Moral Policing

Establishing a Cause & Effect Relationship

Does X lead to Y i.e. does X cause the effect Y? Well it might, but how do you validate this relationship?

A lot of thought and effort goes into designing such an argument. It is not always possible to design perfect cause & effect (C&E) relationships in business because of its dynamic nature, but we can always question a C&E relationship to validate it to a reasonable extent. Validated C&E relationships lead to better decision making, however, validation comes at a cost.

Lets take an example to show how a sound argument is designed (example courtesy Prof Amit Das at NBS)

Suppose we claim that a particular training program improves productivity.

How do we support such a claim? To start with we could show that participants coming out of the program are productive.

But someone could challenge us saying that those who participated in the training are no more productive than those who did not. To counter this, we will need to measure the productivity of both, the people who attended the training and people who did not and show that there indeed is a difference in the productivity levels of the two groups.

However, someone might again challenge us saying that the people who participated in the training were already more productive than others (i.e. training did not increase productivity rather the people chosen were already more productive). We can dismiss this argument by measuring the productivity of the training participants before and after the training and show that there was indeed an increase in the productivity.

Next, we could be challenged with the argument that people who did not attend the training also became more productive over time (i.e. everyone gets more productive over time and training did not have an effect on productivity). To thwart this argument, we can measure the productivity (before and after) for the people who attended the training as well as for the people who did not. We can then show that the people who attended the training had a relatively higher increase in productivity levels than the people who did not attend the training.

The challenger's next argument could be that the people who were sent to the training were smarter than the people who were not so they improved faster than the rest (i.e. the increase in productivity was not on account of training). To eliminate this, we have to make sure that those who went for training and those who did not were comparable people.

Another argument against us could be that the productivity improvement was not because of training as such but maybe due to other differences like training location (maybe Bahamas) which might have improved the morale of the participants and hence led to productivity improvements. Well, to dismiss this argument we could have two groups attend two different training programs in the same place and then measure the productivity of the two groups and show that our training program is more effective, other things kept constant. (Frankly speaking this is going too far, most probably we would not have to go to this extent for business arguments).

All said and done, some thought put in designing our argument goes a long way in determining how useful will that argument be for decision making. A casually made argument without proper validations might lead to erroneous decisions costing companies pots of money (Say if in our case the training program was actually not useful, but just a casual argument like 'the training increased productivity' might cause a company to spend loads on that training).

Lessons to be learnt -
1. If designing an argument, put in a little thought and make it as sound as possible.
2. If encountered with an argument, do not accept it without challenging its validity.

Wrong Metrics and Relationships - The reason behind Business Inefficiencies?

" The salesman who achieves his sales targets should be rewarded"
" Installing SAP helped my department reduce costs by 20%"
" Company X is better than company Y because it has more revenues and its sales grew by 50%"

Familiar sounding statements? The next time you see such a statement, think about it for a second. Metrics/Statistics are as much wrong as they are right. Many times, statisticians only give you the good information and hide the things which you should not see. Many times we ourselves try and link two things which might actually be totally unrelated or might not have a strong correlation.

Many businesses have a "sales achieved" metric for their salesmen. Salesman 'A' might be able to sell 100 units but with a margin of only $1 on each unit; While Salesman 'B' might be able to sell 50 units with a margin of $2 on each unit. Both of them made $100 for the company, but only salesman A was able to achieve the target of 100 units sale. What the managers have wrongly assumed here is "Sales target achieved => better salesman"

There are loads and loads of examples where such a wrongly established relationship leads to a lot of inefficiencies in the business. With such a metric in place, the objective of the salesman becomes to sell more and not for how much margin. The objective of the company is to make more money but the objective of the salesman is not to make money but to sell more...all because of a wrong metric/performance measure.

Incorrect 'cause and effect' relationships have rocked many a business. Many firms are gungho on Technology these days. People claim that a new software reduced costs by 20% for their department. Yeah ok, it must have...but why do you not tell us about the increase in overhead costs (which may not be allocated to that department) due to that software. So the costs for department might have reduced, but the costs for the company might not have!

