Strategy of academic convenience

Academicians have a habit of mutating well established theories, changing a few words, mutating the shape of models and reintroducing the old wine in a self styled bottle.

Google (verb.) ESCO – it means nothing to anyone on this planet (not an iota of connection with strategy) yet students who did not believe in the ESCO model were allegedly the lesser mortals in the world of strategy.

No one really knows what was in Soichiro Honda’s mind when he changed course in the US. The decision to market small Supercub bikes after the dismal performance of Honda’s larger ones has been conveniently described as an emergent strategy. It has been discussed with great vehemence that Honda Motor Co. did not really know what it was doing and therefore it was an emergent strategy.

Can the confines of a classroom discredit the decisions of a great man or a great company?

I spoke to many colleagues in leading business schools and while HONDA is a popular case study no one associates the success of HONDA to an accident a.k.a emergent strategy.

Some believe that HONDA deserves credit only for abiding by the allegedly Japanese ‘belief that corporate direction evolves from an incremental adjustment to unfolding events’. If HONDA had just been incrementing along, it probably would not have moved so early into the US market in the first place. Even while HONDA sold through trading companies in all of SE Asia, it chose to sell directly in the US because of its founder’s strong belief that for a product to have a global acceptance it must succeed in the leading market.

A realm of strategy that has been little discussed is Commitment. HONDA was committed to being successful. The decisions that it took between 1952 and 1960 were irreversible. Capital investments, R&D in cleaner and fuel efficient engine technology put all other development on hold for several years.

This is commitment.

This is strategy.

"Lock yourself into a commitment or you will lock yourself out of success forever."

And let’s not take the credit away from Mr. Honda by nomenclating his decisions as emergent strategy.

Being Awesome!

During an engaging discussion with a fellow colleague, I was taken back to the memories of some wonderful motivational and self development sessions where Nick Bate advised us with clinical sharpness – ‘one way to succeed and to be happy is by being awesome in whatever you do’

The same discussion happens year after year. Nick says just be awesome. Students say, its just not possible because political correctness and ability to keep ones boss happy is of far greater consequence than just being awesome.

Nick’s absolutely right but students have a point.

Every process has a gestation period. Employees take a while before they establish their brand equity in an environment. It may be a new job, an academic cohort or just amongst friends. Till such time that this brand equity is established you have to be ‘correct’. At this point do not be tempted to assume that once the brand equity is established, you needn’t be correct.

Is it difficult to be awesome? – No it isn’t
Be a good human being.
Treat others (employees, customers, friends and relations) as you would want to be treated by others.
Assume that you are the CEO of the company and its 100% shareholder too (to ensure best intent).
Have knowledge of your domain.

It takes a while before you can establish yourself as an awesome human being (gestation period) and once you have done so, simply maintain it and don’t be bothered about anything else.

Success, brand equity, growth, money, happiness, confidence which is all so superfluously relative would then be incidental. And don’t get too busy being awesome!

Bernankonomics

Economics is quite simple really. Ask your mother who manages a home in the resources available to her. She has no problem in managing her home or saving a kitty for a rainy day. Irrespective of one’s position in the pecking order of financial freedom, the lady of the house always manages within her means.

Ben Bernanke (BB) thinks otherwise. He wants the eastern world to spend beyond their means to subsidise the imbalances caused by the western world. He says ‘progress can only be made to remove imbalances when Asians start saving ‘too little’ ’.

He wants every country to run a trillion dollar deficit. When every single country on the planet is precariously debt ridden (as bad as the US) the imbalances will wither away.

Great idea!!

In the meanwhile he needs to learn a thing or two from a prudent homemaker.

The Global rant about carbon emissions

Top leaders of the world O, B, S and the likes amuse me. Their rant never stops about CO2 emissions and the impending urgency of doing something about it. And they want India and China to reduce the emissions to half.

The developed world (read G8) has enjoyed the pleasure of depleting the world of its fossils and fuels for the last 100 years and have failed to acknowledge their own contribution to the green house gases - all this while.

When suddenly they realised that they have brought the world to a precipice of destruction, they started blowing the trumpets of concern and are leaving no stone unturned to suffocate the developing world in the name of global urgency that might deprive the two most progressive nations of their share of development and growth.

The following statistic is a bit of an eye opener.

