The Purpose of Business

"EVERYONE LIVES BY SELLING SOMETHING." Robert Louis Stevenson, the Scottish traveller and writer, once concluded. In the knowledge industry of the modern era, the selling could be of — an idea, a change, an example (PoC), an influence, a model. The logical outcome of which is value creation. Which further translates into profit or benefits of various kinds at different levels of its hierarchy.

Peter Drucker had a different view. Creating profit didn't seem to him to be the main goal of an enterprise. While advocating for Not-for-profit organizations, Drucker observed that there are obvious limitations to making continuous profit-making business models. According to him, to be responsible and relevant in the society, a business model could make profit that is equal to its cost of capital. However, if the goal of the business model is to create a customer, that could possibly provide a sustainable model for existence of a business.

Taking this argument a notch further, FT columnist Michael Skapinker suggests that, like leaders and people, business indeed is in the business of gaining respect:

Some are lucky enough to fulfil the highest of Maslow’s [top need from his psychology theory of the hierarchy of needs], self-actualization, at work. All sorts of people find true fulfilment at work – software developers, recording artists, even auditors. But it is a lot to ask from a job. Others, perhaps most people, hope for work that is reasonably interesting, and indulge their true passions – singing, hiking, wine-tasting – on the weekends.

The best businesses are good at providing a sense of belonging. But belonging can be transient. Businesses succumb to competition and disappear. Or technological innovation makes them redundant. No doubt the photographic darkroom was a companionable place to work; so was a travel agency. There is less need for them now.

I suspect it is Maslow’s second highest need – respect – that people most crave from work: respect not just from their colleagues but from the world [...] and it gets us closer to what business is for: making profits and serving customers by doing something we can be proud of.

[Emphasis added.]

• See also:
• Go here for more on Maslow’s psychology theory of the hierarchy of needs.
• Go here for the full article at FT.

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Sach Is Life!

SACHIN RAMESH TENDULKAR of India scores the first ever double-ton in an One-Day International Cricket match against South Africa on Feb 24, 2010. He remained unbeaten.

"Sach Is Life"

Here are the statistics of the legendary 20 year career of the Master Blaster; here is a short biography; rest of it is Supremacy.

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"Jugaad" - More Than A Fad?

BusinessWeek RAN A STORY LAST MONTH that focused on "Jugadh" and termed it as the new mantra for innovation. Colleagues and clients not too familiar with the Indian culture tried seeking second opinions on the word. Observers commented on the topic from the world over. Some compared the term with Quality techniques such as Lean and Keizen - doing more, with less. Others saw it as the new Agile. Jugadh or Jugaad was considered by the Economist as the latest cost-cutting technique in Asia. WSJ wrote that Jughad is the primary reason why Indian economy remained insulated in the recent Global economic down-turn. Someone else commented that ISB at Hyderabad conducts special workshops to tool executives with Jugadh, also citing the inclusion of the term in the management consulting arsenal. The original title of the article looked at "Jugadh" as the next big export from India.

After due considerations and with due respect to all the views, "Jugadh" is a fad of a business model on the face of hard-core and global requirements for sustainability. To put is into the right perspective, it is rather unfair to model Jugadh either as a new form of innovation or as a path breaking and business changing technique.

The Hindi word Jugadh or Jugaad (de: जुगाड़) literally means a noun referring to an improvised or jury-rigged solution. Wiki traces the root of the term to the farmers of northern India employing indigenous ways to make use of the domestic small diesel engines for multi-purpose transport and similar make-shift usage. There are indigenous ideas like these which can be categorised as Jugadh, but they are by far a minority. In the broader sense of the practical life, however, Jugadh can be described as what Bear Grylls does on his reality TV show "Man vs. Wild" on the discovery channel: some cleaver survival tactics, a desperate measure but with some spin of intelligence, the basic human instinct of improvisation over the most rudimentary of the tools. That is Jugadh; a poor desperate man's innovation, where: Dependence on luck or accidental favours is too great; Against the rewards the risk is usually too high; And measurability, predictability, controllability and repeatability are too low. And it does not matter who opens a "Jugaad" office in Electronics City, in Bangalore.

