Wednesday, October 19, 2005

Leisure and Productivity

Ross Gittins in the Sydney Morning Herald asks the right question in relation to Australia.

She asks "Is the route to riches justified if people are being lost along the way".

In a country like Australia, which has grown its GDP Per capita consistently over the last 3 decades and ranks 11th in the world where does the goal of higher productivity end.

Ross points to the fact that increased productivity is important as it results in the increase in overall incomes. However, "Trouble is, doing so puts means ahead of ends. It focuses on the income, forgetting why we want it. It makes us the servants of factories and offices, rather than their masters.".

She points out that this,

"…robs us of our humanity, taking away our leisure and making us more like robots. Humans don't just need leisure time, they need time off work at the same time as their spouse and while their children aren't at school. That's why weekends were invented, particularly Sundays.

Humans are obsessed by their families - by their mum and their dad, by their spouse and their kids, not to mention their siblings."

Ross points out to the fact that "income" by itself is the wrong measure. What is the goal of being rich? Is it happiness?

The Economist asked a similar question sometime back: "Why don't rising incomes make everybody happier?"

The Economist points to the work of Richard Layard, an economics professor at the London School of Economics. He comes out with some non-intuitive findings. [Happiness: Has Social Science a Clue: Lecture 1, Lecture 2, Lecture 3]

One of the paradoxes is: an individual who becomes richer becomes happier; but when society as a whole grows richer, nobody seems any more content. Professor Layard explains by what he calls "habituation": "people adjust quickly to changes in living standards. So although improvements make them happier for a while, the effect fades rapidly. For instance, 30 years ago central heating was considered a luxury; today it is viewed as essential."

The Economist article goes on to provide results from two surveys of harvard students where

asked whether they would prefer (a) $50,000 a year while others got half that or (b) $100,000 a year while others got twice as much. A majority chose (a). They were happy with less, as long as they were better off than others.

The same Harvard students were also asked to choose between (c) two weeks' holiday, while others have only one week and (d) four weeks' holiday while others get eight. This time a clear majority preferred (d). In other words, people's rivalry over income does not extend to leisure. The result of this, suggests Lord Layard, is that developed societies may tend to work too hard in order to consume more material goods, and so consume too little leisure.

Leisure then is an indicator of progress. For example: The sustainability indicator, The Genuine Progress Indicator (GPI) which puts into monetary terms the value of household and volunteer work, resource depletion, pollution and leisure time is a better indicator of progress. It "for example, subtracts destructive costs and adds in social and economic benefits ignored by the Gross Domestic Product"

According to the GPI:

VII. Changes in Leisure Time
As a nation increases in wealth, people should have increasing latitude to choose between more work and more free time for family or other activities. In recent years, however, the opposite has occurred. The GDP ignores this loss of free time, but the GPI treats leisure as most Americans do — as something of value. When leisure time increases, the GPI goes up; when Americans have less of it, the GPI goes down.

This is so right. If the case was that if a poor country like India or what even the Australians many, many years back (50 yrs to 100 yrs) back used to work for more number hours with lesser pay and lesser leisure time.

One of the advatantages of a developed country is the "quality time" that can be available to a person. The last 6 months that I have spent in Australia has clearly provided me an opportunity to appreciate that.

I get paid by-the-hour which is anathema in India. It provides me the opportunity to work in the prescribed hours, earn enough income to manage my expenses and at the same time spend the rest of time on studies, family, friends and my personal interests.

This would not have been possible with the work-culture, wages and time available in India. And this is one of the differences of living in a developed country.

The Australian's and other developed country citizens should and most of them do value their leisure time. Now only if I could convince them and make a similar case for Environmental management.

Thursday, October 13, 2005

The MBA Menace

There has been a lot being written on MBAs in general and particularly the US style of MBAs. I have touched about it before: here and here.

Check this.

I couldn't get too mad at the MBAs, though. They didn't create the system. Had the blogger been back in the Navy, where putting out fires is serious business, he'd surely have pressed more. But he was at Wharton now, where perception is reality, return on investment is all that counts, and the only fires worth putting out are the sparks inside ourselves

The entire article shows how much the MBA is all about money making and nothing else. Sometimes I wonder if I am in the right field at all, with my assertions that as an MBA I want to make a difference to the world and all. Is this course tell you anything that can help change the world?

Henry Mintzberg attacks the MBA again. He calls it the MBA Menace.

