Nuremberg trials are a series of military tribunals held by the allied forces who won the Second World War. These trials were held to prosecute members of political and military leadership of the Nazi Germany for their crime against humanity. In most of these cases, they were being prosecuted for what they did, for their obedience to their superior’s commands as expected from a disciplined officer of any organisation, more so of the armed forces. Therefore, a certain set of principals had been evolved to determine what constitutes war crime. These principals called the ‘Nuremberg Principles’ had been created by the International Law Commission of the United Nations.
It is now accepted at a philosophical level, that when we act as per the directions of the superiors, we also have the moral responsibility to assess the fairness of the actions and express our dissent when those actions are against the larger interest of the society.
The issues associated with ‘blind following of the order from the superior officer’ are not just a concern in military actions. We face it in our day-to-day life as an officer of the government or even of commercial entities. It is practically difficult for many of us to act on a moral choice to “blow the whistle” as the potential retribution of such action could have an adverse impact in our personal life.
In many cases, the individuals who have questioned the actions of their superiors have been harassed and had to suffer significant damage to their life and career. This include dismissal from job, coming in the way of he getting alternate employment, tarnishing his image so on and so forth.
Society has been trying to evolve legal structures to protect and encourage citizens to ‘blow the whistle’ when they come across un-ethical or fraudulent actions and to give them the right to demand information that could elicit truth.
The listing agreement between the stock exchanges and the companies has a provision (though still non -mandatory) that all listed companies should have a published ‘whistle blower policy’ for employees to report instances of unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy.
The “Right to Information Act” tries to provide a strong tool in the hands of the citizen to demand access to information regarding the actions of the government.
This legal enablement has helped to bring about more transparency in administration and corporate governance. One of the main criticisms against these provisions is that many a time these are misused to further private agenda, inter-personal conflicts or even to clog the pipes of the administrative machinery.
In spite of all these, India is still rated high on corruption both in private and government sector. The tag line of an article written by Mohan Murti (former Europe Director, CII, and lives in Cologne, Germany) in Business Line titled “Is the nation in a coma?” reads “Europeans believe that Indian leaders are too blinded by new wealth and deceit to comprehend that the day will come when the have-nots will hit the streets”
Corruption is not just with respect to monetary returns for favours dispensed or deviation from law; it is also applicable to the actions of commission and omission by the so called clean and honest people, that pander to their needs of ego satisfaction, self glorification and just plain megalomania. As John Milton played by Al Pacino in the award winning movie quips “Vanity definitely my favourite Sin”. And un-ethical actions that satisfy this vanity is equally despicable as the actions that layers the pocket.
While continuous evolvement of the legal framework can help the cleansing process, each us has a responsibility; the responsibility to act ethically and to question ethical violations (especially the ones which are technically and may be even legally correct) that hinders the path to building a cleaner society that respects decency and fair play more than the smell of greenbacks and self edification.
“Nearly all men can stand adversity, but if you want to test a man's character, give him power”. Abraham Lincoln
Monday, June 28, 2010
Monday, June 21, 2010
You don’t get rich if the government prints more money
This is the season when the board examination results (for class 10 and 12) are declared. Many schools with 100% pass rate, thousands of students with more than 90% marks and there is excitement all around. It feels nice to join the celebrations. I also read that a child who got 98% in class 10 could not get admission for the course she wanted in the college she preferred.
But then I can’t help having some contrarian thoughts. Normally, when an examination paper is set there is a sort of algorithm that is used. 50 to 60% questions check the basic level of learning of the topics, 20 to 25% check a little deeper understanding and the remaining evaluate the ability to apply the learning in practical applications and/or the ability to interpret.
When students prepare for the exams, those who just want to pass can afford cursory studies and those who want to do well will have to work harder. The results will more or less be able to differentiate quality and hard work.
Then everybody will not get good marks. But does it really matter? What matters for the admission to next level are, either marks in the board exams or scores in the qualifying entrance examination. If it is the former, then it is not the absolute marks but the relative marks that will determine. If lots of people get 99% cut off marks for admission to the next level may be 97% and if only few get 99% then the cut off could be 80% and so on.
If the admission is on the basis of entrance examination, what is critical is the depth of understanding. Here preparation for a difficult board examination may really help in the preparation for the entrance examination.
Today in India we are seeing competition among the various academic boards (CBSE, ICSE, State Boards and so on) in giving more marks to more students more than strengthening the learning process; sort of academic inflation.
If I use an example from economics, the country cannot make every citizen richer by printing money and distributing. It has to strengthen health, education and infrastructure, it has to provide guaranteed titles to property, it has to ensure rule of law, and it has to empower people to build on this.
If there are lots of aspirants who don’t get admission on account of poor marks, the solution cannot be found by giving everybody more marks. The solution is to have more colleges. Dilution of standards and liberal valuation just provides temporary elation and is almost like a peg of good whisky!
True education is what remains after one has forgotten everything he learned in school.
- Albert Einstein
But then I can’t help having some contrarian thoughts. Normally, when an examination paper is set there is a sort of algorithm that is used. 50 to 60% questions check the basic level of learning of the topics, 20 to 25% check a little deeper understanding and the remaining evaluate the ability to apply the learning in practical applications and/or the ability to interpret.
When students prepare for the exams, those who just want to pass can afford cursory studies and those who want to do well will have to work harder. The results will more or less be able to differentiate quality and hard work.
Then everybody will not get good marks. But does it really matter? What matters for the admission to next level are, either marks in the board exams or scores in the qualifying entrance examination. If it is the former, then it is not the absolute marks but the relative marks that will determine. If lots of people get 99% cut off marks for admission to the next level may be 97% and if only few get 99% then the cut off could be 80% and so on.
If the admission is on the basis of entrance examination, what is critical is the depth of understanding. Here preparation for a difficult board examination may really help in the preparation for the entrance examination.
Today in India we are seeing competition among the various academic boards (CBSE, ICSE, State Boards and so on) in giving more marks to more students more than strengthening the learning process; sort of academic inflation.
If I use an example from economics, the country cannot make every citizen richer by printing money and distributing. It has to strengthen health, education and infrastructure, it has to provide guaranteed titles to property, it has to ensure rule of law, and it has to empower people to build on this.
If there are lots of aspirants who don’t get admission on account of poor marks, the solution cannot be found by giving everybody more marks. The solution is to have more colleges. Dilution of standards and liberal valuation just provides temporary elation and is almost like a peg of good whisky!
True education is what remains after one has forgotten everything he learned in school.
- Albert Einstein
Monday, June 14, 2010
Question of Existence
We humans are part of a giant living system. We are unique, independent, and self contained; but we are also part of the whole and have no existence in isolation. Take a handful of mud from the top soil of a river bank. Is it live? Ask a farmer. He will tell you that it is bustling with life. From micro-organism that we can’t see to insects, to worms! Does it have a collective property? Yes it has. It is fertile. As a combination of those millions of creatures that goes about its routine it becomes a fertile block. Devoid of these teeming life forms, this same mud would be dead.
Look at our human body. Ask a doctor! He will tell you that our various body parts are swamped with multitude of micro-organisms and without them there, we would not survive. If by some magic we manage to get rid of them, we can no longer sustain.
Sometimes some of the organisms mutate and grow too fast or virulent that it destroys the balance. Then the nature has its own way to contain and curtail and bring the balance back.
Our mother earth too, with multitudes of creatures, collectively makes a living system. Though often we see ourselves, fallaciously, as masters of this planet, we are nothing but one of the component that sustains her (or that is sustained by her). In the recent past, we humans have been multiplying too fast and turning virulent to the detriment of our environment, threatening its balance and our own survival.
We humans are endowed with intelligence to understand and we are also way up the chain of enlightenment that we can observe and realise the consequences of our actions.
We have two choices. Learn to discipline this run away plundering or let nature come at us with a heavy hand.
Let us look at our life from a different perspective. All through the past few thousand centuries some men, to some extent attempted and managed to be in synch with the nature and understand, appreciate and connect with the big picture of cosmos. From this connection they shared their insights as Bible, Vedas, Upanishads, Khuran, etc; the windows to this cosmic force and a tool for our spiritual linkage. We have seen, that in spite of rational thinking and scientific progress these truths still remain and sustain, though the rationalist may point out the conflicts and disconnects.
With a large majority of human beings being restricted by this rationalist way of thinking, the link that human beings have with the ‘cosmic truth’ appears to be getting weaker and weaker and the progress in our spiritual maturing appears to have been arrested.
From both perspectives, it appears that unless we realise our irresponsible exploitation of our ‘mother ship’ earth and unless we try to re-synch with the cosmic forces, the nature will soon hit “ctl, alt, del”.
“It is not that science and religion are in conflict; it is just that science is too young to understand” Unknown
Look at our human body. Ask a doctor! He will tell you that our various body parts are swamped with multitude of micro-organisms and without them there, we would not survive. If by some magic we manage to get rid of them, we can no longer sustain.
Sometimes some of the organisms mutate and grow too fast or virulent that it destroys the balance. Then the nature has its own way to contain and curtail and bring the balance back.
Our mother earth too, with multitudes of creatures, collectively makes a living system. Though often we see ourselves, fallaciously, as masters of this planet, we are nothing but one of the component that sustains her (or that is sustained by her). In the recent past, we humans have been multiplying too fast and turning virulent to the detriment of our environment, threatening its balance and our own survival.
We humans are endowed with intelligence to understand and we are also way up the chain of enlightenment that we can observe and realise the consequences of our actions.
We have two choices. Learn to discipline this run away plundering or let nature come at us with a heavy hand.
Let us look at our life from a different perspective. All through the past few thousand centuries some men, to some extent attempted and managed to be in synch with the nature and understand, appreciate and connect with the big picture of cosmos. From this connection they shared their insights as Bible, Vedas, Upanishads, Khuran, etc; the windows to this cosmic force and a tool for our spiritual linkage. We have seen, that in spite of rational thinking and scientific progress these truths still remain and sustain, though the rationalist may point out the conflicts and disconnects.
With a large majority of human beings being restricted by this rationalist way of thinking, the link that human beings have with the ‘cosmic truth’ appears to be getting weaker and weaker and the progress in our spiritual maturing appears to have been arrested.
From both perspectives, it appears that unless we realise our irresponsible exploitation of our ‘mother ship’ earth and unless we try to re-synch with the cosmic forces, the nature will soon hit “ctl, alt, del”.
“It is not that science and religion are in conflict; it is just that science is too young to understand” Unknown
Monday, June 7, 2010
“Beg to differ”
Some of my friends are pilots. One of them once explained to me an interesting point of view. According to him, planes are primarily designed to fly and not to land as most of the time it is up in the air and flying. Therefore, landing can be seen as a managed crash. That is why more accidents have happened during landings and take-off than during cruise.
In a similar fashion, most large organisations particularly bureaucracies, are designed to maintain status quo. One of the primary considerations of such design is to have policies, procedures, rules and conventions that are not adventurous and try to prevent misuse and misappropriations. Such excessively straight-jacketed organisations limit opportunities for human innovation and initiative. Adding on to this is the status quo bias (1) which is inherent in most human beings, and this encourages these organisations to resist change intensely.
For these reasons, transformation that is a game changer becomes a difficult challenge to pull through. However, occasionally when we get a leader (or a team) who wants to make things happen and who has the courage to manoeuvre around the hurdles that is an inherent characteristic of bureaucracies (whether public or private sector), then we witness transformations in its true sense.
Whenever such a combination of stars comes together, we should work in overdrive and try to achieve a level which is irrevocable. If we manage to reach this level, we can be reasonably confident that the transformation will be long lasting if not permanent. This is because even to screw -up something there has to be people with courage and initiative.
One of the conflicts that we often face, especially in social/ public leadership, is the choice we are forced to make between the leaders who deliver and the leaders who are good an honest. This is because the probability of the good and honest leader being a courageous leader who delivers is often not so high. The good often get caught within the technicalities and interpretation and focus only on doing things right and not doing the right things.
