Tuesday, December 15, 2009

In Search of Excellence: Conclusion

Just finished reading the book "In Search of Excellence". I would like to summarize my observations and learning.

I feel that this book is not an attempt to revolutionize but to synthesize, i.e. it does not look to come up with a radically different management theory but tries to consolidate on the existing ones. However, it is not done with a view of academic research. Instead, the synthesis has been achieved by retro-fitting the elements of old management theories with all that seems to work for excellent companies. In this, the book is very practical and hands-on in its approach. There is a lot to take away from this wonderful book. All the same, I feel it does not sufficiently highlight the role of the leader. It does mention how a leader's personality shapes the company and determines its future. But it also tends to make the reader believe that it is possible to reach that stage in a series of calculated steps. I am not sure about this. I agree that learning from experience of excellent companies can help the managers to avoid fundamental mistakes. However, I am more convinced than ever that without an able leader you are not going anywhere. No matter what you do. It is good to talk about building leaders, but only a leader can build a leader. You cannot always manufacture one in any factory, university or consultancy. Finally the company will become the embodiment of the ideals and beliefs of its top leadership. Period.

All the same, the basic principles espoused by the book can make any work place better. It can help all people with any trace of level 5 leadership to recognize what they can achieve (and for them "Built to Last" and "Good to Great" may prove to be good as well). It can also seriously burn your fingers (and more) if you seriously have no idea where you are going. Overall, I think that the basic principles advocated may be an important step in the growth of a leader or forming of an excellent company. This book is also a valuable resource for any management student who wishes to quickly re-cap the main management theories in Business History.

Monday, December 14, 2009

Easy Answers Can Be Misleading

Business executives, especially those of large corporations, do bear a responsibility to the society. Nevertheless, I find the recent attack on "executive greed" by GE chief Mr. Jeffrey Immelt in somewhat bad taste. I guess with recession in full force it is becoming increasingly fashionable to air socialist views as panacea of all evil. Why, I think Hugo Chavez would be delighted. It is true that inequality has increased in the US and the corporations have played their part in it. However, to link the current problems directly (and only) to executive greed is both absurd and far-fetched. I think it is a demagogic effort to find an easy answer to a very difficult question. If US wants to find answers to its problems, it will have to do better than trying to throttle its bankers and executives.

The American dream is about the ability to make it big, no matter who you are, by sheer force of your brain. There in lies the magic of US. America's entrepreneurial spirit defines US and ensures its dominance. All the same, US does face a multitude of problems (to name a few: a hyper-active judicial system that can really sound funny, a broken medical care system, an increasingly bureaucratic structure of governance that may stifle creativity, lack of interest in education in youngsters, the weakening family structure, tense race & religion relations, increasing number of homeless, under-privileged & unemployed). People are living much beyond their means, consuming wastefully and getting into debt. The American dream is not about being irresponsible/lazy and not all its ills result from corporate negligence. Accountability is not the domain of bankers and executives only. Unless each citizen learns to take responsibility about their finances, the size of their family, their personal life and their education, it is useless to irresponsibly point fingers. As someone has rightly said, US needs a "Statue of Responsibility" to balance the "Statue of Liberty". Bashing bankers and executives is not going to solve America's problems. But perhaps they would make convenient targets for politicians so as the Government can hide its own failures and escape the public ire. Considering a career in politics, Mr. Immelt?

Wednesday, December 9, 2009

Excellence: Creativity is not Innovation

As I move along this book, I see that Peter Drucker's principle of employing the "whole" person is pretty central to this book. In fact, the book actively champions the principle and supports it with umpteen anecdotes, stories and examples. It mixes it pretty nicely with having a strong focus on the end-user. In this whole mix, something that struck me as pretty important was the place of creativity and innovation in this whole equation. The writers are pretty clear: creative and new ideas come dime by dozen. What is rare is the ability to see a practical use for these ideas, the will to implement a vision and the willingness to learn by experimentation. This is termed as innovation and dubbed as one of the most critical factors behind the success of excellent companies.

I think this should serve as a stark warning for new entrepreneurs and inventors alike: if you do not get the business basics right but have a good product, ultimately you will be displaced by somebody who can take your ideas to the end customer in a better way. Or, as the book says, an innovator can be an idea-thief (not always). Patents may not always help as there can be many ways to achieve the same thing. Once anybody has proved that a market exists, everybody would want a piece of it. Fewer problems and good communication would help to retain customers. Hence, it may be worth it to go a few months late into the market if it means lesser problems with the product. Moreover, the second-mover can potentially learn from the mistakes of the first mover and cash on it. As I read somewhere, the early bird gets the worm but the second mouse gets the cheese! The vice-versa is also true: to start an enterprise one does not need a multi-million dollar research team: an innovative idea and customer focus will suffice.

One-off big bets with strong patent possibilities (as in pharma, computer chips, chemicals and biotech) may come to the mind as exception to this rule. The book points that the culture of innovation and openness fosters new products (as in 3M) and there is no substitute for innovation. Confusing it with creativity can take one down the wrong road.

Tuesday, November 24, 2009

Excellence: About Culture and Action Bias of Excellent Companies

Moving further "In Search of Excellence", I find that in the beginning it more or less advocates the basic principles of sound management laid down by Peter Drucker in his "Concept of Corporation" and "Principles of Management". The points about a need in people to feel like winners/achievers and the need that the top-line leader/CEO should cultivate a sense of pride and ownership for work/manage culture are fundamentally nicely repackaged Drucker principles. "In Search for Excellence" builds on it by squarely grabbing the user's attention when it matters and giving a number of solid examples to demonstrate its point. This makes it easier to understand and enjoyable. There are two major concepts that I have just read - the importance of culture and the inherent action-bias in excellent companies. What do I think about it?

Drucker advocate a definable, unified task in which a worker can take pride. He also urges the manager to have a vision for the company and the people, that people should not be perpetually tied down to roles form where they can never progress no matter how hard they try. He attributes a lot of labour problems and job dissatisfaction to these two factors. Jim Collins' books demonstrate how (particularly the case of Nucor Steel), if successfully implemented, this can lead to "a culture of discipline" and play a critical role in the rise of the company. I agree with it. "In Search of Excellence" re-brands this mix of strong work-ethic shaped by an able leader as culture by bringing in elements of internal marketing to the mix. It also rightly points out that internal marketing tactics can degenerate into "control games" if not implemented correctly. I am convinced about the usefulness of internal marketing as a potent supplement for a framework of strong work-ethic and able leadership. But leadership is as much about inspiring greatness, so this would also need a careful hiring. As Drucker and Jim Collins both point, hiring the right people is absolutely critical; with hire for attitude and can train for skill (within reasonable limits) being the mantra of good hiring in the long-term. Internal hiring and employee development is essential as well. No wonder a lot of excellent companies tend to hire graduates and then hone them over time; a.k.a. P&G, Goldman Sachs.

