Management by Matrices

Saturday, April 9, 2011

Building an Organizational Grammar

My latest column for The Hindu Business Line - Building an Organizational Grammar
Full text follows
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The full potential of a language can be explored once a grammar systematises key patterns. The user can focus more on creating and communicating ideas and less on creating the structural means to do so.

Similarly, a formal grammar for organisations would enable them to focus greater energies on manifesting their purpose, without constantly reinventing the basic building blocks for doing so.

In this article an attempt is made to understand some of the conceptual units that could make up such a grammar.

Competencies and purpose

The first building block of the organisation is a collection of competencies or areas of expertise. This translates into an overarching purpose (or purposes) for the organisation. Purpose, as such, is an insight-driven discovery, but the insight is usually built upon the bedrock of manifest and un-manifest competencies.

Additionally, purpose is usually an overarching theme that may be able to successfully capture multiple dimensions of the competencies contained within the organisation. The glue that unites competencies with purpose is a shared vision.

The physical manifestation of competencies and purpose could take two forms. Firstly, it clearly influences the areas in which the firm will choose to operate in. Secondly, and, more importantly, it manifests in the choice of leaders who need to be fully aligned with both the competencies and purpose of the firm.

Platforms, Applications and Components

Platforms form the third building block of the organisational grammar. A platform essentially represents a market facing or internal facing proposition that the firm has to offer. A firm may have one or more platforms with possibly overlapping competencies and purposes. A product or service line is one example of a platform.

A platform is, in turn, a collection of one or more ‘applications'. Applications are fully functional, meaningful units, and can be replicated easily. For instance, an e-commerce application used by a firm in one service platform to distribute its products may easily be replicated across platforms.

A component would be small, repeatable units of competencies which may be contained within multiple applications. A component in isolation may not be meaningful, but creates value when it aggregates with other components. A collection of inter-related components would usually make up an application. Of course, components, in turn, may aggregate amongst themselves to form larger components. The linguistic equivalent of a component-application-component paradigm would be a word, sentence and paragraph.

In a really well-designed organisation, it will be evident that the very competencies and purpose that form the first building block of the grammar are found even in the smallest components, applications and platforms in the firm. This is not unlike a fractal, and its feature of ‘self-similarity'.

Applications of a Grammar

A clear understanding of the grammatical elements available in an organisation can become an important guide to actually designing the structure of the firm. Often, one finds firms where components are embedded so deeply into applications and platforms that they aren't well understood outside them, leading to frequent attempts at reinventing the wheel. Organising around grammatical elements will ensure that everything that is created in the organisation finds its full expression. Knowledge management would be a critical element in a ‘grammatically structured' organisation, in order to ensure that component level expertise is consolidated centrally and redeployed as required.

The second arena in which a grammatical element based approach helps is in the identification of talent to place into those elements. While some people are component level thinkers, others may think at a platform level, and still others may excel in conceptualising visions of future states.

A third area in which a grammar-based approach helps is the effective design of conglomerates which operate in multiple spaces, while operating within its overarching purpose or competency areas. Too often one comes across cases of destructive diversification that have nothing to do with the competency-purpose-platform skills of the parent firm.

While this is only a brief attempt at visualising what a formal grammar for firms might look like, it is not difficult to see that a clear, well-tested grammar may have a lot of applications that help organisations fully utilise their creative energy, with both market-facing ramifications (increased revenue, etc,) and internal implications such as enhanced fulfilment.

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Sunday, January 30, 2011

Organizational Culture Change

Check out my latest article at The Hindu Business Line - Organizational Culture Change. Full text follows:
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The changing culture is a complex problem faced by many organisations. It's a lot like repairing the engine of a moving vehicle. While new firms have the luxury of gradually building the culture that best serves their interest, larger organisations tend to find themselves ‘stuck' with cultures that may be completely at odds with their stated vision or strategy. The big question then is whether it is possible to change culture mid-course. The answer may lie in understanding how culture is created in the first place.

Individual & organisational values

The crux of culture is values — in simple terms values expressed in the form of behaviours is what is perceived as culture. Values themselves may be of two kinds — individual and organisational.

The source of organisational values is usually the values of the founders. However, with time, as the firm transitions the values could change. This could be due to a lack of attention paid to the developing culture, particularly when meeting the demands of rapid growth. This takes the form of indiscriminate addition of individuals whose values may be at odds with the founding values. While organisational values may be documented formally, the ‘real' organisational values are informally “stored” in the minds of members of the organisation.

Individual values may be of two kinds — expressed, and suppressed. Expressed values are those that members of an organisation choose to express in their behaviour based on their assessment of what is required in the organisation or ‘what works'. The other values possessed by an individual member may be suppressed, at least in the organisational context. It is this interplay between “stored” organisational values and individual values that develops into “culture” in the manifested form. The metaphor of an iceberg could represent this interplay. What is seen above the surface is culture, but what lies beneath is the cause — the complex, ever-evolving dynamic of organisational and individual values.