I am sure all of us will have number examples on this to share. One of the incidents narrated by Capt Gopinath in his biography stands as an excellent example and is entertaining by being so ludicrous.
When he first acquired fixed wing aircrafts for Air Deccan, he and his senior colleagues went with their family to take possession of the aircraft. Their first port of call in India was Mumbai. He was proceeding from Mumbai to Bengaluru next day morning. His aircraft was allowed to park in a far end of the airport and none of the passengers and pilots were allowed to come in to terminal as the customs formalities of clearing the aircraft was to take place in Bengaluru. The aircraft had no fully functional toilets and all the passengers including women and children and the pilots had to go behind the bushes in the airport to answer to the call of nature. This was in spite pleading to allow ladies to use at least the toilets in the terminal.
So much for doing things right. On the other hand the greedy and selfish leaders may put their might behind honourable causes (if you present the right incentive to them) at least because it offers them good public relations. The information available in public domain about what happened in case of IPL is an interesting case in point.
So the second best choice for the society is to have a few of such elements playing some key roles. If we also have a process in place to contain and discipline such innovations we may be better off than merely having leaders who just try to maintain status quo.
Is this the challenge of democracy?
"The status quo is the only solution that cannot be vetoed," Clark Kerr
In a similar fashion, most large organisations particularly bureaucracies, are designed to maintain status quo. One of the primary considerations of such design is to have policies, procedures, rules and conventions that are not adventurous and try to prevent misuse and misappropriations. Such excessively straight-jacketed organisations limit opportunities for human innovation and initiative. Adding on to this is the status quo bias (1) which is inherent in most human beings, and this encourages these organisations to resist change intensely.
For these reasons, transformation that is a game changer becomes a difficult challenge to pull through. However, occasionally when we get a leader (or a team) who wants to make things happen and who has the courage to manoeuvre around the hurdles that is an inherent characteristic of bureaucracies (whether public or private sector), then we witness transformations in its true sense.
Whenever such a combination of stars comes together, we should work in overdrive and try to achieve a level which is irrevocable. If we manage to reach this level, we can be reasonably confident that the transformation will be long lasting if not permanent. This is because even to screw -up something there has to be people with courage and initiative.
One of the conflicts that we often face, especially in social/ public leadership, is the choice we are forced to make between the leaders who deliver and the leaders who are good an honest. This is because the probability of the good and honest leader being a courageous leader who delivers is often not so high. The good often get caught within the technicalities and interpretation and focus only on doing things right and not doing the right things.
I am sure all of us will have number examples on this to share. One of the incidents narrated by Capt Gopinath in his biography stands as an excellent example and is entertaining by being so ludicrous.
When he first acquired fixed wing aircrafts for Air Deccan, he and his senior colleagues went with their family to take possession of the aircraft. Their first port of call in India was Mumbai. He was proceeding from Mumbai to Bengaluru next day morning. His aircraft was allowed to park in a far end of the airport and none of the passengers and pilots were allowed to come in to terminal as the customs formalities of clearing the aircraft was to take place in Bengaluru. The aircraft had no fully functional toilets and all the passengers including women and children and the pilots had to go behind the bushes in the airport to answer to the call of nature. This was in spite pleading to allow ladies to use at least the toilets in the terminal.
So much for doing things right. On the other hand the greedy and selfish leaders may put their might behind honourable causes (if you present the right incentive to them) at least because it offers them good public relations. The information available in public domain about what happened in case of IPL is an interesting case in point.
So the second best choice for the society is to have a few of such elements playing some key roles. If we also have a process in place to contain and discipline such innovations we may be better off than merely having leaders who just try to maintain status quo.
Is this the challenge of democracy?
"The status quo is the only solution that cannot be vetoed," Clark Kerr
(1) Read up some more on Status Quo Bias
View more presentations from Russell James.
Monday, May 31, 2010
“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
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
Tuesday, May 25, 2010
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
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
Monday, May 17, 2010
Scaling up: The Art of the Impossible - Part II
In Part I of this post, I had set the context for understanding uncertainty and its impact. Part II looks specifically at uncertainty and scale-up.
Generally we give a lot of attention to business uncertainty, but seldom do we give sufficient attention to operational uncertainty that is faced by the team members on their day work. Managing such operational uncertainty therefore is a very critical factor when we attempt to scale up any operation or any business.
Normally the core team that set up any operation or business successfully will consist of highly motivated, highly skilled, high performance individuals who are comfortable in decision making under uncertainty. Once the operations are on steam and ready to scale up we need to work with a different set of people. We cannot afford to have the same calibre people when the operation is scaled-up. It is not just a question of financial affordability; such people will not survive long in a regular operational environment. They are normally impatient lot and in constant search for new dreams.
Therefore we have to have processes to get work with ordinary, risk averse, simple people who want to be led. As Lee Iacocca pointed out “if you are a brilliant person you may be able to do the work of 30 people; but if you are a brilliant leader who can get work out of 1000 ordinary people and then you achieve much more”
One of the major weaknesses of normal people is their inability or discomfort to take decision under uncertainty. They need clear algorithm on how to address each eventuality. In the absence of such clear standard operating procedures (SOP), many people avoid taking decisions or become inefficient in taking decisions. In this case they are almost like computer software that hangs in the absence of sub routines to handle all cases. As in the case of elegant computer programs, the SOPs should have dependable error handling, clear exception reporting and escalation rules in place for un-programmed cases. Otherwise system hangs or misbehaves. Only then we can scale –up with “Intel people” like Google scale up with “Intel boxes”
We have to accept the reality that the vast majority of people need clear delineation of tasks to help them achieve maximum productivity. As Chris Argyris observes in the article ‘Empowerment: The Emperor’s New Clothes’ published in Harvard Business Review “Both research and practice indicate that the best results of reengineering occur when the jobs are rigorously specified and not when individuals are left to define them”
The first thing we need to do in our endeavour to reduce uncertainty is to map organizational goals to group deliverables and break down group deliverables preferably up to the individual level. Once the deliverables are broken down, then we should try to develop standard operating procedure or business rules for as many cases as possible. This has to be a continuous process and there should be process in place to continuously identify cases where SOPs or business rules are developed.
One of the risks when we have processes that depend on SOPs heavily is that the people get to be process oriented instead of result oriented. This is one of the major weaknesses of bureaucracy. It is here that we need to teach human beings to also use his human intelligence and not to behave like computer programs. We should clearly teach each person and team to appreciate what the SOPs are trying to achieve as results. We should empower the process owners to innovate and improvise on the SOPs when there are exceptions. Here again we should try to provide boundary conditions within which they have to flexibility. This will reduce uncertainty even with flexibility.
On the other hand we should also work towards helping people to learn the art of being comfortable under uncertainty because human beings who can make sensible judgement under uncertainty are key assets in any team. Although genetic trait influences this skill quite a lot, this is still a skill that can be strengthened by training and support.
We should also have a way to identify and encourage people who are adept at this skill. Most importantly we should ensure that people who rise up to leadership are the people who can handle uncertainty and also who can reduce uncertainty for their team. It is here that many organisations fail. They get impressed by people who have delivered excellent results based on their skill and knowledge in situations or functions where ambient uncertainty is low. Then we promote them to levels where they have to mange uncertainty which are outside their domain of expertise. This happens very often with respect to technical people. Then these poor souls (smart engineers, doctors, lawyers, accountants) like fish out of water fail and the whole team suffers.
When we develop our scale-up strategies this is one dimension we forget and we focus on everything else like process, technology, people, finance and so on. We have to include operational uncertainty management as a key dimension with which we qualify our scale-up strategies. Else the best of strategies will fail on account of minds that freeze under uncertain outcomes.
Beyond all this theory lie commitment, conviction and faith that is beautifully described in alchemist “If you believe in something the whole world will conspire to make it happen for you”.
“Nothing great has ever been achieved except by those who dared believe that something inside them was superior to circumstances.” Bruce Barton
Generally we give a lot of attention to business uncertainty, but seldom do we give sufficient attention to operational uncertainty that is faced by the team members on their day work. Managing such operational uncertainty therefore is a very critical factor when we attempt to scale up any operation or any business.
Normally the core team that set up any operation or business successfully will consist of highly motivated, highly skilled, high performance individuals who are comfortable in decision making under uncertainty. Once the operations are on steam and ready to scale up we need to work with a different set of people. We cannot afford to have the same calibre people when the operation is scaled-up. It is not just a question of financial affordability; such people will not survive long in a regular operational environment. They are normally impatient lot and in constant search for new dreams.
Therefore we have to have processes to get work with ordinary, risk averse, simple people who want to be led. As Lee Iacocca pointed out “if you are a brilliant person you may be able to do the work of 30 people; but if you are a brilliant leader who can get work out of 1000 ordinary people and then you achieve much more”
One of the major weaknesses of normal people is their inability or discomfort to take decision under uncertainty. They need clear algorithm on how to address each eventuality. In the absence of such clear standard operating procedures (SOP), many people avoid taking decisions or become inefficient in taking decisions. In this case they are almost like computer software that hangs in the absence of sub routines to handle all cases. As in the case of elegant computer programs, the SOPs should have dependable error handling, clear exception reporting and escalation rules in place for un-programmed cases. Otherwise system hangs or misbehaves. Only then we can scale –up with “Intel people” like Google scale up with “Intel boxes”
We have to accept the reality that the vast majority of people need clear delineation of tasks to help them achieve maximum productivity. As Chris Argyris observes in the article ‘Empowerment: The Emperor’s New Clothes’ published in Harvard Business Review “Both research and practice indicate that the best results of reengineering occur when the jobs are rigorously specified and not when individuals are left to define them”
The first thing we need to do in our endeavour to reduce uncertainty is to map organizational goals to group deliverables and break down group deliverables preferably up to the individual level. Once the deliverables are broken down, then we should try to develop standard operating procedure or business rules for as many cases as possible. This has to be a continuous process and there should be process in place to continuously identify cases where SOPs or business rules are developed.
One of the risks when we have processes that depend on SOPs heavily is that the people get to be process oriented instead of result oriented. This is one of the major weaknesses of bureaucracy. It is here that we need to teach human beings to also use his human intelligence and not to behave like computer programs. We should clearly teach each person and team to appreciate what the SOPs are trying to achieve as results. We should empower the process owners to innovate and improvise on the SOPs when there are exceptions. Here again we should try to provide boundary conditions within which they have to flexibility. This will reduce uncertainty even with flexibility.
On the other hand we should also work towards helping people to learn the art of being comfortable under uncertainty because human beings who can make sensible judgement under uncertainty are key assets in any team. Although genetic trait influences this skill quite a lot, this is still a skill that can be strengthened by training and support.
We should also have a way to identify and encourage people who are adept at this skill. Most importantly we should ensure that people who rise up to leadership are the people who can handle uncertainty and also who can reduce uncertainty for their team. It is here that many organisations fail. They get impressed by people who have delivered excellent results based on their skill and knowledge in situations or functions where ambient uncertainty is low. Then we promote them to levels where they have to mange uncertainty which are outside their domain of expertise. This happens very often with respect to technical people. Then these poor souls (smart engineers, doctors, lawyers, accountants) like fish out of water fail and the whole team suffers.
When we develop our scale-up strategies this is one dimension we forget and we focus on everything else like process, technology, people, finance and so on. We have to include operational uncertainty management as a key dimension with which we qualify our scale-up strategies. Else the best of strategies will fail on account of minds that freeze under uncertain outcomes.
Beyond all this theory lie commitment, conviction and faith that is beautifully described in alchemist “If you believe in something the whole world will conspire to make it happen for you”.
“Nothing great has ever been achieved except by those who dared believe that something inside them was superior to circumstances.” Bruce Barton
Wednesday, May 12, 2010
Scaling up;The Art of the Impossible - Part I
There is one thing certain in our life; and that is uncertainty. Uncertainty about of life, our future, our family; everything in our life is uncertain. Most people are not comfortable to deal with uncertainty. But we have learned to accept such uncertainties on which we have absolutely no control, with certain amount of equanimity. Sometimes some of us try to reduce uncertainty about our future by visiting an astrologer, palm reader, so on and so forth. Linda Goodman and her ilk have made fortunes for themselves by exploiting this fear of uncertainty.