China and India are at 80th and 113th position amongst countries emitting CO2 emissions per capita.
C and I are not even amongst top 40 countries in generating CO2 per $ of GDP.
The developed countries are not even amongst the top 100 countries in terms of preserving the forest cover as a percentage of total land mass.

So is there a solution? Well practically ‘No’, which implies that the rant will continue forever.

Academically ‘Yes’ – The maximum amount of CO2 emissions happen because of heating, cooling and driving habits of a country’s population. Increase gas prices to a point that the emissions get reduced to the level that is targeted or to a level that will allegedly save the planet.

Isn’t this a simple economic principle of demand and supply (usage) curve.

Do these countries have a will – NO.
Can a structural and moral change be induced amongst the population of the developed world – NO

Developing countries have been a catalyst in retrieving the world from an abyss of severe depression recently. Let these countries develop and grow. Please do not snatch the right of these countries to their share of development.

And in the meanwhile the top environmental police party - Stop speaking and start acting.

Dollar’s hay days are almost over

Saddam Hussein was a tyrant and he cannot get any sympathy for any of his actions. But he was not executed for what he did to the Kurds or the alleged possession of weapons of mass destruction. He was executed because he started selling his oil in Euros.

For a significant period of time the US of A has been an effective global policeman. And rightly so – because if not US then who?

But the world’s biggest consumer of goods and services has been brought down to its knees by its over zealous spending population and the country is running a deficit of trillions of dollars that is likely to be its waterloo.

For as long as Americans continue to be the world’s largest (and biggest) consumers, no one can take the mantle away from the US. But gradually as the spending patterns shift and wealth shifts from the west to the east, the US$ will slowly and gradually bleed itself to death as the worlds reserve currency.

History has it. This is exactly what happened to the erstwhile reserve currencies of the world - Roman Dinar, Spanish Reale and the British Pound. The reserve currency status has allowed the country and its populace to live beyond its means and eventually be displaced forever.

UN says ‘New reserve currency must be found to end dollars undue privilege’, and rightly so. Because dollar has been and is the reserve currency, Fed could afford to simply add a few zeroes to it’s balance sheet and print money. Some say and ‘couple’ of trillion dollars.

If any other country had created a financial mess that the US and its bankers created, it would have been worse off than Zimbabwe, with a billion dollar note cheaper than the intrinsic value of a toilet roll.

This cannot happen overnight for dollar. It will remain strong for a foreseeable future but small incremental deterioration in its strength is inevitable and the world is beginning to take cognisance of this fact.

Is there an alternative? - No!! No country yet has either the intellectual or financial capital to challenge the dollar. China is too autocratic (almost harmoniously dictatorial), India a bit too nascent. But these two countries are formidable forces to reckon with.

It doesn’t matter how much China rants about the US$. They have financed the American debt of over 770 billion dollars in addition to their dollar reserves of over 2 trillion. So they need to ensure that the value of their investments is maintained. But future investments by countries must be in line with simple rules of portfolio diversification.

The moral of the story – Portfolio diversification reduces the un systemic risk. Invest while the world is still sceptical or else market efficiency will eliminate potential profits.

Where to invest – Renminbi, Indian Rupee and Euro…..

Mahatma Gandhi’s (Bapu*) greatness was His simplicity

Google paid a befitting tribute to the apostle of peace Bapu, on his 140th birthday, by putting his simple picture on its mainpage. Bapu achieved through non-violence what the wars of the world have failed to achieve.

Bapu says…

I have found that life persists in the midst of destruction. Therefore there must be a higher law than that of destruction. Only under that law would well ordered society be intelligible and life worth living. If that is the law of life we must work it out in daily existence. Wherever there are wars, wherever we are confronted with an opponent, conquer by love. I have found that the certain law of love has answered in my own life as the law of destruction has never done.

In daily life, it has to be a course of discipline though one may not like it, like, for instance, the life of a soldier. But I agree that, unless there is a hearty co-operation of the mind, the mere outward observance will be simply a mask, harmful both to the man himself and to others. The perfect state is reached only when mind and body and speech are in proper co-ordination. But it is always a case of intense mental struggle. It is not that I am incapable of anger, for instance, but I succeed almost on all occasions to keep my feelings under control. Whatever may be the result, there is always in me a conscious struggle for following the Law of Non-violence deliberately and ceaselessly. Such a struggle leaves one stronger for it.