Sure, you've taken courses called "management" and "strategy." But these were about looking in from the outside. The truth is, no one can become a manager in a classroom. Management is not a profession, nor is it science. It is a practice that depends mostly on craft and significantly on art. Craft is learned by experience. Art can, of course, be admired in a classroom--think of all the visionaries you read about in cases. But voyeurism is not management, either, nor does it develop creativity.

I hope you learn. The world desperately needs dedicated leaders. Not heroes on some kind of fast track, but decent human beings who engage themselves and others substantially. That could be you--if you can get past your MBA.

There, that's it.

I have started to wonder if the Australian MBA is better than the US ones. My school does not use Case Studies much. Some of them use it, but it is not a case study approach. 80% of the students are part-time students who are working and studying at the same time. Somehow that seems to be a good combination.

Australian's do not put a lot of emphasis on rankings as much as Americans do and even Indians do. So most of the MBA schools are doing well and people go to the one nearest to them.

And frankly Australians do not believe that the MBA can make a huge difference to their career nor get them stratospheric salaries. They kind of follow the idea that it is good in the long term - some knowledge, some connections and a degree to brag about which can open some doors. Of course, the money comes with it I guess.

Due to the nature of the Australian MBA I am getting more freedom to find myself and the stuff that I want to do. There is no specific emphasis on ROI or Finance or technology. In a way it is helping me find myself.

Wednesday, October 12, 2005

Career Interviews

I was reading Robbie's MIT MBA blog and he had a brilliant idea.

Robbie is doing his MBA from the SDM in MIT.

What is the SDM?

The System Design and Management (SDM) program was created at MIT to educate future technical leaders in architecting, engineering, and designing complex products and systems and to give them the leadership and management skills necessary to do that successfully across organizations.

Robbie has 10 yrs of experience hence he is suited for this course. Where can he go from here? He says:

my career path is leading me to be a CIO, CTO, VP of Engineering, or CEO/Founder. But how do I pick the one I want to do? The CIO role is typically quite different than CTO or VP of Engineering.

He faces a fundamental problem which is true at any level. What exactly does a particular job consist of?

Even with all the classes I attend and the speakers I listen to, I get very little information on the specifics of what it is like being in a particular position at a company.

When I decided upon "business model innovation" as my career choice sometime back I had trouble understanding what exactly that the job would be in terms of a day-to-day profile.

I found this great blogger who calls himself "yes". He wants to remain anonymous but provides some valuable understanding into his job. He is a technical guy with a PhD who is into "business development".

He starts off with a post on What to do with your Phd?

You spent some years in Lab (because I know nothing outside of Biology Ph.D.'s, No idea what the rest of you do).

Now what?

He then goes on to provide a list of options for the job possibilities including Business Development, Marketing and Sales.

His blog provides me a good understanding of what it means to commercialize technologies and various nitty gritties like the legal stuff, tech transfers from Universities etc.

Now coming back to Robbie, he comes with a brilliant solution:

So to help me decide what position I'm best suited for, I'm doing several "career interviews." I'm cold-emailing various executives around the Cambridge area and asking for an hour of their time to talk about their job and career. I'll ask a variety of questions about their role, the skills and commitment required, how they obtained the position, among others. One of the last questions I'll ask is if they have any recommendations for additional people I should contact. This also will be a good networking opportunity.

I think I need to do this. There is a good number of tech firms in Adelaide. It has a Tech park and the MSTC Commercialization course which means that a lot of people in the "innovation game" will be attending it.

My Marketing Professor, David Corkindale, provided me the avenue to jump into this field. As I was working on a Marketing Individual project he provided me the idea to do a project on business models for tech firms which conviced me that this is the career I need to pursue.

I can use this help in finding the right people to talk to. Will update you soon on my "Career Interviews". Thanks Robbie.

