Spiritual Intelligence and corporate life

कर्मण्ये  वाधिकारस्ते  मा  फलेषु  कदाचन
मा  कर्मफलहेतुर  भूर  मा  ते संगोस्त्व  अकर्मणि

These words from the Bhagavad Gita were first spoken by Lord Krishna to Arjuna at Kurukshetra. They roughly translate to: you contol your actions, but not their more remote consequences. So take the remote consequences off your mind, act, and fulfill your sacred destiny.

These words were also the theme of a corporate leadership development program I was at earlier this week. A bunch of successful and well-compensated executives spoke to us developees about how leadership is about service, about having a bias for action, and not obsessing about moving up the corporate ladder. Absolutely. Following the blockbuster success of Emotional Intelligence, Amazon is now selling a book on Spiritual Intelligence.

Yeah, right…but this program was not naïve. It recognized that the developees cared about money. After all, these were people in corporate jobs. The program advised setting very specific goals on how much wealth one wanted to build.

This advice, from Jack Weber at the Darden School in Virginia, was based on an interesting longitudinal study done by Harvard Business School. The study sampled a class of HBS MBAs at graduation. It asked the graduates to rate how much they cared about money on a scale of 1-10. It also asked them how much they thought their net worth would be in 5, 10 and 15 years. The answer to the second question could also be “don’t know”. The study then went back and measured the net worth of these graduates in 5, 10 and 15 years. The finding was that the first question had no predictive power: the MBAs all cared about making money. The second question was a strong predictor of future net worth, with the people who didn’t know what they would be worth performing even worse than those who had put down modest targets. As an aside, I would love to know if the students with the highest wealth expectations also had the highest variance in wealth outcomes, because of having made lower probability bets (I couldn’t locate this study through googling).

A third perspective on careers that emerged came not from the faculty but from a fellow developee, chatting after work. Her boss had told her, “Our company is an ocean with many currents running through it. The key to success is to find a current that will become as big as the Gulf Stream, and to ride it.” This makes even more sense if company were replaced by industry or society. Some realpolitick here: how does one respond to mundane work that moves the company forward, but is unlikely to grow into a career-enhancing Gulf Stream?

Maybe staying sane is about balancing these perspectives. Or maybe it is about these elements coming together: ride the Gulf Stream to get wealthy, which enables the generosity of spirit needed to think in terms of मा कर्मफलहेतुर भूर.

Dissociative Identity Leadership

Companies are like people. Other things being equal, companies which do well believe in themselves. They carry vivid images of victory, they fiercely belive success is their destiny. On the other hand, companies which fret about failure usually succumb to the fielding flu and fail.

Yet, the opposite is also true. My friend Greg Pye, the famous and profound management philosopher, writes here about the importance of staring into the abyss and looking for ways in which things can fail. This is an essential part of planning, both for putting defences (or plan Bs) in the right place and in setting expectations.

Balancing these necessary evils, faith and scepticism, is one of the hardest and most universal problems of leadership. Every healthy organization needs this split personality, or dissociative identity.



The simplest solution is to locate these faculties, and the associated sub-cultures, in different departments. This works fine in organizations of thousands of people, despite the friction between departments. But it is hard to do on a smaller scale, say at a cricket club or on a film crew.

The Six Thinking Hats technique popularized by Edward do Bono is also useful. It involves containing the sceptical imagining of failure within a contained area, called Black Hat thinking, before moving on to creative Green Hat thinking or optimistic Yellow Hat thinking.

My discontent with the Six Thinking Hats is with the assumption that faith - that sense of destiny - is the product of thought. It is not. It is an emotion. It is produced by thought, sure, but also by a whole lot else. I find that the more useful way of balancing faith and scepticism is to remain rooted in the emotional state of faith, even while working through the cognitive process of scepticism.

PS: John Kotter essentially wishes away this problem by labeling the faculty of faith as Leadership and the faculty of scepticism as Management. This is worse than useless, because "leaders" are paid a lot more than "managers". This tilts the playing field away from scepticism, and exagerrates the natural cognitive bias towards optimism.