The right culture

The next question that arises is — what is the right kind of culture for a particular organisation. The simple answer to this would be — the culture in which there is no conflict between organisational and individual values, and where organisational values themselves are aligned to what the organisation seeks to achieve. It is important to recognise that the culture manifested at any time is indeed already the most appropriate culture for the current interplay between organisational and individual member values.However, this culture may happen to be completely counter-productive to the organisational goals, owing to degraded organisational values or high conflict between individual and organisational values. Any attempt to transform culture by simply manipulating the manifest dimension of culture will not succeed unless the underlying interplay of values is not addressed.

Thus, culture transformation must address both organisational and individual values. On the organisational values front, one may first need to begin with an assessment of what the organisation's values really are. If the current state of values is a diluted version of the original intent, a fresh rediscovery or redefinition of values may need to take place in order to define an ideal state.

On the individual values front, the first intervention should be at the ‘input' stage, where new members are inducted. If a well-defined organisational identity or value is in place, it is not difficult to identify and add individuals who are in alignment. The bigger challenge is for existing members. Here, the solution is likely to be a more gradual one. It may involve a reassessment of all levels in the hierarchy to determine the “culture” icons best suited for leadership roles in the “new world” as it were. Leadership roles are the key fulcrums upon which culture is reinforced. This is because leadership behaviours typically tend to activate the relevant values in followers (provided the followers subscribe to those values at least partially). Over time, a culture transformation process would start to work on the organisation's memory, replacing negative versions of the organisation's values that are “stored” in the minds of members with fresh versions, till the new version becomes the new normal.

Setting right a malfunctioning or poorly aligned organisational culture is undoubtedly a complex process and may require an intuitive, right-brained mindset on the part of the designers, as well as multiple iterations to arrive at the right solution.Finally, culture needs to be an integral component of organisational strategy, as it is the foundational building block upon which the organisation's purpose can be manifested into reality.

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Tuesday, August 17, 2010

Selfless Leadership - An Indian Perspective

My latest article in The Hindu Business Line - Selfless Leadership - An Indian Perspective.
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Most leadership theories (with a few exceptions, of course) are variants of a ‘hero' based ideal. In other words, the leader is a heroic individual of some sort who summons his followers to accomplish great things. Additionally, there is a tendency to glorify leadership as an achievement or a sort of reward for one's performance in a specific sphere of life.This has led to a situation where society tends to confer leadership upon individuals simply because they are able to function effectively in their individual roles without evaluating whether the individual truly possesses the skill to lead others.Any system that follows such a pattern of leader selection is bound to create a society of unfulfilled ‘followers'.

An Indian definition of leadership
Is there a distinctly Indian definition of leadership? The answer to this may be found in India's cultural foundations. The central idea of the Indian philosophical tradition is the idea of selflessness. An individual begins on his path of spiritual evolution with the initial ego-centric belief that he is distinct and special in relation to others, but as he progresses further he realises that while the particularities of his existence or station in life may be distinct from others, the underlying conscious principle is the same.Krishna's demonstration of his own cosmic form (containing the entire universe within it) to Arjuna in the Gita essentially reinforces the same idea of a universal consciousness that cuts across all beings.It may be argued that an individual who is able to perceive this unique combination of specificity and universality in other human beings is the one who is best suited to lead others.In other words, an individual with a greater degree of selflessness is the ideal candidate to be a leader of other human beings.

Ideals of a selfless leader
A leader whose foundation is the idea of selflessness manifests this in many forms in his relationship with followers.
Freedom: The first ideal of such an enlightened leader would be ‘freedom'. A selfless leader would allow other individuals to operate with a high degree of freedom while providing an outline of what needs to be accomplished.How the follower navigates his way towards the outcome is entirely left to his creative faculties. This approach contradicts the traditional organisational way of getting things accomplished — fear and conformity to pre-defined safe paths.Fear and conformity-based leadership styles are essentially expressions of a control-based tendency which, in turn, stems from an inherent ego-based foundation which demands that all outcomes bear the stamp of the leader.A selfless leader, on the other hand, will demonstrate a lesser tendency to control simply due to the absence of any desire in him to stamp his individual personality on everything that his team produces.

Follower evolution centricity: A selfless leader would be constantly conscious of the specific evolutionary state of his follower, and would constantly try to raise him to higher levels of selflessness.Thus, the role of such a leader is not only to create outcomes through his team, but also to raise followers to his own state of being. In fact, all outcomes are in the distant future, and all that can be done in the present is really to ensure that people working towards those outcomes are raised to higher levels of consciousness (which is essentially the ideal of Karma Yoga).

