Monday, May 30, 2005

General Updates

I have not been writing for a while. I have been busy with a lot of things lately.

The first update is that my course is going fine and we have decided and started working on our group and individual projects.

For the group project, we have taken "Alcoholic Beverages in Australia". We need to conduct an environmental analysis, understand the players and predict no, forecast the future of the industry in India. I am part of a 6 member team.

For my individual project, I am taking the topic "The Internet and The Newspaper" and trying to understand the changes taking place in the media and how the Internet has changed everything.

On the personal front, I have been trying to find a decent one bedroom place for myself since my wife is joining me in July. Its been hard.

There is a lot of competition for housing in Adelaide. Adelaide is generally considered the "retiring capital" of Australia however since there has been a lot more young professionals coming to Adelaide now and the large intake of foreign students in the universities here the demand has exceeded supply.

In a way you can increase the population of the city faster than you can build houses!

Since I am unemployed still (that's another story) I have not been qualifying for any of the houses here. Considering that I have provided my bank statements and student visa etc for convincing that I can pay.

Luckily I have had an opportunity to get a studio apartment from the University Student Housing program. If that is finalized I have a decent place to live by the time my wife joins me.

However, I need to furnish the entire place. So that's a big headache.

In terms of costs, this will cost me $70 per week. One of the cheapest you can find. The general cost of a 1 bed room is $120 per week and increases to $150-$175 as you move closer to the "main city" or CBD.

Yes, another good news. My iBook G4 is back after 6 weeks of repair with a new HDD and Logic board. I need to install and OS and it should be screaming!

Wednesday, May 25, 2005

The Masters of Business Imagination

The Innovation weblog points me to a manifesto by Jim Carroll enshrined, The 'Masters of Business Imagination' Manifesto.

Jim says :

Complacency in a time of rapid, disruptive change can be a death sentence – not only for organizations, but for the careers and skills of those who work there! It's time to abandon the thinking that has had you anchored firmly to the past – and to shift your focus to the future, with enthusiasm, motivation and imagination.

You can do this by abandoning any pretence that the skills of yesterday will be important tomorrow. Figuratively and literally, it is time to move beyond the thinking that has led us to a world of MBA's – Masters of Business Administration – and focus upon the critical skill that will take you into tomorrow.

The world doesn't need more administrators. It needs more MBI's – Masters of Business Imagination!

The elements of an MBI
  • see things differently
  • spur creativity in other people
  • focus on opportunity, not threat
  • refuses to accept the status quo
  • the ability to bring ideas to life
  • has the skill to learn and unlearn
  • refuses to say the word “can't”
  • accepts challenges with passion and enthusiasm
  • embraces change rather than shying away from it
  • listens to people who are different then them
  • lives for the opportunity to have ideas challenged and debated
  • instead of saying “it won't work,” asks the question, “how can we make it work?

The MBI Manifesto is a call to action – a call to creativity – and a call for imagination. Pursue the MBI, and you will rediscover a world in which change and challenge is turned in to opportunity and success.

I think Jim is right that the world is changing and we need to change the way we teach our future leaders and ourselves if we have to make a difference. The one thing which a lot of people do not include is that "as we have become a society of organizations" it is important that the skills considered to be useful for a "business guy" should be relevant to anybody. From Educators to doctors to not-for-profit guys and everybody in between.

The Online Apprentice

Stephen Downes directs me to this :

Donald Trump Looking For New Apprentices Online

Sign of a trend: Trump Univedrsity. "The school consists of online courses, CD-ROMs, consulting services and seminars. The for-profit university doesn't offer degrees or grades. Courses cost $300 and take one to two weeks to complete."

The Future of Textbooks

The Textbook, one of the great "social innovations" which changed the entire educatioin field. As Drucker says it made possible for ordinary teachers to teach high quality courses to many students which was previously only possible for great teachers.

This is what Clayton Christenson would call a disruptive innovation.

However the rapid change we are experiencing in the world has made the "old textbooks" obselete. That is one of the reasons for the CMP course I have one textbook, one study guide with a set of readings from journals and chapters from various books, 2 major references and 20 other references and 5-8 videos! That's a lot of stuff to read and even borrow from the library.

In a way there is not much a good Prof can do if he wants to provide the required study material to his students. How can he create his own textbook? Or Can he?

Welcome to the future of textbook : SafariU

The O'Rielly newsletter brings to me this great new innovation.

Technology's impact on education shouldn't be limited to state-of-the-artlabs, wireless networks, and dare I say, iPods. Innovations can improveteaching tools as mundane as the college textbook. This is an area thatO'Reilly's been exploring for some time now.

A project called SafariU enables college instructors to assemble textbookschoosing sections and chapters from thousands of books and articles. Thebooks are created online via an easy-to-use web interface, then printedand shipped directly to the instructor or the university's bookstore.

Check out the interview with Jon Preston is Interim Chair of the Department of Information Technology at Clayton College and State University who is using SafariU successfully in his course. Unfortunately this service is only limited to O'Rielly publications which are mostly concentrated on IT and Computer Science.

Tuesday, May 24, 2005

Markets are conversations

Taking up from the previous post, I just went and checked out the ClueTrain manifesto, its a book now and found it lot more illuminating then when I first read it.