PPS: The original title for this post was Schizophrenic Leadership. But wikipedia tells me that, despite the etymology, Schizophrenia is not about split personalities. It is about distorted perceptions of reality, typically hallucinations. People with split personalities have a dissolute identity disorder.

Another characteristic of great leaders... learning all the time :)

On Leadership

I will admit to a blush of embarrassment at blogging about leadership; on no other topic have so many people expended so many words to say so little.

However, having attended a leadership development workshop recently, the group I was with came up with a compact definition of leadership that feels useful enough to share.

What is the purpose of leadership: to get people to do things that they otherwise would not

What do leaders do: they listen, speak and centre

In this context, “centre” has a specific meaning. It means the psyche is located at the centre of the body. A centred leader is calm and purposeful. Leaders don’t rage or panic, except intentionally.

What I like about this definition is that it is profoundly situational. Good leadership is defined almost entirely by context. I find this situational take on leadership a lot more useful than the definitions in the standard readings.

Consider this much quoted article by John Kotter, which makes a distinction between management and leadership: “management involves planning and budgeting, leadership involves setting direction”.

This is sometimes true. There are situations where the ship is running well, but doesn’t know where to go. In which case, it is important to choose a destination.

There are also many situations when the desired direction is bleeding obvious. The hard part is to actually get the ship to move in that direction. At times like this, the task of leadership is management. The truth is often closer to "amateurs talk strategy, real generals talk logistics".

Boars, Bears and Core Competencies

Being an omnivore is a winning strategy for bears and boars. Does the same logic work for business corporations?

Most management thinkers like corporations to be specialists (like anteaters) rather than omnivores (like boars or bears). CK Prahalad and Gary Hamel, the Core Competency gurus, usually advise businesses to stick to their knitting, do what they do best, and buy the rest on the market. This is not an especially new idea. Think back to Adam Smith’s pin factory or David Ricardo exhorting Portugal to stick with making wine and buy English cloth. Specialization leads to efficiency, which raises productivity and therefore incomes.

But are specialists too fragile? If one wants to think about businesses as institutions which are meant to be resilient to the madness which sometimes infects markets, maybe boars and bears are better role models than anteaters, hummingbirds or cheetah.

Video game or adventure?

"Bosses complain that...Net Geners demand...an over-precise set of objectives on the path to promotion (rather like the missions that must be completed in a video game)." Thus spake the Economist about Net Geners, or Generation Y, those born in the 80s.

The Economist is, as usual, not untrue but a bit harsh. Many people born in previous decades, including me, have thought in terms of "mission accomplished, so I'm entitled to a promotion". But the metaphor, career as a video game, is apt.

In today's economy, the video game no longer works as advertised. Missions accomplished are being quickly replaced by even more arduous missions to accomplish. But the promotions and bonuses to sweeten the journey, which were a part of the deal, are no longer happening. This heightens the angst in the zeitgiest, we all feel like smashing our broken Nintendos.

So, it was refreshing to hear a different metaphor on Radio 4 last week.

Sean B Carroll describes the careers of biologists following in Darwin's footsteps; these careers were not games but adventures, defined by both spirit and deed. Carroll picked this phrase, adventure being defined by both spirit and deed, from CW Ceram, who wrote about "archaeology as a wonderful combination of high adventure, romance, history and scholarship".

This spirit of adventure - with its acknowledgment that every career is a journey into the vast unknown, where the familiar rules no longer apply, where one will make fast friends and combat appalling evil, where there is the possiblity of both spectacular success and awful tragedy, a journey which is essentially a journey of the spirit in which the greatest challenge is to find truth and integrity - this spirit of adventure is sadly missing in corporate life.

Can this spirit be introduced? Individually, yes. A lot of this spirit probably does exist, in private. But institutionally? Maybe...though I'm not about to ask the HR staff to inject the spirit of adventure into my workplace.

Grabbing the SKU Rationalization bull by the horns

The day after Pongal is mattu Pongal, literally cattle Pongal. The idea is to thank the cattle for their help with the harvest. The cattle are fed sugar cane, which is a nice alternative to hay. They are decorated with flowers and bells, their horns are painted, and they are proudly paraded through their home towns.

