Reflections of Beijing- What international immersion did to me

Hi people... long time no see I know.... blame it on the MBA, i guess.

there are so many experiences, so much i have learned, so many expectations have been exceeded.... its all impossible to describe. In these months (8 of them already!) so much has happened that to write even a part of it seemed hard. And as time passed, the task got harder. So here I am, freely confessing that I'll probably never be able to put all that in words.

And i feel light already. I'll write as much as i can.... and I'll start with a description of one of the many unique experiences that you can only have at EPGP. It was the international immersion in China. A few days of brilliant fun.

The picture above is one of my favourites: Big Mac and a German car reflected in the window of a shop selling antiques.

I promise to share more... and soon.

A Very Special Officer

His book is called "Bankruptcy to Billions", and when he came on stage, he asked us what we want him to talk about. Leadership, change management, resource management, public sector management, or all of the above.

He is Sudhir Kumar, the Officer on Special Duty in Indian Railways, man on Lalu Prasad Yadav's personal staff, and widely recognized as the man behind the transformation of Indian Railways from near-bankruptcy, deep in debt and loss to billions in profits and reserves (How does the figure of Rs90,000 Crores grab you?)

He was the latest in our seminar series, a unique feature of EPGP where some eminent personality talks to us about his life experiences. Will try to talk about the previous ones when i can, but I HAD to talk about this right now.

Mr Sudhir Kumar is an IAS officer of Bihar Cadre, and has been doing fascinating things for last 27 years as a civil servant. But this has to be the feather in his cap. He did what Rakesh Mohan Committee said couldn't be done, what Lalu wanted done, what the oppposition is finding hard to poke holes into, and what any business leader should be proud of.

Humble, and brutally honest, he refuses to take more credit than he thinks is due. Even though he was no fan of Lalu before joining him, Lalu gets more credit from him than anywhere else. He quotes Drucker & Welch with as much ease as scriptures, and he is in his element having a back and forth. For hours after the seminar, we basked in the glow of a brilliant intellect, who is a brilliant doer as well... the rarest combination.

A few takeaways, relevent in business and beyond:
1. Ethos. What helped him achieve was staying within and leveraging the ethos of railways.
2. Look for changes in structure, they will outlast you, and will change the opportunity for corruption/other undesirable activities. A simple example will illustrate this. It was found that the freight bogeys were carrying more than permissible tonnage, with the extra being skimmed off. Mr Sudhir Kumar persuaded the railway board to increase the permissible amount. lo presto, not only is the railways earning more, the scope for corruption is now almost negligible.

Most Importantly, he emphasizes that honesty is appreciated in this age more tha it ever was, but it has to be delivered with politeness and humility, not arrogance. He says people who pick fights want to be like Shaheed Bhagat Singh, show that they died for a cause. Whats needed are people like Gandhi, who work within the system, never getting corrupted, and win not only the battle, but the war.

This interaction was over several hours, and will leave a lasting impression on all of us. We talked of theory v/s practice, politicians and democracy, moving towards light in a bleak scenario, and much much more. We will always remember this evening for the insight into this brilliant and humble man. By the way, the book is supposed to be fascinating (reliable reports, not read personally, yet.)and Mr Kumar asks us to read the Chapter 2 especially well, its about politics and democracy, and feels has special relevance if we want to progress as a nation.

A week in IIMB

Hi friends, its me again. This time reporting as a student of IIM Bangalore. Its been a week since our classes started, after a few days of inauguration and orientation. A few facts emerged from this interaction: we have 11 yrs of mean experience, over hundred years of international experience between us, and have representation from more industries than even I thought!

Factor in the salaries we have had to give up to reach here, and its no surprise that the energy levels are super-high. The 90 minutes classes seemed daunting before we started, but the interaction is so vibrant that there's usually surprise that the time is up. We all wrote and anticipated that classroom learning will be an important part pf the education, but we never bargained on so much interaction.