I remember reading the Cluetrain when it was a manifesto and not a book. Frankly, except that "markets are conversations" and was the only idea which I took from there. Its still the same but the major difference is that now I know the deeper meaning of the manifesto.

The main difference in the in-between years has been "participation". I have been using Yahoo groups, the most famous incarnation of the orginal conversational tools : Usenets. I created some groups and then made one really good one.

I also started participating in the new blog world. The RSS feeds, bloglines, Google News, Blogger and others made a major difference.

When I wanted to buy my Apple iBook for the MBA program the first place I went was to register in various communities on the net and ask the networked consumers. They provided me answers which was far better than Apples Website.

The conversations made all the difference.

It will be interesting to see how my Marketing course will be structured. Is the University focussed on the networked economy. Do they understand it?

If you have still not checked it out....check out the "future of business".

Consumer Generated Marketing

You have to hand it out to the Profs in business schools to come out with a easy name for touch concepts. A lot of the times an easy name makes it easier to remember and understand the concept.

Jim Heskett writes in the HBS Working Knowledge about the "marketing buzz" generated by consumers on newsgroups, blogs and other conversations on the internet.

However, this could be old news for people who know that "markets are conversations". (The Cluetrain Manifesto)

What Could Bring Globalization Down?

Niall Ferguson from the Harvard Business School parallels the "present globalization" with the first one ninety years ago and suggests that this could be a "sinking globalization" as the first one.

I am an historian who has long been preoccupied by the similarities between our own time and the pre-1914 period. That the years 1880–1914 were the "first age of globalization" is now quite a widely accepted idea among economic historians. The data on trade, capital flows, and migration certainly bear that out.

I don't say it's impending. I just say it's possible. Like the outbreak of the First World War, a crisis of globalization today is a low-probability worst-case scenario. The key causes of the 1914 crisis were:
  1. The overstretch of the hegemonic empire (Britain).
  2. The escalation of rivalry between great powers (Britain and Germany in
    particular, but also Germany and Russia).
  3. The destabilization of the alliance system (unreliability of Austria in
    German eyes, of Britain in French eyes).
  4. The existence of a rogue regime sponsoring terror (Serbia).
  5. The rise of a revolutionary organization hostile to global capitalism
To see my point, just change the words in parenthesis to:

(the United States)
(the United States and China)
(unreliability of
the Europeans in American eyes, unreliability of the Americans in Japanese,
South Korean, and Taiwanese eyes)
(Syria, Iran, etc.)
(Al Qaeda)

It would be a very good idea if the United States were to act now to avert the danger of a clash with China over the future of Taiwan. There is a real danger that Taiwan could be what Belgium was in 1914: the small state over which two great powers went to war without either quite meaning to.

Saturday, May 21, 2005

Systems Mapping of Yuan

Systems Mapping of Yuan
Originally uploaded by thegreenguy.

Using Systems Thinking to understand the effect of the yuan peg to the dollar. The data for this diagram has been used from the article in The Economist "What do yuant from us?".

The mental model of "Systems Thinking" is more useful when it can be applied. Hence, this idea of using the mapping technique for the Yuan Peg.

This map is not entirely correct. I have not been able to map reinforcing loops and balancing loops. But I am sure if you read the economist article and look at the diagram it should make sense.

Click on this URL for a larger size, alternatively you can also click on the photo.

Update :(24th May) I have got some people asking for a simpler explanation of the mapping.

The map shows the following.

The American economy buys inexpensive goods from the Chinese which fuels the consumer and mortgage finance markets which in turn is responsible for the fiscal deficit in the US. This is supported by selling the US Treasury bills to other countries. China is the biggest buyer of all.

China maintains a Yuan Peg of 8.28 for the dollar. This is maintained by buying US treasuries. The US believes that the Yuan is artificially supported and it needs to be revalaued. The "shadow yuan" shows this to be true. Now, China needs this peg to support its exports and inflation. Exports will becomes less competitive and inflation will rise with the increase in the Yuan value which may bring about political instability.

The Shadow Yuan

Yuan and Dollar

The side-effect is that the Euro is appreciating because of this.

There are other reasons, but I guess you get the idea.

Now, there have been new developments with the US asking China to revalue or it will slap import taxes on its textile exporters. China has added new export taxes on its exporters before the US reacts.

I believe that this could be a short term development till China revalues its currencies. (BTW, there are many ways China can do this. The Economist has more info on this)

The side effect of this export tax is that Walmart is urging its suppliers to move to India where the Walmart supplier base is only $1 billion against a possible $100 billion for China.

I guess I need to change this map. This subject though randomly selected is becoming interesting by the moment.

Tuesday, May 17, 2005

The Apprentice

Ok. I may be the last MBA student to have started seeing the Apprentice in its their avatar. I have been following the hit show "The Appretice" in Australia. It is aired every monday on Cnel 9.

Now Apprentice is interesting game for all people involved in organizations especially the MBA types. Donald Trump created a new reality show where he has a unique process of selecting a top candidate to work for him. The candidate needs to go through a gruelling process of interviews and selections to join the show and the work through all the tasks and emerge as the winner at the end of it.