Asian Paints, India’s leading paints brand, markets small cans of paint in festive colours during the Pongal season, targeted specially at the horn-painting market. Cool. This is the work of India Inc., woven right into the fabric of Indian life.

Except... extensive googling earlier today reveals no evidence that this Pongal SKU (stock keeping unit) actually exists.

I first heard this story about twenty years ago from my father. My dad was a marketing professional; he was probably trying to impress on his teenage son that marketing is cool, and in that mission he succeeded. Is there a version of events that could make my dad’s story not only successful, but also accurate?

Perhaps 20-25 years ago paint was mixed in centralized factories, packaged in cans, and then distributed nationally. This would have meant managing a system with literally millions of colour * can size combinations. Today, pigments and a paint base are probably distributed independently, and mixed and packed at the point of sale. So the farmer painting a bull’s horns can now buy a small quantity of paint, in the colour of his choice, at a retail point in the local farmers’ market....

Or maybe painting contractors re-sell the small sample cans they get free from paint companies to wholesalers, who in turn bundle these small paint cans into special Pongal packages, which include sugar cane stalks, flowers, new clothes, luridly illustrated religious calendars, and cans of paint, to sell at local farmers’ markets.

Either way, the one thing I’m pretty sure of is that the work of India Inc. is woven right into the fabric of Indian life. Asian Paints did try to build this Pongal connection into their brand identity with this excellent TV commercial. Enjoy.

Amateurs talk strategy. Real generals talk logistics

Here's the Economist on the last lap of the Obama-McCain campaign in Pennsylvania, a vital swing state.

...Obama has 81 field offices across the state, many in places where Democrats have never competed before, compared with Mr McCain’s three dozen...

...The McCain office only had a couple of people working the phones when The Economist visited. The young man who was in charge had no idea that Mr McCain was in the state that day. The Obama office, by contrast, was crammed to the brim and hyper-organised. There were plenty of older people sporting “Hillary sent me” badges as well as younger Obamaphiles. The walls were covered with charts telling people where they had to be and when. After dark, it was still buzzing with volunteers. The McCain office was closed...

There's the glimmer of an interesting theory here: winning elections is not about policy, performances, or even mud-slinging. All that is just noise that keeps the commentariat busy. The real business of winning elections is about logistics, keeping the show rolling on the ground. Politics is about Sales, not Marketing.

This may also be the real reason why the Congress, India's Grand Old Party, is now a shambles. It's not the failure of Nehruvian socialism or any such grand theory. It's probably about the about the slow tactical melting away of the grass-roots organization, of the Congressman in each village, of the great sales organization that was built up during the freedom struggle.

Working hours

Found a interesting natural experiment on culture at my workplace.

As a manager, my approach to working hours has always been laissez faire. I'm fine with members of my team working whatever hours suit them, as long as commitments to colleagues are kept. Some people come in at 7:30 and wrap up by 4:30. Other come in at 10:00 and work till 7:30. Still other, like me, frequently do a second shift between 9:00 and 10:30 after the kids are in bed. This works just fine.

I recently discovered that my successor at the department I used to run until early 2007 has a different approach. He expects people to be in at 9:00. And he shoos home the laggards who're still working at 5:30. And while the panache and elan that this department had in my time are missing, this approach also works well enough. There isn't one right answer here.

However, the two right answers produce interestingly different selection effects.

My laissez faire approach tends to favour ambitious people willing to work long hours to get ahead. Other things being equal, people who were willing to put in 70 hours a week instead of the typical 50 would achieve more and be rewarded for that achievement. And I did observe a handful of people who were ravenously hungry for success choosing to burn their weekends at work trying to get ahead.

Under a more rigid 9:00 to 5:30 culture the ambitious can't catch up with more talented, knowledgeable or likable colleagues by sheer dint of hard work. Preventing over-long working hours is sort of like a price-setting mechanism in a cartel. People who work too many hours would be "punished" by an external or superior enforcer.