Action-bias revolves around the willingness of a company to experiment and innovate. To just do something, anything except standing still. Run around, look busy? I am absolutely sold-out on the idea of experimentation, testing and marketing trials. It makes a lot of sense. This principle when juxtaposed with Jim Collin's "hedge-hog" principle makes a potent mix of sound company strategy: experimenting but keeping your ears to the ground. Too long and expensive "experiments" and one-shot untested projects,as the writers point, are a no-no.

Finally, I feel that only a company that has a clear, hopeful vision based on brutal facts for itself and its people can excel, create value for its employees and enrich the society in which it operates. For me, this book captures certain critical aspects of this belief brilliantly. Let us see what else we learn from this book in days to come.

Thursday, November 5, 2009

Excellence

I have just started reading "In Search Of Excellence: Lessons from America's Best-Run Companies" by Robert H Waterman Jr, Tom Peters. Just down the first few pages, already I have got some interesting insights about some questions that had been bothering me about the sustainability of a profitable corporation over time. The Mckinsey's 7S framework, as the writers point out, presents a good way to diagnose the possible factors holding back a company from achieving excellence but it does not present a solution to actually address those problems. The writers further define eight signs of excellence. However, in the same breath they go on to assert that an excellent company may NOT have all the presented signs but will have at least some of the features. They further acknowledge the role of a "strong" leader in setting the tempo and talk about a CEO as manager of that culture, a person who makes sure that the values set by the leader are carried on. The book sounds promising and there sure will be some good things to learn. Nevertheless, the initial pitch has got me thinking about whatever I have learned about companies by reading from other sources and my own observation.

Excellence consists of delivering quality customer service, quality returns on investment and being able to sustain both of them over a long period of time. I agree that only if everybody in the company is passionate about the product can we have a great company. In this respect, Jim Collin's research in "Good to Great" offers very powerful insights about good-to-great turn arounds. Not surprisingly, the role of a good leader (what Jim Collins defines as a level 5 leader) was a major finding that resonates well with what what this books talks about leadership. Essentially, it boils down to getting the right people, keeping them and having an effective succession. The basic problem is that human beings are not perfect and it is possible to abuse any policy. For this, I did suggest having a "living will" for a policy, that is trying to anticipate when and how the policy should be abandoned. Thinking over, I realize that it may make things more complicated. I am also reminded of Jim Collin's assertion that rules are made for people who are not committed, but they end up stifling the creativity of those who are. And it turns out to be a major factor in the death of the entrepreneurial spirit, so to say. Careful hiring and small teams come to mind as a logical solution. Still, it seems clear from the start that having enough good managers is going to be the final hurdle in growth of a company and sustainability of excellence.

I think a transparent, meritocratic succession system can help provided you have a level 5 leader at the helm and give him sufficient freedom. A good way to get get a level 5 leader may be to identify a level 5 company and try to poach its top people, as Bank of America did to some extent with Wells Fargo. That may not help much,as in this case, if the leader does not have enough freedom to restructure. I completely agree with Jim Collins that getting the right people on the bus, getting the wrong people off the bus and shifting people to places where they can perform best is absolutely critical before starting. The "who" is absolutely more important than "what". Another element to it would be effective internal communication and internal marketing so as the employees identify with the company, trust it and take pride in it. Sustaining it is not possible if it is just lip service. Having in mind a growth plan for your employee and willingness to let him go if you cannot offer him growth is part of the deal.

About sustainability, it is worth remembering that fastest growth does not necessarily mean sustainable growth. Many times a company sacrifices speed and profit for sustainability. Not surprisingly, the best example that comes to my mind is of McKinsey. Christopher McKenna in his book about Management Consultancy attributes the resilience of McKinsey to its simple yet effective organization and strong culture. Due to this, many times even though McKinsey has not been either the number one or the most profitable of all consultancies, it has grown incrementally and has never been in remotely any kind of financial trouble. Its survival ultimately helped it to dominate.

One also needs to remember that success is never final. In fact, sometimes it is easier to achieve success than staying consistently successful. A too successful company can also fall victim to its refusal to change with time, Government greed and unreasonable union demands. In fact, refusal to address the problems right away inflates the problem over time. There is no substitute for constant vigilance.

Finally, there is no magic pill to excellence. Frameworks can help to structure the thinking but they can never replace thinking. Leaders are perishable goods and don't come dime by dozen, so it is quite natural to seek for a way to grow without them. I feel it is like trying to get to heaven without dying. I feel that frameworks cannot replace disciplined thinking and "cultural mangers" cannot substitute for a level 5 leader. The answer lies in nurturing leaders, if we can really understand the alchemy of leadership, or by finding such leaders and promoting them.

Friday, October 2, 2009

Worth

Life is short, it is going by
Fears and prejudices will make it a lie
Hard work and loneliness may often hurt
But keep kicking your feet in the dirt

Without an aim life is a broken star
Without an aim you will not go far
Life is not a desert, it is an ocean
So get rid of every silly notion
And feel the plenty that you get
For the worst may not have come yet

Wipe your tears and your sweat
With every sunrise and sunset
To work hard and to grow
To move forward and to know
Is the best gift that one can get
Is the blessing that I covet

Past is a shadow and a dream
And as glorious as it may seem
Work for now with the goal in sight
Let valor be your guiding light
Use your time on this earth
Life is short, make it worth

Thursday, October 1, 2009

Reasoning and Survival

I was just thinking about what a system (a nation, a company, an organization) needs (or does not need) to be able to do to survive over the long run.

One thing that any system that expects to survive over a long period of time cannot afford is complacency. I am not talking about any idealistic thought that claims, "Excellence is a never ending journey." No misty-eyed idealism please. This is about one ground fact that is undeniable: change. If there is one thing that is certain, it is that things will change. Sooner or later, for worse or the best. If anything, information technology has just speeded up this change. Only those who keep their ears to the ground and make decisions based on facts will survive in the long run. In fact, only by doing so can a company grow.

Complacency, generally, is the child of success. Success can make a company (or a person) believe in its infallibility and hence become haughty or careless. It is just one step short of hubris and total destruction. In Hemmingway's words. you can be either lucky or exact. Luck you cannot control, but your due diligence you can. Complacency often leads to obstinacy. Following a fixed path blindly can only lead to trouble. Let blind faith be for destructive fanatics who are close to reason. In real time complacency translates to lazy thinking, lazy action and refusal to see the facts. So question everything from time to time. If there is something that somebody says and you do not like it, especially hear that. If something looks bad, it probably is. Do not accept or reject anything at face value, except assertion of a person who refuses to reason.

Monday, September 28, 2009

Gaming the World

Group dynamics should be of interest to anybody who needs to deal with a group. This can include nations, corporates, religious groups, unions, professional associations and the likes. It can be interesting for individuals in general and can help them to try and understand their position in the society and their contribution to the resulting dynamics. Game theory has been an important step towards rationalizing this dynamics. Its concept of equilibrium between various competing forces is a nothing but a stroke of genius. The theory, however, abstracts the results and a sequence of events. A framework that maybe able to account for human motivations and behaviour may be able to complement the theory. There are two places where I see the potential of extracting such behaviour patterns: the animal kingdom and astrology.