Enlightened doer-ship: An enlightened leader would constantly reinforce the idea of enlightened doer-ship. This means that credit-seeking would be a shunned practice. This returns once again to the Vedantic ideal that the idea of a specific doer is an ego-centric idea. Ego-centric behaviour in any team pursuit rapidly diminishes the motivation and performance of other players in addition to creating a zero sum situation where people perceive that for one person to win, another has to lose. This does not mean that skilled performers are not rewarded — it only means that rewards are structured on a non-zero-sum, non-relative basis.One may even argue that skilled performance is its own reward and per se does not need any other reward to reinforce that behaviour!

In conclusion, it must be pointed out that a selfless leadership based organisation does not completely shun individualism. In fact, it celebrates individualism in a different manner — through the freedom it offers to its members to creatively express themselves towards the accomplishment of outcomes.All it does though is to check individualism that is expressed in the desire to possess greater control and power.

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Wednesday, May 19, 2010

Organizations as fulfilment engines

My latest piece for The Hindu Business Line - Organizations as fulfilment engines
Full text follows:

What is the true purpose of an organisation? Is it merely the creation of wealth, or must there be a higher purpose to it? The East may have some answers to this question.Indian culture, as a result of its philosophical foundations in Vedic traditions, has never eschewed wealth. However, it has repeatedly stressed that the real purpose of life is a higher fulfilment whose end goal is self-realisation.Thus, material wealth of any form cannot become the end of any enterprise or human life. It may certainly be one of the outcomes, but is not the central purpose.Our institutions in all spheres - be it business, education or Government - seem to be losing sight of the higher purpose of their existence and have increasingly started viewing themselves as a means to an end. What then could be the higher purpose that an institution must seek to address itself to?

While there could be many ways of looking at this issue, one possible answer is that the reason for the existence of any institution is to provide an arena for fulfilment for its end-users (customers) and constituents (employees and other stakeholders).What might such a fulfilment-centred organisation look like across these two dimensions of external and internal stakeholders?

CUSTOMER FULFILMENT
The big question here is - which customer purpose is this organisation trying to fulfil? Unfortunately, the industrial era mindset is one of viewing customers as being no more than `wallets' waiting to be tapped. This is not to suggest that such firms are unethical - they are only responding to shareholder and investor expectations by behaving in a manner that only focuses on financial goals.Additionally, given the complexity of large organisations and the degrees of separation between the producers and end-consumers, it is no surprise that organisations view customers as abstractions.

The post-industrial world needs to view customers and their needs in the light of purpose fulfilment. Every customer is essentially seeking fulfilment of some sort through the consumption of goods and services. This fulfilment could be at a basic level of survival, or at the highest level of self-actualisation.

What if a business organisation were to align itself to this hierarchy of needs and claim as its mission the goal of raising the customer to higher levels of fulfilment? This may mean the creation of increasingly sophisticated products for which there may not be a market at the moment. The exact opposite of this is seen in many privately- owned electronic news media outlets. In the interest of `what sells', these outlets cater to the lowest in their `customers' instead of raising the bar to challenge their customers to evolve. They need to realise that producers of goods and services have a moral responsibility towards customers. In fact, this is a far higher form of corporate social responsibility than the contribution of a share of profits towards social causes.

THE INTERNAL PERSPECTIVE
Within the organisation two axes of fulfilment must be clearly defined - the first is the fulfilment of customers through the work done by a worker, and second is the fulfilment of the worker himself, and the two reinforce each other. However, as pointed out earlier, the distance from the actual customer, and the abstract way in which tasks are parcelled out means that the average worker no longer feels connected to the customer's purpose or even his own purpose.The way out of this alienation is to erase the boundaries between the firm and its customers, and allow customers to `infiltrate' with their views and allow these to actively influence corporate strategy.

The second dimension i.e. the worker's own fulfilment. This involves a systemic reevaluation of how careers are viewed from the traditional give-and-take transactional model to a fulfilment-oriented model. In the latter model, a service mindset (seva) will be very important. Seva, in the Vedic/ karma yoga context, is a work offered without any anticipation of reward, because the work itself is the reward in that it offers an opportunity to expand oneself from one's narrow selfish ego, towards a greater humanity.While this may seem like lofty idealism, it is easy to see its practical function. Activities performed without anticipation or anxiety for future rewards must necessarily bring greater focus to the work at hand, and hence, a greater quality in the outcome, as well as greater fulfilment.

In conclusion, India is well placed due to its unique cultural and historical context to bring alive the vision of fulfilment-centric organisations. The question then is whether we will choose to replicate the path taken by the West and its attendant pitfalls, or will we at some point integrate the best of the East with the West.

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Tuesday, March 23, 2010

Organizational memory and change

My latest column for The Hindu Business Line - Organizational memory and change. Full text follows.