As a result, one would expect people with boundless raw ambition to self-select out of the organization. The culture would increasingly reflect the choices of people with ambition, but who are less willing to make personal sacrifices for the sake of ambition.

Nothing wrong with that. But over time, it does produce an interestingly different culture.

Manners for the Mangalam

To close out the thought from Shaping the Beast ...how would the Music Academy in Madras use design to discourage people from leaving during the Mangalam?

Here are five free suggestions. Without my usual consulting fee of $350 per hour :)

1. Lighting. Reduce the amount of light in the hall, especially in the stairwells, to make it hard for people to move in and out easily. Maybe even make the stairs slightly uneven, so one needs the light to walk comfortably

2. Symmetry. Make it mandatory for people to be in their seats before the concert starts. Lock the doors and don't let anyone in even slightly late. That makes it more natural for people to stay in their seats until the concert ends. For this to work, the artists also need to start and finish their concerts at specific times

3. Transport. Get people to park in a lot a mile away. Run a good bus service from the concert hall to the parking lot, with buses leaving immediately after the concert. People don't have a reason to leave before time

4. Ergonomics. Buy (or design) chairs that are comfortable to sit on for 150 minutes. The chair should ideally support the neck and arms, allow for plenty of wiggle room, and breathe. The pokey, folding contraptions usually supplied by tent-houses in Madras are a no-no

5. Food. A great thought stolen from Vishnu's blog. Serve soggy, over-priced sandwiches in cellophane wrap, like they do at the Kennedy center, instead of delicious idlis and vadais with piping hot coffee. Nobody will ever go to the canteen

Did Disney Invent Happiness?

Just attended a class at work on how to be a better coach. My employer wants to make sure younger analysts get really good at writing code for regression models and making snappy presentations to management. This class led to my thinking: Walt Disney deserves more credit than he generally gets for humanity's increasing happiness.

Where am I coming from? Or, what am I smoking?

The truism that effective coaching hinges on is that positive visualization works. Asking the coachee to avoid the silly stuff is counter productive. "Don't spill the milk" puts an image of spilt milk in the coachee's mind. The psyche is very good at taking these mental images and making them come true. So the injunction "don't spill the milk" almost inevitably leads to spilt milk, despite positive intent all around.

In cricketing terms, a good coach doesn't say "don't fish outside the off stump". That inevitably results in more slip catches. A good coach says "hit through the line". He wants the batter to have a vivid mental image of good batting.

John Wright, India's cricket coach in the early 2000s, was brilliant at this. Rahul Dravid is one of India's most gifted but psychologically weak batters (Rahul thinks too much?). Wright compiled a video montage of Rahul Dravid batting at his best, and made Rahul watch it before he went out to bat, most famously in Australia in 2004.

Ravi Bopara has a similar take on why winning is a habit in today's cricinfo.

"It makes a big difference to how you play when your team is winning. Then as a player you think less about it. You have that mentality that you are going to win every time you walk out. So you can go out and express yourself..."

The same process plays out in more important contexts than management presentations, drinking milk or hitting cricket balls.

Dr. Eric Berne, a psychotherapist who became famous for Transactional Analysis (TA), later developed TA into a more complete concept he called life scripts.

Dr. Berne's simple idea was that people passively and unconsciously internalize stories about the way their lives will play out, often when they are young or vulnerable, and spend their entire lives fulfilling that script. People who carry a visual, visceral sense of their own life-story featuring themselves as winners tend to be winners, in whatever sphere. Equally, negative life stories are self-fulfilling, even when (or maybe especially when) they are subliminal. Tragedies waiting to happen. This is interesting to a clinical psychologist because re-writing that subliminal script might change people's destiny.

Miguel Sabido is a Mexican film maker who tries to use soap operas, telenovellas, to re-program whole societies towards better lives. Here is the New Yorker's take on Sabido. It includes a thrilling passage on how The Bold And The Beautiful helped change attitudes to AIDS in Botswana.

These aren't new ideas. Religion is embedded within mythology for precisely this reason.