I am not sure if Tata Nano is the right example of a Jugadh - it just happens to be one very cheap car from India. Neither it is fully agreeable that people in India are risk-averse - historically, India has one of the most risk taking trading and entrepreneur communities in the world. Likewise, considering Jugadh cleaver without appreciating the risks associated with it is but a mistake. A "Jugaadoo" arrangement - by its very application and circumstance, is only a temporary measure. A hope, if you may, largely thanks to Darwin, of doing better by using inherent human intelligence while the resources are scarce. And then, there are ethical issues when short-cuts and cutting of corners become integral parts of "Jugaad-ovative" solutions.

• See also:
• Related article: Santa's "Jugaad" over Euro tunnel project.
• Related article: Catch Phrases of Consulting.
• Image courtesy: outlookindia.com.

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HBR: Managing Oneself - by Peter Drucker

HISTORY'S GREAT ACHIEVERS - A NAPOLEON, A DA VINCI, A MOZART - have always managed themselves. That, in large measures, is what makes them great achievers. Addressing the knowledge workers in the new economy, Peter Drucker goes on to emphasize the needs for personal development, stating that they must, effectively, be their own chief executive officers in taking the responsibilities of developing their own careers; beginning by saying:

We live in an age of unprecedented opportunity: If you've got ambition and smarts, you can rise to the top of your chosen profession, regardless of where you start.

As the first of the series, the presentation that follows - within a max of 10 slides - captures the essence of Peter Drucker's legendary paper "Managing Oneself", which he published while stepping into the new century at the turn of the millennium.

Peter F Drucker - Managing Oneself

• See also:
• Go here for the full article at HBR website, and go here to try it out at Amazon
• Go here to download this presentation from slideshare.net

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Welcome 2k10

Happy New Year!

And

Welcome 2k10

PS:

1. And, by the way, 2010 = 1+2-(3-4-5)*6*7*8-9
2. Now that the hype is done and soberness returns, here is an interesting one on new year resolutions at The Economist. Here are some of the most anticipated Hollywood films in 2010.
3. Here is a nice graphic at NYT capturing the past decade, and here is a text version of 200X’s at Foreign Policy blog (apparently, both with a pinch of 'merican vanity).
4. Among technology predictions for 2010, here is one on "wisdom of crowd" at CTO blog.
   
5. For mindgap.in - There was this plan to do a three-part series on best of Peter Ducker over the holidays. While the first part was almost done around X'mas, turns out there were no holidays after all, and the plans were to be deferred. (Also, see point 2 above)
   

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"What would Peter do?" – A Tribute at Drucker Century

PETER F. DRUCKER WAS BORN IN AUSTRIA IN 1910, and would have completed a century this past Nov '09. It was celebrated all over by "Duckerites", among which one IIM professor said - if you have some time that you want to spend in a gainly manner then simply flip open any of Peter Drucker’s books and start reading. “Classic Drucker” was at an arm's length at that time and was worth giving a try. Apparently, the prof was right. What follows now is a brief intro before the main business.

Originally, an investment banker from London, Drucker was first published in German in 1930. He then went on to write 39 books on management and wrote editorial for WSJ for 20 years. At the height of the financial chaos, one WSJ issue carried his picture on the front page titled "What would Peter do?" – as if the question was being put to, if you may, a body of knowledge collectively known as Peter F. Drucker.

Drucker was also titled "the father of modern management". His writings have remained remarkably relevant up to and beyond Y2K era, at times touching daily life; his lessons in leadership and managing change offered a very fresh thinking; his passion towards non-profit organizations were of a true spirit; his “predictions” of corporate events such as fall of General Motors – which he actually helped build in 1950's, make him stand ahead of his time. Same as most of visionaries, perhaps. But if one is looking, there is a pattern to be found in Drucker’s digests – the advices pertain to the fundamentals, they encompass overall entropy of the system and urged to find solutions by referring to the organism’s inherent nature, and they were kept simple, brief and generic at times by cleaver wordplay.

What shall follow is a three-part series wherein some from Ducker's best of articles would be featured. A humble tribute [update] starting with Managing Oneself where Drucker sets goals, objectives and responsibilities for the Knowledge Worker.