When it comes to areas where we have some control, like education, career, wealth etc, we are more uncomfortable with uncertainty. One of the primary reasons why we go to colleges and acquire degrees is to reduce uncertainty in our life. When we take up employment in a company instead of starting our own, we are trying to reduce uncertainty because the company has taken many of the key decisions with respect to the line of business, technology, product, process etc and we form a part of the team in implementing the strategies that have already been decided. Even in this case there may be still high level uncertainty as we go up in the ladder and/ or if we have direct business responsibility. When we take up a career in government we are still reducing uncertainty, as normally there is very limited systemic compulsion for results (as against process compliance) in many of the bureaucratic positions. (But there are many bureaucrats who try to do justice to their inner compulsion to make a difference)
I once did an experiment with a large group of my colleagues as a part of our internal training program. I gave three problems to all the participants and asked them to choose one problem they would take up to solve. The first problem was long, it had quite a lot of brute force computation to do; but the algorithm was sort of clear. The second problem was a logical puzzle. In this case the end result was quite measurable; it was evident that there would be an algorithm to solve, though the algorithm was not clear. The third problem had no clear algorithm or no one right answer. Most of the people chose problem 1, and only few chose problem 3. This kind of result will be common among most of the people.
There is one thing certain about uncertainty; that the success of any idea or project or company or organization is highly dependent on how we manage uncertainty for ourselves and for our teams.
To be continued ....
Certainty is the mother of quiet and repose, and uncertainty the cause of variance and contentions. Edward Coke
When it comes to areas where we have some control, like education, career, wealth etc, we are more uncomfortable with uncertainty. One of the primary reasons why we go to colleges and acquire degrees is to reduce uncertainty in our life. When we take up employment in a company instead of starting our own, we are trying to reduce uncertainty because the company has taken many of the key decisions with respect to the line of business, technology, product, process etc and we form a part of the team in implementing the strategies that have already been decided. Even in this case there may be still high level uncertainty as we go up in the ladder and/ or if we have direct business responsibility. When we take up a career in government we are still reducing uncertainty, as normally there is very limited systemic compulsion for results (as against process compliance) in many of the bureaucratic positions. (But there are many bureaucrats who try to do justice to their inner compulsion to make a difference)
I once did an experiment with a large group of my colleagues as a part of our internal training program. I gave three problems to all the participants and asked them to choose one problem they would take up to solve. The first problem was long, it had quite a lot of brute force computation to do; but the algorithm was sort of clear. The second problem was a logical puzzle. In this case the end result was quite measurable; it was evident that there would be an algorithm to solve, though the algorithm was not clear. The third problem had no clear algorithm or no one right answer. Most of the people chose problem 1, and only few chose problem 3. This kind of result will be common among most of the people.
There is one thing certain about uncertainty; that the success of any idea or project or company or organization is highly dependent on how we manage uncertainty for ourselves and for our teams.
To be continued ....
Certainty is the mother of quiet and repose, and uncertainty the cause of variance and contentions. Edward Coke
Monday, May 3, 2010
It is for me to choose
“It was my fate”, “It was destined to happen” are comments we often hear when something unexpected happens. Such comments suggest that we are a part of a giant puppet show in which things happen as per a supreme design and we have no control on what happens. Usually, such thoughts console us when things go wrong; because the failure was not on account of our shortcoming, not on account of our irresponsible behaviour, not on account of the evil deeds of some, but because it was ‘so destined’.
On the other hand, most of our formal social systems like the legal system, the education system and the performance evaluation system are administered on the basis that we have the complete capability and freedom to choose our (re)actions and behaviour. If we break the law, we can’t escape the penalty claiming that it was destined. This is sort of a paradox; the mental balance propped by our faith in fate and will of a supreme force and the social balance supported by a structure that assumes rational choice by every human being. In our day-to-day life we often vacillate between these two extremes.
I decided to think through a bit and take a view that could guide the way I interpret events and act upon them. I agree with the brilliant one line summary by Jawaharlal Nehru; “Life is like a game of cards. The hand you are dealt is determinism; the way you play it is freewill.”
We live in a totally inter-connected world. What we do out of our freewill could set off a series of chain reactions like what happens on the snooker board. Sometimes we get the shot right and the outcome is as predicted. Very often the chain reactions we trigger bring about a new order on the board which we never imagined; as expressed by the butterfly effect, based on chaos theory, made popular by the paper by Philip Merilees titled “Does the flap of a butterfly’s wings in Brazil set off a tornado in Texas?”
Some crazy kid decides to take his car for a spin. It was his free will. I happened to be in his way and got hit; it was my destiny. I survive with two artificial limbs; it is my destiny. I now have two choices. I can try to live on and find happiness in spite of my broken leg or can spent the life cursing the crazy kid and live a life of regret despair. Here I need to exercise my freewill.
This framework of freewill helps me to appreciate the fact that even though I have the freewill to choose, the options available to me are outcomes of a large number of factors on which I have no control and sometime the choice that we take makes it possible to predict how things turnout. It also teaches me that the freewill to choose does not guarantee any outcome; but I am still responsible for the choice.
How I exercise my freewill is also dependent on my mental makeup and strength. If I let myself to grow up without taking responsibility of my action then I may not be able to exercise freewill to the extent that is needed in any occasion. From this point of view freewill needs to be nurtured consciously and worked upon.
We can build up this skill as we build on our muscles. There could be limit on our ability to build on various skills; which could be on account of our DNA structure. But as we have to exercise regularly to develop a healthy body, we have to work on to strengthen how we react to what happens around us.
One of the true marks of achievement in life is the way we master this art of exercising our choice.
“The annoying thing about believing in free will and individual responsibility is the difficulty of finding somebody to blame our problems on." P. J. O'Rourke
On the other hand, most of our formal social systems like the legal system, the education system and the performance evaluation system are administered on the basis that we have the complete capability and freedom to choose our (re)actions and behaviour. If we break the law, we can’t escape the penalty claiming that it was destined. This is sort of a paradox; the mental balance propped by our faith in fate and will of a supreme force and the social balance supported by a structure that assumes rational choice by every human being. In our day-to-day life we often vacillate between these two extremes.
I decided to think through a bit and take a view that could guide the way I interpret events and act upon them. I agree with the brilliant one line summary by Jawaharlal Nehru; “Life is like a game of cards. The hand you are dealt is determinism; the way you play it is freewill.”
We live in a totally inter-connected world. What we do out of our freewill could set off a series of chain reactions like what happens on the snooker board. Sometimes we get the shot right and the outcome is as predicted. Very often the chain reactions we trigger bring about a new order on the board which we never imagined; as expressed by the butterfly effect, based on chaos theory, made popular by the paper by Philip Merilees titled “Does the flap of a butterfly’s wings in Brazil set off a tornado in Texas?”
Some crazy kid decides to take his car for a spin. It was his free will. I happened to be in his way and got hit; it was my destiny. I survive with two artificial limbs; it is my destiny. I now have two choices. I can try to live on and find happiness in spite of my broken leg or can spent the life cursing the crazy kid and live a life of regret despair. Here I need to exercise my freewill.
This framework of freewill helps me to appreciate the fact that even though I have the freewill to choose, the options available to me are outcomes of a large number of factors on which I have no control and sometime the choice that we take makes it possible to predict how things turnout. It also teaches me that the freewill to choose does not guarantee any outcome; but I am still responsible for the choice.
How I exercise my freewill is also dependent on my mental makeup and strength. If I let myself to grow up without taking responsibility of my action then I may not be able to exercise freewill to the extent that is needed in any occasion. From this point of view freewill needs to be nurtured consciously and worked upon.
We can build up this skill as we build on our muscles. There could be limit on our ability to build on various skills; which could be on account of our DNA structure. But as we have to exercise regularly to develop a healthy body, we have to work on to strengthen how we react to what happens around us.
One of the true marks of achievement in life is the way we master this art of exercising our choice.
“The annoying thing about believing in free will and individual responsibility is the difficulty of finding somebody to blame our problems on." P. J. O'Rourke
Sunday, April 25, 2010
Regulation of Innovation and Innovative Regulation
“In 1898, delegates from across the globe gathered in New York City for the world’s first international urban planning conference. One topic dominated the discussion. It was not housing, land use, economic development, or infrastructure. The delegates were driven to desperation by horse manure. The situation seemed dire. In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure.” (From Horse Power to Horsepower -Eric Morris)
Domestication of horse has been one of the key contributors of human progress; as it provided logistics support for business, leisure, pleasure and even conquests. We are good at building on and exploiting anything that would maximise our private benefits that sooner than later the negative externalities start taking a toll to the society at large; what the economists call the tragedy of the commons.
This happened in case of Horse Power too. With exponential growth in horse drawn logistics, by the end of 19th century accidents, pollution, and health hazards associated with horse was scary and appeared un-controllable.
Then came internal combustion engines that were much less polluting (even the methane produced by horse manure is eight times more potent than CO2 from automobiles as a greenhouse gas) less accident prone, much faster and more powerful. But by the end of 20th century this saviour has grown to a monster that is ready to savour its creator as it has proliferated to almost unsustainable levels.
The same is true for most of the human innovations. In financial services the time taken for an innovation of graduate to a Frankenstein has been quite low.
For examples derivatives have been developed as a tool for hedging risk. It has grown to be an instrument not infrequently used to structure products with the sole intention of profiting from the unsuspecting investors. Credit Default Swaps and Securitisation of debt instruments contributed enormously to the maturing of debt markets and helped better resource allocation. But this was also taken to its ridiculous extent that in most cases there was nobody who really cared or owned up responsibility to assess the true cost and risks associated with the underlying assets. The recent indictment of Goldman Sachs is an example of such unfair practices.
Does it mean that we need to curtail innovations? The answer is no. It is these innovations that ensured that the Malthusian theory has turned out to be an imaginary fear and the standard of living of a significant majority of human beings across the globe is hundreds of times better than the best the select few enjoyed even a few decades ago.
But as the time goes, products of these innovations reach such gargantuan proportions with very high impact on the well being of the society especially in a ‘flat world’ as described by Thomas Friedman. With large segment of wealth under the control of few large entities who are ‘too big to fail’, the difficulty of reining their run-way exploitation of their innovations gets to be even more difficult.
Addressing these is one of the key challenges for any government. Towards this goal, firstly we need to support strong regulations and stronger regulators who do not fall prey to their megalomaniacal instincts and try to micro-manage or centrally control; but who have the intellectual capability to analyse issues to identify key levers for action, recognize practices that exploit the common investors and curtail them, have courage to take strong and often unpopular decisions, can make the institutions who screw-up to pay-up and has moral strength not to be influenced by money, power or influence and at the same time is capable to encourage and get out of the way of innovations that are game changers. The stand taken by SEBI recently with respect to Unit Linked Insurance Policies (ULIP) which is a mutual fund masquerading as insurance is an excellent case in point on the constructive role the regulator can play.
Secondly we need to enable, encourage and empower disruptive technologies, processes and products that solve problems that are critical to survival of humanity. Especially since the existing interest groups who have heavily invested in the old system will work overtime to prevent success of these innovations. For example the oil industry will be happy to ensure that till the last drop of oil is left, human beings are addicted to it and are willing to pay more and more for the less and less that is drilled or excavated out. We experienced similar resistance from custodians and registrars when we were setting up a depository for Indian Capital Market.
The governments have a major role to play here too. They have to support, encourage, fund and place enabling provisions so that innovations are allowed to take root and reach a critical mass. Only then these disruptive technologies, products and processes can manage to break the status-quo and establish better, cleaner, more efficient solutions to problems that appear to make human race a run way experiment that is ready to destroy the mother earth as we know today.