Memory plays an important role in a human being's tendency to change. As a person experiences more, he creates more memories and as a result becomes a product of his memories.In a similar manner, organisations too have memories which are essentially the sum total of experiences of the current members. While these collections of memories or knowledge are certainly useful in building and scaling expertise contained within the organisation, they often become impediments to change.Such organisations find themselves with a ‘culture' that is unsupportive to change and prefers old habits that are unproductive and safe. The only exceptions are tipping point situations where the cost of holding on to memories becomes far greater than the benefits of change.In the face of such situations, some organisations finally reinvent themselves, while others just become extinct or fade away.Another point to be considered is that even in such extreme situations the change process is designed in a top-down way, and thus there is an inevitable resistance through the levels within the organisation, making it all the more difficult to create change when it is most needed.

Designing organisations for change
The question then is whether change can actually be designed to occur well before such extreme situations. The best way to go about achieving this would be the creation of decentralised change protocols at the micro level ‘sub-systems' within the organisational system. This is because the idea of change is closely linked to the idea of ‘spontaneity', or the ability to respond to a situation without stopping to consider the past (memories) or future.It can easily be observed that within sub-systems, the ability to be spontaneous is far higher than within a complex system as a whole. This is because sub-systems have far fewer moving parts, and as a result are able to quickly change to meet new demands. How then can an organisation be designed in such a way that its smaller sub-systems embrace change?

Decentralisation & capacity building
Decentralisation: As organisations get larger, there is a strong tendency to centralise all protocols for change. This leads to tedious bureaucratic processes of ‘approvals' and over-analysis which inevitably quell not just the proposed change initiative but reduce the tendency for future such attempts.Thus, the first key is to decentralise the origination and execution of change initiatives almost entirely to the sub-systems. There would still be ‘rules' to be followed, but these would be known in advance.

Building capacity for change:
The immediate criticism of the first suggestion is that too much decentralisation may lead to excessive risk-taking or poorly thought out initiatives that fail to take into account the larger impact of the changes in the sub-system on the system as a whole.Thus, the second key is to actually build capacity within the sub-systems so that there is a deep understanding of how changes within the sub-system impact different parts of the larger system, as well as the ‘whole' of the system. This capacity could be built into individual change agents within each sub-system.

Emergent change
From the foregoing discussion it may appear that the entire process of change can only be autonomous at the micro level, and not at the macro level as a whole. However, one may argue that the best change for any organisation is the sum total of the spontaneous changes in all its sub-systems.

In other words, if the mechanisms for rapid, spontaneous change are embedded into sub-systems, there is no need to worry about the system as a whole. It will automatically reach the place where it needs to be.
Thus, change at the level of a system is essentially an emergent property of change at the levels of the sub-systems. As such, there may be no need to be too concerned about where the system as a whole is headed as long as the sub-systems have the required capacity to design and execute change. In such a situation, the only ‘central' role in the organisation as far as change initiatives are concerned would be the design of efficient and simple change protocols for the sub-systems, as well as capacity building to understand the impact of sub-system change on the system as a whole.

In summary, any process of change is dependant on the capacity of an organisation to temporarily discard its memories in favour of spontaneous responses to the environment. However, in most organisations, particularly the large ones, this process can happen easily only at the sub-system level. The key then is to ensure that there is adequate intelligence built into all these smaller units that make up the organisation, while believing that the sub-systems' process of change will automatically result in the evolution of the system as a whole for the better.
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Tuesday, January 26, 2010

Leadership phases in society

My latest column for The Hindu Business Line: Leadership phases in society .Full text follows:
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Stagnation is the bane of any social order in that it disallows a full expression of society's potential.
Leadership is the lever through which society casts itself out of periods of stagnation towards periods of possibility. There appear to be essentially three phases of leadership in society (or for that matter any institution or organisation). These three phases represent three states of being or collective will, and not necessarily a sequence.

Expression:
Capturing the mood of the times The first phase is the formation of a strong collective mood due to various circumstances. This leads to the arrival of an individual who effectively expresses the current state of the collective consciousness, and is thus elevated to a leadership role. Political history is rife with examples of such leaders who brilliantly capture a prevailing mood to their own advantage. Such leaders may later be viewed harshly by history, but the fact remains that the collective will, at least temporarily, was in sync with the aspirations of these leaders. Thus in this first phase, the leader is very much a part of the collective, and a representative of its wishes. This phase may be termed as an `Expression Phase'.

Evolution:
Arrival of a transformational leader The second phase of leadership in society occurs with the arrival of a transformational leader. This leader's views may often not even match the will of the collective on a number of issues. He may craft a completely new agenda or vision for the future yet unforeseen. Yet, the persuasiveness, and the moral character of such a leader may cause the collective to suspend its current way of looking at things in favour of a completely new future. So, in this second phase, the leader is almost outside the collective, and yet successfully charts a new path for it. This phase may be termed as an `Evolutionary Phase'.

Revolution:
Collapse of old orders The third phase of leadership is a complete erosion of boundaries between the leader and the collective. This tends to occur in certain mass movements where the objectives to be accomplished become so ingrained in the collective that the leader may just become a figurehead, while the collective marches on, often crafting strategies and tactics on the go. This phase is based on a sense of distributed ownership, and is also characterised by a breakdown of existing norms and institutions. This phase may be called as a `Revolutionary Phase'.