So, coming back to Disney. Generations of children have watched avidly, in a semi-hypnotic state, while princesses marry handsome princes, children go on adventures and return to their loving parents, and baddies get punished. No irony, no moral ambiguity, no confusion. Result = children programmed to live happy lives.

Would the world be materially different if Disney hadn't given happy endings to the gruesome Hans Christian Andersen or Grimm brother's versions of the same fairy tales? Yeah, I think so. Thank you Walt.

Shaping the beast

Where does culture come from?

I found myself arguing on my blog that culture is a given. More specifically, that corporate cultures are deterministically shaped by underlying economics. Companies, great companies, get good at the stuff that sits in their economic core and build rich cultures that celebrate and enhance that core. Even great companies remain mediocre at pretty much everything else, and have weak, transactional cultures in non-core areas.

I have also found myself passionately arguing on my friend Vishnu Vasudev’s blog that culture is malleable. The music lovers of Madras can be trained to sit in their seats until the concert is over. There is nothing about Madras or its culture that prevents this basic courtesy from taking hold.

Do I really believe both ideas? When is culture malleable? When is it diamantine?

Rattled the options around in my head over pints of Grolsch at Canal House last evening. Came up with a list of three culture-shapers. Economics and leadership were the usual suspects. The surprise candidate, the one I like most, was design.

Incentives shaping culture is obvious, to the point of being anodyne. It probably is the one thing Marxists and Chicago school liberals will agree on. The point worth remembering is that soft incentives - prestige, tribal membership, reinforcement of identity, shame, inertia - these are often more powerful incentives than explicit money.

So, incentives work. What else? Leadership? On no other topic have have more words been expended to say less. Naw, please. Lets not bring that cheezy, nutritionally-deficient, management jargon into this blog :)

More seriously, leadership can be transformational. Authentic leadership is rare, and can be an amazing experience for both the leader and led. I'm a huge fan of what Saurav Ganguly did for the self-belief of the ~20 Indian cricketers who played under him. Saurav and John Wright really did change the culture of the Indian cricket team. Dhoni (more than Kumble or Dravid) carries the torch Saurav lit.

But, unfortunately, authentic leadership depends on personal chemistry, which doesn't scale.

In larger organizations, leaders tend to reflect cultures more than they shape them. Strong cultures are very good at self-selecting clones. At best, change-leadership in large organizations (or even nations) is about sensing the shift in the tectonic plates the organization stands on, and preparing the organization to positively respond to that shift. Those tectonic plates are mostly economic.

So incentives work on both a large and small scale. And personal leadership works, but on a small scale. What else is out there?

Design. Architecture. Physical organization. Much more interesting.

An Agile team - with business customers, systems analysts, testers, developers and the copier boy all crammed into a messy conference room - creates a culture, a vibe, which is 10x more effective than the same people with the same incentives sitting at their desks and pinging emails at each other.

A suite of offices organized around a service hub - fully equipped with printers, sofas, steaming coffee, and streaming sports coverage on a plasma screen - creates a more social and collaborative work place than a bunch of closed doors along a long corridor.

Offices with glass doors and/or big windows opening on to the corridor takes that a step further, and also reduce the risk of corruption.

Facebook's instant messenger works on the same general principle of manufacturing chance meetings. I wind up chatting with friends I was not specifically planning to call. A laptop in the kitchen means the net gets used a lot more than when a desktop sat upstairs in the study.

My first job was at Procter and Gamble in India. While I was there, P&G formalized the dress code (made ties mandatory) as part of an effort to make the culture more formal, accountable and better at completing projects in time, within budget and up to specs. The broader effort worked. The dress code change was not irrelevant.

A petting zoo under the stands at Twenty20 cricket matches makes it easier to take kids along. I was glad to have this facility at hand at Trent Bridge earlier this summer. Changes the mix of fans in the stands.

The famous broken windows theory maintains that smartening up a neighbourhood can actually reduce crime in that neighbourhood. Policing inspired by this theory is credited with a part of reduction in urban crime in America, in very serious circles.