That is why the two principal challenges for the day are Regulation of Innovation and Innovative Regulation
"It has yet to be proven that intelligence has any survival value." — Arthur C. Clarke
Domestication of horse has been one of the key contributors of human progress; as it provided logistics support for business, leisure, pleasure and even conquests. We are good at building on and exploiting anything that would maximise our private benefits that sooner than later the negative externalities start taking a toll to the society at large; what the economists call the tragedy of the commons.
This happened in case of Horse Power too. With exponential growth in horse drawn logistics, by the end of 19th century accidents, pollution, and health hazards associated with horse was scary and appeared un-controllable.
Then came internal combustion engines that were much less polluting (even the methane produced by horse manure is eight times more potent than CO2 from automobiles as a greenhouse gas) less accident prone, much faster and more powerful. But by the end of 20th century this saviour has grown to a monster that is ready to savour its creator as it has proliferated to almost unsustainable levels.
The same is true for most of the human innovations. In financial services the time taken for an innovation of graduate to a Frankenstein has been quite low.
For examples derivatives have been developed as a tool for hedging risk. It has grown to be an instrument not infrequently used to structure products with the sole intention of profiting from the unsuspecting investors. Credit Default Swaps and Securitisation of debt instruments contributed enormously to the maturing of debt markets and helped better resource allocation. But this was also taken to its ridiculous extent that in most cases there was nobody who really cared or owned up responsibility to assess the true cost and risks associated with the underlying assets. The recent indictment of Goldman Sachs is an example of such unfair practices.
Does it mean that we need to curtail innovations? The answer is no. It is these innovations that ensured that the Malthusian theory has turned out to be an imaginary fear and the standard of living of a significant majority of human beings across the globe is hundreds of times better than the best the select few enjoyed even a few decades ago.
But as the time goes, products of these innovations reach such gargantuan proportions with very high impact on the well being of the society especially in a ‘flat world’ as described by Thomas Friedman. With large segment of wealth under the control of few large entities who are ‘too big to fail’, the difficulty of reining their run-way exploitation of their innovations gets to be even more difficult.
Addressing these is one of the key challenges for any government. Towards this goal, firstly we need to support strong regulations and stronger regulators who do not fall prey to their megalomaniacal instincts and try to micro-manage or centrally control; but who have the intellectual capability to analyse issues to identify key levers for action, recognize practices that exploit the common investors and curtail them, have courage to take strong and often unpopular decisions, can make the institutions who screw-up to pay-up and has moral strength not to be influenced by money, power or influence and at the same time is capable to encourage and get out of the way of innovations that are game changers. The stand taken by SEBI recently with respect to Unit Linked Insurance Policies (ULIP) which is a mutual fund masquerading as insurance is an excellent case in point on the constructive role the regulator can play.
Secondly we need to enable, encourage and empower disruptive technologies, processes and products that solve problems that are critical to survival of humanity. Especially since the existing interest groups who have heavily invested in the old system will work overtime to prevent success of these innovations. For example the oil industry will be happy to ensure that till the last drop of oil is left, human beings are addicted to it and are willing to pay more and more for the less and less that is drilled or excavated out. We experienced similar resistance from custodians and registrars when we were setting up a depository for Indian Capital Market.
The governments have a major role to play here too. They have to support, encourage, fund and place enabling provisions so that innovations are allowed to take root and reach a critical mass. Only then these disruptive technologies, products and processes can manage to break the status-quo and establish better, cleaner, more efficient solutions to problems that appear to make human race a run way experiment that is ready to destroy the mother earth as we know today.
That is why the two principal challenges for the day are Regulation of Innovation and Innovative Regulation
"It has yet to be proven that intelligence has any survival value." — Arthur C. Clarke
Monday, April 19, 2010
To be or Not to be – Part III - Tharoor’s Dilemma
After eleven months in the office, Shahi Tharoor has stepped down from the post of Minister of State for External Affairs. Everybody knows the reason. It was not his ability to perform that cost him the post. He, instead of being an asset in the parliament for the ruling party, became a liability on account of the way he has conducted himself on a few occasions.
I don’t believe that he was corrupt, I don’t know whether his ‘transgression’ compared to the standards of some of the politicians are anything extraordinary, I don’t know whether compared to the loot of public finance that many in the ruling class perpetrate, Tharoor benefitted in any financial sense; though the there are questions on the nature of sweat that paid for certain equity.
For a seasoned diplomat with decades of experience in international diplomacy his failure is that he forgot an age old dictum; “Caesar’s wife has to be above suspicion”. Natural question is whether all our “Caesars' wives are above suspicion”
There is one big difference here. Tharoor was trying to muscle into a club, banking on a different skill set and preaching a different value system. On the basis of these credentials he had managed to take an express elevator to the position of power and influence in Indian politics. It has caused jealousy pangs among many who had been waiting in the wings for years, it has caused concerns among some established veterans about the changes propounded by people like him, it has caused worries that the apple cart is tilting. It was natural that the empire would strike back.
When he embarked on such a challenge he should have been a bit more careful; especially when he was yet to establish a strong support base who would have stood up for him. He should have shown more discretion and tried to avoid anything that could be misconstrued as pushing private agendas.
Now he has two choices. Work on building the support base and fight on the position of strength. Or join the club on their terms. This is standard operating procedure for any new entrant at the top. Or he can decide to retire and take up less risky hobbies like sky diving...
“Serious sport has nothing to do with fair play. It is bound up with hatred, jealousy, boastfulness, disregard of all rules and sadistic pleasure in witnessing violence. In other words, it is war minus the shooting". George Orwell.
Politics could be more demanding than any serious sport.
I don’t believe that he was corrupt, I don’t know whether his ‘transgression’ compared to the standards of some of the politicians are anything extraordinary, I don’t know whether compared to the loot of public finance that many in the ruling class perpetrate, Tharoor benefitted in any financial sense; though the there are questions on the nature of sweat that paid for certain equity.
For a seasoned diplomat with decades of experience in international diplomacy his failure is that he forgot an age old dictum; “Caesar’s wife has to be above suspicion”. Natural question is whether all our “Caesars' wives are above suspicion”
There is one big difference here. Tharoor was trying to muscle into a club, banking on a different skill set and preaching a different value system. On the basis of these credentials he had managed to take an express elevator to the position of power and influence in Indian politics. It has caused jealousy pangs among many who had been waiting in the wings for years, it has caused concerns among some established veterans about the changes propounded by people like him, it has caused worries that the apple cart is tilting. It was natural that the empire would strike back.
When he embarked on such a challenge he should have been a bit more careful; especially when he was yet to establish a strong support base who would have stood up for him. He should have shown more discretion and tried to avoid anything that could be misconstrued as pushing private agendas.
Now he has two choices. Work on building the support base and fight on the position of strength. Or join the club on their terms. This is standard operating procedure for any new entrant at the top. Or he can decide to retire and take up less risky hobbies like sky diving...
“Serious sport has nothing to do with fair play. It is bound up with hatred, jealousy, boastfulness, disregard of all rules and sadistic pleasure in witnessing violence. In other words, it is war minus the shooting". George Orwell.
Politics could be more demanding than any serious sport.
Sunday, April 11, 2010
One good reason to blog
When I took to writing a blog, two of my friends had strong reservations. One is a senior banker who believes that he is more an economist (he apparently reads quite a number of books on economics and spends a lot of time in the hallowed company of economists) and other an economist by training, thoughts and deeds. They came to a conclusion that I should avoid attempting this venture. The reason, my academic credentials on economics are not good enough to write on topics like public policy or management of financial services which have relation with economics. I completely agree with them about my academic credentials in economics.
This conflict of academic elitism and managerial pragmatism is a reality of life. Many academics tend to take the path of extreme specialisation that they are incapable to grapple with multi-disciplinary challenges of real world. They hide themselves in specialised jargon and restrictive logic of “ceteris paribus” that while much of what they say are sensible, it fails to make sense to those who are expected to act on it. In fact many of these academic high priests behave as if it is below their dignity to articulate their theories in a manner the common man (even an educated manager) can understand. Some of them seem to think that the world is made up of only rational economic agents analysing myriad decision variables in real-time leading to best possible outcome. Such elitism is still tolerable in music, literature, drama etc But in applied sciences like economics, management etc., unless it connects with the practitioners it will fail to have real value except to satisfy a few ego trips
If they don’t find a way to reach across to the guy who is expected to practice the theories they propound, how can they expect those thoughts to be more widely accepted? If they don’t find a way to fathom the life and challenges of the practitioners, how can they evolve solutions that are acceptable? If they don’t understand the inner fears, insecurities and private agendas and work around them, how can they implement policies that are game changers?
On the other hand the managers and administrators hide their laziness to be up-to-date and unwillingness to think-through, under their complaints on impracticability of the academic thoughts. They are happy with the networking dinners, what the various vendors and interest groups are keen to convince them or their boss’s whims. The more ‘professional manager’ or the more senior in the bureaucratic ladder they are, the more intransigent and intellectually sterile they make themselves. Quick results at whatever cost instead of institution building become the norm than an exception.
Our educational institutions, even the elite ones, fail to bridge this chasm to any meaningful extent. Our schools focus primarily on the ability to memorise and regurgitate answers to a bank of potential questions that may come for the exams. The colleges follow the same route too and the kids forget everything the moment the exams are over because the focus is more on marks than on what is learned. We can’t blame them as none of the teachings are contextual and most fail to demonstrate any relevance. Then the schools and colleges become just tools to attain a degree which itself is nothing but a pre-requisite to open many doors.
My blog is my attempt to address this conflict within me; the conflict between practical compulsions and theoretical possibilities. The blog for me is not a log of my private life laid bare to the public voyeurism as a means of keeping in touch. It is a tool that forces me to work on a thought and think-through its nuances for a few hours; crossing the ‘t’s and dotting the ‘i’s, which helps to bring some more clarity in my mind. It also throws open, to peer scrutiny, criticism and appreciation, my interpretations and how I use this learning (or the lack of it) and interpretations in tackling day-to-day challenges.
When I get your comments or thoughts or experiences on related issues, (I get many private mails in response to my postings and it appears that many are not comfortable to take a public position, may be eventually they will) it could offer another avenue,for both of us, to benefit from the “wisdom of the crowds” at very little cost. Some academicians willing to skim through these ramblings may also get some ideas on how to “win and influence” the guys in the trenches.
The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn. ALVIN TOFFLER
This conflict of academic elitism and managerial pragmatism is a reality of life. Many academics tend to take the path of extreme specialisation that they are incapable to grapple with multi-disciplinary challenges of real world. They hide themselves in specialised jargon and restrictive logic of “ceteris paribus” that while much of what they say are sensible, it fails to make sense to those who are expected to act on it. In fact many of these academic high priests behave as if it is below their dignity to articulate their theories in a manner the common man (even an educated manager) can understand. Some of them seem to think that the world is made up of only rational economic agents analysing myriad decision variables in real-time leading to best possible outcome. Such elitism is still tolerable in music, literature, drama etc But in applied sciences like economics, management etc., unless it connects with the practitioners it will fail to have real value except to satisfy a few ego trips
If they don’t find a way to reach across to the guy who is expected to practice the theories they propound, how can they expect those thoughts to be more widely accepted? If they don’t find a way to fathom the life and challenges of the practitioners, how can they evolve solutions that are acceptable? If they don’t understand the inner fears, insecurities and private agendas and work around them, how can they implement policies that are game changers?
On the other hand the managers and administrators hide their laziness to be up-to-date and unwillingness to think-through, under their complaints on impracticability of the academic thoughts. They are happy with the networking dinners, what the various vendors and interest groups are keen to convince them or their boss’s whims. The more ‘professional manager’ or the more senior in the bureaucratic ladder they are, the more intransigent and intellectually sterile they make themselves. Quick results at whatever cost instead of institution building become the norm than an exception.