Take the example of the Fortune 500 rankings. The rankings are done on the basis of gross revenues. The companies which make it to the ranking proudly claim that they are a Fortune 500 company and we run behind those companies for jobs and even metion in our resumes "Worked for a Fortune 500 client". Do you think gross revenues is the correct measure? Tomorrow, I could open a company, make 10 billion laptops and sell them for $10 each. This would give me revenues of $100 billion and would make my company rank #18 in the Fortune 500 rankings. Yeah, I got the revenues but made a huge loss! Profitability (profit as a percent of revenues) would any day be a better metric to give us a more realistic picture of which company is performing well.

Statisticians are not the only people to be blamed, normal people like you and me are to blame as much. We try and make frameworks and models out of everything we see and try and correlate things which in reality might not be correlated. We see X leading to Y and make a notion in our head that X leads to Y. Does it, really? It might, it might not.

Check the next post to see how to establish a cause and effect relationship.

Democratic values?

Came across this recently -

"In USA you can kiss in public places but cannot shit; in India you can shit in public places but cannot kiss"

Very aptly describes how democracy could mean different things in different places.

Advertising Battles

The battle is on for the control of the Indian skies!!
Am sure Naresh Goyal won't be amused though....

Petty Rivalry

"British Airways has airbrushed a scene of arch-rival Sir Richard Branson out of its in-flight James Bond movie "Casino Royale", sources close to the company said on Monday.

The Virgin Atlantic chief is briefly featured in the original 007 film at an airport security scanner, but can only be seen from the back in the edited version.

Shots of the tail fin of a Virgin plane have also been obscured."

Read the article here

How much lower can competition take the companies?? Do you think a 2 second shot of Richard Branson would make you switch airlines from BA to Virgin? NO. Maybe high prices and crappy service will. Grow up BA..you have got better things to do!

Maradona vs Messi

There is lot of comparision going on between the recent goal from Messi and Maradona's goal in 1986 world cup. There is a very striking similarity between the two goals, but there is one reason why Maradona's goal was special - 'Context'

Not taking anything away from Messi though.

For-moolah one!

I recently had the opportunity to witness a live F1 race. Kind of a dream come true for me, have been following this sport since 1996 (from the Damon Hill & Jacques Villeneuve times). Must say, this is one heck of a sport...1.5 hrs of adrenaline pumping, full of glamour, noise and lots and lots of moolah!

Here are some pics from the 2007 Malaysian Formula 1 Grand Prix -

The BMW Sauber Petronas car on display

Fans!

StandsAah! the F1 cars!
If there are cars...there have to be babes! :-D

'The twenty-first century is India's to lose'

Came across a nice article recently. This article outlines a lot of issues that India currently faces and how it is still able to move ahead.

Read it here

Some favorite excerpts from the article:

1. India is like a truck with twelve wheels: even if one or two are punctured, the truck moves on. China, on the other hand, has fewer wheels that enable it to move faster, but others wonder what the consequences will be if a couple of wheels fall off.

2. The shining India that every newspaper praises as the country of the future is thwarted repeatedly when it seeks to acquire the trappings of a great power like permanent membership of the UN Security Council.

3. India never loses an opportunity to lose an opportunity.

Media blues!

After India was thrown out of the cricket world cup, Sharad Pawar, the BCCI chief made the following comment on Greg Chappel(according to PTI)...

"Definitely there is a responsibility to train properly but at the same time one can show water too hot but cannot compel him to drink."

Water too Hot!! I think Pawar meant to say "water to horse". Not sure who made the mistake here, did Pawar really say it wrong or did the journalist goof it up?

Whatever it is...PTI needs to careful what it releases or else we could have a big problem...


Read the article here

Somebody get the pig a glass of champagne!!

Nicolette Hanh Niman writes in the New York Times -

"As a cattle rancher, I am comfortable raising animals for human consumption, but they should not be made to suffer. Because we ask the ultimate sacrifice of these creatures, it is incumbent on us to ensure that they have decent lives"

Read the article here

Don't know what to say, people are ok with killing animals to satisfy their hunger, but, they would like that the animals they eat, live in good conditions. Talk about human(pig) rights in the stomach!!

0.5 MBA

Its the end of trimester 2, meaning am halfway through. Another 8 months to the finish line.
This was the longest trimester, with the christmas break in between. The first half was frentic-paced and the second half was pretty relaxed.

T3 promises to be more balanced. Am taking some heavy-duty courses this trimester.