Game theory has found its way to biology. What I propose is that in addition to this we can extract basic behaviour patterns that can be observed. As in physics we begin with the simplest of assumptions, why not first try to extract behaviour patterns from animals? Most animals, after all, exhibit a fairly consistent behaviour when compared to humans. Humans differ from animals in their ability to choose and switch behaviour. A cheetah can never become a vulture but a human producer can transform to sloth. A series of predictable, simple animal behaviour patterns can be used to describe a complex human one, and similarly the way animal groups interact can be used for group dynamics as well.

For example, the diverse wildlife of an African savannah can make an interesting study in basic patterns. We can see that in order to survive the animals seek or develop some kind of advantage. This can take form of numbers, size or specializations. Numbers are sought as either an offensive or a defensive strategy. Most herbivores generally seek groups for a nominal defence against predators, though only few like wild buffalo would take the fight back to the predator. Even carnivores like lions and wild dogs seek numbers to ensure success and survival. Some animals, like the rhino and elephant, count on their size to bully and get their way. Finally, some kind of specialization is used for survival. Giraffe uses its long neck, a cheetah uses its speed while vultures use their flexibility. At the end, various unknown choices on the path of evolution determine the place occupied by any particular animal. This determines their strengths, weaknesses, opportunities and threat; so to say. For example, a cheetah goes hungry despite of being the most successful hunter on the savannah due to its inability to defend what it is able to hunt. Lions, hyenas and vultures manage to harass the cheetah enough to forfeit its hard-earned food. So, when Ayn Rand talks about the fact that the creators are taken for a ride, I think it is a brave defence of the heroics of an achiever (cheetah) but ignores the fact that the strength to defend what one has is as important to succeed. For ages, hungry barbarians at the gate have ravenously consumed civilizations smug with its achievements. Be it ancient Rome or India, the story is the same. Similar parallels can be found in other animal behaviours as well. The bottom-line is that each one tries to maximize their advantage as they know best. Be it the chest-thumping of morality to induce guilt, brute force, majority, cunning, intelligence or hard work; the whole question is about getting an advantage and trying to maintain it. Morals come up to try to enforce stability as such a purely Machiavellian society may tend to get totally turbulent. All forms of social institutions come up with a view of creating stability. Nevertheless, a few always manage to find a way to game the system and the ones who feel left out, feeling taken for a ride, push for changes and alternative systems of organization. So, effectively, we have managed to transform power games between individuals into power games with in groups and alternative organizing principles.

Similar patterns can be found in astrology. Astrology gives us a classification system that tries to crystallize "human" elements (picture a periodic table of elements) and defines a set of rules for their reaction in various circumstances. Most people think of astrology only as the sun sign. My observation says that it is NOT about the sun sign as sun is only one out of nine planets influencing a person. Think of it like a vector problem in Mathematics. It is not the presence of one force that counts, it is where the resultant vector would point to that determines the personality. Or a chemical reaction in which certain elements react to produce a result that may be quite different from the reacting elements. In fact, after some observation, it is possible to map the result to its constituent elements without seeing the birth chart, to see how a person behaves and then try to classify it under any of the observable patterns in the matrix. If we are able to see a fit, it immediately gives us a perspective on the person's current state of mind and the possible behaviour he is expecting. And you do not need any birth chart for this! This, for me, has been the most practical application of astrology. A tool to better understand myself, people around me and behaviour patterns. It has certainly helped me to be more understanding and modify my behaviour according to the situation. It has also helped me to understand my own prejudices & thought patterns.

Further, linking this to artificial intelligence and reducing the patterns to programs can help to further refine the framework. Using studies from emergent behaviour or modelling of a probabilistic systems of interlinked events (a system in which events are not definite but probable, and occurrence of any one event has the potential of affecting the probability of all other events in the system) around this could prove to be interesting.

Thursday, September 24, 2009

The Will of a Policy





The basic principles that define a company are generally codified into a policy document so as it can be institutionalised over time. These basic tenets help companies to reuse experience (something like design patterns in computer programming) and define a course of action for different situations. Nothing can replace a pro-active, thinking manager. Nevertheless, such a document helps to promote uniformity and makes various company decisions, appointments and promotions appear more transparent and rational. It can also serve as a reference point in times of trouble and internal feuds. However, over time there is a serious danger that the map may become the prison if it is not flexible enough to accommodate the changes in the landscape, so to say. The day a successful company thinks that it has found a "Golden Rule" to succeed, it is doomed to fail sooner or later. There are plenty of examples that show this, the most significant being that of General Motors.

So, I was thinking what can be done to prevent this. As any management book will tell you, flexibility is of paramount importance and there is no final word on improvement. To actually implement this in spirit is another matter. The recent attempt by regulators to make bank write their living wills gave me an idea. Wouldn't it help if every policy point also attempts to define the circumstances in which it should be scrapped off gracefully, lest it sticks around like a troubling, evil relic that nobody understands. Effectively, I want every policy point to not only write its will but also a suicide note. A policy can also attempt to define the thinking behind it and possible scenarios when the recommended line of action may not be the best one. The language has to be very direct, clear and reasonably simple; a grade 10 should be able to make some sense out of it without contradictions. This would prevent misuse and misinterpretation. It is inevitable that better ways will be found to do business, technology will impose fast changes and that there will be potential for growth in the future. Old markets will die, new will come up. Good people will come to organization and there will be some rotten, lazy apples as well. Transparency, fairness, speed and flexibility are the only defence, we are often told. But unless this is put into concrete words of policy and then put into action, they are not likely to mean anything to anybody.

Another thing to remember while making policies is that the world exists in shades of grey. So, it is good to be skeptical about any thought that irrevocably ties you to either black or white. A bipartisan solution is often the most balanced one. Another thing to keep in mind is the cyclical, unpredictable nature of things: what is bad today can be good tomorrow and vice-versa. The same ball that gets hit for a six by a batsman in cricket can get him clean bowled as well. The trick, then, is to use all your experience to watch every ball keenly and play it on the merit of the ball with perfect timing(So easy to say and yet so few that are able to do it with perfection). Management decisions are no different.

With these points in mind, this is how I would like to define the policies for my company. And I hope I will be doing it soon.

Tuesday, September 22, 2009

Finding Merit


This year I read two books by Ayn Rand- "The Fountainhead" and "Atlas Shrugged". Very beautifully (and bitterly) written. A considerable amount of depth is evident in every word written in these two books. Nevertheless, like most extreme view points, these books fail to capture the complexity of human society. At the same time, they do raise some key questions that we can ignore only at our own peril.

Let me start with what I agree. I agree with the importance of work, the value of ability against need and justice against charity. I concur with the view that collectivism can promote mediocrity and that many do try to ride on the back of few who produce and create. However, I do not agree with a simplistic view of the world that demands enlightenment from everybody. It completely ignores the fact that the world essentially runs on principles of power and opportunism. You cannot wish it away or solve it magically.Moreover, every argument has two sides. Overall, things are much more complex and the solutions are ever more so elusive.