Our educational institutions, even the elite ones, fail to bridge this chasm to any meaningful extent. Our schools focus primarily on the ability to memorise and regurgitate answers to a bank of potential questions that may come for the exams. The colleges follow the same route too and the kids forget everything the moment the exams are over because the focus is more on marks than on what is learned. We can’t blame them as none of the teachings are contextual and most fail to demonstrate any relevance. Then the schools and colleges become just tools to attain a degree which itself is nothing but a pre-requisite to open many doors.
My blog is my attempt to address this conflict within me; the conflict between practical compulsions and theoretical possibilities. The blog for me is not a log of my private life laid bare to the public voyeurism as a means of keeping in touch. It is a tool that forces me to work on a thought and think-through its nuances for a few hours; crossing the ‘t’s and dotting the ‘i’s, which helps to bring some more clarity in my mind. It also throws open, to peer scrutiny, criticism and appreciation, my interpretations and how I use this learning (or the lack of it) and interpretations in tackling day-to-day challenges.
When I get your comments or thoughts or experiences on related issues, (I get many private mails in response to my postings and it appears that many are not comfortable to take a public position, may be eventually they will) it could offer another avenue,for both of us, to benefit from the “wisdom of the crowds” at very little cost. Some academicians willing to skim through these ramblings may also get some ideas on how to “win and influence” the guys in the trenches.
The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn. ALVIN TOFFLER
Monday, April 5, 2010
It doesn’t make sense
The newspapers these days have almost a daily coverage on Sania Mirza’s marriage to Shoaib Mallik, the Pakistan cricketer. It is a celebrity wedding and there is controversy; so newspapers have a right to capitalise on this. It is a matter of circulation and profits for them.
Why should there be such controversy? Isn’t it their personal choice 'whom to marry'? The controversy is because she is marrying a Pakistani and anything related to Pakistan is paranoia these days. (The feelings are mutual)
I remember an incident that was narrated by one of my friends narrated. He is the country head of a multinational IT firm in India. He had a technical expert coming over for a project and he was by roots a Pakistani though he has never been to Pakistan as his father had migrated to US. It took an enormous effort to get the visa cleared. Then the local police insisted that he could not move out of the hotel room, except to attend office. They posted two police men outside his hotel room. This young lad had to be in this state of house (hotel) arrest for almost a month. Almost at the end of his project, he decided to go for a picnic with his friends for a drive out.
He sent an SMS to the local Police Superintend as he could not get him on phone. Within an hour the matter became a security emergency and quite a lot of harassment to his local sponsors and him. He had to be packed out of the country within a day!
It is true that both countries are not on good terms and forces of destabilisation are at work everywhere. We agree that we need to be careful that 26/11 is not repeated.
But does it mean that we have to have these extreme reaction in anything related with Pakistan and vice versa? There is no reason why Sania is not allowed a visa to visit the hometown of her would be fiancé and there was no sense it kicking up the controversy on the participation of Pakistani Cricketers in IPL.
Doesn’t it make sense to keep the tension low and encourage better interaction between both the countries without dilution of security controls? For example we have very strict verification process when we issue a passport. But, on the basis of the standing of the person (which is clearly defined and traceable) who issues a testimony there is of course a relaxation.
This is not an exception based on nepotism but an exceptional process of risk mitigation. If we find that such exceptional process can help more avenues for healthy interaction and such exceptions don't affect security concerns, we should try to encourage it. This can only help to strengthen both the countries.
Let us also ask ourselves some hard questions on the underlying causes of this mutual distrust. Don’t factors like religious intolerance, political expediency, attempt to distract public attention, machinations of a variety of interest groups and the self interest of the arms lobby contribute to this sustained tension?
Some of us need to rise above these biases, to build up a voice of reason, a voice of tolerance and a voice of compromise if we have to see a de-escalation of tension at the border and deep in our hearts. May be we need a few more marriages like that of Sania and Shoaib, some more train rides like the one Vajpayee initiated and a lot more cricket. The idea is to allow more opportunities for active engagement and more occasions to come together as human beings; sharing joy and sorrow. It is then that we can bring about disarmament of minds. But it is worth it.
“Unless both sides win, no agreement can be permanent.” ~ Jimmy Carter
Why should there be such controversy? Isn’t it their personal choice 'whom to marry'? The controversy is because she is marrying a Pakistani and anything related to Pakistan is paranoia these days. (The feelings are mutual)
I remember an incident that was narrated by one of my friends narrated. He is the country head of a multinational IT firm in India. He had a technical expert coming over for a project and he was by roots a Pakistani though he has never been to Pakistan as his father had migrated to US. It took an enormous effort to get the visa cleared. Then the local police insisted that he could not move out of the hotel room, except to attend office. They posted two police men outside his hotel room. This young lad had to be in this state of house (hotel) arrest for almost a month. Almost at the end of his project, he decided to go for a picnic with his friends for a drive out.
He sent an SMS to the local Police Superintend as he could not get him on phone. Within an hour the matter became a security emergency and quite a lot of harassment to his local sponsors and him. He had to be packed out of the country within a day!
It is true that both countries are not on good terms and forces of destabilisation are at work everywhere. We agree that we need to be careful that 26/11 is not repeated.
But does it mean that we have to have these extreme reaction in anything related with Pakistan and vice versa? There is no reason why Sania is not allowed a visa to visit the hometown of her would be fiancé and there was no sense it kicking up the controversy on the participation of Pakistani Cricketers in IPL.
Doesn’t it make sense to keep the tension low and encourage better interaction between both the countries without dilution of security controls? For example we have very strict verification process when we issue a passport. But, on the basis of the standing of the person (which is clearly defined and traceable) who issues a testimony there is of course a relaxation.
This is not an exception based on nepotism but an exceptional process of risk mitigation. If we find that such exceptional process can help more avenues for healthy interaction and such exceptions don't affect security concerns, we should try to encourage it. This can only help to strengthen both the countries.
Let us also ask ourselves some hard questions on the underlying causes of this mutual distrust. Don’t factors like religious intolerance, political expediency, attempt to distract public attention, machinations of a variety of interest groups and the self interest of the arms lobby contribute to this sustained tension?
Some of us need to rise above these biases, to build up a voice of reason, a voice of tolerance and a voice of compromise if we have to see a de-escalation of tension at the border and deep in our hearts. May be we need a few more marriages like that of Sania and Shoaib, some more train rides like the one Vajpayee initiated and a lot more cricket. The idea is to allow more opportunities for active engagement and more occasions to come together as human beings; sharing joy and sorrow. It is then that we can bring about disarmament of minds. But it is worth it.
“Unless both sides win, no agreement can be permanent.” ~ Jimmy Carter
Tuesday, March 30, 2010
Your slip is showing - Humour
Once upon a time there was a king and one day into his court walked in a man who was almost blind and looked quite frail. He wanted an audience with the king and as the king was in a good mood he relented. He asked the king
“Lord will you give me a job in your court?”
The king was flabbergasted. He asked him,
“What is that you have that makes you worthy of my court?”
‘My lord I can touch anything and anybody and judge its worth”
“Ha! I don’t need anybody’s help to make such judgements. I am the king and I know what to do. But I am in a good mood today and I am allowing you to stay in the barracks. You can have rice and lentils every day.”
After that, the king just forgot about the whole incident. Our blind friend was not asked for any advice. Days went by. One day a merchant came to the king’s court. He had a magnificent horse to sell. The horse looked royal and trotted with majesty. The king couldn’t take his eyes off and was willing to pay anything to buy it. Then the minister reminded the king.
“Let us ask the blind man what he thinks.”
The blind man was summoned. He touched the horse. Then he commented.
“Lord, this horse is majestic. But he has a major flaw. Take him for a long ride. He won’t last”
The horse was taken for a long ride and the blind man was proved right. The King was happy. He ordered that the blind man be treated to a feast.
Time went by. Then one day a jeweller came to the king’s court. He had some exquisite jewellery. The king was almost ready to pay the ridiculous price the trader demanded. However, the minister again suggested that the blind man be called.
He came, touched and commented.
“Look at this angle, you can notice a blemish”.
Again the King saved lots of money. He ordered that the blind man be treated to a great meal again.
Then the king had a wild thought. He turned to the blind man and asked.
“Touch me and tell me what my worth is”
“I don’t need to touch you Lord. You are son of a cook”
“What nonsense!!!” The king roared. “Don’t you know I am the king?”
“ Yes my lord, I know you are the king”
The king called him into his anteroom and confided.
“Yes, I am really the son the cook at the queen mother’s father’s court. I was adopted by the king when the king lost his son. But then how did you know? It was a well kept secret”
“Don’t feel offended my lord. Your actions revealed your worth. When I first came and offered my services, you could not even appreciate what I could do for you. Then it was just your whim that you agreed to call me for opinion when the horse trader and the jeweller visited you; that too on the advice of the minister. I saved you lot of money. But what you offered me in return was more food!”
“You never could recognise what difference my skills could make to your life. You are so full of yourself. Your response showed lack of depth in your thinking and vision; you had to be the son of the cook. Even though you have reached the position of a king, you have not managed to shake out your insecurities and rise up in your stature to match your position. In your heart you are still the son of a cook.” (आप तो बावर्ची के बेटे हो l आपकी औकात इतनी ही है )
This is a story narrated by one of my friends. Learning from the story?
We may often come across actions that are totally irrational, irresponsible or just plain stupid. Action by people who have not matured in their thinking, their vision, their ability to appreciate the way the world around them is changing, the way the business and governance is being transformed and the way the customer expectations are metamorphosing.
What are our options?
i) Tolerate them; They may not mean any harm; it is just that they are not capable of anything better. Don’t fret! Learn to deal with these bozos. There are lots of them around. This learning may be critical for a healthy heart and a sane mind.
ii) Contain them: When we have to assign people to critical positions, spend some effort to assess whether they are capable to assume the responsibility. Great cooks don’t make great kings.
iii) Work around them: Sometime they may become big stumbling blocks. Rational discussions won’t cut ice with them. You have to have strategies to work around them.
Do read “Hitchhiker’s guide to corporate galaxy Part 1 and Part 2 for survival kit.
“Just like swine disdains pearls and asses prefer thistles, so is eloquence wasted upon the ignorant and culture unavailing to the uncouth” Unknown
“Lord will you give me a job in your court?”
The king was flabbergasted. He asked him,
“What is that you have that makes you worthy of my court?”
‘My lord I can touch anything and anybody and judge its worth”
“Ha! I don’t need anybody’s help to make such judgements. I am the king and I know what to do. But I am in a good mood today and I am allowing you to stay in the barracks. You can have rice and lentils every day.”
After that, the king just forgot about the whole incident. Our blind friend was not asked for any advice. Days went by. One day a merchant came to the king’s court. He had a magnificent horse to sell. The horse looked royal and trotted with majesty. The king couldn’t take his eyes off and was willing to pay anything to buy it. Then the minister reminded the king.
“Let us ask the blind man what he thinks.”
The blind man was summoned. He touched the horse. Then he commented.
“Lord, this horse is majestic. But he has a major flaw. Take him for a long ride. He won’t last”
The horse was taken for a long ride and the blind man was proved right. The King was happy. He ordered that the blind man be treated to a feast.
Time went by. Then one day a jeweller came to the king’s court. He had some exquisite jewellery. The king was almost ready to pay the ridiculous price the trader demanded. However, the minister again suggested that the blind man be called.
He came, touched and commented.
“Look at this angle, you can notice a blemish”.
Again the King saved lots of money. He ordered that the blind man be treated to a great meal again.
Then the king had a wild thought. He turned to the blind man and asked.
“Touch me and tell me what my worth is”
“I don’t need to touch you Lord. You are son of a cook”
“What nonsense!!!” The king roared. “Don’t you know I am the king?”
“ Yes my lord, I know you are the king”
The king called him into his anteroom and confided.
“Yes, I am really the son the cook at the queen mother’s father’s court. I was adopted by the king when the king lost his son. But then how did you know? It was a well kept secret”
“Don’t feel offended my lord. Your actions revealed your worth. When I first came and offered my services, you could not even appreciate what I could do for you. Then it was just your whim that you agreed to call me for opinion when the horse trader and the jeweller visited you; that too on the advice of the minister. I saved you lot of money. But what you offered me in return was more food!”