1.Global Business Management in Manufacturing: The fomer chief of Nissan, America; BMW, Japan is taking this course. The course deals with Japanese manufacturing expertise with a special focus on the Japanese automotive industry.

2. Life Sciences - A business perspective: This course deals with businesses relating to the biotech and pharma industry.

3. Corporate Business Strategy: This course focuses on the application of strategy theory and principles. "Think like a CEO" is what the prof mentions.

4. Statistics & Research Methods: The objective is to build the design and analysis skills necessary to carry out applied business research.

5. Competitive Strategy: This course examines how firms build sustainable competitive advantage.

6. Strategy Implementation: All about the issues encountered when implementing strategies.

Pretty interesting stuff.

Insecurity?

Have been experiencing this since school times, albeit in different proportions. Was the most in school, a little less in college and lesser in the MBA, nevertheless it still exists.

Am sure most of u must have heard your friends telling you "Kitna padhega yaar, bas kar"
Is that out of genuine concern or is it the insecurity? In most cases, its the insecurity, the person asking you this statement is worried more about himself/herself than about the person he/she is asking the question to.

The situation becomes more evident in the opposite case. You wont find many people asking you "Kitna cigarette fookega, bas kar". Only people who are genuinely concerned will tell you this.

Time to change...so now if you see a person smoking tell him/her, "Kitna cigarette fookega, bas kar" and if u see a person studying, you say, "Arre tu padh raha hai, padh padh. Main bhi join karta hoon".

In MBA lingo, channelize your tension in an efficient manner to do value-adding work rather than bring the other person down and hamper overall growth!!

$700,000 car!

Got the chance to sit in a $700,000 Bentley recently (courtesy Hemant)
Must say..really impressed! Hope to own something like this one day..

The Nanyang MBA rising fast!

Very happy to hear that The Nanyang MBA program got ranked in the top 100 MBA programs in the world by Financial Times and Economist IU.

To be precise, we are ranked 67th in the world (a jump of 35 spots from last year). We rank #1 in Singapore, #2 in Asia and #3 in Asia-Pacific.

Hope that we can maintain the momentum and get into the top-tier of the world's B-schools.

Some more information available here

Here is a video link

And this one is a video from a Chinese News channel. The only reason for putting this up is because it shows a class in progress. I am seen towards the end of the clip for a spilt second.

Here is a photo from the party held at Harry's for the celebrations.

Leftist v/s Libertarian

Europe and America were also agrarian at one point of time. They too had millions of small farmers at one point of time. But gradually the agriculture there moved in the hands of the big farmers, because it gave economies of scale. The children of erstwhile small farmers started doing something else. Same story in South East Asia.

In India, this consolidation has not happened because leftists and quasi-leftists are of the opinion that 100 small farmers selling their land to one big farmers and getting into some other business is a wrong thing.

For people like them, the fact that "70% of the Indian workforce is still employed by agriculture" is a source of pride.

It should be a matter of concern!

Why is such a huge chunk of our workforce still engaged in a profession with low productivity? Surveys have mentioned that 95% of farmers do not want their kids to keep farming. but they have no choice. I think that their kids deserve to do something more productive as well.

But what will they do if not farming, leftists ask? They say that if these farmers are forced out of unproductive farming because of globalisation, then they will die like flies.

Did they die like flies in other countries? Maybe a few here and there. But would you maintain an unproductive status quo and be happy with abject poverty because of it?

Give the masses the freedom and they definitely will come up with alternate means of employment.

The status-quo-ist mindset advocated by leftists is born out of a deep inferiority complex. Deep down they feel the Indian masses are inferior and hence need protection. Indian libertarians on the other hand, do not suffer from this inferiority complex. We believe that the Indian masses, if freed from the state's illogical shackles, can prosper and make the transition into an economy which is not so strongly agrarian.

Look at Indians living abroad. I am not just talking about the white collared engineers and doctors. Even the blue collared people who reach foreign shores by illegal ways do very well. You do not see low-class immigrants living on welfare in Europe or America. they are hardworking and ingenious people who make something of themselves.

A lot is written about the WASP work ethic, but I think the Indian work ethic, born out of our history and our "culture" is a potential gold mine. Which is why most Indians, be they educated or uneducated, do well in foreign countries.