These last few days have been a blur. Picking up a calculator after almost two decades, I wondered how I will cope with the quant jocks that are bound to be there. And they are there, make no mistake, but the teaching is so great that whether its probability, accounts, economics or organization design..... the profs make sure teaching is accessible as well as challenging. When our program chair said the faculty are world class, he wasn't kidding.

Ohh and by the way,. we already had our first sets of quizzes yesterday. When i said the profs were great, I didn't mean they were willing to give us any time to dawdle.... and its going to get tougher. I don't know how I'll find time, but will try to keep you guys posted.

The Insights of a Columbia Professor

I am a regular Listener of Econtalk, where an Economics scholar (Russell Roberts) talks with luminaries of the field about various aspects of political economy. This week I listened with interest to Prof Amar Bhide of Columbia business school talk about outsourcing and venturesome economy. I was hooked early on when he talked about the fears of Americans regarding innovation in other countries, and the supposed lack of basic science research at home (link to the episode page).

He said that there are multiple levels of innovation, but they may be divided into three basic ones. Taking the example of shipping, the Archimedes' Principle regarding buoyancy is critical, but not sufficient to build a ship. You need technical expertise of various kinds for that. And then you need to run the shipyard, and that requires a different set of skills altogether. His point was that basic research is all well and good, but the knowledge, once created, is there for all to use. What is much more critical for prosperity is the application of that knowledge, and that requires skills that are much more local. Leading a team of workers to either build, or manage requires much more local knowledge, and contributes much more to the profits than basic research. We may agree or not with him, (I do, with the caveat of health care) but the idea leads to interesting paths.

I think its obvious from his exposition that the three basic tiers of wealth creation are basic sciences, technical sciences (like medicine and engineering), and management sciences. And it is interesting to see that almost all of my classmates are moving from technical sciences to management, implicitly agreeing with his theory that this will lead to them contributing more than they do now (and presumably receiving more too :-) )

And now, look at this EPGP course. One of the major explicit differentiators for the course is the focus on India and emerging economies. This ties in well with Prof Bhide's thoughts that the management needs to be much more focused on the local factors that any other branch. There is going to be a local focus throughout the course while teaching us general principles. Sure, there are differences between different emerging economies, and that's why we will have full-time immersion into these counties for several weeks, giving us a first hand experience of how business is done there. This fantastic aproach is one of the reasons I'm excited to pursue this course.

Economics is a Rap Song

Demand, Supply - Rhythm, Rhyme, Results

The top ten Principles of economics, courtesy Greg Minkew's blog

Here are lyrics:

Verse I
Tradin’ this for that, call it tit for tat
We all face tradeoffs and that’s a fact because
Everything is in finite supply
That’s the reason why we all sell and buy

Next up is rule deuce, the next best use
Of money or time defines its true value
It’s more convoluted than just the simple cost
What else could you do? What opportunities are lost?

Decisions at the margin, yeah that’s the key
To understanding principle #3
Take your present situation and assume that it’s the best
If a change is worth more than it costs, then that’s your test

Lesson #4: it’s like the carrot and the stick
We break it down so you can see what makes the world tick
So why do we do the things that we do?
It’s a system of incentives that we all respond to

Chorus
Demand, supply
Listen up, learn this, and you’ll know why
We work, we buy
The price is right when the competition’s alive
(x2)

Verse II
Everyone in society can benefit from trade
#5 is a reminder that we shouldn’t let hope fade
Just use what you’ve got to produce your best
The money that you make will buy the rest

Lesson 6 is a trick, the invisible hand
Buyers and sellers clear markets without the man
The market system almost always prevails
But recognize, too, that markets can fail

Because of monopolies and the troubles they create
Uncle Sam comes along and he’s gotta regulate
That’s lesson #7: when government’s there
They oversee to guarantee that competition is fair

#8 says the future of a national State
Relies on services and products people create
If we sell and excel and we keep doing well
Then the money keeps going ’round just like a carousel

Chorus

Verse III
#9: keep an eye on that money supply
Printing too much paper sends prices sky high
A dollar means nothing, it’s just a nice name
If what it represents doesn’t stay the same

Number 10: there’s a tradeoff in the short run
Between unemployment and inflation
I really can’t explain the whole situation
You want the full story? Step up your education!