“You never could recognise what difference my skills could make to your life. You are so full of yourself. Your response showed lack of depth in your thinking and vision; you had to be the son of the cook. Even though you have reached the position of a king, you have not managed to shake out your insecurities and rise up in your stature to match your position. In your heart you are still the son of a cook.” (आप तो बावर्ची के बेटे हो l आपकी औकात इतनी ही है )
This is a story narrated by one of my friends. Learning from the story?
We may often come across actions that are totally irrational, irresponsible or just plain stupid. Action by people who have not matured in their thinking, their vision, their ability to appreciate the way the world around them is changing, the way the business and governance is being transformed and the way the customer expectations are metamorphosing.
What are our options?
i) Tolerate them; They may not mean any harm; it is just that they are not capable of anything better. Don’t fret! Learn to deal with these bozos. There are lots of them around. This learning may be critical for a healthy heart and a sane mind.
ii) Contain them: When we have to assign people to critical positions, spend some effort to assess whether they are capable to assume the responsibility. Great cooks don’t make great kings.
iii) Work around them: Sometime they may become big stumbling blocks. Rational discussions won’t cut ice with them. You have to have strategies to work around them.
Do read “Hitchhiker’s guide to corporate galaxy Part 1 and Part 2 for survival kit.
“Just like swine disdains pearls and asses prefer thistles, so is eloquence wasted upon the ignorant and culture unavailing to the uncouth” Unknown
Tuesday, March 23, 2010
India Gets a CIO – Part II
Soon after the advent of computer, many progressive companies started to use it to improve their data tracking and transaction processing. To begin with, only a few innovative companies took the lead. However, in the last couple of decades we have witnessed a wider proliferation and it is still expanding.
Most of the companies followed a predictable path. At first PCs were installed at the desks of the “Big Man” who often did not know how to use it. One of his trusted assistants made use of the computer in some limited fashion; often as a substitute for typewriters. Then some computer savvy youngsters who joined the company convinced their bosses to introduce computers in their functional areas. Often it was some readymade accounting software or some bespoke applications developed by a small software development company run by a friend. Then a Manager (earlier called the EDP manger now called VP (systems)) joined the firm bringing more sophistication in the hardware and software used.
Even at this stage the computerisation was patchy and driven independently by functional / regional satraps with divergent hardware, operating systems and databases. Very often the transfer/ resignation of the individual who was the driving force of this localised computerisation lead to a quick degeneration. Then the VP(systems) with the support of CFO attempted some integration. This integration was limited to some budgetary control, supervision and common procurement strategy.
Eventually the organisation got a CIO who helped the senior manger to see IT as a strategic tool and help the organisation to develop an IT foundation and a framework that would help to bring about a business transformation.
Today, we see many companies at various stages of this transition. But many of the progressive companies have already reached the highest level of sophistication that is described above.
The IT enabled Governance (ITeG) is still in its early stage. It was not so far away when we could observe the PCs in a typical government department placed at the boss’s cabin with secretary using this as a word processor. Those days are gone. But we still have a long way ahead. Even when a catalytic role is played by some central authorities, it is often limited to budgetary control by purse holders with limited appreciation of the larger role of technology enablement. This is akin to what happens in the corporate sector when the controller (Finance and Administration) is in the driver’s seat as far as computerisation is concerned
The top echelons of both the legislature and administration appear to have caught on to the significant role IT can play and the need to have technology visioning rather than technology administration. The establishment of Technology Advisory Group for Unique Projects (TAGUP) is a welcome move in this direction and a strong message.
I believe that the limited set of critical projects brought under the purview of TAGUP is quite significant from the governance perspective. GST implementation and Tax Information Network (TIN) on revenue side and Expenditure Information Network (EIN) on the expenditure side complemented with UID (which can play a critical role in streamlining the outreach to needy) can be a game changer transformation in governance.
This can help to evolve a nationwide strategy for ITeG and develop a framework for managing ITeG Projects with respect to people, process and technology.
History of technology is replete with advances that first met wide opposition, later found acceptance and finally were widely regarded as having being inevitable all along!!- unknown
Most of the companies followed a predictable path. At first PCs were installed at the desks of the “Big Man” who often did not know how to use it. One of his trusted assistants made use of the computer in some limited fashion; often as a substitute for typewriters. Then some computer savvy youngsters who joined the company convinced their bosses to introduce computers in their functional areas. Often it was some readymade accounting software or some bespoke applications developed by a small software development company run by a friend. Then a Manager (earlier called the EDP manger now called VP (systems)) joined the firm bringing more sophistication in the hardware and software used.
Even at this stage the computerisation was patchy and driven independently by functional / regional satraps with divergent hardware, operating systems and databases. Very often the transfer/ resignation of the individual who was the driving force of this localised computerisation lead to a quick degeneration. Then the VP(systems) with the support of CFO attempted some integration. This integration was limited to some budgetary control, supervision and common procurement strategy.
Eventually the organisation got a CIO who helped the senior manger to see IT as a strategic tool and help the organisation to develop an IT foundation and a framework that would help to bring about a business transformation.
Today, we see many companies at various stages of this transition. But many of the progressive companies have already reached the highest level of sophistication that is described above.
The IT enabled Governance (ITeG) is still in its early stage. It was not so far away when we could observe the PCs in a typical government department placed at the boss’s cabin with secretary using this as a word processor. Those days are gone. But we still have a long way ahead. Even when a catalytic role is played by some central authorities, it is often limited to budgetary control by purse holders with limited appreciation of the larger role of technology enablement. This is akin to what happens in the corporate sector when the controller (Finance and Administration) is in the driver’s seat as far as computerisation is concerned
The top echelons of both the legislature and administration appear to have caught on to the significant role IT can play and the need to have technology visioning rather than technology administration. The establishment of Technology Advisory Group for Unique Projects (TAGUP) is a welcome move in this direction and a strong message.
I believe that the limited set of critical projects brought under the purview of TAGUP is quite significant from the governance perspective. GST implementation and Tax Information Network (TIN) on revenue side and Expenditure Information Network (EIN) on the expenditure side complemented with UID (which can play a critical role in streamlining the outreach to needy) can be a game changer transformation in governance.
This can help to evolve a nationwide strategy for ITeG and develop a framework for managing ITeG Projects with respect to people, process and technology.
History of technology is replete with advances that first met wide opposition, later found acceptance and finally were widely regarded as having being inevitable all along!!- unknown
Tuesday, March 16, 2010
Service with a smile
Sometime ago I was travelling to Delhi from Mumbai. As I had a meeting early on a Monday Morning, I decided to take the evening flight on Sunday even though it conflicted with my Sunday siesta and dinner with family. I was to take a 5.30 pm Kingfisher. Being a disciplined person, I was at the counter one hour before and I was informed that the flight was going to be delayed.
Unlike the normal practice, the airline had not sent any SMS intimation of the delay and I was really upset. I wanted to shout but kept quiet as I had learned to accept such callous behaviour from most of the service providers here.
The girl at the counter (I think her name was Chaitali) asked me to wait for a minute and went off somewhere. Within a minute she came running and told me that she has tied up with Air India and had got me a seat on the flight that was scheduled to leave immediately. She took my bag and ran to the Air India counter, finished the formalities, and helped me board the flight. I could reach Delhi in time to spend some time with my mother before she slept.
Compare this with the experience I had in January on one of my return flight from Delhi on Jet airways. That was the day when there was a terrible fog. We boarded the flight which was already one and a half hour late and had to wait inside the plane for another about three hours. Then they decided to cancel the flight and we were asked to deplane. We asked them what arrangements were made and no crew member could give us any guidance.
We reached the terminal. There was such chaos. No boards, no announcements and a long queue to reach the few operating counters. I waited for an hour and could get no assistance. One of my friends who was travelling on the same flight arranged for a car and a hotel booking with the help of his local office. The next day I got no SMS/ telephone update on what to do and I could not get anybody on the phone either. I decided to land up at the airport in the afternoon and finally managed to get a seat in a flight that took off in the evening at seven. I reached home 24 hours late of which 14 hours were spent in the plane/ airport. (Apparently, the Kingfisher flight that was supposed to take off with the Jet airways flight was also cancelled; but managed to take off late at night on the same day.
In both these cases the disruption of service was outside the control of the airline. But the response of both airlines (at least the officers who handled the situation) was different. Although such disruptions are very rare, in airlines business, these are situation that can be anticipated and planned for.
Jet airways could have made a difference by just being helpful. They could have made arrangement to provide the instruction by the crew in the plane. The announcement could have been as simple as (i) Those who have a place to stay in Delhi may leave their contact number at the counter and go home and if any of them needed help to get a cab they could contact the ground staff at a special counter and (ii) those who had no place to stay in Delhi could contact ground staff to get help for overnight accommodation. They should have just arranged two special counters to handle these at the terminal and there would have been no crowd shouting. The next day, depending on the weather, they could have arranged to call those who left the contact number and update them on when they could travel.
In the first case Kingfisher had enabled a junior officer to take an exceptional decision and had motivated her to take pride in taking such decisions. (I hope it was not just a one-off decision by the ground hostess who felt sympathy for my distress or who was impressed by my handsome face:- )) I believe such empowerment and encouragement (may be incentivising) would go a long way in improving the service delivery.
Very often many service providers do fail miserably in such nuances of customer service. At best their focus is limited to delivering the functionalities that they have charged for and service quality is often seen as a favour being extended. The more the monopoly power of the service provider, the worse is the service quality.
One way all of us can contribute is to demand for service quality and be bold to protest when it is screwed-up.
Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.DONALD PORTER. Courtesy http://www.customerservicepoint.com
Note: I have used two anecdotal experiences that I had to make a point. This does not mean that the experiences I had with Jet and Kingfisher necessarily represent their customer service practices.
Unlike the normal practice, the airline had not sent any SMS intimation of the delay and I was really upset. I wanted to shout but kept quiet as I had learned to accept such callous behaviour from most of the service providers here.
The girl at the counter (I think her name was Chaitali) asked me to wait for a minute and went off somewhere. Within a minute she came running and told me that she has tied up with Air India and had got me a seat on the flight that was scheduled to leave immediately. She took my bag and ran to the Air India counter, finished the formalities, and helped me board the flight. I could reach Delhi in time to spend some time with my mother before she slept.
Compare this with the experience I had in January on one of my return flight from Delhi on Jet airways. That was the day when there was a terrible fog. We boarded the flight which was already one and a half hour late and had to wait inside the plane for another about three hours. Then they decided to cancel the flight and we were asked to deplane. We asked them what arrangements were made and no crew member could give us any guidance.
We reached the terminal. There was such chaos. No boards, no announcements and a long queue to reach the few operating counters. I waited for an hour and could get no assistance. One of my friends who was travelling on the same flight arranged for a car and a hotel booking with the help of his local office. The next day I got no SMS/ telephone update on what to do and I could not get anybody on the phone either. I decided to land up at the airport in the afternoon and finally managed to get a seat in a flight that took off in the evening at seven. I reached home 24 hours late of which 14 hours were spent in the plane/ airport. (Apparently, the Kingfisher flight that was supposed to take off with the Jet airways flight was also cancelled; but managed to take off late at night on the same day.
In both these cases the disruption of service was outside the control of the airline. But the response of both airlines (at least the officers who handled the situation) was different. Although such disruptions are very rare, in airlines business, these are situation that can be anticipated and planned for.
Jet airways could have made a difference by just being helpful. They could have made arrangement to provide the instruction by the crew in the plane. The announcement could have been as simple as (i) Those who have a place to stay in Delhi may leave their contact number at the counter and go home and if any of them needed help to get a cab they could contact the ground staff at a special counter and (ii) those who had no place to stay in Delhi could contact ground staff to get help for overnight accommodation. They should have just arranged two special counters to handle these at the terminal and there would have been no crowd shouting. The next day, depending on the weather, they could have arranged to call those who left the contact number and update them on when they could travel.