A lot of this can, of course, be interpreted economically. A laptop in the kitchen is less costly to use, in terms of effort. Accepting a bribe in a glass office is more costly, in terms of embarrassment or risk. The dress code change sends a "signal" about what the organization now values.

But it is more fun, and perhaps more useful while planning culture change, to think about these changes as design rather than incentives changes.

Time for thought

A private conversation between Barack Obama and David Cameron picked up by accident on an ABC microphone:

Cameron: Do you have a break at all?

Obama: Actually, the most important thing you need to do is to have big chunks of time during the day when all you're doing is thinking...The biggest mistake a lot of folks make is just feeling as if you have to be...

Cameron: These guys just chalk up your diary

Obama: Right. In 15 minute increments...

Cameron: We call it the dentist's waiting room. You have to scrap that...you've got to have time

Obama: And...well you start making mistake, or you lose the big picture, or you lose a sense of, I think you lose a feel...

Cameron: Your feeling. And this is exactly what politics is all about. The judgment you bring to making decisions.

It is not universal. I find it hard to imagine Hillary Clinton living by this ethic of reflective thought rather than just working harder. Maybe Hillary would have been better off with a less packed schedule and more time for thought.

For my money, this might be the best management advice I've ever had.

Scrabulous scandal

Start with first principles.

Intellectual property right (IPR) laws exist to increase the stock of knowledge in the public domain. Giving innovators a time-bound monopoly hurts the public interest in the short term. But it helps the public interest in the long term, by increasing the rewards on innovation.

Notice that the argument works only if the knowledge created actually filters into the public domain. The argument might work in pharmaceuticals. Patented drugs do become generics in fifteen years.

This is totally not working in media/ entertainment. Private businesses seem to have a lock on media/ entertainment properties pretty much in perpetuity, to a point where I simply can't believe that the public interest is being served.

Take the latest absurd scandal . A company called Hasbro claims to own rights to Scrabble. They therefore claim that the boys who developed the Scrabulous application are violating Hasbro's copyright.

Let's even assume that the corporate lawyers have their papers in order. Where is the moral case here? Scrabble was invented in 1931. Why is this game not in the public domain 77 years after it was invented?

To make this situation even more absurd, Scrabulous is not a knock-off. It is a real value added innovation.

There are any number of small businesses which will print and sell the old off-line Scrabble without paying Hasbro royalties. Seems reasonable that they shouldn't have the right to print and market zero-royalty copies for 15 years. Feels like even the argument breaks down somewhere between 15.01 and 77, but there is an argument.

But with a true innovation - one that delivers massive amounts of additional value to at least some end users - isn't that what IPR laws are meant to be enabling? And these same IPR laws are now being used to prevent such innovation? This is a system that has been perverted to the point of absurdity.

Separately, the business executive in me can't help spotting mutual interest.

I suspect the Agarwala brothers would not be averse to an appropriately valued buy-out. Nothing at all wrong with a buyout. Reminds me of a pitch-your-business-idea-to-venture-capital competition when I was at B-school. Six out of eight teams' exit strategy was to sell out to Microsoft. All that may be going on here is legal posturing by Hasbro to scare the developers into accepting a lower price.

It's just a shame that laws that were initially written to serve the public interest can be used to create the opposite of what was intended.

Fun days, summer balls, team spirit and all that jazz

I'm seriously back-logged at work after a day out water skiing, a night out camping and a night out for the summer ball...all company events. Got to spend lots of time out soaking up the glorious English summer, and to reflect on corporate fun events and how they work.

- Conclusions first. My top management tip. Spend the money, create the time, and make sure your team does lots of fun stuff together. The return you get in terms of morale and productivity (less time wasted on whingeing/ managing the whinge) is huge

- The cricketing parallel...more games are won in the dressing room than on the field

- Things I remember doing on Fun Days include, in no particular order: water-skiing, white water rafting, yatching, steering a canal boat, camping, ultimate frizbee, fishing, mini-golf, tennis ball cricket, baseball hitting in batting cages, softball, bowling, skiing, laser tag, rock climbing, a ropes course, hiking up Snowdon (the highest peak in Britain), hiking up Scafell Pike (the highest peak in England), quad bike racing, go karting, a treasure hunt through the "heart of rural England", archery, ice-skating, clay pigeon shooting, visiting an aquarium, visiting ESPN Zone, visiting an amusement park with many roller coaster rides, and wine tasting