I think there a lot of lessons learned from the show. I did a small Google search and found a plethora of websites devoted to the show. If you want to know more check these out.

Monday, May 16, 2005

The New Digital Divide

Seth Godin (my fav. marketing author and thinker) writes about the new digital divide.

The Digital divide is :

The short definition is that the haves would have reliable, fast access to the Net, which would give them employment and learning opportunities that others wouldn't be able to get. This would further divide those with a head start from everyone else.

The New Digital Divide:

I think a new divide has opened up, one that is based far more on choice than on circumstance. Several million people (and the number is growing, daily) have chosen to become the haves of the Internet, and at the same time that their number is growing, so are their skills.

The New Digital Divide
The Digerati The Left Behind
Uses Firefox Uses Internet Explorer
Knows who Doc Searls
Already has a doctor, thanks
very much
Uses RSS Reader RSS?
Has a blog Reads blogs (sometimes)
Reads BoingBoing
(or Slashdot)
Watches the Tonight Show
Bored with Flickr Flickr?
Gets news from Google Gets news from Peter Jennings

You need to read the rest of Seth's blogpost to get the idea.

I think he is onto something right now. I am not a "geek" in any sense atleast not a technical guy. But I would like to call myself technologist. I believe in the power of technology to make a difference.

I write blogs, I read SlashDot, I use Firefox, yes uses Flickr (not yet bored), Yes yes RSS and ofcourse News from Google. I do know Doc Searls!

So there could be other factors which you can add.

The important thing is that this could be the new demographic for marketers to understand. The people who can use the new internet tools to spread new ideas wide and fast.

Saturday, May 14, 2005

IT Conversations

I had heard a lot about "IT Conversations" however the download speeds in India did not provide me the chance to download or stream the conversations I wanted to listen.

Now in Australia it is easy! I have spent a whole evening yesterday and the entire afternoon today hearing some great interviews and speeches.

The ones I heard :

Joel on Software, The Software Paradigm Shift (Tim O'Rielly), Ben and Mena Trot (Movable Type), Alex Steffan (, Janine Benyus (Biomimicry), Steve Wozniak.

Do check them. They are amazing.
(this post has been updated. I used the mail-to-program to publish on the blog however it did not work well)

Wednesday, May 11, 2005

Subscribing to this blog

You can also subscribe to my blog through e-mail or RSS/XML Feed.

The e-mail subs will take you to a yahoo group where you can join and recieve a the posts as they are blogged, or a daily digest or just read them on the web.

The RSS feed needs a feed reader. You can check out My Yahoo or Bloglines for this.

Finding your calling

One of the side-effects of the two years in Adelaide as I planned would be to understand myself better and find my calling.

The HBS Working Knowledge reviews a new book called "Nobodies to Somebodies: How 100 Great Careers Got Their Start" by Peter Han.

In this book Han examines the careers of one hundred achievers from business, government, science, the literary world, the nonprofit sector, and the arts.

Nobodies to Somebodies is written as a narrative and is organized into fourteen lessons within three sections. The first section, "Basics: Finding One's Calling," provides some useful insight from these high achievers on self-assessment and describes the various approaches they used to decide which way to go.

The second section, "Keys: Chasing the Dream," describes tactical career moves and how the achievers dealt with unexpected surprises that might have diverted their paths.

The third section, "End Game: Using A Little Magic," discusses mentoring, work-life balance, and the importance of drive and passion.

Another book which I read called "What Should I do with my life?" by Po Bronson was a fantastic book.

Let Po tell us about his book:

You can make decisions to pad your wallet. You can make decisions to maintain proper appearances. You can make decisions because they're safe or predictable. You can make decisions because it'll keep your parents off your back. You can make decisions simply to delay making harder decisions. I began this book because I was drawn, artistically, to those who've made decisions to serve none of those ends. I was interested in people who resisted those pressures and made a decision simply because it was good, or right, or true to their nature - and were willing to be challenged by the consequences.

As I wrote in the introduction, "Nothing seemed more brave to me than facing up to one's own identity, and filtering out the chatter that tells us to be someone we're not."

I found that it's not what you do that defines you nearly as much as what you overcame to get there that shapes you. This is a journey of infinite variety that we all share.

My hope is that by reading these people's stories, you will find yourself contemplating the decisions you've made in your life.

These are stories of maturation; of gaining understanding through being forced to look at life a different way. In the end, having the benefit of perspective contributed to their satisfaction as much as the new lifestyle.

You can also check out the NPR piece or a chapter excerpt.

This book is wonderful. It made me look at life with a different view. One of the differences that I have found with this book and "Nobodies to Somebodies" is that Nobodies....starts with the assumption of what success is and Po just started a journey to find out how people made brave decisions and then the story of the book followed.

PO is right. He does not provide startegies or anything else in the book but a good narrative set of stories. Peter Han in 'Nobodies...' decides what is success and then finds the people and the carriers to decide what is the strategy.

I found Po's book highly engaging. If you can read his book. And if anybody does read "Nobodies to Somebodies" do let me know what you think about it.

Are you successful or a "success fool"?

