Making the Elephant Dance

We once had a government that tried to do everything by itself. In addition to the business of governance, it also actively dabbled in bread making to aircraft production and banking to hotels.  Over a period of time it has accepted that it should focus on its core responsibility of governance and has attempted to move out from non-core sectors. Therefore it has, in the recent past, started using private sector capital and private sector involvement to augment and strengthen governance and to provide public good

Some of these partnerships have been successes and some failures.  The success and failure of such joint initiatives depend on many factors.  The willingness of the key bureaucrats driving the project to take bold decisions and the scruples of the private sector partner are two critical factors of success.

The worst combination is when we have an indecisive officer and a scrupulous service provider. In this case the project will suffer and the service provider will suffer humongous loss. This is the reason why many private sector companies desist from working for government.

The next worst combination is when we have an officer who is decisive and absolutely corrupt teaming with an unscrupulous service provider. In this case they will clean the tills and the project will suffer.

The best result is when there is combination of decisive and result oriented officer and scrupulous service provider.  This is a road fraught with risks because this will involve judgement calls and judgement calls involve calculated risks based on information available at that point of time. But unfortunately these judgment calls often are often misinterpreted. This then leads to both parties being accused of the personal agenda behind their actions.  They get equated to the worst combination described above. Both end up suffering for the decisions they have taken. That is why this is a rare combination. However what we need today is this combination.  

This is less of an issue when outcomes of the envisaged projects are very clear and the scope of private sector participation can be articulated un-ambiguously. In these cases it will be possible to develop a clear contract and monitor the performance against the clear milestones in the contract. However in projects which are transformative in nature this becomes all the more critical. In this kind of project it will not be very easy to clearly develop the implementation plan and identify clear milestones. Therefore there will be many occasions, based on ground realities, when judgement calls are required to be made and course corrections are required to be effected. In such cases the combination of visionary and courageous leadership from the government and scruples of the service provider becomes very critical. 

In typical government procurement such a combination which will effectively enable active management will be very difficult to implement. This is the reason why many of the transformative projects in Private Public Participation fail.

This is especially true for IT projects. Today many top-notch IT companies are unwilling to work with government because they feel that government does not understand or appreciate this dimension. On account of this blindness on the part of the government buyer, for honest service providers government projects are loss leaders. Especially with the alternate business opportunities recovering around the world it will be difficult for the government to to attract good IT companies to take serious interest in the e-enablement of government projects.

The most effective way to handle such transformative projects is to carve these as independent projects and hand these over to a Special Purpose Vehicle (SPV) which has been suitably structured with sufficient flexibility to take nimble decisions and relevant mid-course corrections when needed. It is also important to have the right kind of leadership, team with relevant expertise and experience and also a supervisory body that recognizes the different approach needed for these SPVs to succeed. Especially the leadership vision and courage to take decisions will be very critical.  Delhi Metro is a very visible example of a successive implementation in this model.

There are many more transformative ideas that are awaiting such interventions especially in the area of digital transformation. We hope that the clear mandate the government has this time will help them take this path with more confidence. 

“Planning is helpful. If you don’t know what you want, you’ll seldom get it. But, no matter how well you plan, you will fare better if you expect the unexpected. The unexpected, by nature, comes unseen, unthought, unenvisioned. All you can do is plan to go unplanned, prepare to be unprepared, make going with the flow part of your agenda, for the most successful among us envision, plan, and prepare, but cast all aside as needed, while those who are unable to go with the flow often suffer, if they survive.”   David W. Jones, Moses and Mickey Mouse

If you liked this post, share it

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

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

E = MC Squared

For us in NSDL, establishing a world class depository was a challenge in itself. Once we did a decent job of this, we proceeded further to figure out what our core strengths are which could act as the foundation for our growth. We did not want to limit ourselves as a player in capital market alone.

We now see NSDL as a total solution provider Covering Information Technology, Process Design, Operations, Legal & Administrative infrastructure and Integrating multiple agencies to Manage very large databases and large volume transactions in a Secure and Efficient manner.

With this diversification we want to ensure that the organization does not get too unwieldy and non-responsive in our service delivery. We want to make the passion for excellence a habit and not an exception.

To achieve this, a host of areas needs attention. We sat down and assessed our immediate challenges in the projects we are on and the core strengths around which our growth strategy is built. This posting briefly describes our operational strategy that is still evolving.

One of the first things that we have taken up is to structure a simple model that could direct our prioritization. We call it E = MC2; which summarizes our belief that Excellence can be derived from a culture that Measures each and every drivers of performance and strives for Continuous improvement with a Customer focus. Let me explain each of these in a little more detail.