The entire process may be quite long drawn, and when finally the goal is accomplished, society reverts to the first phase, wherein a leader is selected who will preserve and maintain the current will of the collective. TRINITY Interestingly, the three phases have a close relationship to the Indian idea of cycles of creation and destruction. The triumvirate of Brahma, Vishnu and Shiva represent the tendencies to create, preserve and destroy at a cosmic level. Thus, the evolutionary phase of leadership represents a creative era in which society reinvents itself. The preservation phase represents an era when society maintains the status quo. The revolutionary phase represents a destructive period when all old ideals and institutions may be cast aside in favour of a desired future state, sometimes without even knowing the precise contours of the future state.

It is interesting to note that in the first two phases, leaders continue to operate within the boundaries of existing institutions, while in the third phase the desire for rapid change far exceeds the need to preserve and work with existing institutions. Also in the first phase, there is a fairly precise articulation of how the future looks, while in the last there is only an articulation of how the future must not look. In sum, viewing leadership through the model of these phases enables us to get beyond the current personality-centric or heroic definition of leadership towards a new definition that is based on the complex relationship between what society `needs' at a given point of time and how it chooses to accomplish the same through a tool called the leader.

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Tuesday, December 8, 2009

Strategic Obsolescence

My latest column for The Hindu Business Line - Strategic Obsolescence. Full text follows:

A major cause of the failure of most organisations is their inability to foresee their own obsolescence and remaining stuck in their old ways of doing things. In this article I argue that every organisation must actively plan for its own obsolescence, and work in parallel on future opportunities. In other words, becoming obsolete should be part of the core strategy of a firm.

This entails taking a flexible view on the core purpose of the organisation. Not surprisingly, most firms tend to ignore the possibility of extinction until it’s too late. This is because most of firms’ energies are involved in improving upon past metrics, and very less energy is devoted to the future that is emerging.

Studies show that the average Fortune 500 company only exists for about 40 years. This means that even the largest, most well-managed organisations, are woefully short on vision when it comes to evolving with the marketplace.

Model of innovation

The accompanying graphic demonstrates the implications of strategic obsolescence. Every new industry begins with an early wave of innovators or market creators who create a new market.

First movers have the freedom of pricing and tend to use this to their advantage by skimming the market. As more and more players get in, efficiencies increase and prices fall further as a result. At one point, the market is saturated and prices and efficiencies plateau out. At this point, in most industries the incumbents begin looking for growth by setting up subsidiaries in new markets, and doing more of the same.

Meanwhile, some new innovator may introduce a disruptive product that may act as a perfect substitute to the current product and still be just as competitive on all dimensions. Alternatively, another innovator may be working in a direction where future Government policies are headed (example Green Energy). This is when large, bulky incumbents are taken by surprise and end up facing the possibility of extinction.

A company that invests in its own ‘strategic obsolescence’ will start aggressively investing for the future at every downward slope of the Z depicted in the graphic (similar to the S-curve concept commonly used to depict innovation). Incidentally, the downward slope of the Z also indicates a transition from innovative product to commodity.

Examples

A number of industries demonstrate a lack of planning towards strategic obsolescence. American automakers who have always resisted green/ hybrid vehicles may have well found themselves at the cusp of a lucrative new opportunity had they invested in that opportunity many years back. Instead, they face imminent bankruptcies.

Similarly, the conflict between traditional electric utility companies and new green technologies is likely to play out in a similar manner as Governments invest in and incentivise these new technologies, while the existing players may lobby for their own self-preservation.

A lot of technology companies understand this idea quite well because the rate of obsolescence of technological products is far higher than any other sector (the ‘Z’ in their case would be more like a steep step).These firms have entrepreneurial teams that are constantly working on determining what the next wave is likely to be, and iterating new innovations to meet the challenges of the future.

An alternative approach seen today is the acquisition of early stage ventures that are already working on disruptive ideas, and incubating those ideas (even if they turn out to be failures in the future).While it may appear counter-intuitive to invest in one’s own obsolescence, it must be kept in mind that other firms working on disruptive innovations are already doing so. The options then are to either invest for obsolescence or face unexpected extinction.

In conclusion, it is important to view extinction as a given and thus not get too attached to the idea of a core product line that remains static, and oblivious to the changes in the environment. In other words, the firm not only ‘exists’, but is actually a living, breathing entity that is constantly ‘becoming’.

Being indicates status quo, while becoming indicates a vibrant, creative outlook that is open to an ever-changing environment.

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Monday, October 26, 2009

From Alienation to Meaning

My latest column for The Hindu Business Line - From Alienation to Meaning . Full text follows.