Jagdish Parikh an alumni of HBS writes about what it takes to be a leader :

According to Jagdish Parikh (HBS MBA '54), the gap between what everyone learns about leadership and what they actually experience exposes a fundamental flaw in leadership models today. The qualities that genuine leaders possess—and what makes inspiring leaders so rare—are not innate characteristics. Rather, he believes, they are skills that aspiring leaders can and should actually teach themselves, such as self-knowledge and self-mastery. Self-knowledge and self-mastery can be developed through conscientious practice.

"Unless one knows how to lead oneself, it would be presumptuous to lead others," Parikh said. And, he added, "If you don't know how to lead yourself, someone else will."

To him leading means sharing and facilitating. "Sharing what? And facilitating what? Information, ideas, events, and things. ... Leadership is not a quality, strategy, or tactic, in my opinion. It's a way of life, a way of being."

"In formal education we learn nothing about feelings, but we exist at a feeling level. We cannot change just by wishing. We must discover ourselves. What are you referring to when you say 'I'? What is your organizational chart of yourself? Life is a culmination of experiences, mind, and emotions. Feelings come and go but as individuals we are unchanging."

"Detached involvement is the essence of leadership."

A lot of the ideas seem to come directly from eastern philosophies. Better still read The Buddha.

Tuesday, May 10, 2005

My Presentation on Systems Thinking

I mentioned in the CMP course that I presented on Systems Thinking in the class.

Just click the following link to access the presentation.

Systems Thinking.

(Thanks to Robin Good for providing information on this wonderful service for sharing files)

The new growth

The new growth

Student acco in adelaide

(This is fun. I have had my first take at mobile blogging. This was one of the photos I took on my mobile phone and posted it to Flickr and to my blog through it.)

Good Karma

Good Karma
Originally uploaded by thegreenguy.
One of the principles to live your life!

The Search for Sustainability

My University, The University of South Australia (UniSA) conducts something called the "Working Links" seminars. This as the Pro-Vice Chancellor of the Division of Business at UniSA, Garry Griffin, says is one of UniSA's way to give back to the community.

In this seminars, the top Profs at UniSA present their research in a public seminar. The first one for the year kicked off today.

The search for sustainability: Balancing environmental, economic and social needs

Professor Rob Fowler, presented his ideas on sustainability and what needs to be done in that area. He specifically covered his experience as an advisor of the 'Environmental Protection Agency' for South Australia.

In trying to find common ground, Prof Fowler suggests practical ways the issues can be addressed, looking at three main areas – ‘law and order’, ‘jobs and the environment’, and ‘people power’.

Some excerpts :

“There needs to be more emphasis on law and order. We need to strengthen regulation and how it’s administered, develop smart regulation – looking at using economic instruments, market mechanisms, and voluntary methods industry might adopt – as well as alternatives to conventional regulation that might work better for everyone,” Prof Fowler says.

“When we look at jobs and the environment, the legal and policy framework is inadequate in helping the EPA to do their job. There isn’t enough clear guidance and there’s a need to develop criteria for weighing up economic and environmental values. For example, if you’re going to trade off a wetland for a project that would deliver a whole lot of jobs – in what circumstances are you willing to do that? We need to go to the next level of detail in defining what sustainability means when these sorts of decisions are being made.”

And Prof Fowler also advocates a greater level of public involvement in all levels of the decision making process. “There is a need for more people power, to revamp the Environment Protection Act and the way in which the EPA operates to provide greater community involvement in its decisions. Currently there is a closed loop in
terms of access to information, public participation in decision making and access to appeal to the courts. These are some significant deficiencies in the South Australian system at the moment.”

I discussed the case for India. My point was that India had a different problem from Australia in the sense that we needed to manage our economic development and environmental prorection. Australia and other developed countries were in a much better position to manage the environments. However, there are a large part of the Industry which does not believe in this.

He had a particular mention about the Supreme Court of India which had to step into the administrative role to clean up Delhi, The Ganges and The Taj Mahal. Since he was a lawyer he was more keenly interested I guess.

However, coming to the point of sustainability and environmental protection one major point is the problem of measurement.

How do we measure 'better environment' or worse environment'. In the same way that we can measure profits, inventory turnover, sales per quarter we need better methods to understand and measure this environment.

This is important for many reasons. The other day I was watching a video called "The Corporation". This was an interesting video in many ways. One of the good things about an MBA program is that you get to know new things, see these videos, read the books and have fun.

Ok, coming to the video, the main concern there was the way the companies were wrong in many ways and the 'corporation' was compared to a psychopath. I guess it needs another post to explain, however I found a piece of that program which is very relevant.

One of the commodity traders in the US had this to say.

He said how do we know what the companies are doing on the environment front. If you have stocks we trade, if you have information on pigs we can trade. In the same way if you can make environment a commodity we can trade on them.

I think that he meant a lot. Measuring the environment, tradable pollution units and other "accountable" measures are need to make a difference to the field of sustainability.

Saturday, May 07, 2005

The Topics in CMP - Part I

The CMP Course as I mentioned before is a thinking course. However, I like to take it down further. This exercise is more for myself than the blog. As I mentioned before the blog helps me in reflecting on the work I am doing rather than just going from one event to another. It helps me to find patterns, to mark priorities and to plan better.