Measurement

Measurement and MIS are integral parts of all management processes. But often these measures and reports hide more than what they reveal. As a cynic observed “Statistics is like bikini; what it reveals is interesting, but what is hides is the most critical’

We decided to have a “bare it all” culture when it comes to measurement. When we measure we try to remind ourselves “No Pads Please”. We realize that the matrices that we chose and measure could change our behavior, help to make the performance visible, improve control and help in decision making.

This is most easily preached and more difficult to practice. So we try to establish rituals to make this a habit than response to the big boss’s whims. We have also developed a framework that drives our measurements. (I shall discuss this in details in another posting)

Continuous improvement

The measurements help us to know where we are and where we appear to be going. It also helps us to identify trends and exceptions and then get to the root cause(s). This helps us to identify and anticipate in advance potential pitfalls and take preventive/ proactive actions and not just react to emergencies.

Customer Focus

Measurement and Improvement can be distractive and could lead to enormous waste of resources if we don’t have focus. We attempt to inculcate in each of us a belief that the most powerful factor that provides a ‘right focus’ is the customer.

We developed (and continue to develop) a series of measures which we call “Customer Service Commitments” (CSC). This is fundamentally different from the service level agreement (SLA). SLA is a commitment on the minimum below which we will try not to go. But CSC is what we try our best to deliver; a level much above SLA.

Footnote: These are foundations on which our operations are built. This, as you would see, is not a static model. It is a virtuous cycle of that continuously up the bar and helps us to achieve our vision of establishing ourselves as the First Choice Information Utility in India which offers the Optimum solution at the Optimum price.

Hidden Agenda Holds the Key..

Transformational projects that attempt to bring about revolutionary changes in processes, structure, technology or strategy are both exciting and frustrating. It germinates from visionary leadership and will succeed only with patience and perseverance.

When we embark on such a project for an industry or a large cross section of society the challenges becomes manifold. Three essential ingredients for such projects to succeed are (i) design of right incentive structure for the participants, (II) building awareness, interest and demand among the users and (iii) identification of and safeguarding against the conflicting agendas and incentives.

Normally the first two get significantly more attention than the last because it is hidden behind a veil of apparent co-operation or hidden in the garb of protection of the weak. Failure to unearth these agendas often is the reason for failure of many projects. We see that many protests against reform measures in capital markets come in the name of the ‘small investors’, protests against taxation reforms comes in the name of ‘small taxpayers’ or protests against agricultural reforms comes in the name of ‘small farmer’. Critical analysis of the issues often reveals that the problem lies elsewhere.

In this article I attempt to share some examples of our experience in this count. The intention is to highlight the importance of such issues and the need to make strategies to address these agendas an important component of the design plan.

1. Conflict of interest at industry level

Sometimes the reform measures have negative impact on the prospect of the industry. Therefore no individual firm would be willing to co-operate of participate and seldom the industry association take a collective view. In such cases compliance can be ensured only by regulatory intervention.

For example strict KYC verification is required to be undertaken in case of investments in capital markets, mutual funds and even bank accounts to restrict social evils like tax evasion, money laundering. As far as the industry is concerned such measures will dampen attractiveness of these investment options and without regulatory compulsion nobody would be interested to ensure compliance.

2. Conflict of interest at the firm level

In some cases the investments made by the individual firms or the strategic interests of the related firms my work against the transformation.

Ideally the establishment of the securities depository was in Indian capital market should be welcomed by any custodian or fund manager on account of the reduction in risk and improvement in efficiency. However when NSDL was set up in 1996, there were some custodians who found this to be a matter of inconvenience at least in the short term. This is because these custodians had, in the immediate past, established infrastructure to handle physical securities and were able to charge premium rates for this and depository would have removed this strategic advantage. While they did not obstruct overtly and in fact had joined as the depository participants they quietly advised their FII clients of the need for ‘wait and watch’.

In this case we had to also work directly with the end clients (the fund managers) who could evaluate the option without such biases.

3. Conflict of interest at individual level

Some time there could be conflict between the interest of the individual officers and the interest of the organization. The resistance of some of the officers who were handling the share transfer department on account of the loss in importance and financial power resulting from dematerialization of share certificates is a good example for this.

We managed to address this issue to quite an extent by means of direct dialogue with the senior management of such firms.

4. Conflict of interest of the regulating / enforcement authority

Most of the transformational projects in the area of governance lead to transparency and reduce rent seeking opportunities which may not be liked by some who profit from the inefficiency.