Many people believe that Ayn Rand stands for capitalism. I don't think so. A careful read will convince you that she damns any system that asks people to discard reason, merit, independence, or happiness. She denounces every system that does not value ability or forces one man to live for another. I think that this can easily include most of the known systems of government except Meritocracy (rule by merit). Hence, I feel Ayn Rand stands for Meritocracy and not an exploitative Capitalism. Once we can see this, it is easy to see that all the problems inherent to a state built on tenets of Meritocracy apply to Ayn Rand's philosophy. Interested reader should read about Singapore to understand the advantages and disadvantages of such a system with a practical example.

I feel that most of the systems of government can succeed, provided certain conditions are met. However, only a few have managed to actually succeed in actually enriching the life of its citizens, maintain peace and provide meaningful progress. Too theoretical or puritan frameworks tend to degenerate more easily. Hence, Communism without fail degenerates into dictatorship while Aristocracy often degenerates to Plutocracy and so on. Meritocracy falls just in between the extremely theoretical and the viable. Provided the country can establish an objective scale of merit that takes into account education, practical experience and practical results achieved into consideration; it is possible to make a meritocracy work. Otherwise there is a genuine danger of it degenerating into a Plutocracy (rule by money) or Oligarchy (rule by elite). Till somebody goes on to establish such a framework (and a country), capitalistic democracies remain our best bet for the better or the worse.

Finally, I think that the same principle can help one make a model corporation. In fact I feel that if a country is run like a well-run corporation, the result would be a true meritocracy.

Wednesday, August 26, 2009

Questions

Perhaps a man's lifespan is insignificant in the life of the universe. Perhaps he is puny and conveniently forgotten by Gods and Devils alike in one small corner of the galaxy. Perhaps he deliriously dreams of worlds beyond and lives in an inconsequential bubble of his own making, an illusion severely limited by his senses and knowledge. Perhaps.

In this random jungle unmistakeably governed by the rules of power and cause-effect, I live with what I have and strive to grow and learn. Beyond that I don't really see anything. I know that answers come to the one who is not in a hurry to either get them or drop them. So I wait and work with infinite patience, hoping someday I will completely understand the matrix of this world. I don't know if I will find the answers, but I know that I will never give up. My unshakable faith, spiritual Master and unyielding strength of mind are my only true allies. Hubristic Complacency, meaningless laziness and all-consuming despair are my only true enemies. In this game of uncertainty only change is certain.

I cannot live a meaningless existence, so I strive to create meaning from what I know. A meaning that can rationalize my efforts in face of imminent death and give me satisfaction right this moment. This moment is all I have, even though I am told I am forever. I just try to hold to what I can understand and use it to augment happiness and purpose in equal measure.

I also think if it is possible to be bound and yet free; like free-range cows left to roam the pastures but to be ultimately slaughtered to satiate somebody's hunger? Its fate is better than the cow confined to dirty pens for most of its miserable life and slaughtered anyway. The end, however, remains as grisly and unforgiving. A creature dependent on small mercies of its masters. Are we cattle too? Creatures enslaved for their limited productivity, creatures ready to live a second-hand existence out of fear, ignorance, helplessness or peer-pressure? I hope not..

Even if I have nothing, I still have the will, the hope and the spirit. With them I move and with them, I believe, one day I will find all the answers.

Thursday, August 20, 2009

The Nomura Game

Reading an article on Nomura's efforts to radically change its culture and absorb people from Lehman got me thinking. From whatever I have read/experienced about either management or leadership, the effort looks doomed to fail miserably. Nomura is clearly thinking "the best of both the worlds", but all I can see is a "fall between two stools".

On one hand Nomura is trying to change the culture of its own employees from top up. As far as I know, the Japanese society is very hierarchical and people respect "elders", every member is expected to respect his role in the chain. By removing seniority as a defining factor and bringing in performance related pay Nomura seems to be moving in the right direction from corporate point of view. However, that does not mean that it will not create any resentment. I am not sure to what extent these decisions were debated company-wide to cushion their impact. The current facts indicate that they were not.

On the other hand it is trying to absorb the talent it bought from the remains of Lehman. Most of Lehman people may find the culture almost as alien as the Nomura employees may find the Lehman culture disagreeable. At the end who can leave will leave, which means Nomura risks loosing the best of its current AND Lehman employees.

From pure management and leadership point of view, I feel it violates three key principles.

First, it is trying to fix something that may not be necessarily broken. It is worth noting that Nomura was able to buy Lehman only because it had been conservative. If it wants to change to "Lehman" culture, the current employees are well within their right to question the sensibility of the decision.

Second, instead of building two distinct, decentralized units Nomura is trying to have one quick merger of two entities that are poles apart. It is like General Motors deciding one fine day that Chevrolet and Cadillac would be made by one unit to achieve economies of scale and share best practices. At best it is going to be problematic, at worst catastrophic. There are better ways to achieve the same result.

Third, it is not making enough effort to overcome the pretty evident communication gap between the two units, accentuated by the language and cultural differences. Without that the decisions, however well thought, will look like enlightened despotism and further alienate people.

Overall, Nomura has got itself in a tight spot. Although the basic thought process has been correct, it looks like that the implementation will run into problem due to lack of communication and lack of consideration for the cultural differences. Nevertheless, I feel that the situation is still not beyond redemption and if addressed right away can help Nomura immensely.

Sunday, August 2, 2009

Master of My Destiny

A man's life may be a dream, and his dreams a dream within a dream. The existence may be a futile, never ending conviction. The world moves on with a promise of balance and fairness that manifest in equal opportunity for good and bad. In the short term life seems to be rigidly ruled by rules of power, uncertainty and change. The change that consumes everything and anything. Yet in the long term it is non-changing and boringly cyclical. Such is the nature of the balance it promises.

Through this evanescent life of mine I try to extract a meaning that can appeal to my short-term selfish self and the long-term divine whole. Something that gives meaning to me as I am. The futile play and display of consciousness? Whatever. If I am played with, I play in return. At least I try to. So, I move with the prayer of St. Assisi in my heart and a stubborn determination to make the best of it. To strive to be the master of my mind and my destiny.

Tuesday, July 21, 2009

Numerology

Whats with numbers? Subjects like astrology, numerology, palmistry etc. tend to evoke wonder and disdain in equal measure. For most part, people ignore them as something that may be useful but is essentially inaccurate. Far worse, some see it as means to exploit and fleece the mentally weak. All these views have some degree of truth to them.

As a science student, I do not rule out anything without trying it myself objectively. With this view, I started exploring various occult sciences from the age of 15. This was inspired by a chance meeting with an astrologer who described many things about me pretty precisely by just looking at my birth chart. I found the whole thing interesting as I saw it an excellent tool to understand myself and the people around me.