Topic 1 : The Evolution of Management upto World War II

Covers the classical management theories.

  • Scientific Management from Frederic Taylor
  • Administrative Management from Henry Fayol
  • Bereaucratic Management from Max Weber
It then covers the "Human Relations Movement" and Systems and Contingency theories.

This topic provides an overview of history of management thought.

Topic 2 : The Evolution of Management after World War II till 1990

Again here there is a sense of history and trends in various areas.

  • Organizational Development
  • Startegy - Sun Tzu, Clausewitz, Drucker and MBO, Porter & Mintzberg
  • Quality - Deming, Juran, Crosby, Feigenbaum, Quality movements
  • Learning Organization

Topic 3 : The Influences of the Sciences : Part I - Systems Thinking

  • Reductionism
  • History of Systems Thinking
  • Systems Thinking
  • Cybernetics
  • Human and Social Systems

Topic 4 : The Influences of the Sciences : Part II - The New Sciences

A large part of this topic is influenced by Margaret Wheatley and her book "Leadership and the New Sciences".

  • Complexity Science
  • Quantum Physics
  • Chaos Theory
  • Evolutionary Biology
  • New Organizational Systems and Structures of the Future
  • Tops Model

Topic 5 : New Perspectives on Management Practices - Part I

  • Globalization
  • Technology
  • Knowledge Management
  • Learning Organizations

Topic 6 : New Perspectives on Management Practices - Part II

  • E-Business
  • Creativity and Innovation
  • Organizational Design - The Boundaryless Organization
  • Quality
  • Governance
  • Sustainability (Triple Bottom Line and Balanced Score card)

Topics 7 - 10 are on Strategy. This will covered in a later post.

The course looks great if you look at the topics. But considering the number of concepts packed into each topic and the diversity of each it does take lot of time to cover them.

That is one of the problems. The other problem is the relative newness of the topics and the scope of the topice. For example : Understanding the history of management till 1990 is relatively easy and may be a lot of MBA students do know about it. Atleast I did.

But, understanding and ingraining "Systems thinking" is no mean task. I am not sure how you can do it in a short time period. This course also makes a start in Systems Thinking, more like providing us direction, a new path to venture. However, it is upto the student to do his own work and learn and utilize this knowledge in other parts of the MBA and in the future.

For instance, MIT (where System Dynamics was invented by Jay Forrestor) has a half and full semester course on System Dynamics. System Dynamics is a branch which provides the tools to create models. These system models will help in understanding our decisions and will speed-up our understanding of systems thinking.

The next ideas of Complexity, Chaos Theory and Evolutionary Biology are major 'mental models' which if can be ingrained in us it can change our worldview. I can understand the limitation of the course here. You cannot teach these new ideas vis-a-vis management and organization. It is upto us.

An excerpt from the Editorial Review on for the book:

The result is a much clearer work that first explores the implications of quantum physics on organizational practice, then investigates ways that biology and chemistry affect living systems, and finally focuses on chaos theory, the creation of a new order, and the manner that scientific principles affect leadership. "Our old ways of relating to each other don't support us any longer," she writes. "It is up to us to journey forth in search of new practices and new ideas that will enable us to create lives and organizations worthy of human habitation."

Globalization and technology are important concepts which will take time to understand. However, Systems Thinking and other thinking tools will help in making sense of this.

The main aspect of learning for me in this course is to identify the various broad themes and select what to glance at, what to read, what to go deep into.

Institutions for Development

Reading through Freakonomics I got an idea and posted it onto my blog. However, I wanted to report the inquiry here.

Considering this :

Acemoglu and co-authors challenge the conventional wisdom that democracy causes strong economic performance. They argue that although democracy and income are positively correlated, it is actually that they are both caused by long ago implemented institutions that fostered both democracy and strong economies. If this result holds up, it is really a remarkable finding.

What about this?:

Amartya Sen has always maintained that Freedom of Speech is as important Economic freedom and that ‘developemt’ would encompass both of them. Now, if India as we know is the largest dmocracy in the world. Does the institutions which hold India’s democracy in place may also generate the required economic development and the more interesting one, will China’s institutions for economic development take it towards “democracy".


Kenneth Silber reviews the book, Freakonomicc by Steven Levitt, an economist at the University of Chicago. Looks like a very interesting book.

The philosopher Isaiah Berlin once divided intellectuals into two categories, based on a fragment from the ancient Greek poet Archilochus: "The fox knows many things, but the hedgehog knows one big thing." Thus, hedgehogs produce work that reflects a single vision or principle, while foxes explore a scattered array of ideas. In Berlin's telling, Plato, Dante, and Proust were hedgehogs; Aristotle, Shakespeare, and Joyce were foxes.

[BTW, Jim Collins uses a similar approach to understand the leaders in successful companies and leaders in would be successful companies in Buil-to-last. The HedgeHog wins!]