• See also:
• Series article: Managing Oneself - by Peter Drucker

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Best Performing CEO's and Why MBA's Are Paid Higher

A HARVARD TEAM OF ORGANIZATIONAL DEVELOPMENT consultants did a sampling of nearly 14 years covering 2000 Chief Executives of global companies listed by S&P. The sampling and tests were fairly exhaustive and unique, and presented a vivid picture of the Executive boardrooms that saw many major global economic events including the Y2K IT burst, Oil-price surge and dive, and 2007 economic down-turn, among others. Though the headline making "attribute" of the published list came out highlighting that the first three of top 5 best performing executives in the world do not have a formal degree in management. Three of the top five are connected to IT industry, and the other two are from petroleum and energy sector. Broadly, four out of 10 successful leaders in IT and six out 10 in energy sector do not possess such formal b-school education.

Overall, there are less than 30% of the top 50 listed chief executives having any formal management degree. The top 5 have total industry experience of about 30 years. And there doesn’t seem to be any trend suggesting that having an MBA correlates with (or compensates for) lesser industry experience.

Basis the media coverage of this HBR story, I did a small poll among peers of taking their opinions on the study, and one common question that I had for all was – what is the "special" expectation from a management grad from top management institutes. After all, this skill-set does command a certain premium over compensation and designation in the job market. Interestingly, alumni of these institutes could provide but a very sketchy and rather tentative reply. Whereas responses from non-MBA managers and professionals were found to be more thought-through.

As a personal point-of-view within the premise of making of an effective leader, the three key specialities in order of their importance that must be expected from these executive (management grads from primer institutes) are:

1. The ability to influence the work parameters
2. The ability to survive in and surpass non-conducive, and at times hostile, situations
3. The ability of effective and dynamic role-play and role-changes

Ability to Influence: Given the set of rules and roles, constraints and commitments, goals and objectives, the problem definition is analyzed. The ability to influence these problem statement parameters (and success thereof) is the value-add that the executive can bring to the table. Negotiators are high-influencers and negotiators are a sort after folks similar to these executives. This should not imply however that all executives should be negotiators; it is important though that most of the activities in addressing the problem definition would involve various levels of negotiations by the executive. It is also important to become an influencer before becoming a decision-maker.

Survive and surpass: The ability to survive in and surpass non-conducive and hostile situations directly correlates with the executive’s ability to stand-up and face challenges and adversities. Simply put, it is the attitude of the executive of not giving up and keep trying, and keep trying different things. (The expectation also arises from the fact that the executive has already surpassed trying conditions of cracking the entrance exams of premier institutes, and then has survived the onslaught of a tough curriculum.) The condition is the training. And the expectation is to have that training extended to the live working environment for the benefit of the project at hand.

Dynamic Role-play and "Seasoning": The top spot of the hierarchy is a summarization of all the roles beneath. A hands-on leader has a clear advantage over a theoretical one in practical situations. Organizations, by design or by default, provide opportunities of taking on various roles in varied capacities. "Seasoning" or Role Maturity is a parameter by which role change is judged, initiated and calibrated. It is also a very effective personal assessment tool by which the executive can identify personal strengths and work on weaker areas. While on one hand this ability is personality driven (where certain individuals may pursue a specific vertical growth is a defined area), versatility indeed is what separates successful top-spot holders from the rest.

• See also:
• Related article: NRN-Percepts of Being a Respectable Leader.
• Go here for the article at (new) HBR website.
• Go here for why Steve Ballmer of Microsoft might have missed any mention at all in the list.

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Leadership Speech of 'Guru' Greg Chappell

Greg Chappell at Mysore, Nov'09 [Source: self]

BRIEF, ARTICULATE, NO-NONSENSE, ALL-BUSINESS 'Guru' Greg Chappell has a pleasantly lighter side to his otherwise tough-guy personality and the young Indian crowd of Software professionals at ILI, Mysore got the rare pleasure of interacting up close and personal with the Australian cricket legend during his leadership speech last week.

Greg Chappell is a master tactician from southern Australia – apart from being the captain of Australia Test squad like his grandfather and elder brother, his illustrious career also includes joining breakaway leagues, fighting off nude opponents on the pitch, and the historically forgettable under-arm delivery that Greg as the then captain of Australia instructed his younger brother Trevor Chappell to deliver as the final ball in '81 against NZ at MCG.