Shared by joyce santos at imeem

Digital War on Poverty

For a free marketeer like me, the ghastly poverty of the world is a nightmarish challenge. If the world were a free market, the only poor people would be the lazy or the incompetent. Sadly, that's not the case. Poverty is a rut, hard to get out of, and a challenge to the best of abilities. The poor are often enterprising and resourceful, but are defeated by a system that protects entrenched interests, mostly in the garb of pro-poor policies. Indian experience has shown that IT is one way of bypassing crippling regulation and enabling enterprise. Kenya shows another way technology can be liberating. As I heard in this story by BBC's Digital Planet.

Kenya is not an ideal nation. Most people don't have a bank account, roads are not particularly safe, and the distances are substantial. And a large proportion of population depends on buying and selling goods for relatively small amounts, or remittances from people in larger cities. Without bank accounts and safe roads, it meant a greater risk, bigger cost, and therefore less business. Not any more. The largest "bank" in Kenya today is Safaricom, a telecom operator. They started a mobile money transfer service in 2007, and today its so widely used that a survey shows 83% say they will be worse off without it. (Link here)
Its called m-pesa, and it works with a combination of kiosks and text messaging. Reducing the cost, time and risk of transaction removes the inefficiency introduced by the government. That's a small step towards lower poverty. It has the generated interest from CGAP and Gates foundation, amongst others, and there is a huge likelihood of replicating its success else where. (Like Afganistan, and Pakistan).

ITC's e-chaupal provides a very different services to indian villages It tells them the price of their produce, amongst other things. Just these simple measures are changing lives. Just by providing information and reducing transaction costs, these applications of now-mundane technologies have a potential to pull millions out of poverty.

Whither Jobs?

Fan though I am, this is not about the eerie absence of Steve Jobs from the helm of Apple. With or without him, I don't foresee an 80's style collapse of Apple. There is, however, another threat to Apple, and to me. The Economy.

First, the disclaimer. I am not an economist, you know. Although i read this essay by Daron Acemoglu, an MIT economist, and he details where economists too went wrong. This article by Arnold Kling is very accessible.

To quote Acemoglu, economists started believing that

the era of aggregate volatility had come to an end. We believed that through astute policy or new technologies, including better methods of communication and inventory control, the business cycles were conquered. Our belief in a more benign economy made us more optimistic about the stock market and the housing market. If any contraction must be soft and short lived, then it becomes easier to believe that financial intermediaries, firms and consumers should not worry about large drops in asset values.

I'm no one to judge an economist, much less an economist's assessment of economists, but I must say that till early 2008, I heard many economic writers I admire say that this problem was all "much ado about nothing".

Anywho, here we are, no one seems willing to give any good news. Wall Street Journal had this article, saying recruitment in Business Schools were at a lower level than even one expected in October. One quote by a student caught my eye. She said about the placement system in the college,

The system they have in place now seems to be one that works very well when the economy is good, but now that there are no employers coming -- no one knows what to do

This may be true, and therefore we will need a plan. This is the moment for aggressively reaching out, and I'm happy to say our batch is already thinking on those lines. I never would have thought that there will be dozens of mails everyday in our mailing list. Some are about mundane issues like what laptops to buy, but several talk about projecting ourselves to the world. This being the first batch, and the institute is flexible, so a lot of ideas are being discussed, and nothing is off limits.

This may sound like an ad for the batch, but it didn't start that way. I wanted to discuss the problems, ended us talking about the solutions we are working on. So.... does anyone have any idea? Where do we look for jobs next?