Astrology is pretty complicated, either by design or by accident. In essence, I could make out at least 144 distinct elements that can combine in different proportions to give different personality outcomes. I guess it simply reaffirms that every individual is unique. Nevertheless, there are some basic temperaments and approaches towards life, and some basic ways in which people of different temperament would react to others & the environment.

Interestingly, the occult science essentially means that you should be able to derive the same results no matter which route you take. It can be by reading the palm, numbers, vaastu or even the forehead. It all depends which omens you can read, but the omens will match. I don't think it is humanly possible for anybody to accurately predict the future due to so many uncontrolled variables involved. Perhaps a "Krish"(the movie) style super computer which can correlate each of the variables with supreme accuracy will one day show us the future. But for now, the various omens simply point towards a direction and can only help you to understand yourself and your environment in a better way. Beyond this, if anybody promises you anything, be skeptical.

In the same vein, I have studied Numerology and supplemented it with observation, intuition and correlating with other omens I can read. I do not claim to have all the answers, but I can give you some questions to think about and work with if you have an open mind.

Friday, July 3, 2009

Easy Answers

What do you want to know? What? Why is it that I want easy answers to difficult questions? Elementary my friend: they seem easier and worth a try. Moreover, adaptation is painful and virtue is an unaffordable luxury. So we live for today with least concern for tomorrow. If not this, there are always easier answers to find.

What? Change? Well, it is a good thing. I have been telling my neighbour to change and forgo his greedy nature. I tell you people, short-sighted pigs they are. What? Me? How dare you suggest that?! I deserve this privilege, I was born with it. My ancestors have made the sacrifices and it is only fair that I get the due. What is to be changed here? You must be my neighbour's agent. Tell him he cannot escape from his responsibilities! Better get going before I have you disposed off!

Friday, June 26, 2009

IT Management Practices: Involving the Team

I have an experience that I feel may be useful to share. Till date, I have worked on two excellent new product development projects and it has been a wonderful learning experience. However, each team had its challenges. Since I do not want to name the companies or the managers, let us say I am talking for company Alpha and company Beta.

Both companies are technically very strong. However, company Alpha had to put together a team to develop a rich Internet web application when RIA as a concept was pretty new. This initially led to ambiguity in terms of experience and possibilities, but the manager ran a tight ship and delegated responsibility. The whole team was encouraged to develop skills and participate very closely at every stage - including interviewing, requirement gathering and architecture. This ultimately led to technical skill development, team bonding, growth of all team members and decent execution of the project. The stress and responsibility were evenly divided, but there was no doubt on who was leading the pack. Leadership was inclusive and far-sighted.

Company Beta, on the other hand, had significant experience with web applications and RIA was relatively known by this time. So they could hire the people with right skills and there was less ambiguity to start with. But the structure was more hierarchical and the manager less keen on sharing "power" across the board, giving less influence to team members on requirement gathering, designing or interviewing. Of this, for me, the most difficult part was not being included in requirement gathering. Working with a requirement document may be the norm in big companies, but for entrepreneurial setups it is absolutely critical to be involve the team closely. This can save a lot of time down the line lost to bugs resulting from misunderstood requirements. Moreover, such involvement creates more urgency, creates an aura of responsibility and gives additional perspective to the whole process. This can be critical in long term.

Ultimately, both companies managed to launch a good product. Nevertheless, Alpha is playing for the long term - trying to nurture second rung of leadership - while Beta will increasingly get dependent on one row of leadership with a big vacuum below. In the long run, it may indeed make a difference between great and good, and would be another testimony to Jim Collins.

Thursday, June 25, 2009

Iran's regime can learn from China and Libya

Iran is increasingly finding itself facing intense criticism and an unsupportive populace. The Revolutionary Guard have been firm and the Government's propaganda machine is in overdrive. Yet the tensions simmer.


In my opinion, if the current regime wishes to maintain its vice-like grip on power, it has two examples to copy.


The first is China. It survived Tianamese Square with decisive, brute force - the world opinion be damned. Nevertheless, the repression could not have been successful without a plan to either integrate or neutralize the aggrieved groups effectively. China's growing economic might and propaganda also helped.


Libya, on the other hand, made a U-turn on its policies and re-built its bridges with the western powers, including the "Great Satan". Its bargaining chips were, of course, oil and building the right public image for the leader. Colonel Gaddafi has carefully crafted a statesman like image using a mix of impossible sweet talks (like United States of Africa) and oil money. The logic is simple: nobody may cry for you if you are thought of to be Saddam Hussein-II. Nevertheless, behind the facade Libya remains as dictatorial as ever. In fact, riding on back of current economic crisis and oil money, they (along with Chinese and Middle Eastern funds) have gained a significant influence in the world market.


Iran's regime can do a bit of both if it really wants to achieve its ambition of retaining power and dominating the world stage. In fact, with its large oil reserves Iran can become an oil super-power displacing Saudi Arabia and Libya (in terms of influence). Iran should know that West doesn't give two hoots about democracy as long as it is profitable. After all, the West does deal with China, Libya and Saudi Arabia. And are Burma and North Korea less oppressed than Iraq? A pity they are not oil rich. Nuclear weapons et al will come if Iran can phase out its problems and take them one by one using diplomacy, money and stealth.

Monday, June 22, 2009

The Fibre of Stability

A recent article in FT about China and the conundrum that it presents to the democracies of the world got me thinking about quite a few things. A few days of serious thinking has yielded some interesting results.
People like to believe that historically capitalistic democratic societies have been the most successful, prosperous, stable, free and just ruling political systems in the world. Stability and prosperity have been the two most important selling points in the quest of exporting democracy. After all, communism never managed to deliver its promises, fascism was a disaster, theocracies have proved to be repressive, most erstwhile socialist countries were marching towards progress (until this recession) by adopting capitalism and monarchies are all but in name now. Democracy never had it better. That is, if we can forget Iraq.
The only exception to this rule is China. The way the Chinese economy is growing; by 2050 it will be double the size of that of a democratic USA. It is also a fairly stable country with an excellent infrastructure and a very shrewd, pragmatic & ruthless foreign policy. All the wishful thinking of China's demise remains that- a wishful thinking. What went wrong?
Nothing, if you ask me. I feel that it is too early to judge the "stability" of capitalistic democracies as they are pretty young. Generally, stability and prosperity can be achieved by any system (democratic or not) if it has:
  • a strong & reliable succession mechanism agreed upon by populace(democratic or otherwise)
  • a strong armed force & intelligence wing
  • natural resources plenty enough to survive and scarce enough to not cause complacency (and not attract marauders looking for a quick buck at your expense)
  • fair and fast law system
  • strong infrastructure and encouragement for education
  • power blocs (judiciary, armed forces, intelligence, legislature, Prime Minister, President, King) that are divided enough to be controllable and united enough to be useful
  • open trade and clever, disguised protectionism
  • enough propaganda to instil a feeling of nationhood
  • ability to deal with adversaries decisively and intelligently
  • and finally, full coffers
Ultimately, the discussion about leadership and politics is out of scope and I cannot possibly address all issues. My point, however, is that capitalistic democracies need to look beyond their self-righteousness if they wish to find an answer to the Chinese conundrum.