I call myself a nationalist, but my nationalism is as broad as the universe. It includes in its sweep all the nations of the earth. My nationalism includes the well-being of the whole world. I do not want my India to rise on the ashes of other nations. I do not want India to exploit a single human being. I want India to be strong in order that she can infect the other nations also with her strength. Not so with a single nation in Europe today; they do not give strength to the others.

President Wilson mentioned his beautiful fourteen points, but said: "After all, if this endeavour of ours to arrive at peace fails, we have our armaments to fall back upon." I want to reverse that position, and I say: "Our armaments have failed already. Let us now be in search of something new; let us try the force of love and God which is truth." When we have got that, we shall want nothing else.

Einstein wrote “will scarce believe that such a one as this ever in flesh and blood walked upon this earth”

“Happy Birthday Bapu”

* The nation calls him ‘Bapu’ (Hindi for Father of the Nation) as a mark of respect

My first week at school a year ago!

Just as the new set of students on the MBA ‘conveyor’ start their year long journey tomorrow, my memories go back to my first week at Warwick. Excitement levels to their hilt. It was an amazing amalgam of excitement and nervousness. Many amongst us were getting back to books after over 10 years.

Fellow students were regaling the groups with their past achievements. The class seemed infinitely large because of the urgency to speak to each one of the fellow students and make friends. Some were loud, some were muted, some were interesting and some……..

The first week was action packed. While we coped with the schedules of introductory classes, alumni meets and tried to make our airplanes to take a flight of success and achievement, some stumbling blocks came our way in the form of settling-in blues.

Bank Accounts – It’s a struggle, we needed to get a letter from the University house that we were registered students - to open a bank account. And this needed to be done fairly early on as the first instalment of fees was due soon. HSBC and Barclays charged 6 pounds a month just to keep our money with them. NatWest didn’t charge anything like this and was happy to give you a connect card (more easily acceptable in most establishments and online transactions) if your balance was over 5000 pounds.

Mobile phones – We were required to give our mobile numbers for the talent book that had an alleged life of a year and beyond. Most mobile companies have arduous procedures of giving out contracts. The least requirement is a proof of address in the form of bank statement and the first statement can take about 2 months to arrive. A pay as you go card can be as expensive as 20p for a minute’s call and 10p for a sms but a contract gave us almost 600 mins and unlimited texts in under 20 pounds. My advice – do not worry. Take a pre-paid card and convert it into a contract at a later date and retain your number.

Lunch – University house that is 5 mins of walk gave us a lunch in under 5 pounds and Rootes (Ist floor behind bar fusion) that is 8 mins of walk from the school served an elaborate buffet that costed less than 4 pounds. Needless to say – if we did justice to the buffet, it helped us better in catching up with our sleep during the afternoon class. Else for the benefit of pocket and weight watchers, the school – kindly and appreciably, served a splendid variety of fruits and muffins at the coffee lounge.

Grocery – Cost cutter (next to Rootes) was really a pocket cutter. It took many of us a month to realise this. Tesco is 30% cheaper. Is open 24 hrs Monday to Friday, till 2200 hrs on Saturdays and 1600 hrs on Sundays. Residents of Claycroft had an advantage here. Its 2 mins away. Residents of Heron Bank and Lakeside struggled a bit more as they stacked up their freezers etc in the initial weeks. But 2 or 3 of us always enjoyed our walk from lakeside to Tesco and took a taxi back in 5 pounds.

Extracurricular – Warwick has over a hundred societies to suit every enthusiast. Polo, salsa, golf, cricket, sailing and many more. This we could figure out only in the 3rd or the 4th week as we began to settle down.

Hostels – Computers took a while to adjust to the new environment. A data cable could be purchased at Tesco or Costcutter. Irrespective of our previous attachments with our old IP settings we had to let our computers find their new IP. The accommodation service was fast and efficient. If at all we had an issue with our accommodation we used our login starting with bs….. and logged in an online complaint. We only realised much later that all the spiders that we found in our rooms were pets. But if there was a strong aversion we could politely request their removal.

A high point of the first week was Nicholas Bate and his introduction to discipline and self development.

In retrospect I feel academics were a miniscule part of this amazing experience that we lived. Work smart and party hard was the mantra. This was an opportunity of a lifetime to make new friends and nurture relationships. Some amongst us made the most of it, some faded away into oblivion.