Henry Mintzberg on MBAs

From Robbie's MIT Musings

# Can't create a manager in a classroom
# MBA programs don't create managers
# Management is the intersection of craft, art and science
# Don't close MBA schools, just recognize them for what they are. They are teaching analytical skills to future analysts.
# If you want to be a manager, get in an industry and be promoted to a manager. Then join a educational program that lets you enhance those skills
# MBA programs should be part-time so they don't cut students off from their experience
# Should earn managerial stripes, not get it because you have an MBA
# You are being trained well on business functions, but NOT on being a leader of tomorrow
# Cases are not a way to learn management (several digs at Harvard's style of teaching)
# Students should build the learning around their experience
# Management isn't like engineering or medicine – there is no such thing as a natural surgeon, but there are natural leaders, i.e., some leaders have never taken a single leadership course
# The problem with being in the rat race is that even if you win, you are still a rat
# MBA is so hyped up
# Only 5 of 19 Harvard superstars from 1990 were still "successful" in 2003
# He has a pretty dire perception and outlook on American business
# After Enron, schools added a course on ethics next to the 12 on shareholder value
# Shareholder value is not a value
# Softkills are blended in all courses, you don't need specific classes on it
# The biggest problem in leadership today is selection
# We almost never consult the people who have been managed by the candidates we evaluate

The Business Model of Business Schools

Starling Hunter, on his blog "The Business of America is Business" (a curious name) talks about the change required by the B-Schools in America.

Quoting from the Los Angeles Daily, it sites that there is decline in the student participation for MBA programs across America. (I would say it is increasing in India, China and other Asian countries and even Australia, although I do not have concrete numbers backing it). One of the ways that American schools are solving the present problem is recruit students from overseas like Taiwan, India and China.

The article suggests a few solutions:

Instead of adding accounting and marketing courses, USC is attempting to tap creativity. The school is focusing on strategies to help students manage innovation. To do that, Gupta is advocating that students work in groups and understand how businesses interact with their environment.

However, there is a deeper problem. Hunter connects the problem to "functional division" of the b-school.

Attracting foreign MBA students from the world's developing economies is certainly one option, but only a stop gap measure, a way to keep the money coming in while the strategies are overhauled. If US schools want to keep US students interested in the MBA and thus be educators of the world, not the outside world, then they'll need to overhaul not only curriculum but also pedagogy. Chief among the needed changes is the division of labor among business school faculty along functional lines.

Anyone who has read much about modern organization theory knows that while functional organization is very effective in certain sectors of the economy, it does carry with it the hazard of the functional silo problem. This is especially the case in business schools where faculty often have very deep functional expertise in just one area of management studies, many time without anywhere as much practical experience in said area. When you put several dozen such experts together, the task of achieving cross-functional coordination and providing students with a cross-functional perspective on organizations is very difficult indeed. What you get instead is graduates who are, as a rule, smart as whip, but who have no view of firms as a whole. It is precisely this kind of graduate to whom many businesses have said "no thanks" in increasing numbers, preferring instead to uncover and train management talent on their own
.In the increasing trend towards systems thinking, strategy, innovation and business model innovation there is greater need for "various kinds of knowledge in one head".

The business schools expect that once students attend 10 different courses on various subjects they will be able to connect them in their mind and become multi-disciplinary. However, this does not happen. The main reason is that when we do a particular course there is no way a Professor connects that to other disciplines and ideas.

The width is missing in the b-schools. And the only way to Innovate is to have a wide variety of ideas in one head and make the lollapalooza effect come about. This is what Charlie Munger, Vice-Chairman of Berkshire Hathaway called "the latticework of mental models" (PDF).

Sadly, the b-schools do not understand that.

Tuesday, October 11, 2005

Game Theory

Atanu Dey, my ex-boss, mentor and a dear friend introduced me to the concept of Game theory and its importance in everyday life and business. He once told me that "if you understand the concepts in Game Theory you will start seeing them everywhere in life".

I did try to understand Game Theory but it was of no success. (Many of you may have heard of John Nash, who received the Nobel Prize in Economics in 1994 for his work on non-cooperative games and the Nash Equilibrium).

A good introduction to the subject is from Econ Lib by Avinash Dixit and Barry Nalebuff who define Game Theory "as the science of strategy".

A large part of the MBA courses talk about strategy. About how finance, marketing, technology, innovation and other aspects of business relate to strategy. Sadly my University and many others do not have a basic course on Game theory.

I have found a course in the Economics dept. of the University of Adelaide which has a course without the mathematics called "Strategic Thinking for Decision Making" which is an introduction to managers about the uses of game theory in business.

I will know more about this tool and field next year once I take the course however, I would suggest every student to do a basic course to better able to start using this tool in the future.

Incidently, this years Nobel Prize in Economics was awarded to two people who spent their life understand co-operation and conflict from a game theoritic point of view.

What is a College Ranking?

The MBA students all over the world are used to checking the rankings of the various business schools in order to get into the best ones depending on their circumstances.

The Mises Economics Blog is questioning the validity of these rankings.