Cracking the GMAT

3 months, many sleepless nights, 82 essays and 30 practice tests. Worth it? Yes. Every bit of it. GMAT is not the only thing that you would need to make it to your dream business college, but it can help. At least I hope it does! My learnings from the GMAT for you. Of course these are my views and may not work for you. But I will be glad if they do!
  1. I feel GMAT is a test of will rather than any special skill. The questions are not especially difficult after some practice, but it is challenging to maintain your focus at its highest level throughout the test. The only way to do make focus better is to take as many practice tests as you can. Besides the one you will get from your test material and GMAC, you can buy some from www.800score.com
  2. If you have the discipline, there is no substitute for self-study. Buy all the material you can, but the best material that you will get is from GMAC itself. Kaplan and Princeton will not hurt either. But keep your hands off Barons, bad book. Will waste your time and confuse you.
  3. I went overboard with 82 essays, but it does not hurt to at least brain-storm as many topics as you can with your friends
  4. Nobody is going to come from the business school to meet you personally at the test venue; do yourself a favor and go in the most comfortable dress you can find.
Hope that helps. Cheers!

Friday, March 27, 2009

Motorcycle Sales

The following appeared as part of an article in the business section of a local newspaper:

"Motorcycle X has been manufactured in the United States for more than 70 years. Although one foreign company has copied the motorcycle and is selling it for less, the company has failed to attract motorcycle X customers - some say because its product lacks the exceptionally loud noise made by motorcycle X. But there must be some other explanation. After all, foreign cars tend to be quieter than similar American-made cars, but they sell at least as well. Also, television advertisements for motorcycle X highlight its durability and sleek lines, not its noisiness, and the ads typically have voice-overs or rock music rather than engine-roar on the sound track."

Discuss how well reasoned . . . etc.

The presented article speculates about the reasons behind the success of motorcycle X, despite it being copied by some foreign company. This is speculated to be because of the exceptionally loud noise made by the motorcycle. However, even though the article tries to find alternative explanation, it goes ahead to reason based on the premise that its speculation is,in fact, correct. Further, it tries to compare the sales of indigenous cars to foreign cars, completely ignoring the fact that the foreign cars are not necessarily a copy of American cars. Neither does it take into account any differences between the target audience for cars and motorcycles.

Initially the article tries to articulate a reason behind the success of motorcycle X in face of it being copied and sold at a lower price by a foreign company. The reason is said to be the exceptionally loud noise made by the motorcycle by some of the users. By the article's own admission, it is the viewpoint of some and not all (or even most, for that matter). The source of the data is not clear and hence the certainty attached with it is not warranted. To its credit, the article does cast a doubt on reason and states an intention to look for an alternative explanation. To its discredit, it goes on to base the argument on the reason that itself put to doubt, hence basing the examples and arguments around noise. By doing this it also completely fails to explore an alternative reasons (like better quality or brand value) behind the sales.

Further, the comparison used to illustrate the point is invalid as it does not address the same situation: foreign cars are not necessarily a copy of American cars. The foreign motorcycle, on the other hand, is a direct copy of its American counterpart. When motorcycles look essentially same, the end-user can compare everything feature-by-feature easily. Moreover, the target audience would also be similar. For cars the choice may not be that easy with the given parameters. Comparing a Mercedes to a Hummer or a Porsche is simply not possible as they are three different genres of cars. The choice may depend on if the person wants a luxury car, a land rover or a sports car rather than any other feature.

Finally, the article does not take into account the difference in expectations of a motorcycle buyer and a car buyer. While it is possible that a motorcycle buyer may be looking for brash, youthful, loud vehicle; a car buyer may be looking for a luxury vehicle as a status symbol. Since they may not be looking for the same thing, equating their buyer expectations may not lead to correct results.

Concluding, the presented article is logically flawed on many counts. In order to appear stronger, it needs to at least present a more relevant analogy besides actually exploring reasons behind success of motorcycle X. Otherwise it risks appearing poorly reasoned, hypothetical and incomplete.

Professional and Personal Fulfillment

"It is difficult for people to achieve professional success without sacrificing important aspects of a fulfilling personal life."

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.

There are no free lunches in this world. To gain something, one has to often loose something else. The same is true for professional success;it is hard to achieve it without sacrificing important aspects of a fulfilling personal life.

A fulfilling personal life needs enough time with the family, daily exercise and some time for leisure. However, there are only twenty-four hours in a day. Success demands persistent hard work, focus and vigilance. In fact, the more one becomes successful, the more responsibility one gets. Not only that, success also has the potential to attract all the wrong kind of people to one's life: it may be a gold-digger, a jealous rival who  or a fraudulent charity. This demands higher level of vigilance and takes its toll on the successful individual. 

A pertinent example I can think of is a report that I read in a health magazine on the rise of occurrence of diseases like high blood pressure, cardiac arrests, asthma and depression in young, working professionals. This is attributed to rising stress level in the fast-paced working environment of today. As individuals compete to out-perform the other in a zero-sum game, the entire focus shifts to  getting ahead. This leaves people with very less time with their family or themselves. Hence, when professional fulfilment takes precedence, personal fulfilment is often the first casualty.

Even if I had not read the report, my personal experience would have led me to reach the same conclusion. A friend of mine and his wife were two successful professional in the investment banking and sales sector respectively. While the husband worked long, unreasonable hours; the wife had to travel frequently across the country. As they wanted to grow in their respective careers, they also decided to delay having a baby. Over the years their interaction fell down drastically and now they are also facing a problem in conceiving a baby. The situation is so bad that it is likely that they may divorce each other. It is a clear example of how the pursuit of professional success often entails sacrificing important aspects of a fulfilling personal life. 

Concluding, I completely agree with the stated opinion. Obsession with the rat-race of achieving professional success often involves forgoing other things: personal fulfillment. This is not something that is planned, but is a consequence of having fixed number of hours in a day and the desire to excel professionally in today's fast-paced environment. 

Monday, March 23, 2009

A Language Course

The following appeared in an article in a college departmental newsletter:

"Professor Taylor of Jones University is promoting a model of foreign language instruction in which students receive 10 weeks of intensive training, then go abroad to live with families for 10 weeks. The superiority of the model, Professor Taylor contends, is proved by the results of a study in which foreign language tests given to students at 25 other colleges show that first-year foreign language students at Jones speak more fluently after only 10 to 20 weeks in the program than do nine out of 10 foreign language majors elsewhere at the time of their graduation."

Discuss how well reasoned . . . etc.

The presented article aims to promote a model of foreign language instruction. It tries to achieve this by presenting the results of a study. However, it fails to talk about either the source or the methodology of the study. It also fails to address possible cost-handicaps associated with a course that involves living abroad for 10 weeks. 