The book, which grew out of a 2003 profile of Levitt by Dubner in the New York Times Magazine, is organized around an eccentric set of questions. One chapter, for instance, is titled "How is the Ku Klux Klan Like a Group of Real-Estate Agents?" The answer is that both groups depend on closely held information. Agents hoard data on market trends, inventories and leads. Klansmen obscure their identities and activities. The Internet has eroded real-estate professionals' information edge. The Klan was thrown into turmoil decades ago by an informant who revealed passwords and other secrets to producers of a Superman radio show, such that kids were soon engaged in mock Klan-busting.

Levitt sparked intense controversy several years ago with a study suggesting that legalized abortion in the 1970s was a major factor in the decline of crime in the 1990s -- since abortions prevented many births that would have resulted in children growing up at high risk of becoming criminals. He maintains this position in Freakonomics, arguing that statistical analysis shows Roe v. Wade led to safer cities. (He acknowledges, though, that this does not settle moral arguments over abortion.)

A chapter titled "Why Do Drug Dealers Still Live with Their Moms?" provides an analysis of the economic workings of a Chicago crack gang, based on data collected (initially at high personal risk) by a young sociologist named Sudhir Venkatesh. The upshot is that the crack trade, even at its market peak, was lucrative only for those at the top of a selling organization. The gang's foot soldiers made less than minimum wage and faced a 1-in-4 risk of being killed over four years. (In the same time, being a timber cutter, the most dangerous legitimate job in the U.S., carried a 1-in-200 risk.) These drug dealers struggled desperately to reach the gang's upper echelons, but few would make it.

Steven and Stephen (the co-author) also maintains a blog with the same name, which made it to the Blogger "Blog of Note" list. (I guess my readers are coming to this blog from the same list. Feels great to be part of the same list as Freakonomics, unfortunately Blogger (or Google) has been highly lenient in selecting my blog)

Siegel's constant

I was reading Arnold Kling on his Econ Log. He is one of the economists whose ideas I like. He blogs about Jeremy Siegel who is a Professor at the Wharton Business School.

Prof. Siegel talks about the Stock market and the globalizing world ecpnomy, Some excerpts.

About Siegel :

Wharton Business School Professor Jeremy Siegel is one of the world's most important scholars on stock ownership and investing. His 1994 book "Stocks for the Long Run" became an instant classic. His extensive original research found that over periods of 20 or more years, stocks are not only the best investment for your money, but the safest as well, returning 6.5 -7% after inflation (now popularly called "Siegel's constant") while bonds and other investment vehicles fared considerably less well.

The Interview :

The growth trap is falling into a pattern of just buying companies with what you think are the fastest growing earnings, and ignoring the price. It is so important to realize that when you're paying a higher than usual price, you're already putting up for those higher earnings. In fact, I find that the faster growing companies often give poorer returns for investors; those investors that chase after those fast growing companies actually suffer worse returns than those that buy slower growing companies at reasonable prices.

This surprised me. Even though IBM won, hands-down, on all the growth parameters that Wall Street looks at -- earnings per share growth, market value growth, sales -- it fell behind Standard Oil of New Jersey in terms of return for investor. And the two reasons for that: IBM sold at more than twice the price-earnings ratio of Standard Oil and had less the half the dividend rate. So when you put those two together, over the next 53 years, Standard Oil of New Jersey -- and this is even before the very latest run-up in oil prices, because I ended my first data set in 2003 -- out-performed IBM even though IBM was one of the fastest growing companies in the world.

[If you have been following Warren Buffet or reading his letters to Investors then this would be old news to you]

Absolutely. It surprised me. From 1957, when the S & P was founded, to the present, the best performing company is Philip Morris, which is now the Altria Group. It won hands-down against all the others. The returns were three percent per year more than the next best-performing stock and almost doubled the S & P over the last half century, which is really remarkable when you consider the record.

And a major reason for that performance is that no one wanted to buy it. The price stayed low. First off, there are those who object morally to cigarettes so they don't buy it. And, more importantly, those that said, oh, the government's going to put them out of business; these liability payments -- Philip Morris has already paid over $150 billion! And, as a result, the price fell so low. They were still pumping out cash and the dividend yield got to be extremely high. And, once you had reinvested dividends, the returns on that company just soared above everything else.

[In fact Phillip Morris is one company which also featured in the "Built to Last" list of Jim Collins. It is amazing that this company is in many ways one of the best managed in the US. In fact, ITC Limited in India, a tobacco company, is a similar example. I guess there is something with these cigaratte's?]

The best solution of the aging problem is what I call the 'global solution.' I think that we have to think of ourselves very much like Florida, which is an aging state. In a younger country, we don't talk about an aging crisis in the state of Florida. Their retirees sell their assets in the US to the rest of the US market that absorbs them. They import goods. They're enjoying a good retirement.

In 50 years the United States will be more aged than all of Florida is today, but we will be, existing in a younger world. So, what I see is exactly the same pattern. We will be selling assets into the world market. They will be buying, they will be absorbing, they will be saving, and they will be producing the goods that we will be importing to satisfy our retirement needs. And, I think that is the only way that we could have an ever-increasing retirement period with the shrinkage of workers and the extension of life expectancy.