How can you rank heterogenous, dissimilar institutions? Each instructor has their own subjective evaluation of a student, course work is different at each institution, resources available to students are different, student-body diversity/dynamic is different, how can these be aggregated?

It also links to some good articles and analysis on the value of a university and the correctness of these rankings.

A great article by Malcolm Gladwell called the " the social logic of ivy league admissions" in the New Yorker magazine is linked to. This is a must read.

Its conclusion:

  • Success depends on Individual ability like drive, energy, goal setting, hard-work
  • Harvard, Yale and other Ivy league institutions are more like 'modelling agencies' where they take the best of the lot of make them a little better
  • Harvard is like a luxury brand and selects its students on the basis of maintaining that brand rather than any academic or other merits
Another story in the WSJ on why Haravrd is still in the press even though it is not so relevant in terms of its academic output as before. The short answer : the harvard-educated journalists

Sunday, October 09, 2005

Managing Information

A friend of mine who is currently doing his MBA back in India wanted to know how I manage my "information flow" especially news and how to save time doing it.

The following is what I wrote to him. One thing to note is that there are several other attributes to the ones I mentioned that I would do. How would you manage your stuff?

The response starts below:

What you has asked me about is "efficiency"?

How do you get the most information in the least possible way?

Much more important than that is "effectiveness" which is what I will dwell on first and the go to efficiency.

It is very important for somebody to realise that whatever is published is not the truth. Especially with political news. This could be true for management stuff. In the case of financial stuff it can be mingled.

For example: The stock market moved a couple of hundred points. The financial press informs us with stuff like "due to the FII activity the stock market has moved" or "due to the fall in the NASDAY the tech stocks in India has fallen".

It is always important to understand that facts, information, analysis, opinion are different things. you need to understand the difference and be conscious about it while you are reading anything. Sometimes we can take analysis or opinion as facts.

The different types of information is important but more important is that we "trust the sources" from which we get the information. Especially in terms of opinion.

Let me give you a good recent example of what I mean. I am not sure but if you have heard about the recent Sun-Google press meet. There they have stepped forward to form a pact in which Sun will distribute the Google toolbar with their Java software. Google promised something vaguely of helping distribute Sun's Open Office.

Now see what the Times of India and the Indian Express reported.

[ ]

According to the Times of India, "Google has announced a strategic merger with giant Sun Microsystems, in a deal that is expected to create another dent in arch-competitor Microsoft's monopoly over the Internet."

Many of you will have spotted two pretty significant problems with this sentence. Firstly, Sun and Google announced an alliance, not a merger. Second, Microsoft does not have a "monopoly over the Internet". No-one does. Microsoft may have the lion's share of the browser market, but that's not the same as having a monopoly over the Internet. Besides, the Sun-Google collaboration is not so much about changing the dynamics of the browser market as it is about changing the dynamics of the desktop applications market.

The Indian Express fared slightly better, but they too seem to have witnessed a completely different press conference to the rest of the world. According to the paper, "Google Inc took a big step toward challenging Microsoft Corp's dominance in computer word-processing and spreadsheets with the announcement today that it would distribute Java technology from Sun Microsystems Inc." Wrong again - Sun will distribute the Google Toolbar when people download Java from Sun. So far, Google has not said it will be distributing Java. They are exploring other ways to collaborate, they say, but there is no firm news yet.

See the blatant mistakes these esteemed newspapers from India have made. They could not report a simple alliance. They could have just copied from the press release of Sun.

For my part, I believe a lot in Blogs. First I try to find the best blog sources that I can trust on various topics. Then I follow then. If they take me to a specific newspaper or magazine I follow it.

Google or Yahoo groups is a good source to follow as it is community based. I like Slashdot or in Australia for broabband information.

I also search for any specific topic that I want to follow and the read many sources on one big issue to understand the various viewpoints.

it is important that you find sources that you can trust. This may take a while but it is worth the effort.

The next part is "efficiency". This is what your question was all about.

I use as my preferred service for reading news and other stuff. I am not sure if you have heard but this thing called RSS or Really Simple Syndication makes it a breeze to folloe various sources like newspapers, magazines, Google or yahoo groups, blogs and even news searches through PubSub.

It makes it easier to follow various stuff.

To get an idea of the stuff I read I would suggest checking out my Bloglines subcriptions

Also, I follow the NyTimes etc but again mostly through articles suggested in blogs.