On the other hand some of the officers may attempt short cuts without the larger interest of the project in mind for their personal credit; especially because they want to show some magic results during their tenure. Such short-termism could lead to the failure/ delay of the project.

While both are corruption in some ways, the latter is more difficult to manage and this is the most difficult problem to crack in case of PPP projects.

Tailpiece: In any project we need develop an eye to hidden agendas and have strategies to address these. The solution to all such hidden agendas cannot be regulatory fiats as it will be impractical to ensure compliance. We should learn to address these more by managing incentives or by identifying countervailing forces.

The Delhi Metro-Symphony Orchestra

“The typical symphony orchestra consists of four proportionate groups of similar musical instruments called the woodwinds, brass, percussion, and strings. The orchestra, depending on the size, contains almost all of the standard instruments in each group. Apart from the core orchestral complement, various other instruments also may be called for...."

So what is common between Delhi Metro and Symphony Orchestra?

When Delhi Metro was inaugurated in 2002, I was impressed that our country also has infrastructure that represents modernity and we seem to have realized the importance of mass transport systems to support our urban development. (This realization seems to be far and wide. In the last few decades only two such systems have come up; one in Kolkata and one in Delhi though there are many more cities that desperately need something like this.)

Why this island of excellence and what ensures its continuity?

Is it just because of the visionary leadership of Sreedharan that gave the organization courage to dream big, the patience to translate the dream to actionable tasks with clear specifications, ensured that proposals were evaluated on merit and not on the “educational efforts of the suppliers”, established clear service level expectations and mercilessly insisted on commitment to delivery, the Metro still stand tall in its quality of service?

I had serious doubts on whether the above qualities in project execution would ensure that this quality will be sustained in its operations day after day. My scepticism was rooted on what I have observed in most of the public structures and institutions in our country.  The trend of poor upkeep and maintenance exacerbated by the pathetic civic sense of our society starts showing soon. The civic sense that instills no shame in throwing things out of the windows of the muti-storied apartments and air conditioned cars, that considers it natural to relieve oneself on public roads, that doesn’t evoke compunction when littering public places and spit at every corner of staircase unless (or in spite of) photograph of a god is stuck there.

Further, I also was very sceptical about quality of customer service and I have seldom seen a government agency that understood the meaning of customer service.

Since the inauguration of Metro a number of years have gone by. The metro has expanded considerably and is in the process of expanding more. The stations are still spotlessly clean, the coaches look brand new and I can see practically no graffiti. The experience of a customer is still a matter of delight.

The visionary leadership is still there and it has managed to inculcate certain practices that has now been ingrained in its people and processes and is more infectious than common cold. The organization still passionately focuses on a lot of small things. Like ensuring that the cleaning staff leaves no dust unturned and the surveillance system does not let go of irresponsible behavior in its premises. Such an all pervading commitment to quality suddenly appears to instill a sense of shame and responsibility to the denizens who use the metro. The service he gets is so good that he has no reason to spit in disgust:-)

It looks like a symphony orchestra with hundreds of people each contributing in big and small way. In a symphony there are so many instruments that make almost indistinguishable sounds a layman would wonder what difference they make. But all of them together bring about a heavenly halo.

This attention to small details is what we often lack in many organizations (particularly government organisations) and that leads to gradual degeneration. When I see a station with not even one cigarette butt or a candy cover I almost feel ashamed to throw one myself; but even if I see a few litter scattered around then it becomes less of a worry for me.

This logic gets extended to in all fields. When we have hardly any customer complaints pending and suddenly one complaints pop up we care. But if we have 10,000 pending grievances, 100 more makes no difference.

When the policy maker tries to set up solutions with without thinking through, then we only try to show that there is something working and just don’t care how the customer feels.

Public services cannot be set up like the “Tabala Solo” a maestro like ustad Zakkir Hussain. It is like a symphony orchestra with lots of small bells and whistles all integrated together.

This is what Singapore did in getting the city to be clean and this is what Metro has done and has the persistence to continue with.

When we learn to worship this “god of small things” more and more, we will see islands of excellence growing and joining together to cover the sub-continent - India.

‘Right Stuff’ in Managing Projects

“Right Stuff” is a book written by Tom Wolfe in late 70s that won American book award for non-fiction. This is a story about about the pilots engaged in U.S. postwar experiments with experimental rocket-powered, high-speed aircraft.