In the first case Kingfisher had enabled a junior officer to take an exceptional decision and had motivated her to take pride in taking such decisions. (I hope it was not just a one-off decision by the ground hostess who felt sympathy for my distress or who was impressed by my handsome face:- )) I believe such empowerment and encouragement (may be incentivising) would go a long way in improving the service delivery.
Very often many service providers do fail miserably in such nuances of customer service. At best their focus is limited to delivering the functionalities that they have charged for and service quality is often seen as a favour being extended. The more the monopoly power of the service provider, the worse is the service quality.
One way all of us can contribute is to demand for service quality and be bold to protest when it is screwed-up.
Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.DONALD PORTER. Courtesy http://www.customerservicepoint.com
Note: I have used two anecdotal experiences that I had to make a point. This does not mean that the experiences I had with Jet and Kingfisher necessarily represent their customer service practices.
Tuesday, March 9, 2010
“Barbarians at the gate”
‘Barbarians at the gate’ is a book by Bryan Burrough and John Helyar. It tells the story of the largest Leveraged Buyout in the late eighties. I liked the book and the title. It triggered some thoughts about barbarians, at or inside the gate of institutions, who may eventually zap the life and vigour of these organizations and turn them to zombies. The whole train of thought got triggered when I was reading "Too big to fail" a book by Andrew Ross Sorkin which is the ball-by-ball account of the recent mayhem in the Wall Street that spilled to all the Main Streets in the world. This book has been described as the heir to "Barbarians at the Gate" by Financial Times.
Organisations succeed and grow when they are built and/or headed by visionaries who can dream up or recognize processes, products, technologies or services that make sense and also have the ability to implement and scale these dreams. But if the organisations don’t have a process to ensure that there is a culture and succession plan that will ensure that they continue to bring to the helm such visionary leaders, gamesters and bureaucrats will rise up to fill the vacuum. Then the organisational decay sets in.
It is easy to recognise this decay when it has already manifested in the form of dissatisfied customers, loss in market share, dropping profitability and so on. However the seed of such decay could have kicked-in even when apparently everything is hunky-dory. And it is very difficult to recognize it then. Some of the early symptoms that go unnoticed till it is very late are discussed here.
Form gets priority over substance
One of the early weaknesses that can be observed with these brain dead captains is the focus on ‘process for process sake’ instead of the processes being used as a tool to manage and grow the business. The bean counters, corporate secretaries and legal eagles who have very little appreciation of the nuances of business take over.
The atmosphere so created, stifles innovation and initiative, business leaders leave and clerks and paper pushers rule the roost.
Business strategy gets driven by corporate secretaries.
Structuring and restructuring of companyto consolidate power and meet private agenda of the management becomes the priority. Sometimes this gets driven by the unholy alliance of some shareholders and the management who then works towards maximizing their self interest. The interests of the organisation, its people, customers and its shareholders at large get compromised. It can become a vicious cycle with both the management and the interested shareholders believing that what they do is for the good of the company.
The people become pawns.
People instead of being utilised as resources that drive the business and who are to be nurtured, become pawns to be shuffled around on private whims and fancies of management.
People are controlled with their weaknesses, follies, mistakes and insecurities and not enabled and encouraged. Then they fail to earn loyalty from the ranks.
“I, me, myself”
The top managers spend lots of time in office to push their private agendas and priorities ranging from managing their finances for activities of their clubs, children’s projects, their admission etc. The priorities of the organisation gets back seat.
This acts as a downer for the working class. Listen to the gossips at the water cooler and we can judge the respect the top managers command.
Moral decay
In this stage of degeneration, decisions are driven by greed;private bonus and benefits get to have priority even at the cost of long term survival. It is this moral decay that drove Wall Street to develop products and deals that turned toxic for the whole financial markets around the world. Enron, WorldCom, Satyam, Arthur Anderson, Lehman, AIG episodes are monuments of this moral decay in the recent history. Many more are around; it is just that they have not been caught.
Some organisations don’t recognise these early warnings and act upon them, and that is one of the reasons why the corporate longevity is not so high.
"I searched the whole world for a bad mind, never found one
Looked into myself, found the worst of all" - Unknown
Organisations succeed and grow when they are built and/or headed by visionaries who can dream up or recognize processes, products, technologies or services that make sense and also have the ability to implement and scale these dreams. But if the organisations don’t have a process to ensure that there is a culture and succession plan that will ensure that they continue to bring to the helm such visionary leaders, gamesters and bureaucrats will rise up to fill the vacuum. Then the organisational decay sets in.
It is easy to recognise this decay when it has already manifested in the form of dissatisfied customers, loss in market share, dropping profitability and so on. However the seed of such decay could have kicked-in even when apparently everything is hunky-dory. And it is very difficult to recognize it then. Some of the early symptoms that go unnoticed till it is very late are discussed here.
Form gets priority over substance
One of the early weaknesses that can be observed with these brain dead captains is the focus on ‘process for process sake’ instead of the processes being used as a tool to manage and grow the business. The bean counters, corporate secretaries and legal eagles who have very little appreciation of the nuances of business take over.
The atmosphere so created, stifles innovation and initiative, business leaders leave and clerks and paper pushers rule the roost.
Business strategy gets driven by corporate secretaries.
Structuring and restructuring of companyto consolidate power and meet private agenda of the management becomes the priority. Sometimes this gets driven by the unholy alliance of some shareholders and the management who then works towards maximizing their self interest. The interests of the organisation, its people, customers and its shareholders at large get compromised. It can become a vicious cycle with both the management and the interested shareholders believing that what they do is for the good of the company.
The people become pawns.
People instead of being utilised as resources that drive the business and who are to be nurtured, become pawns to be shuffled around on private whims and fancies of management.
People are controlled with their weaknesses, follies, mistakes and insecurities and not enabled and encouraged. Then they fail to earn loyalty from the ranks.
“I, me, myself”
The top managers spend lots of time in office to push their private agendas and priorities ranging from managing their finances for activities of their clubs, children’s projects, their admission etc. The priorities of the organisation gets back seat.
This acts as a downer for the working class. Listen to the gossips at the water cooler and we can judge the respect the top managers command.
Moral decay
In this stage of degeneration, decisions are driven by greed;private bonus and benefits get to have priority even at the cost of long term survival. It is this moral decay that drove Wall Street to develop products and deals that turned toxic for the whole financial markets around the world. Enron, WorldCom, Satyam, Arthur Anderson, Lehman, AIG episodes are monuments of this moral decay in the recent history. Many more are around; it is just that they have not been caught.
Some organisations don’t recognise these early warnings and act upon them, and that is one of the reasons why the corporate longevity is not so high.
"I searched the whole world for a bad mind, never found one
Looked into myself, found the worst of all" - Unknown
Saturday, February 27, 2010
India gets a CIO
“Who said Elephants can’t dance” is a book written by Louis Gerstner the CEO who turned around IBM, the ailing giant that it was in 1992. I am sure many of us feel the same about India. We used to have a growth rate of around 3% that was termed as the Hindu rate of growth. That is history, and we are now demonstrating to the world that Indian Elephants can dance too.
One of the key strengths that any country, corporate or individual needs to compete in this new world is strength in Information and Communication Technology. And it is an area India has clearly demonstrated comfort among a broad cross section of the society. Today we have a booming IT industry ranging from cottage industries to International Giants. But we have not yet capitalised on this strength in strengthening our governance Infrastructure on a national scale.
We have patches of brilliant executions across the country. The modernisation spearheaded by NSDL and NSE with support from SEBI has catapulted the Indian capital market to world standards. There are many other examples like the bhoomi project in Karnataka, VAT computerisation in Kerala, and many more. The tragedy is that this learning is almost quarantined and has not yet formed a part of the DNA of governance. The concern is not just this isolation, there is significant duplication of efforts and investments which benefits the vendors more than the users.
For example GST is one of the most critical national initiatives India is embarking on. The empowered committee after protracted deliberations has brought out a Discussion Paper on GST on November 2009. The Finance Minster has announced that the target for implementation will be 2011, revised from the original target of 2010. A project of such magnitude and transaction intensity can and will succeed only with the help of a powerful ICT infrastructure. But we hardly see sufficient focus on issues of computerisation in all these discourses and deliberations. Each of the interested parties and states are on their own trip and trying to push their own agenda.
What we need now is to establish a framework and guidelines to facilitate IT enabled Governance (ITeG) on a national scale . The Government has woken up to this challenge. It has asked Nandan Nilekani, the Chairman of Unique Identity Authority Of India (UIDAI) to head a newly constituted Technical Advisory Group for Unique Projects (TAGUP). This is a welcome development and can surely contribute towards integration of the divergent initiatives that are going around (often in circles).
I remember attending a party soon after Nandan was appointed as the chairman of UIDAI (read up It Made Sense – 3; Nandan and the Unique ID*). I made a remark that it looked like we have a CIO for government. One investment bankers based in London who was attending this party quipped “I have now one more story to sell India”
But the remark looked a bit preposterous at that point of time. Today it is a reality. I have been keenly watching the development of UIDAI. There appears to be a clear strategy that it is following. The concept note was world class. The RFP that has recently come out for application development can be easily termed as one of the top quality RFP brought out by any government agency. He has also managed to bring together a world class talent pool to support him.
India looks good, India looks corporate, and India has now has a CIO...Read it aloud, it sounds nice and almost musical
“Part of the inhumanity of the computer is that, once it is competently programmed and working smoothly, it is completely honest.” Isaac Asimov
One of the key strengths that any country, corporate or individual needs to compete in this new world is strength in Information and Communication Technology. And it is an area India has clearly demonstrated comfort among a broad cross section of the society. Today we have a booming IT industry ranging from cottage industries to International Giants. But we have not yet capitalised on this strength in strengthening our governance Infrastructure on a national scale.
We have patches of brilliant executions across the country. The modernisation spearheaded by NSDL and NSE with support from SEBI has catapulted the Indian capital market to world standards. There are many other examples like the bhoomi project in Karnataka, VAT computerisation in Kerala, and many more. The tragedy is that this learning is almost quarantined and has not yet formed a part of the DNA of governance. The concern is not just this isolation, there is significant duplication of efforts and investments which benefits the vendors more than the users.
For example GST is one of the most critical national initiatives India is embarking on. The empowered committee after protracted deliberations has brought out a Discussion Paper on GST on November 2009. The Finance Minster has announced that the target for implementation will be 2011, revised from the original target of 2010. A project of such magnitude and transaction intensity can and will succeed only with the help of a powerful ICT infrastructure. But we hardly see sufficient focus on issues of computerisation in all these discourses and deliberations. Each of the interested parties and states are on their own trip and trying to push their own agenda.
What we need now is to establish a framework and guidelines to facilitate IT enabled Governance (ITeG) on a national scale . The Government has woken up to this challenge. It has asked Nandan Nilekani, the Chairman of Unique Identity Authority Of India (UIDAI) to head a newly constituted Technical Advisory Group for Unique Projects (TAGUP). This is a welcome development and can surely contribute towards integration of the divergent initiatives that are going around (often in circles).
I remember attending a party soon after Nandan was appointed as the chairman of UIDAI (read up It Made Sense – 3; Nandan and the Unique ID*). I made a remark that it looked like we have a CIO for government. One investment bankers based in London who was attending this party quipped “I have now one more story to sell India”
But the remark looked a bit preposterous at that point of time. Today it is a reality. I have been keenly watching the development of UIDAI. There appears to be a clear strategy that it is following. The concept note was world class. The RFP that has recently come out for application development can be easily termed as one of the top quality RFP brought out by any government agency. He has also managed to bring together a world class talent pool to support him.