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Indian Nodding and TED India

THE FIRST EVER TECHNOLOGY, ENTERTAINMENT, DESIGN (TED) EVENT IN INDIA drew to a close this afternoon at the lavish and state-of-the-art technology campus of Infosys at the Indian city of Mysore - about 120km south of Bangalore. It was an adrenalin pumping experience, and it left so many feeling spent at the end of four days. Absorbing a torrent of ideas condensed in a time-capsule is a demanding event for the creativity centre - glucose consuming frontal cortex of the human brain.

After all, TED may be the new religion. For generation Y + X.

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Consulting and Creative (un)commons

Santa and Banta submitted the tender for digging the second underwater Euro Channel Tunnel connecting England with France and continental Europe. This was perhaps the first time that a bid for such an extreme engineering project was coming from India, and apparently so it raised a few eyebrows and steered interest. An outsourcing relationship with India was not a new thing, but bidding for second Euro tunnel - that had got to be special...

Mr. Santa and Mr. Banta, the proprietors of Santa Banta & Co., were also among the main invitees to present their ideas describing their technology, tools, budget and time-lines to the consortium presiding over the project. As it turned out S B & Co had the lowest quotation, the shortest time-line for the project, the simplest possible plan and most straightforward execution using the most standard of tools: Santa would take one team (of a few hundred thousand labourers) digging from England towards France, and Banta would do the same from the opposite direction. The consortium was now specifically interested in the technology that S B & Co would employ like Global Positioning GPS for estimation and co-ordination of their efforts and meeting midway through the English Channel.

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Change, Catch Words of Consulting II

Continuing from the previous post, following are a few more Catch Words of Consulting:

Q x A = E : Quality of Solution x Acceptance = Effectiveness of Change. Q is good most of the time. The Key differentiator is Acceptance and Adaptability for a successful Change management.

Passive Resistance: is nodding the head, but not actually going to participate in change; civil disobedience of a personal kind; dragging the feet with a smile.

Planning vs Plans: D. Eisenhower once said, "In preparing for battle I have always found that plans are useless, but planning is indispensable." Planing is so important that PMBOK devotes the largest of its five process groups entirely on planning.

• See also:
• Related post: Change, and Catch Words of Consulting I

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Shubh Deepavali

Shubh Deepavali
A warm wishes to you and your family for
A Happy and Prosperous Diwali

The Festival of Lights of India - illuminations, oil lamps, firecrackers, colourful lanterns, rangoli mandalas, bright clothing, sweets, feasts, and festivities with families and friends.

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Change, and Catch Words of Consulting I

"CHANGE IS THAT BIG FAT PINK ELEPHANT that drunkenly roams around this large organization, stamping on people, without anyone having any idea what to do about it." This is how the elderly consultant illustrated in his concluding report to the senior management of [an organization] that was undergoing post-Outsourcing blues. (Do notice elephant as a hidden reference to India as the low-cost location.)

It indeed was a significant experience to participate in a professional forum in Australia with such Consulting veterans and alumni of the global consulting 'Big 5' sharing their vivid experiences.

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Malthusian Matters(?)

GOLDMAN SACHS PROJECTS THAT India’s middle class will outstrip China’s by 2045. This is some 15 years after half of China’s population becomes either too old or too young to be part of the workforce.



Perhaps instant-ness of contemporary life induces a certain myopia. Social media - twitter, FB, and other "self trumpets" - may make one feel that 2045 is too far away to be bothered about. And perhaps that's true for some as well, those who would want to die out soon, but 35 years is a fairly short turn around time by economic standards.

Malthusian Matters (pun intended), and stands nonetheless to see another day, another argument.

• See also:
• Go here for more on Malthusian catastrophe.
• Go here for more on this interesting article at Reuters.

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Mind the Gap and Business Technology

"MIND THE GAP AND THE ACCIDENTAL TECHNOLOGISTS" is the topic on which Andy Mulholland wrote an interesting note recently, and I so wish if this were a guest post on this blog, if only for the namesake.

Highlighting 'the gap', as he puts it, Andy describes the misalignment of Technology focus with Business needs. The problem is rather recent, cropping up only from 90's, because before that, nobody actually bothered. The flexibility of IT introduced by leaps and bounce of advances of the recent decades is the reason for this widening gap because previously the rigidity of how computer systems worked almost ensured that business accepted what (MIS) system owners dictated.