This is a story set in 40s and 50s when the mortality rate of the test pilots was very high. They had a certain underlying belief that kept their morale up. They believed that the machine could never let you down and if you had the right stuff you will always survive; the unspoken and unwritten code of bravery and machismo that persuaded these men to ride atop dangerous rockets. In the foreword to a new edition published in 1983 at the time the film adaptation was released, Wolfe wrote that his "book grew out of some ordinary curiosity" about what "makes a man willing to sit up on top of an enormous Roman candle… and wait for someone to light the fuse.

The right stuff is not an algorithm that you can learn by heart. It is sum total of a variety of Attitudes, Knowledge and Skill.

What I intend to discuss in this article is a set of attributes that makes up the right stuff for a project man. These are not what Tom Wolf observed for an astronaut. These are some of my observations from my experience which I have grouped as the right stuff for the prject man. I don’t say this is comprehensive nor can I give you the recipe on how to mix this together.

When we try to identify the right stuff for the project man we need to first appreciate what is so uniquely different about Project Management in comparison with General Management. It is the ‘level of uncertainty’ which requires multiple skills to manage.

In this context of managing uncertainty let us look at the ‘stuff’ that makes the ‘right stuff?’

i. Don’t Give Up…
This represents your ability to persist and look out for a new window when one after another the windows close, because when you handle uncertainty you should be capable to continuously come up with new ideas and options. You should critically evaluate what works and dump the ones that don’t. Don’t get married to your ideas. Be ready to divorce, if the idea doesn’t work.

ii. The Seal Motto ..
My God, My Country, My team and then Me.
I’ve read somewhere that the most diversified commando force of the US government called the SEALS (on account of their proficiency in fighting in sea, land and air) have an ingrained order of sacrifice. First be ready to kill yourself for the sake of your team and then be ready to sacrifice the team for the country which stands only one step below God. (This may be a romanticized version of the story; or just plain fiction. But I like the relevance in this context)
Very often the priority chart for many is exactly in the reverse order. Ready to dump the company for your gang and ready to dump your gang for your self-interest.
You need the same S’EAL binding Philosophy’ as a team and commitment to a project to be a successful project man.

iii. Right Fighting Spirit
‘Fight when you Plan and Fight when you dissect. But when you implement, fight as one.’
As we are trying to manage high levels of uncertainty, the team should have the maturity and strength to put each idea to the furnace of critical evaluation and to dissect each mistake with the vengeance of a ruthless attorney.
At the same time when you take a decision, it should be a collective one. Each one should own the decision whether you supported the idea in the first place or not. No one should dare to work towards proving his point at the cost of implementation- no room for “I_told_u_so”

iv. Get Out of the Box.
Don’t get caught up in your ideas and stereotyped readymade solutions. Be willing to experiment beyond the ordinary, with focus on the end-result and not anything else.

v. Self Confidence
““Nothing great has ever been achieved except by those who dared believe that something inside them was superior to circumstances.” Bruce Barton
You need enormous self confidence to push ahead with what you believe is right. This is important to the leader as well as each member of the team.

vi. Show your Guts.
Project management need lots of guts to push and bully many uncommon ideas at uncommon speeds. You seldom gets chance to test out all your assumptions or point our credible references. Then your strength of conviction and the courage to take a position becomes very critical.

vii. Be in Synch
In projects the speed of change is quite high. The normal communication channel often fails in keeping each member updated about any new development. So each person should have the ability to judge the impact of any change in his area in the areas of others. He should take special effort to bring this to the attention of the affected party.
The project team should also have mechanisms in place to broadcast key developments to each member of the team.

viii. Fire in the belly
Every member of a project team should be a person with fire in the belly, a burning passion to make a difference and make things happen.

ix. Self Driven-SETI Vs Master Slave
Normal management structure often follows the Master Slave Model with the master distributing work and the slaves executing them. When a slave has a slack, he waits for a new job to be assigned and till then he is idling.
A project management team should follow the SETI@ home model (SETI @ home is a virus like program sitting in your computer, crunching numbers to support ‘Search for Extra Terrestrial Intelligence’ when your CPU is free from your work) polling his team for meaningful support when he has a slack.

x. Have Fun
Most important of all you should have fun in what you do. You should enjoy the challenges and the heartache as enriching experiences and not as sufferings in hell.

xi. Walk the Talk
A project manger should be a leader who leads from the front and not from the armchair. Be ready to roll up your sleeves and get grease in your hands.

xii. It is all in your mind..
Develop an attitude that takes pride in looking ahead and not rest on your laurels.
My favorite quote that portrays this spirit, is by Barnard Shaw
“I dread the word success. To have succeeded is to have finished one’s goal in life. Like the Male Spider that gets eaten up once it succeeds in its courtship. I like the world of continuous becoming. With a goal in front and not behind”