India looks good, India looks corporate, and India has now has a CIO...Read it aloud, it sounds nice and almost musical
“Part of the inhumanity of the computer is that, once it is competently programmed and working smoothly, it is completely honest.” Isaac Asimov
Monday, February 22, 2010
The art and ethics of lying - Part II
My posting on “The art and ethics of lying” evoked quite a few responses; some as comments in the blog and some as emails. The two comments given below are thought provoking.
“Thought the rule was not ‘Don’t lie’ but ‘Don’t get caught?’ (by others or by self-guilt) Ethics is an essential compass - a needle towards north, but - but true north is slightly different on Earth?” Sajan
“I think you carry the thread too far. Saying "I bluffed" does not mean that I will do the things that you cite later in the paragraph. When I am talking with you on a contract, do not my morals require me to be responsible, (loyal, even) to the party I represent? So I say "If you do not accept my final offer, we will walk away". I might e bluffing, and this is a lie; but do I own no debt to my colleagues to get them the best deal from you? This need not be a slippery slope (Once we allow in western music, we will end up with...).” Sanjeev Gupta (ghane)
I did not mean that it is always possible to live by the commandment “Thou shall not Lie.” There could be occasions when lying is fair and even necessary. Let us take an extreme example to make a point. Consider that you are standing at a junction and a person comes running totally scared and he runs along the right fork at the junction. After few minutes you see a thug coming running with a gun and he asks you which way the first person went. You may prefer to lie to save a life. There may be less dramatic reasons where lying is the right thing to do.
As Machiavelli argues in ‘The Prince’ “A man who wishes to profess goodness at all times will come to ruin among so many who are not so good. Hence it is necessary for a prince who wishes to maintain his position to learn how not to be good and to use this knowledge or not according to necessity”. A desi corollary is “the Good may often bear the fruit of the Bad”
Then there is the question of business ethics that Sanjeev has raised. Business in that sense is like poker. It requires strategies and posture that could be termed as lies in the normal sense. But that is how poker and business are played. But poker and business have their own set of rules. So in this case being good is about playing as per the rules of the game.
Game theorists will point out that reciprocal altruism, (generous tit-for-tat) which while showing a friendly face to the world will not want us to be exploited, is the most sensible strategy for survival.
But what is more reprehensible is when you become the follower of Shakuni and take pride in the rigged dice game where the balance between rational self interest and selfishness tilts as per convenience. It is then that the lies get to be amoral.
As Laurie Calhoun noted in his article The Problem of “Dirty Hands” and Corrupt Leadership “In thinking about this issue, it is important to distinguish self-serving opportunists from those who suffer corruption through their sincere efforts to govern well. Self-serving opportunists often rationalize their dubious measures to themselves through self-deceptive references to ‘the good of the whole,’ claiming that group loyalty demands moral sacrifice or that ‘the end justifies the means.’”
Such rationalisation could become a slippery slope. Especially if we start to justify in relative terms, drawing examples of errors and omissions that we see around particularly that of people who are held in high esteem. In this world of seven billion human beings, who by design are not perfect, there would be statistically significant sample for aberrant behaviours from all walks of life.
That is the message that comes from the story of Yudhishtira’s chariot settling down to the ground when he lies. It reminds us that while we may have a justification of an ‘extenuating circumstance” a deceit is still a deceit.
So while it may not be humanly possible or even unnecessary to strive for absolute truth and justice, it could still an ideal, a ‘guiding star’ (concepts like ‘six sigma’ and ‘ethics in business’ are examples of attempts to represent absolute ideals which many may never reach) so that when we are faced with moral conflicts we could attempt not to justify our selfish acts in relation to the ‘immorality and injustice we see around’.
“We are all in the gutter. But some of us are looking at the stars” Oscar Wilde
“Thought the rule was not ‘Don’t lie’ but ‘Don’t get caught?’ (by others or by self-guilt) Ethics is an essential compass - a needle towards north, but - but true north is slightly different on Earth?” Sajan
“I think you carry the thread too far. Saying "I bluffed" does not mean that I will do the things that you cite later in the paragraph. When I am talking with you on a contract, do not my morals require me to be responsible, (loyal, even) to the party I represent? So I say "If you do not accept my final offer, we will walk away". I might e bluffing, and this is a lie; but do I own no debt to my colleagues to get them the best deal from you? This need not be a slippery slope (Once we allow in western music, we will end up with...).” Sanjeev Gupta (ghane)
I did not mean that it is always possible to live by the commandment “Thou shall not Lie.” There could be occasions when lying is fair and even necessary. Let us take an extreme example to make a point. Consider that you are standing at a junction and a person comes running totally scared and he runs along the right fork at the junction. After few minutes you see a thug coming running with a gun and he asks you which way the first person went. You may prefer to lie to save a life. There may be less dramatic reasons where lying is the right thing to do.
As Machiavelli argues in ‘The Prince’ “A man who wishes to profess goodness at all times will come to ruin among so many who are not so good. Hence it is necessary for a prince who wishes to maintain his position to learn how not to be good and to use this knowledge or not according to necessity”. A desi corollary is “the Good may often bear the fruit of the Bad”
Then there is the question of business ethics that Sanjeev has raised. Business in that sense is like poker. It requires strategies and posture that could be termed as lies in the normal sense. But that is how poker and business are played. But poker and business have their own set of rules. So in this case being good is about playing as per the rules of the game.
Game theorists will point out that reciprocal altruism, (generous tit-for-tat) which while showing a friendly face to the world will not want us to be exploited, is the most sensible strategy for survival.
But what is more reprehensible is when you become the follower of Shakuni and take pride in the rigged dice game where the balance between rational self interest and selfishness tilts as per convenience. It is then that the lies get to be amoral.
As Laurie Calhoun noted in his article The Problem of “Dirty Hands” and Corrupt Leadership “In thinking about this issue, it is important to distinguish self-serving opportunists from those who suffer corruption through their sincere efforts to govern well. Self-serving opportunists often rationalize their dubious measures to themselves through self-deceptive references to ‘the good of the whole,’ claiming that group loyalty demands moral sacrifice or that ‘the end justifies the means.’”
Such rationalisation could become a slippery slope. Especially if we start to justify in relative terms, drawing examples of errors and omissions that we see around particularly that of people who are held in high esteem. In this world of seven billion human beings, who by design are not perfect, there would be statistically significant sample for aberrant behaviours from all walks of life.
That is the message that comes from the story of Yudhishtira’s chariot settling down to the ground when he lies. It reminds us that while we may have a justification of an ‘extenuating circumstance” a deceit is still a deceit.
So while it may not be humanly possible or even unnecessary to strive for absolute truth and justice, it could still an ideal, a ‘guiding star’ (concepts like ‘six sigma’ and ‘ethics in business’ are examples of attempts to represent absolute ideals which many may never reach) so that when we are faced with moral conflicts we could attempt not to justify our selfish acts in relation to the ‘immorality and injustice we see around’.
“We are all in the gutter. But some of us are looking at the stars” Oscar Wilde
Tuesday, February 16, 2010
Few Good Men
Recently there were couple of accidents in the construction site of Delhi Metro. There has been much hue and cry demanding the blood of senior officers. Criticism and accusations were part of daily news. I was surprised at such negative media attention on an organisation that in my mind is an icon of national pride.
I “Googled” for some facts. Since the construction work started in 1998 there have been a few accidents in at the Metro construction sites. But the incidences have been very few and except one or two instances these were minor. Even by international standards the accident history of Delhi Metro Rail Corporation (DMRC) related to its construction activities is quite low. On the other hand in the last eight years of operation of the Phase 1, there has been not a single accident in its operations.
I agree that we cannot condone accidents and we need to expose inefficiencies, failures and corruption in all public projects. When I read through the press coverage on the recent accidents at DMRC construction sites, I almost got a feeling that it is one of the most poorly managed projects.
But the reality is that this is one of the few institutions that our country can be proud of from the point of its magnitude, scope, design, implementation, operations and maintenance. Name any area the score is superlative. It has been spearheaded by a man who has proved himself multiple times in projects of such scale and national importance which has been widely acclaimed around the world.
We don’t need to treat such people and institutions like Gods and close our eyes when they make mistakes. But when we present these cases we should place these in proper perspective. Very often we see these cases blown out of proportion whereas the incidences which need true and sustained exposure are buried so fast.
The reasons for this phenomenon are many. The real scams get buried because media may have been bought over with the financial and political muscle of the perpetrators. Lack of support to genuine organisations and genuine people have many underlying reasons. The corrupt don’t want ‘the clean’ to succeed or deliver. The ‘good’ believes that only his goodness is the authentic variety. Then we have the “Indian Crab syndrome” which cannot stand the other guy rising above mediocrity. We are happy to pull him/ her down. Recently I was talking to a person who was instrumental in establishing and nurturing an institution of national importance. He confided to me that he was surprised at the extent of anger (not just jealousy) that the success of his institution had evoked.
We recently witnessed this kind of failure when practically very few took a public position to support Shahrukh Khan when there was a backlash against his remark about allowing Pakistani Cricket players to play in IPL. We have seen many more such examples of unwarranted allegations and criticisms; Sound bites on RK Pachauri, CB Bhave, Shashi Taroor etc are examples of this.
There is nothing new in this other than a suggestion that there is a need to stand up and support those few good men who try to make a difference. If you are too scared to open your mouth, at least try to take a position as a group.
"First they came for the unions, but I didn't speak up because I wasn't union. Then they came for the communists, but I didn't speak up because I wasn't a communist. Then they came for the Jews, but I didn't speak up because I was Protestant. And then they came for me, and there was no one left to speak up."
- Reverend Martin Niemoller a German Lutheran monk who was arrested by the Gestapo in 1937
I “Googled” for some facts. Since the construction work started in 1998 there have been a few accidents in at the Metro construction sites. But the incidences have been very few and except one or two instances these were minor. Even by international standards the accident history of Delhi Metro Rail Corporation (DMRC) related to its construction activities is quite low. On the other hand in the last eight years of operation of the Phase 1, there has been not a single accident in its operations.
I agree that we cannot condone accidents and we need to expose inefficiencies, failures and corruption in all public projects. When I read through the press coverage on the recent accidents at DMRC construction sites, I almost got a feeling that it is one of the most poorly managed projects.
But the reality is that this is one of the few institutions that our country can be proud of from the point of its magnitude, scope, design, implementation, operations and maintenance. Name any area the score is superlative. It has been spearheaded by a man who has proved himself multiple times in projects of such scale and national importance which has been widely acclaimed around the world.
We don’t need to treat such people and institutions like Gods and close our eyes when they make mistakes. But when we present these cases we should place these in proper perspective. Very often we see these cases blown out of proportion whereas the incidences which need true and sustained exposure are buried so fast.
The reasons for this phenomenon are many. The real scams get buried because media may have been bought over with the financial and political muscle of the perpetrators. Lack of support to genuine organisations and genuine people have many underlying reasons. The corrupt don’t want ‘the clean’ to succeed or deliver. The ‘good’ believes that only his goodness is the authentic variety. Then we have the “Indian Crab syndrome” which cannot stand the other guy rising above mediocrity. We are happy to pull him/ her down. Recently I was talking to a person who was instrumental in establishing and nurturing an institution of national importance. He confided to me that he was surprised at the extent of anger (not just jealousy) that the success of his institution had evoked.
We recently witnessed this kind of failure when practically very few took a public position to support Shahrukh Khan when there was a backlash against his remark about allowing Pakistani Cricket players to play in IPL. We have seen many more such examples of unwarranted allegations and criticisms; Sound bites on RK Pachauri, CB Bhave, Shashi Taroor etc are examples of this.
There is nothing new in this other than a suggestion that there is a need to stand up and support those few good men who try to make a difference. If you are too scared to open your mouth, at least try to take a position as a group.
"First they came for the unions, but I didn't speak up because I wasn't union. Then they came for the communists, but I didn't speak up because I wasn't a communist. Then they came for the Jews, but I didn't speak up because I was Protestant. And then they came for me, and there was no one left to speak up."
- Reverend Martin Niemoller a German Lutheran monk who was arrested by the Gestapo in 1937
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