Certainly India is very young country. The rest of Asia is a very young. Indonesia is very young. And even China -- I know that because of its one-child policy it is aging, but they have a huge supply of surplus labor with state-owned enterprises that they can absorb into the private sector. I expect, and I hope, that this development not only sweeps through Asia, which looks extremely promising, but also Latin America, the Middle East, and even Africa, which has been the so-called basket case. But there are a billion people in Africa -- very young ages -- and they have not yet started their growth.

India and China, by the middle of the century, will together be, in my opinion, more than four times the size of the United States.

[Since I come from India, I see that the energy levels and the sense of optimism of the future and what needs to be done is so high compared to say Australia...atleast that's the experience till now]

Technology is critical for progress. For increases in standard of living, what we call growth, it is so very important; but that doesn't mean that technology stocks are the best stocks to buy. Just like not always the best horse on paper is what you should bet on at the race track. The horse could be over-bet and as a result the odds are way too low. You've got to look at the price, as well. Too many people just look at one, without looking at the other. Technology is an unbelievable force -- the communications and Internet revolution is one of the most exciting things to ever happen. Do I want to go into those stocks? Maybe, maybe not. I want to see what people are paying for them. If everyone else is excited about something, I tend not to want it.

[Very important to understand. Systems Thinking would help in looking at the whole rather than the parts. And of course Buffet has been talking about this for some 30 years now.]

Do check this business school reading list.

Friday, May 06, 2005

CMP - The Course

I have taken "Comtemporary Management Perspectives" as my first and only course in my first term. In a way I am lucky to take this as my first course.

Before I begin, I want to explain why I am lucky. Since UniSA has intakes every term and there a finite number of core courses taught every term we need to decide and join the ones which are run in the term we join. In that sense I am able to do this because I joined the term 2 starting April.

Ok, now what is CMP? This is a thinking course. Our Professor, Mr. Murray Olliver is a guy with business experience and a academic too. I have joined the Intensive style for this course. This means that my classes are going to be from 9 AM - 4 PM every alternate friday against the regular course which will run from 6 PM - 9 PM every week.

Each course or subject is for 11 weeks. So at the end of it we have appx 30-35 contact hours for each 4.5 credit course.

[To the MBAs reading this, is this normal. What has been your experience in terms of contact hourse?]

This course is all about how to think. Murray says that there has been a lot of complaints about the way the business schools do not teach people how to think and that this course is solve that issue.

I think that "thinking processes" are more important than what you can learn in the school. Knowledge changes, but the ability to understand new knowledge and may be create your knowledge is far more valuable.

The course starts with Systems Thinking. Systems Thinking is all about "the whole" and the "not the parts". The ability to see the interrelationships and inter-dependencies in any system.

On the day of the lecture some designated students need to prepare a response to a question from one of the topics taught. The entire course is broken up into 10 topics and through 10 weeks we finish all the topics.

I decided to take up the "What is Systems Thinking?" question and its applications to organization. I made a small presentation on that to the class. I am finding a way to host my file. I will upload and post the link here to my presentation.

Anyway, this course then goes into understanding Globalization, Strategy etc. I will continue to post as we go on with the course.

As part of the course we need to do a group project and one individual project. These projects will help us think strategically and make use of the ideas and tools we have learnt in the course.

Tuesday, May 03, 2005

Larry Page Advice to Graduates

Sometime back it was Warren Buffet, now its Larry Page's turn.

Larry Page, co-founder of Google, recently gave a speech at the University of Michigan his Alma mater. Adam herscher recently graduated from the University and he recoreded the entire speech on his cell phone, which he posted on his webpage and braodcasted on Slashdot. Luckily, some guy made the effort to transcribe the entire speech.

So here are some excerpts :

Your son wants to leave his PhD program in Stanford and hasn't graduated yet, would you let him go off and start a crazy company? Your supposed to nod. So maybe not, I guess its really important for people to take risks.

One is that, doing bigger things is easier than doing smaller things. I know that sounds really strange but it turns out, if you do something really big, you can get other people to help you, and you can get more people to help you. You get more of the kind of resources that you need. So its worth thinking about those big things to get done in the world.

One of the biggest things that surprises me is, there is a lot of money out there and resources for things, and there is very few people out there trying to do them. One of the things that amazes me is that very few people approached me that have good ideas, that have a team of people, even a small one, that have a little bit of traction and a good idea.

If you want to change the world, a good way of doing it is to be in a position of authority, positions of leadership.

I know some of [you] will [be] going to business school. I know what its like in business school and I wanted to give you a plug. I think you don't really need to go to business school. You have a pretty rigorous education, much of this covers rocket science, but it does help us to have interests in business. You basically just need the interest and read a lot of books. I read a whole bookshelf full of business books, and that's basically what I needed.

My advice to you, have confidence, fail often, have a healthy disregard for the impossible. You have a huge opportunity to use engineering, technology and businesses skill to improve the world. You should do things that matter, and you should have fun, because otherwise you wont succeed, and you should travel, and I suggest China, Africa and India there's lots of amazing things there.

The good thing about any Slashdot discussion is that if you do have the time to check the comments you will find some very good ones. Let me show an example which is relevant to this blog.