It might sound like an unlikely place to find insights into human potential pertaining to the modern world, but Marx’s ideas on alienation continue to be relevant even in the world of free markets. It appears that the long journey spanning centuries from a factory-centred economy to a knowledge-based one hasn’t quite seen a proportional change in the way human capital is viewed. In this article, an attempt is made to bridge this gap by loo king at two concepts which mark the ends of the spectrum — Alienation and Meaning.

Marx identifies four sources of alienation that ‘workers’ in a capitalistic society feel.

The first form of alienation is that between the worker and the product of his labour, as he has no rights to it after production.
The second is between the worker and the process of production — in other words, predictable, well-defined transactions are the order of the day.
The third is alienation between fellow human beings as a result of a class structure or hierarchy that emerges in any organised structure like this.
The fourth source of alienation is alienation from the worker’s human essence, whereby all possibility of creativity and spontaneity are stripped away from a human being.

An important difference between humans and other animals is in the way they interact with nature — while animals interact in a static way to the external world, humans are endowed with consciousness and imagination which allows them the faculty of being able to visualise new future possibilities first in their minds, and then in the world outside.

Of course, all these sources of alienation were originally described in the context of blue-collar or factory work which was the dominant kind of labour in those days. However, quite surprisingly, the entire concept seems equally applicable to the modern world where the ‘worker’ is engaged primarily in white-collar work.
It’s quite astounding that the way work is viewed and structured has undergone so little updating in all these years. It appears that only a few token steps have been taken in the direction of moving away from alienation, without a clear articulation of where the destination is.

In this article, I argue that the ideological opposite of alienation is meaning, and that should be the direction towards which all future notions of work must converge.

The meaning infrastructure
A post-alienation world view would be based on the idea of ‘meaning’. All the four causes of alienation identified above would need to be addressed. The journey from alienation to meaning would need to be accompanied by the creation of appropriate infrastructure. This infrastructure would consist of four key pillars — each mapped to a source of alienation.

The first pillar would be the creation of significant distributed ownership of equity across the firm. This would mean far greater ownership than the token ESOPs that exist in the market place today. Currently, there is an under-estimation of the value of human capital relative to financial capital. However, it is encouraging to see that a large number of firms these days adopt some form of compensation in the form of equity.
The second key aspect of this new infrastructure would be a systematic extinction of ‘job descriptions’, and an emergence of ‘responsibility descriptions’. A responsibility description outlines outcomes, and not behaviours. How outcomes are accomplished is left to the imagination of the employee.

The third element of the infrastructure is the creation of flatter hierarchies that eliminates the needless creation of layers or artificial ‘career paths’ where each step tends to signify vintage rather than genuine upgrade of skills. Again, this concept is already widely in use, particularly in new ventures without the legacy of large, pre-existing hierarchies.

The fourth pillar is the recognition of innovation and creativity as key sources of value addition from the workforce. Currently, the perception of value addition is restricted to increase in revenues and reduction in costs. Innovation is seen as a response reserved only for crisis situations, as opposed to an ongoing process of articulating fresh responses to the environment.

Of course, there are many ways to create meaning, and this is just an indicative set of ideas.
An important quality of the modern ‘worker’ (or indeed human beings in general) is the belief in one’s own uniqueness. This belief translates into a need to create customised experiences for oneself in all dimensions of one’s life. It’s time society updated the way it views work to reflect this desire.

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Previously published articles:

Tuesday, October 13, 2009

Telecom pricing

With the price wars in telecom intensifying each day in what is already the cheapest telecom market in the world, I think the logical next step in pricing innovation will be something like this: Pay Rs. X per month, and use your phone as much as you want.

I think this will happen in the next 12 months. This way the telecom companies will be able to protect or guarantee their Average Revenue Per User even if its at a low level. Of course, price wars will start on the monthly amount as well, and telecom companies will need to innovate further. Also, within the next five years, VOIP may also become a viable alternative to traditional telephony. Interesting times ahead.

Monday, October 12, 2009

Three skills

Seth Godin has an interesting post on what he believes to be the three skill areas that ensure you are in demand as an employee:

Sales
Additive effort (someone who brings in efficiencies)
Initiation (someone who can initiate action... or start something transformational)

I think the three skill areas can be re-articulated as follows:

Someone who can increase revenue
Someone who can reduce cost
Someone who can bring creative ideas to life or create new wealth creating assets.

Seth rightly points out that the last skill is difficult to value. The first two are directly P&L oriented, while the last one is more fuzzy and takes time to enter the P&L, and is also prone to failure i.e. ( a lot of entrepreneurial initiatives tend to fail or fizzle out) .

Wednesday, October 7, 2009

Story of Stuff

A really fascinating presentation - Link

In short, it argues that our entire economy and our self worth is now linked to the idea of being consumers who will infinitely keep the engine of production going, without being mindful of the destruction that this is causing to the environment, as well as the harmful effects on society as a whole.