It is our inferiority complex, caused by colonisation and compunded manifold by a socialist polity, that holds us back.

Bottomline is, that the Indian workforce, if freed, can make rapid strides. There will be some growing pains of course, but we need to look at the bigger picture. We can not stay in the dark ages just because of a few suicides.

I will use an example. Tongawallahs (horsecart-pullers) ruled the streets of India a few decades ago. They were the only means of public transport. And yes,a tongawallah is also unskilled. So when taxis, buses and autorickshaws came in, they obviously threatened to put the tongawallah out of business. I am sure a 50 year old tongawallah, who has just driven a tonga all his life, would have contemplated suicide. In fact I dare say some of them must have committed suicides. People who manufactured tongas, and their workers, would also have contemplated and committed suicide.

Would you use this as a reason to keep taxis, buses and rickshwas out, and continue using tongas? the exit of tongas benefitted everyone. It was a slow, unproductive means of travel, and had outlived its utility.

That doesn't mean that Indian-made-tongas were replaced by imported buses and taxis. indians started making buses and taxis too. And others, much more in number, started driving them.

Hope you get the point.

Happy New Year

A Very Happy New Year to all of you!

Some food for thought to begin the year:

#The busiest man has the greatest leisure#

#Silence is the hardest argument which can sometimes be offered to your opponent#

#If I like praise, it means I can be easily hurt by defamation#

#If you want to avoid pains, you will have to avoid pleasures also#

Going home...

Its vacation time!

How I longed for such a vacation while I was working. This is definitely a huge advantage of being in college..you get good long vacations! I am going back to India for 3 weeks. Lots of things planned. Will be visiting my native to attend a felicitation function of my Grandpa. A road is being named after him and a statue of his is being inaugrated. Will be visiting a few more of my relatives all over M.P and then head to home. Hope to have a good, long, relaxing holiday!

Bintan, Indonesia

The school has closed for Christmas vacations. Everyone is heading back to India in the next couple of days...but before that we decided to have some unadulterated fun. We headed for the Indonesian island called Bintan for a 2 day trip.
Guess what we did there? We did nothing!! No hurried sightseeing, no getting up early, no plans! Just relaxed...ate...drank...slept!
I surely did enjoy this trip...it is sometimes good to do nothing. Caught up on some music, some gossip and generally made peace with myself while lying down on the beach. Here are some pics....

The gang

Thats our boat

Bintan island

Our resort

Pax's birthday celebration

Total chill!

Quenching our thirst

Beach Volleyball

Lunch time

Soothing sea

Resort

Kick ass!

Taxi Talk!

The taxi wala's in Singapore can be quite interesting and knowledgeable. I have now had 2-3 episodes and thought its high time I wrote something about them.

Episode 1: As soon as i get in, the taxi guy says "Namaste, Aap kaise hain?"...and he was not Indian..was a Singaporean with Chinese origins. I reply to him and then ask him where did he learn this. He says from his passengers. Then tells me teach something more in Hindi.

Episode 2: This time its a local Singaporean muslim as the taxi guy. We are travelling back to the hostel and he starts talking about life. And i was taken aback, he had such passionate thoughts that he could become a preacher. Some of the things he told us,
1. "I do everything for a reason, I do not know why people go on vacations (we were coming back from a vacation in Indonesia). Its the same air, same earth everywhere. Its the same eyes and nose you have. So why go on a vacation? Its all in the mind about getting stressed or de-stressed."
2. "Mother is the most loving person on earth. If there are complications during pregnancy, the mother is ready to sacrifice her life to let the baby be born. A baby who is unknown to her. A baby who might not listen to her or might mistreat her one day."

Epsiode 3: Its again a local Singaporean guy. We ask him a general question of how bad is the taxi problem during christmas. And he says "Its bad during christmas, but will not be very bad this time around. The Singapore economy is not doing very well. People do not have much money to spend as compared to last year. Singapore has become like a saturated market and news jobs and company headquarters are going to India and China. Singapore needs to pull up its socks if it wants its economy to keep growing."

A customer friendly driver, a human behaviour specialist driver and an economist driver! I am impressed! Wonder if these guys did their MBAs! If not, then the MBAs of the world are in for some competition from the Singaporean cab drivers!!