One last bit of people I follow are some "analysts" like Bon Cringley or Maunboussin etc.

Thursday, October 06, 2005

Love for High-Tech

I have been thinking of lately a lot on High-tech.

I have been in love for technology for many years now. I did try my hand at doing an engineering degree from the premier schools in India, the famed IITs, however failed to get it. Statistically it is just tough!

Anyways, I then did not want to go for a lesser engineering college (hubris or plain simple teenage wisdom stopped me). I shifted from science and maths to business and commerce in my undergrads coming out with a Bachelors of Commerce (hons). The one thing I learned was business is interesting, but you can only learn from working not from studying atleast not what I was taught and the way I was taught in my undergrad.

And now after 6 yrs of working I am doing my MBA and can genuinely say that I am learning something. Six months into the MBA program made me realize how much stuff that I need to understand and it has opened up new nodes in my brain which did not exist but the best thing which is happening to me is the connection of the various nodes. This is happening at such a rapid pace that I just cannot fathom.

Sometimes I just get up with just 4 hrs of sleep and start working on my lovely iBook G4. The love for the Mac does play a role, but there is a bigger reason. I just cannot wait to understand the world better.

As I went about this exercises I started to see what electives that I need to take. This made me think about myself. What is that I want to do? Where do I want to go?

Peter Drucker in his "The Effective Executive" suggested that the best way to contribute is to understand your strengths. The way to understand is to find patterns in what you do over years and see where you have been doing good, doing bad, you are happy, comes naturally, etc.

For me two things stood out.

  • My love for working in start-ups
  • My love for high-tech
  • The worldisgreen concept.
I worked in a MNC and then with a start-up and it just seems that I want to be in the start-up world. In fact it is clear as I do my MBA where my interests lie.

MBA for a large part deals with "managing wealth". I want to deal with "creating wealth". That is what start-ups all about.

My reading is predicated with slashdot,, blogs on technology, the info wars, google stuff, software, etc. I have been consistently interested in the tech stuff and one thing is sure I have always been able to understand technology and related to geeks.

I think that is a skill that I find in myself and think it is a unique advantage.

The think with geeks is that they love their technology and always would love to talk about it. However, not every geek is good at markets and business. My role as I see it slowly is to fill that gap or what you can call commercializing innovations.

I have been trying to get this together and I see that the best job for me is in "business development" in high-tech stuff.

The more I started to understand this the better it seemed. Technology is changing the world. There is greater than ever need for technology to reach the masses. The only way technology can be reached is when it "the technical domain" makes value for the "social domain".

The gap is something which can be clearly filled by what can be called "business model innovation". The value of a technology is only which can be realised by the society. It is useless if the social aspect is not realized. The greatest idea in the lab is useless compared to a insignificant idea in the use of average people. That is what innovation all about. And the vehicle for that is "business model innovation".

I now see a clear way I can be part of high-tech without being a techie and still contribute as much the techies who develop a particular technology or product. In fact, a business model innovation is more like a " social innovation". Drucker has argued that innovation is in the technological, economic and social realms. And all the three types of innovation is important for making change happen.

A large part of innovation is concentrated on the "technological aspect". The social concept sometimes comes in marketing (Moore stuff) but it is far more important. The "business model" encompasses the "social and economic aspect" and hence the place where future innovation battles going to take place.

This fits in very well with my love for "green stuff". The bottom of the pyramid or rural development is one part of the green stuff for me. Green here would signify prosperity and growth. This is where I see that much change can be made. Deeshaa Ventures provided me a chance to work on that aspect.

The other Green stuff is "environmental" stuff. The ones which we are generally familiar with and associate with green. This is my job currently. I am an "Environmental Project Officer" working in the Govt. of South Australia to implement their Greening program in one of the agencies.

The unique thing is this - all of the above aspect; high-tech (IT, bio-tech, nanotech), BoP, Green technology have much in common. They all are dependent on "innovation".

Innovation in the sense of technology, economic and social. Depending on the situation one more than the other. Take the "bottom of the pyramid" ideas. It is a technological and a greatly economic innovation to make products and services available to the 4 billion people living in poverty or just above it in the world.

The same goes for "Green Technologies". The need for commercializing the Toyota Prius or the solar car, organic food. Or social innovation in terms of "stopping the use of plastic bags".

Somehow in all these I have had a chance to work in or relate to it.

My goal now is to concentrate on learning the stuff in the MBA and in the future related to "business model innovation".