I think the future lies in sustainable local economies, where most of the basic 'stuff' we need is produced in our local economy or neighbourhood, consumed locally, and then disposed and recycled. If something can't be recycled or disposed harmlessly, it should not be produced in the first place. Also the single biggest piece in this consumption engine is Energy, and hence the sooner we move to green energy the better.

It seems like change can happen more easily in developing and poor economies which haven't yet gone through the entire cycle of increasing incomes and consumption. On the contrary, we have India arguing at climate change forums that developing countries should be spared the burden of contributing to reduced carbon footprints etc. as all that would come at the cost of development. In other words, we are arguing that we will first replicate what the developed economies did, commit the same mistakes, and only then be held accountable for any damage we may caused in the process!

Saturday, September 19, 2009

Brokerage Comparison - ICICI Direct, SBI, HDFC Securities etc

Out of curiosity I did a comparison of brokerages across various providers of trading and demat accounts in India. Here are the findings:

For a delivery based volume of less than Rs. 50 Lakhs per quarter, here are the brokerages across some leading providers of trading and demat accounts.

ICICI Direct =fixed plan of 0.50%, (and a variable plan of 0.25-0.75% which is beneficial only for large investors)

HDFC Securities = 0.50%
SBI Demat = 0.50%
Reliance Money = 0.45%
Geojit BNP Paribas = 0.25% to 0.30%
Edelweiss = 0.30% to 0.50%
Fullerton Securities = Upto 0.50% on pre-paid plans
Angel broking = 0.35%

[Readers may drop in brokerage charges for other service providers and I will update the post accordingly.]

Sunday, September 6, 2009

Life Settlements - The next sub-prime crisis

Undeterred by the mess that it created with securitization of mortgages (the Subprime crisis), Wall Street is now working on a new kind of securitization, that of life insurance policies.

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

... And investors are not interested in healthy people’s policies because they would have to pay those premiums for too long, reducing profits on the investment...

More here

Some clear flaws that could make this the next bubble are:

1. With better health care facilities and medical research, people will end up living longer thereby reducing returns on these 'life settlements' for investors like banks.

2. Some currently fatal diseases may soon have cures, causing the value of this new product to plummet.

3. A large market may emerge where people buy insurance policies just to 'flip out' and sell it to a bank. This is exactly what happened with real estate mortgages, where a whole bunch of people bought houses simply hoping to flip out as the underlying value of their homes went up.

4. Life insurance companies will blow up due to larger payouts being paid as a result of a greater percentage of policies NOT lapsing (a lot of long term policies lapse because the insured / dependents may no longer need the benefits).

5. Life insurance premiums will go up, implying that more and more people who actually need insurance will no longer cover themselves. As it is the poor are already on the fringes of the mainstream financial market.

6. The best returns on this investment product will be gained when the insured person dies sooner than later - there may well be some strange consequences to this.

7. A big market would develop for sub-prime policies (policies of people who are likely to die sooner). This product would be in the highest demand. Some rating agency will slap a AAA rating on it. Either 1. or 2. listed above will cause a major blowout.

The article linked to above implies that Wall Street is going ahead full steam on this new product. Awesome.

Thursday, August 13, 2009

Prospect Theory

Check out this old post on prospect theory.

Tuesday, August 11, 2009

Netflix culture and values

Here's an interesting internal presentation from Netflix on their company culture and values.

Among other things, the presentation argues that in order to preserve a high level of freedom as the organization transitions from start up mode to large organization mode, the organization will actually hire more and more star performers. In other words, you maintain freedom by hiring more responsible people who are good performers. I don't see how that is practical. A ten employee company can easily hire 2-3 stars and increase head count by 20-30%. However, a 1000 employee company would need to find 200-300 stars in the market place in order to maintain its star ratio as it were. This seems quite hard to do.

Culture

View more presentations from reed2001.

Saturday, August 8, 2009

New Look

Testing a brand new visual identity and template for Management by Matrices.

Monday, July 20, 2009

Argentina's peculiar coin shortage

For well over a year now, small change has been hard to come by there. Stores hang “No Coins” signs in their windows, and offer candies instead of change. Taxi-drivers round up—or down—to avoid giving up precious coins, while smaller merchants sometimes turn away business if you have only bills to offer them. The government has fined banks thousands of pesos for refusing to hand over coins, and, in October, the city’s subways became temporarily free when the booths ran short of change. For the average Bonaerense, everyday transactions now entail a complicated calculation of where coins can be acquired and when they will be needed.

More here

Thursday, July 9, 2009

Tata Docomo's launch

Tata Docomo's GSM service is being launched in a very Web 2.0 way, with a Twitter page ,Youtube Channel , and a very 'social' website with user comments, page ratings, share links for facebook etc. I see

a very strong brand in the making - one that could challenge Vodafone. The pricing innovation of having a 1 second pulse rate is also a first. Of course, the actual network coverage and customer service will be the final decider, but all the preceding steps have been executed quite well.

