentment all around. This is specially the case with some people who work in the staff function like personnel, administration and finance. With very little responsibility in client facing activities where client satisfaction may get measured and significant control they have of day to day conveniences, upward orientation gives them enormous influence with the big bosses. They grow very fast. But this is cancerous growth. If it is not contained, it can spell doom for their organization in the long run. Unfortunately such behavior will have very negative impact on the bosses

I have met a few such people in my long career. One used to be an HR executive. She made sure that she implemented her boss’s wishes ruthlessly. She gave regular feedback to her boss on what is happening around. But she was an absolute failure as far as her role as an HR executive. Her colleagues could not stand her and her subordinates hated her. But she was the gunslinger for her bosses and hence their darling.

The worst is when they reach very senior position. That often becomes the beginning of the end for the organization they head. If they have risen up primarily by pleasing their bosses, they will have difficulty in making the team/ organization to deliver. But by then many of the good people would have left. With what is left, it could be practically difficult to deliver. That is why when we evaluate and reward performance of people it has to be against the total organizational cost (not the cost of salary and perks alone ) and not just on what they may deliver. Bull dogs can be good in hunting trips, but they can not be the one running the farm.

In the past a leader was a boss. Today's leaders must be partners with their people... they no longer can lead solely based on positional power.  Ken Blanchard

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Riding a Tiger

“It was like riding a tiger; not knowing how to get off without being eaten” This is how Raju, former chief of Satyam, described his cover up of the poor quarterly performance he started few years ago that grew to a multi-billion dollar accounting scam that finally engulfed him and his company.

I don’t claim to be privy to what happened nor do I know the complete details of the scam. But I don’t think that he is the only one who is into managing the books in some fashion to achieve or over achieve the targets. I am sure most of us would agree with me. May be he took it to the extreme; or maybe he just got caught?

See what happens when the year-end approaches. The extra effort and extra push to generate more sales is of course a great idea and desirable. But it doesn’t end there. Each industry has its own bag of tricks. Arm twist the distributer to take an extra consignment which he may not be able to sell in the coming quarter. An accommodating purchase manager could be asked to book an order which he can cancel in the next month. A conditional loan conformation from the client. Create a fictitious company to book an order that will one day be written off. This is not just a private sector phenomenon. Ask the tax-collector what tricks he has to reach the target. Anything goes for the sake of ‘numbers’; especially when the numbers lead to fat bonusus and or promotions. One of the primary reasons for the 2008 meltdown in financial markets was also this mad scramble.

The degree of accommodation may vary. Some will do a bit of arm twisting. Some will shift the next quarter sale to this quarter. (A short fall in the first quarter is understandable!) The degree of dishonesty varies from coercion to manipulation to absolute fraud. This is not just the handiwork of the sales manager. This is the culture we are inculcating and encouraging. This culture of deceit then becomes a part of the organisational DNA.Sometimes somebody gets carried away and goes all the way and occasionally a Raju gets caught. Just hard luck!

May be we should take the spirit of the “General Anti-Avoidance Rules” in taxation where admissibility of an item of expenditure is supposed to be based on whether it is a truly value adding transaction or a transaction just for the sake of tax avoidance. In the same fashion the top management could insist that only a true sale or true collection that brings revenue for the period under consideration is booked as the income. That could be the first step towards recognizing and encouraging honesty.

The problem is not just about managing the book for achieving target. It is about the culture of honesty in our business dealing or even governance. 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.’”

But we live in Kaliyuga when it is all about managing “The art and ethics of lying” (Read on Part 1 and Part 2)

The truth is never dangerous. Except when told. PHILIP MOELLER

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

‘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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“Half Full or Half Empty?”

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

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

My first love

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

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 ?

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

Quadrants of Success

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 

Take it or leave it

“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.

"Candle in the wind"

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”

“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

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

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

Of being “True and Fair”

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

“What an idea Sirjee”

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

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