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HBR: Short Overseas Assignments

HOW SHOULD ONE REPLY TO THAT seemingly casual email detailing titillating offer of servicing the client from onsite or onshore location for a few weeks or months to take the project to the next big level? The short answer is, reply by sleeping over it a couple of days, especially while one is been-there-done-that category. The recent HBR research article however goes on to urge you to deny it flatly.

It is apparently less costly for the company to push for short-termed, employee-only transfer compared to a two-year global assignment having a settled designation for the similar tasks. The research running for a couple of years shows that these propositions are riddled with marriage troubles, depression, child behaviour issues, and other difficulties.

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Peter Principle and Promotions

Peter Principle: "Every new member in a hierarchical organization climbs the hierarchy until he/she reaches his/her level of maximum incompetence." [try here for more]

IT IS PARADOXICAL, SOUNDS UNREASONABLE, AND DEFIES COMMON-SENSE. But that is how it works, realistically and evidently, for any hierarchical organization where the way of promotion rewards the best members and where the competence at their new level in the hierarchical structure does not depend on the competence they had at the previous level, usually because the tasks of the levels are very different between each other. Since about 50 years ago when a Canadian psychologist named Laurence J. Peter published his studies to this effect in 1969, there has been many changes in the way organizations and it workforce operate in relation with each other. There has been multiple experimental models across various industries, including Role-based organization, Competency-based designations, (A fusion of sorts of these two), flat-structures, circular organizations, and alike. Peter principle seem to have remained steadfast among all of these nonetheless.

In their study published a few days ago on Organization Efficiency titled "The Peter Principle Revisited" Prof Alessandro Pluchino and two other colleagues of the Universita di Catania of Italy argue that the long term consequence of Peter principle seems to imply an unavoidable spreading of the incompetence over all the organization and would be in danger of causing a collapse in its efficiency. The team presents a numerical study of Peter principle (arguably for the first time) which they presented as "agent based model" of managing organization efficiency.


[Above: Agent Based Model -- The computational study of the Peter principle process applied to a prototypical organization with pyramidal hierarchical structure having 160 positions across 6 levels. On a lighter note, a colleague recently came up with his idea on the progression within the pyramid structure that the "lighter" the person in terms of work-load, the "higher" she floats towards the top of the pyramid.]
The "Common Sense strategy" is to promote the most efficient person up the hierarchy. However, the study argues that the best strategies to improve, or at least not to diminish, the efficiency of an organization, when one ignores the actual way of competence transmission, are those of promoting an agent at random or of randomly alternating the promotion of the best and the worst members.

Providing alternatives to the CS approach for promotions, the study illustrates two alternative strategies inspired by Peter Hypothesis wherein either a random person is promoted (incidental, which is also in line with Game-theory), or the best and the worst persons are promoted alternatively.

• See also:
• Go here for more fun with Dilbert Principle.
• Go here for the research paper "Peter Principle Revisited" at Cornell Uni Library.
• Go here for MIT Technology Review blog "Why Incompetence Spreads through Big Organizations"

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Mushroom Theory Leadership

Mushroom Management Theory: Keep employees in the dark and fearful, feed them manure and dung, watch them grow and when they grow enough, get them canned. (try here for more at urban dictionary)

IN QUITE A CONTRAST TO THE PREVIOUS post on model leadership, this is not only a different type of leadership, it is found being practices widely as well. Referencing their publication for this month (June 2009), John Landry of Harvard Business Review writes that Lehman would not have happened if they would have allowed a freer flow of information, or made it easier for employees to raise their concerns. Industry observers have drawn parallels of Lehman explosion with implosions of Enron and WorldCom citing the same "keeping in dark" issues where information is not shared.

But before that, a brief 'story':

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NRN: Percepts of Being a Respectable Leader

Americanism means the virtues of courage, honor, justice, truth, sincerity, and hardihood; the virtues that made America. The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living and the get-rich-quick theory of life.
-- Theodore Roosevelt

NR NARAYANA MURTHY OF INFOSYS delivered the opening lecture at Columbia Business School's Khemka Distinguished Speaker Forum at Manhattan on May 26, 2009, where the above quote from Roosevelt were the closing lines.