Incidentally, Docomo has a strong R&D focus in Japan, which makes it the only player that is creating new technologies as opposed to just using existing ones. That's a fantastic source of long term competitive advantage in the face of 'commoditization' of telephony.

Tuesday, June 2, 2009

Bing Review: Microsoft’s first web winner

For a change Microsoft gets it right with Bing. Bing clearly wins over Google on the following counts:

1. Visual Appeal- reminiscent of Ask.com’s earlier avatar.
2. Speed – it’s just as fast as google.
3. Clean categorization of ‘Related searches’, using Powerset’s technology (I presume)
4. A preview feature that helps you read content from the target site before clicking.
5. An overall philosophy focused on getting as much of the information you need from the search engine itself before actually clicking and going to a site, thereby making it a decision engine.
6. A spectacularly clean integration of Travel and Shopping into the search engine in a manner never seen before, including the special Bing Cashback discounts that you can avail by clicking through and buying products via Bing search results. (This feature is available on the US version of the site.)
7. Finally, Bing looks like it was designed for ‘real’ users, while in retrospect Google looks like it was designed more for geeks than regular users.

In short, Microsoft has surprisingly achieved the next frontier in search. Google may well outdo it in the future, but Microsoft has set the agenda for sure.

Monday, May 11, 2009

Insight Institutionalization

My latest article for The Hindu Business Line appears here: Weaving Insight into an Organization's DNA. Full text follows.

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In Meno, one of the dialogues written by Plato, Socrates contends that all knowledge pre-exists in an individual; all he needs is the ability to find out what is already inside him. It appears that Socrates was referring to the ‘insight’ or ‘inspiration’ dimension to the creation of new knowledge.

A lot of times, new insights appear to us in a flash, out of no logical process based on facts. This statement holds true today too, as a significant portion of new knowledge creation is often based first on insight and subsequently on ‘finding evidence’ to support the conclusion.

Whatever the truth of this assertion, it is hard not to see that insight/ inspiration are key tools for knowledge creation. However, these two dimensions find little place in modern organisations.

Focus on facts

For long, fact-based approaches have assumed a prime position in management thinking. One reason for this could be that facts are not subjective and hence leaders may view facts as a risk-free way to push through initiatives, make decisions and find solutions to problems. However, it is increasingly becoming clear that decision making is a far more complex process, where the whole is often greater than the sum of the parts.

Systems Thinking is a form of analysis in which problems are solved not just by understanding a component or part of a system, but rather by looking at its inter-relationships with the ‘whole’. Such an analysis would clearly need more than just an analysis of facts; it would require inputs from more nebulous things like ‘inspiration’ and ‘insight’.

In the model depicted in the accompanying graphic, an attempt is made to understand how ‘insight’ is a function of many parameters — facts being only one of them. Data in the external world becomes information through its organising. Analysis of this information leads to partial insight. This is fulfilled through further contributions from past experiences of the decision maker, as well as the creative force of inspiration.

In the absence of experience and inspiration, it may well be argued that all decision making could be entirely done by machines and there is no need for human intervention. Moving on, codified insight becomes knowledge, which when acted upon becomes a practice. Practice in turn generates further data and so on.

Institutionalising insight

Unfortunately, most organisations do not invest in institutionalising the insight process. This means that ‘best practices’ may be discovered accidentally and not be scaled up to the entire system. Also, people end up sticking to existing norms, processes and approval mechanisms without questioning whether or not things could be any better. Here are some thoughts on how insight could be institutionalised.

Acceptance of failure: The first step is the creation of a culture that is extremely accepting of failure. It is not hard to see that the ability to see new creative possibilities is closely linked to a tolerant view of failure.

Investing in cross-functional skills: Organisations rarely invest in the creation of cross-functional skills amongst managers. One of the biggest threats to insight realisation is ‘silo-based’ thinking, where individual divisions seek to maximise their own self-interest, leading to highly non-cooperative political environments. In such environments, people tend to focus only on their ‘parts’ without realising that the ‘whole’ is greater than the sum of the parts.

For instance, most multi-product companies routinely fail in implementing effective cross-selling programmes because of this very reason. Once an investment is made in the creation of individuals who appreciate the ‘whole’, the above problems would diminish.

Hubs for insight realisation: To close the gap between insight and implementation, it would help to have hubs or teams that focus exclusively on realisation of insight in the real world.This would be done in the form of quick pilots, which if successful would scale up to become new practices.Often, line managers do not have the bandwidth to focus exclusively on such initiatives as they would come in the way of fulfilment of regular responsibilities or achievement metrics.

The role of new insight and knowledge creation in an organisation cannot be underestimated.Today, rapid advances in technology mean that the duration for which any organisation can hold on to a ‘competitive advantage’ is severely compressed.This implies that institutionalising insight is key to sustainability through the creation of new sources of competitive advantage.Hence, it is important to respect the role of insight and also understand that its source lies not just in fact-based analysis.

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