The cornerstone of the reasoning is the result of the study conducted. Hence, it is extremely important to know how effective and authentic the study is as strength of the study will essentially determine the strength of the argument. If it was conducted by Jones University, its neutrality is questionable as the tests may have been designed to favor its own students. On the other hand, if the study was conducted by a neutral third-party, it would make the study highly credible.

Further, the background of students chosen for the test is also important to know. If they had a reasonable level even before they started the course, it would be unfair to compare them to students who were absolutely new to the language. The level of students on which the study was conducted has to be at a reasonably same level for the study to be credible.

Finally, the proposed programme involves staying abroad for 10 weeks. This may make the programme prohibitively expensive when compared to other programmes. A proper cost analysis is important to determine how much more a student may need to spend to complete the programme and whether such an investment is warranted. Sending students abroad may be a good way to teach them, but they should be able to afford to do it as well.

Concluding, the presented reasoning is flawed in some ways. In fact, it looks like a marketing gimmick undertaken by Jones University to promote its course. If Professor Taylor wants the article to be credible, he can do so by clarifying the source and the methodology of the study and whether his programme would inflate tuition cost significantly. Barring, all prospective students should take the presented arguments with a pinch of salt.

Disappearing Courtesy

"Courtesy is rapidly disappearing from everyday interactions, and as a result, we are all the poorer for it."

From your perspective, is this an accurate observation? Why or why not? Explain, using reasons and/or examples from your own experience, observations, or reading.

Courtesy used to be the hallmark of a gentleman or a lady, a mark of good upbringing and a way of respecting fellow human beings. Unfortunately, with each passing day such courtesies are abandoned in favour of a more direct and brash approach. Such a transition has indeed left us all the poorer for it.

Courtesy is to daily life as punctuation marks are to writing. Without them many, an interaction seem abrupt, confusing, unsolicited or downright rude. For anybody who has been a victim of road rage, air rage or someone in hurry to save a few seconds, the loss is self-evident. A discourteous society is a danger to itself and is stressful to live in. 

Courtesy is not just a sugar coated pill that is just "good to have": it can have a significant practical effect on the day-to-day life of people and businesses as well. Every year companies loose revenues and man-hours to discourteous employees who make the work-environment tougher. A discourteous population is a sure-shot way to kill tourism and local happiness alike. It is no surprise, then, that countries like Singapore have even gone to the extent of undertaking National Courtesy Campaigns that aim at making the populace more considerate towards each other and hence make the society a better place to live in. All this has gone a long way to project Singapore as a business friendly and safe place around the globe. Similarly, the British have long been envied for their flawless, polished politeness and, hence, seen as master diplomats. The position London enjoys in the international circuit is partly attributable to that.

Saying "please" is a recognition that we need help. Saying "thank you" acknowledges that somebody has taken out time to do something for us. Cutting someone to get ahead in line may save a few seconds, but is a blatant disrespect of people's time and sensibility. Respecting each other's space and time, while adopting a less selfish and less greedy attitude, can go a long way in cutting down tension, improving productivity and encouraging happiness. In fact, I would go as far to say that the ever-growing incidents of shooting rampages that the US suffers is a case-in-point of the falling level of respect for human life. The current President of US, hence, deeply stresses on "respect" when dealing with foreign relations.

Concluding, courtesy is indeed disappearing rapidly from everyday interaction. This in turn is pushing down human values, friendliness and compassion. Even when the immediate results of such changes may not be evident, over the long run it increases tensions and make societies rude and unlivable. The loss is not just moral but has practical ramifications in form of mental anguish, loss of productivity, deterioration of work atmosphere and loss of business. 

Friday, March 20, 2009

Improving University

The following appeared as part of a recommendation from the financial planning office to the administration of Fern Valley University:

"In the past few years, Fern Valley University has suffered from a decline in both enrollments and admissions applications. The reason can be discovered from our students, who most often cite poor teaching and inadequate library resources as their chief sources of dissatisfaction with Fern Valley. Therefore, in order to increase the number of students attending our university, and hence to regain our position as the most prestigious university in the greater Fern Valley metropolitan area, it is necessary to initiate a fund-raising campaign among the alumni that will enable us to expand the range of subjects we teach and to increase the size of our library facilities."

Discuss how well reasoned . . . etc.

The recommendation traces the cause of decline in the number of enrollments and admission applications to the feedback from students that the university has poor standards of teaching and inadequate library resource. This methodology relies on current students rather than prospective students, while the suggested solutions are meant to attract new students rather than improving the "learning" experience of the current students. Further, only one method of fund-raising has been cited;there is no reason to simply believe that it would indeed be the best method. Finally, it is not clear that how increasing the number of subjects taught may lead to better teaching.

It is clear that the Fern Valley wishes to attract more students and re-vamp its brand image. Although the existing students may be able to tell the failings that they have experienced first hand while studying, such issues may not be obvious to people seeking fresh admissions. Hence, a survey that takes account of why students did not choose Fern Valley University may give a more useful insight into the university's perceived weaknesses. Similarly, a survey about the reason why the currently enrolled students chose the university may be helpful in understanding what prospective students look for in a University. Understanding current students' grievances may also help in the long run, but it is in no way a comprehensive set of data on which the university may base its plan of action.

Further, initiating a fund-raising campaign among the alumni is the method proposed to raise funds. Although credible, the reasoning neither attempts to explore alternative ways of raising funds, nor does it specify if the proposed method would be able to generate enough money in time. Why wouldn't it be better to raise money from, say, Government funds for education, educational charities, donations from trustees or some form of financial re-structuring? I feel a proper analysis of each method should be done so as the most reliable and cheap method is recommended.

Finally, it is implied that expanding the range of subjects taught will be able to address poor teaching. The logic behind the correlation is baffling. Is it hoped that simply increasing the number of subjects would lead to a miraculous improvement in teaching standards? In order to address poor teaching the university may need to recruit better teachers, train existing staff, get better teaching equipment and use new media, like computers and videos, in order to enhance the teaching experience. How increasing the number of subjects alone will improve the teaching is not clear at all.

Concluding, the presented recommendation is flawed on many counts. It uses insufficient data to derive arguably faulty conclusions. It also fails to explore alternative ways of raising funds and hence does not logically support the suggested method. Not only that, even one of the recommendations to address the ill-founded conclusions does not correlate convincingly with the deduced problem.  

Thursday, March 19, 2009

Science, Arts and Humanities

"Since science and technology are becoming more and more essential to modern society, schools should devote more time to teaching science and technology and less to teaching the arts and humanities."

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.

Science and technology have revolutionized human existence. Right from invention of the wheel to the Internet; science has continuously changed the way human beings live- for the better or the worse. Today, science is so hopelessly entwined with our lives that to imagine an existence without it is extremely difficult, if not downright impossible. 

However, making schools devote more time to teaching science and technology and less to teaching the arts and humanities can be an overzealous, misguided obsession with science. In fact, it is akin to slitting the golden goose that lays golden eggs in hope of getting all the eggs at once.