Pavan Gupta comments :

I couldn't agree with Page more ..

larry page: "I know a lot of you are planning on going to business school, but I don't think you need to go to business schoool"

larry page: "I just read a bookshelf of business books"

From a man worth 7 billion dollars, it sure seems to me like his statement on how to run a business is pretty reputable.

Now, check the following replies :


just because a successful business man says don't bother going to b-school doesn't mean he's right. it depends very much on what he said in context. if by "don't go, i just ready books," page meant "don't go to b-school to gain business knowledge, because it's better to gain experience," then his advice is probably a good one. if the message you took home is that someone became successful without going to b-school and he said don't bother, so b-school is useless, then that's not a very smart interpretation of his message.

i know it's not quite the same thing, but a lottery-winning millionaire simply recommending "don't bother to take jobs, just buy lottery tickets" and listening to it simply because he/she is wealthy is dumb, don't you think?


I doubt that you'd base most of your other decisions based on one data point. Why do it now?

For every successful dropout there are thousands who are very unsuccessful. Too often we point to these sui generis cases and say "see! I don't have to go to school." The drop-out, under-educated successful type happens, but it's not the norm.

Adelaide Gets a Taste of Free WiFi

SlashDot reports that Adelaide now has its own Free Wifi network. Wow!

"Adelaide's Citilan network is being relaunched. Sometime in the last two weeks they decided to open it up for free use to anyone in Adelaide's CBD, pending full commercial launch. Get in and find a hotspot while its hot!"

My lovely Apple iBook has sadly had a HDD failure. Its damn new, but I guess these things happen. It is being serviced by an Apple Center and after more than 10 business days they have still not got it ready. Looks like they are waiting for the parts. I guess that's too long a period to wait.

Once I do have it back, I can start accessing this network in the CBD.

Monday, May 02, 2005

Social Venture Competitions

Mash, from the Zoo Station stable, writes about the Global SOcial Venture Competition.
The 2004-05 edition of the Global Social Venture Competition, a business plan competition for new business ventures that address social or environmental change had its final round at Berkeley yesterday. This competition is co-hosted annually by the London School of Business, Berkeley and Columbia University. The first prize winner, was a team titled 'A World of Good', a venture that plans to sell handicrafts manufactured by artisans from all over the world at fair trade prices. Interestingly as one of the judges mentioned during the prize distribution ceremony, this venture employs a proven business model. Although related or similar models and oganizations exist at micro and macro levels in several parts of the world, this team's successful operational performance over the past year was the key factor that separated it from the other contestants.

Interestingly, at my previous company Deeshaa Ventures we looked at a similar model called ABC. And yesterday as I was browsing the career pages in Adelaide, I found that Oxfam was looking for a CEO for their handicrafts division managing a similar business.

Mash has some interesting observations on the strategy adopted.
Professor Emeritus James G.March, famous for co-authoring many works in organizational theory - most notably with Nobel Laureate Herbert Simon, has written about firms indulging in Exploration (seeking out new markets, strategies or technologies) and Exploitation (exploiting existing technologies or strategies). It is indeed interesting to note that some contemporary business plan competitions do seem to favor 'Exploitation' strategies that showcase executional efficiency as opposed to uncertain but potentially high-impact 'Exploration' ventures.

Green Thinking

Now how many of us really worry about the environment? After we worry how many of us really make the effort to make a difference to our environment or ecology. Then, how many of us actually go about doing it.

One of the main realizations of my past year has been the need to understand the natural systems and work out ways where we can be in sync with it. I have writing about this and other topics on the development of less developed places like rural India on my other blog : World is Green. This would cover also the "Bottom of the Pyramid" ideas.

This blog has helped me to learn and understand the principles, the effort required and also helped in networking with people involved in similar ventures. One of the people who does in a large scale and helps propagate these ideas is Alex Steffan from

In the past week they touched about the topic of Green Campuses.

The MBA schools in the world are always considered to be the place where future business leaders are made. In this scenario, apart from leadership, ethical standards and the latest management techniques MBAs also need to be taught sustainability, respecting the eco-system and the much need "triple bottomline".

A good number of MBA schools have started sustainability as part of their courses. Some concentrate on the ecology, some on the 'bottom of the pyramids' and some on innovative ventures in the not-for-profit world.

WorldChanging is now reporting that a sizable number of these schools are also making their campuses Green.

Alex asks : How much momentum does this campus greening movement have? This overview takes us back to school:

Rob Gogan, of Cambridge, Massachusetts, was startled by what he found while accompanying his son on college-campus tours. Sparkling dorms with wireless Internet in every room? Of course. But guides bragging about geothermal energy and furniture made of conscientiously harvested wood? "Unbelievable," Gogan says. He claims such innovations would not have existed even five years ago. ... 91 percent of people ages 16 to 25 say the environment is important to them, according to a poll by Look-Look Inc., a research and marketing company specializing in youth culture.

He provides other examples of Harvard, Columbia, California and other schools are working towards these goals. The interesting part is where students contribute in using "wind energy" or initiating a green building due to a case study. These kind of action examples are need to make a difference in the real world.

If these students actually learn the gospel of sustainability in their courses and take it back to the business world and actually implement it then we have started a small movement which can make a difference.

As for me, I will continue to learn, write and understand how we can make this world an environmentally friendly place.