- This does not include Community Days, which might involve riding a bicycle 75 miles across the Pennines, building a house for Habitat for Humanity, or painting the hall of an inner city school

- Fun Days are fun despite being hopelessly bad at the fun activity. This is less obvious than it sounds. Games I play regularly, like squash, are fun when I'm playing well and no fun when I'm playing badly

- The Fun Day is mainly about being out with the blokes from work, and not talking work. The activity is just time structuring

- The hardest thing about fun days is being inclusive. The activities I've listed above reflect the culture of the teams I work in...mainly quant jocks in their 20s. The teams are very diverse in terms of ethnicity/ race/ nationality, but are very homogeneous in attitudes/ interests/ mind-set. I remember a gentle, soft spoken girl who decided to make herself unavailable for white water rafting because she couldn't quite picture herself in a wet suit. That didn't feel right

- Twenty20 cricket games don't qualify as official Fun Days, because they are not inclusive enough

- It's impossible to be completely inclusive. Our most feminine fun events are probably the Summer and Winter Balls. These tend to involve nice clothes, stately homes, fine food and wine, live entertainers or fireworks, karaoke, an open bar and disco dancing. A shaven-headed Australian Vice President in his mid-forties consistently boycotts these evenings, since he "doesn't want to watch 23 year olds getting wasted and throwing up in the toilets". In case you're wondering, I've never seen or even heard of anyone throwing up in toilets at company events

- Fun Days have no impact on the number/ quality of people who apply for jobs at this company. Potential recruits, especially graduates, care a lot more about pay, prestige and career prospects than fun or culture

- Fun Days, and the broader culture that they are a part of, are great for retention. Culture is a big part of what people like about their jobs here. It is a key reason why people who leave want to (and often do) come back. People leaving and coming back...and the incentive that creates to leave on a whim...is a topic for another post

- The disconnect between the selection effect and the retention effect is quite an interesting puzzle, really. When asked, graduates say they want "serious" jobs. Join us because we do cool Fun Days sounds condescending. That apart, there are at least three other interesting economic effects going on here:

(i) Competition. Other employers competing for the same talent also do Fun Days

(ii) Asymmetric information. Everybody says their company is fun. But is it? Really? An extra $5000 is real for sure

(iii) Consumer choice theory. People are really bad at forecasting what they enjoy/ care about/ derive utility from. They overestimate the utility of obscure features while evaluating digital cameras. Similarly, they underestimate the utility derived from fun or culture in evaluating potential employers.

Leos suffer from weak digestion. They do, don't they?

Great old story from the Economist about a very common statistical error. Cherry picking.

Hospital admission data from Canada shows that Leos are likely to have gastric trouble and Sagittarians are more likely to break their arms. Both results are statistically significant...if your statistical technique ignores the fact that with 24 comparisons 2-3 are likely to be significant at the 95% level due to pure randomness.

I unconsciously resisted absorbing this idea during stats training...probably because I'm usually very keen for the results of my tests to be significant. Yet when one is doing dozens of tests (as I often am) results that appear significant are often just noise.

This example hammered the point home...probably because I am very receptive to the thought that astrology is a vicious scam. Cultural context: astrology in India isn't just harmless fun. The truth is that Leos are no more likely than anyone else to have gastric trouble. And my mom's painful feet are because of poorly designed footwear, not her Virgo birth sign.

Culture is a Beast

Tigers hunt alone. They stalk their prey through dense jungle, relying first on stealth and then on a burst of incredible power. Wolves hunt in packs. They chase their prey down through open terrain, encircle, harass and exhaust their prey, before killing and feeding as a pack. The social organization of animals, their cultures, are determined by their survival strategy. Animals evolve to do what it takes to get food without becoming food.

Tigers don’t stomp. Wolves don’t graze…even if they are made to sit through a thousand PowerPoint presentations.