Science has no place for subjects like political science, business administration, product design and graphics. Science may make life better, but it does not teach people to deal with practical realities of life. Science is an essential building block of life. It is not, however, the only important part. Absence of arts and humanities has the potential of having a destabilizing influence on the society as a whole and may derail the progress of science itself. Ignoring them can be, hence, as catastrophic as ignoring science. 

A key thing to remember is that, historically, business and military have been the driving force behind technology. Without patronage of the Pentagon, the world would not have got either databases (Oracle) or Internet. Similarly, businesses and governments contribute more to technology than technocrats themselves. This brings in a stark reminder: however important technology may be, it is essentially a strategic tool in hands of people who can see life beyond the confines of a laboratory. And such people are not necessarily from science background. A good example is that none of the US Presidents that I can think of were either engineers or scientists, including our current President. This should be enough to convince most people that scientific education alone is not enough to build a modern, prosperous society.

Talking about arts, arts are a testimony to success of science and not a rival to be wiped off. As advances in science make life easier, people find more time to pursue art. The science also contributes to and enriches arts continuously: the mediums to express art have grown to include  paper, cloth, canvas, glass and , now, even computers. Arts make life enjoyable after science has made it livable. Promoting one on the expense of the other is neither advisable nor desirable. Imagine having a world without Sistine Chapel or Taj Mahal, without the music produced by Vivaldi, Mozart and Bach and without the mysterious smile of Mona Lisa. It would indeed be a dull world. 

Concluding, I do not agree with the stated opinion. Even though science is important, its importance cannot be overemphasized. The essence of life is balance, where each element has a unique place. Science depends on other disciplines as much as other disciplines depend on science. Hence, devoting more time to science on cost of arts and humanities can be an egregious decision.

Environmental Credit Plan

The following appeared as part of a plan proposed by an executive of the Easy Credit Company to the president:

"The Easy Credit Company would gain an advantage over competing credit card services if we were to donate a portion of the proceeds from the use of our cards to a well-known environmental organization in exchange for the use of its symbol or logo on our card. Since a recent poll shows that a large percentage of the public is concerned about environmental issues, this policy would attract new customers, increase use among existing customers, and enable us to charge interest rates that are higher than the lowest ones available."

Discuss how well reasoned . . . etc.

The proposed plan aims to help Easy Credit Company in gaining an advantage over competing credit card services by donating a portion of the proceeds from the use of the company's cards to a well-known environmental organization in exchange for the use of its symbol or logo on the company's cards. This argument is essentially based on a survey. The source of this survey, however, has not been made clear- putting into doubt the authenticity of the survey. The argument also assumes that the measure will not only attract new customers, it will also increase card usage and allow Easy Credit to charge higher interest rates. In the process, it completely fails to  cite the reason why people would increase usage of the cards or if higher interest rates may actually prove counter-productive by having unintended consequences. 

Taking the issues one at a time, the first in line is the survey that is the cornerstone of the whole argument. The credibility of the survey depends a lot upon the organization that conducted it and the methodology employed to achieve the same. If the survey was sponsored by the "well-known" environmental organization, the neutrality of the survey may be seriously questionable. On the other hand, a survey by a neutral, well-known third party may prove to be extremely credible.

Secondly, even though it may be fair to assume that such a policy may bring in some new customers, one is left to wonder how it would increase card usage? Can a company's policy change cause its customer to become a bit more reckless with their finances? Possibly: nothing is impossible. Nevertheless, it may help if the plan establishes the basis of this assumption more clearly: did people who said that they are concerned about environmental changes also asserted that they would not only support environment friendly products but will also increase usage and put up with incompetent interest rates? May be not.

This brings us to the assumption that this policy would allow the company to bring in new customers  and over-charge them as well.  A lot of current customers, who may not be that environmentally sensitive, may be lost to competition if such a change was made; such customers would not even have a far-fetched incentive to either increase usage or put with high rates. The resulting loss  of competitiveness and revenues has not been factored in the argument. Hence, The assumption is not only ungrounded, it also assumes that such an action would not have any unintended consequences.

Concluding, the presented plan is logically flawed on many counts. Before implementing it, the management should try to find more about the survey and examine if the suggested measures would indeed result in a competitive advantage. If implemented as it is, the plan risks loosing revenue and current customers in hope of winning more revenue and new customers.

Wednesday, March 18, 2009

Importance of Teamwork

"Businesses and other organizations have overemphasized the importance of working as a team. Clearly, in any human group, it is the strong individual, the person with the most commitment and energy, who gets things done."

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.

Have businesses and other organizations really overemphasized the importance of working as a team? Who really gets things done? A strong-willed individual or a team? I feel that such an emphasis is not unwarranted and totally justified: working in a team is of paramount importance. 

The basic reason that the team is important is that you cannot run a business or an organization alone- no matter how brilliant, strong or talented you are. True, it is often an individual who thinks of an idea or who pushes through revolutionary changes. There is no substitute for brilliance. Nevertheless, lasting success comes to a business only if all the stakeholders contribute and feel valuable. Moreover, any robust business or organization cannot afford to be dependent on any one individual if it has to deliver value consistently. One also needs to remember that an organization needs several talented people to work in unison to achieve any kind of success. For example, an organization may need engineers, accountants, lawyers, product managers, sales professional and marketing professionals. It is not possible for one strong individual to be able to either do or drive all of these functions alone.

A good example I can think of is of Mr. Thain, the erstwhile CEO or Merrill Lynch, about whom I read recently in Financial Times. The investment bank hired him as they thought him to be a capable leader as he had turned around NYSE. He tried to raise funds based on his personality and projected himself as the "face of the company". Although the strategy worked initially, it upset many key team members who thought they were working as hard and deserved recognition. This finally culminated into his key executives resigning from the company. Further, Mr. Thain's autocratic decisions caused significant losses to the organization. Finally, Bank of America acquired  the company and Mr. Thain was soon dropped unceremoniously (after he refurbished his office of $1.2 million). The incident clearly shows the pitfalls of not being able to work in a team and being dependent on a brilliant but headstrong individual. More often than not, the personal hubris of such strong individuals leads to the downfall of the business. Then, why should the businesses not overemphasize the importance of team work?

Another example that is relevant is of Microsoft and Apple. One can argue that one talented designer of Apple has produced more beautiful products than a hundred industrial designers of Microsoft. True. What is also true, however, is that Microsoft has been a more successful organization than Apple. Even without Bill Gates, Microsoft has ploughed on. Apple, on the other hand, may find it tough to survive (like it did) without Steve Jobs. Relying on one single individual is not a good thing for a company.

Jim Collins in his book good to great emphasizes on having "leaders" and not just one strong "leader" if company has to succeed. After spending more than five years in the corporate world, I could not agree more. Works of art, consulting or may be even being a lawyer may absolve certain professions from giving any importance to team work. However, if one is working in a business that needs more than one kind of people to operate, success is not possible without teamwork.