Mr. Murthy began by describing Capitalism as an economic system in which investment in and ownership of the means of production, distribution and exchange of wealth is made possible and is maintained chiefly by the private individuals or corporations. It is a system that incentivises individuals to use their enterprise, drive, hard-work and innovation to create wealth for themselves and the society.

Mr. Murthy argued that capitalism is also a system most conducive of creation of jobs and elimination of poverty and no other social or political system has succeeded as much as capitalism in benefiting the society at large. Providing his reactions on the issue of things going wrong with capitalism in recent months - especially the disproportional funds and bonuses claimed by executives of organizations going bankrupt, billions worth of fraud funds, and leaders cooking up accounting books - Mr. Murthy, who was declared by The Economist in 2005 as one of the top 10 most admired global business leaders, called for looking inward and for cultivating better ethical qualities to become a respectable leader. Following are the eight of them as he recounts.

Percepts of being a Respectable Leader:

1. Create a good culture around you: Decent behaviour stems from a good culture surrounding a person. It is required to have the culture of openness, fairness, honesty, decency, transparency and accountability in a corporation. This task has to start from day one, and can not wait till you become a CEO.

2. Cultivate simple and inexpensive habits: The best way to overcoming greed is to derive pleasure and spend time on small, simple and inexpensive habits in life. Every decent town has a modest library. And, the government (still) does not tax having a good conversation.

3. Do not equate success with money and power: Success is your acceptance by the circle of you family, friends, your officemates, and your community that you are indeed valuable. Success is also about having good sleep every night.

4. Create an environment of happiness around you: A happy leader has a circle of supportive family and friends. Building such a circle requires a lot of emotional investment on your part. I do not know of anybody who is a demon at his office and an angel at home.

5. Don't get fixated on extreme desires: Desire is the root cause of all sorrows, said the Buddha. Extreme fixation with material things leads to greed, fraud and acts that we would later regret.

6. Shun jealousy: Jealousy is a rationalization of your failure vis-a-vis another's success or achievements.

7. Maintain transparency and develop a sense of humility: When in doubt, disclose (with your family, friends and at workplace). Humility is admitting that there could be other people better than me, and helps cultivate team-spirit.

8. Take part in charitable activities in your spare time: The opportunity of meeting other generous people outside the hierarchy of your organization is a sure way of escaping the orbit of jealousy.


[Above: NR Narayan Murthy delivering speech at Columbia. Go here at YouTube.]

• See also:
• Go here for the related article on Columbia website.
• Go here for more on Mr. Murthy on the official Infosys website.

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Books: Beautiful Data and The Passionate Programmer

Beautiful Data: The Stories Behind Elegant Data Solutions
by Toby Segaran and Jeff Hammerbacher (try here)
Looking forward to his book which is due in July 2009.

The 39 contributors of the book explain how they developed simple and elegant solutions on projects ranging from the Mars lander to a Radiohead video.

Some of the topics include:

• opportunities and challenges of datasets on the Web
• visualize trends in urban crime using maps and data mashups
• challenges of data processing system of space travel
• crowdsourcing and transparency helps drug research
• automatic alerts when new data overlaps pre-existing data
• massive investment to create, capture, and process DNA data

The Passionate Programmer: Creating a Remarkable Career in Software Development
by Chad Fowler (try here)

Chad Fowler argues here that your career in Software has to be a personal enterprise. And this publication from Pragmatic Bookshelf is one of my picks for the new engineers joining the Software industry, and who come for advice (and expects me to fortune tell for them :-)

This book is about creating a remarkable career in software development. In most cases, remarkable careers don't come by chance. They require thought, intention, action, and a willingness to change course when you've made mistakes. Most of us (including me to a larger part, and most of those that I know personally) have been stumbling around letting our careers take us where they may. While the uncertainty is not entirely avoidable, Fowler argues that it can be controlled, and this book aims to lay out a strategy for planning a possible successful life in software development.

Success in today's IT environment requires you to view your career as a business endeavour. This book tries to teach how to become an entrepreneur, driving your career in the direction of your choosing. Fowler talks about building your software development career step by step, following the same path that you would follow if you were building, marketing, and selling a product. After all, your skills themselves are a product.

• See also:
• Related post: Some from the Bookshelf.

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