Organizations are like animals. They evolve to do what is necessary for their survival, and very little else.

All that is obvious, right? Apparently not. The alchemy of “leadership”, armed with the sword of PowerPoint, can transform organizations into the object of the heart’s desire…never mind how the organization actually makes money.

My top management tip: beware the man in the Armani suit who teaches the elephant to be stealthy.

Or teaches the snake to fly. Hey…a snake who learns to fly is a dragon. That’s the metaphor which will super-charge my next change management program.

IPL payments and CEOs

The winners of the IPL will earn $1.5MM. Works out to $75K for each player if there are 20 in the squad.

Sure, $75k is nothing to sneeze at. Unless you’ve been paid $500K to just show up and take part. The incentives aren’t sloped steeply enough. It is creditable that the stars are playing hard despite the relatively small prize.

For the true geeks reading this post…the formula that describes optimal effort in a tournament is (w1 – w2) = g(0)*c’(e). (w1 – w2) represents the increase in wealth due to winning. g(0) is a measure of how much randomness effects winning. c'(e) is a measure of effort. This formula is lifted from a seminal 1981 paper by Sherwin Rosen and Edward Lazear. If you really want to get under the skin of the formula, you can download the paper from jstor for $14.

The intuitive part of the result is that people work harder to win if the rewards of winning are greater. The fascinating part of this result is that the rewards for winning need to be greater in games with more randomness to extract the same effort. If you can win through pure luck, you’re less likely to work hard to win. So the reward needs to be bigger to get the same hard work.

This Sherwin Rosen paper - and the vast body of secondary research that his paper spawned - is often used to understand why CEOs get paid so much. Everybody in an organization works hard to become the CEO because the reward is so big. That hard work is what creates value for the organization, or for society, which is good. The reward goes to one CEO, one individual who basically got lucky, which feels unfair. Horrible dilemma. The only way to square this circle seems to be to design games with less randomness.

Sandlot Wars

I’m really stretched at work nowadays (hence the relatively low frequency of blog posts). Too much work. Not quite enough people to get through the work. I’m not alone. Most of my peers are in the same situation.

One unexpectedly good consequence is that my peers and I are playing as a team more than we used to. We clearly need help from each other, and are generally quite happy to punt the ball over to each other.

This is in stark contrast to another time, within this same company, when we were overstaffed. We had too many ambitious and talented people, with plenty of time on their hands, looking to carve out bigger roles to match their ambitions and talents. This lead to the Sandlot wars. Almost all conversations were political rather than truth-seeking, and came with an undercurrent of “this is my sandlot and you’re not going to play here.”

Based on that contrast, my top management tip: keep your team slightly short-staffed. Your people will be under pressure. That’s OK. They will learn to take the pressure. An environment where people have a lot of room to play and grow, and have a credible prospect of advancement, creates a much healthier culture.

My inner sceptic just asked a question. Organizations riven by turf wars are clearly less pleasant work-places than those where people co-operate. But are they less successful? Great research topic for a Ph.D. student. But, for sure, you will have more fun working for a light, stretched organization.

The hardest people to manage

It's people who are on their way out of your organization.

My top management tip: don't prolong the agony. If one of your people wants to leave, tell her to just go right now. You may not know exactly how you will cope with the loss, but you will cope.

Just go right now sometimes feels hard. Having a familiar face who knows the ropes running her show for a few more months often feels safer. That is false security. Having an player who is not fully checked-in on your team for a few months is toxic. Best case, safe players start making amateurish errors. Worst case, open-minded, constructive scepticism degenerates into corrosive, contagious cynicism. I've seen it happen too many times. It's not worth it.

The shadow of the future is everybody's best friend.

Stealing Music?

Fans and musicians are enjoying each other's presence at the South by South West music festival, unencumbered by record companies. And they are talking about how they can do just fine, forever after, without record companies.

It's good to move beyond the toxic divisions of the digital rights/ copyright wars and start the conversation about how the music industry ought to work.

Record company jobs and copyright laws serve a useful purpose if they bring together artists and fans. Everything else is secondary.