Monday, October 16, 2017

Predictable Irrationality

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Professor Richard Thaler of the University of Chicago has been honored with the 2017 Nobel Memorial Prize in Economic Sciences.

For 200 years, economists have argued (and continue to argue) that humans are rational.

Economists would probably be the first to accept that the assumption is far from being perfect. The holy grail of rationality is so deeply embedded in economic theory that any alternative is looked down upon.

Professor Thaler is the proponent of behavioral economics – a branch of economics that studies human behavior without making lofty assumptions.

Professor Thaler’s basic argument is that humans are not rational.

The argument that humans are not rational by itself is not profound. The practical usefulness of the argument is that certain types of irrationality can be predicted. The predictability of certain types of irrational behavior has significant implications for everything from individual happiness to public policy.

Consider his phenomenal 1985 paper on mental accounting and consider this example:

“Mr. and Mrs. J have saved $15,000 toward their dream vacation home. They hope to buy the home in five years. The money earns 10% in a money market account. They just bought a car for $11,000 which they financed with a three-year car loan at 15%.”

From an economic perspective, this does not make any sense. Why can’t Mr. and Mrs. J use part of their savings to pay cash and buy the car? After all, the interest on the car loan is higher than the earnings on the saving. Rational behavior would suggest that the couple would be better off paying $11,000 in cash and setting aside what they would be paying as the monthly installment on the loan toward their vacation home. A simple calculation will show you this is the better of the two options.

In Professor Thaler’s view, this is not how we make decisions. We tend to make economic decisions by budgeting certain amounts of money for certain purposes. In other words, the $15,000 in savings is not just $15,000. It is the money set aside for the vacation home down payment. Using the amount (or a part of it) to buy a car amounts to pilferage (in our minds). The behavioral part of the decision stems from the fact that we are conscious of our limits at self-control. We are more confident in our discipline to pay the monthly installment on the loan (otherwise the bank will take away the car) than in our willingness to save a certain amount month after month.

This has important implications for analyzing people’s behavior.

Let us start with a simple example. Assume that gasoline prices go down. Rationality would say that people would use the resulting saving to buy something more important than gasoline. In one experiment after another, researchers have shown that people switch to premium gasoline even though there is no evidence to suggest that premium gasoline is good for your car. Thus, we have in our minds what may be called “gasoline money” and we are unlikely to spend it on anything else.

Other illustrations of irrational behavior include:

1.    Suppose the vehicle registration department sends out letters to car owners reminding them that the due date for making the next payment is approaching. The response is nothing to write home about. Include a picture of the car in the letter. The response goes up dramatically. Why?

2.    Reminders sent for paying a municipal tax evoke practically no response. Just include a statistic – 90% of the people have already paid the tax in your community (or zip code). The rest promptly respond with the payment. Why?

3.    Appeals for organ donation typically go unnoticed. It is amazing to see one country with a 28% volunteer rate and a very similar neighboring country having a 100% volunteer rate. The answer is in the wording of the appeal. In countries with low rates, you are required to check a box to “opt-in” if you wish to be a donor. Most people do nothing. In countries with high rates, you are required to check a box if you wish to “opt-out” of organ donation. Most people overlook to check this box as well!

A second aspect of Professor Thaler’s work is referred to as the endowment effect. In simple terms, we are more sensitive to incurring losses than we are to feeling good about gains.

For example, assume that you have been to a place where a new virus has been detected and if the disease is contracted, painless death is certain within a week. The probability of your having the disease is 0.1%. What would you be willing to pay for a cure?

Tweak the above example a little. Volunteers are required for research to find a cure. You would be required to expose yourself to a 0.1% chance of contracting the disease. What is the minimum amount you would require to volunteer for the program? (you cannot purchase the cure).

Through the prism of classical economics, the answer to both questions should be the same.

Professor Thaler proves the assumption to be wrong – by a long shot.

He has found that while people were willing to pay $200 for a cure, they would demand $10,000 to participate in the study. The endowment effect is so powerful that people are willing to pay 50 times more to preserve their current level of health than to get a little healthier.

The endowment effect is useful in explaining why retail outlets cannot suddenly increase the price of umbrellas in a thunderstorm, why concert organizers cannot increase prices significantly even when the demand is high, and why a car dealer who expects a premium of $200 for a car that has a long waiting list is viewed as more unfair than a car dealer who traditionally gives a $200 discount but merely withdraws the discount when there is a waiting line. Think about it. If a dealer has been selling a car at list price and increases the price by $200 to cope with demand, people find that unfair. If the dealer has been selling at a $200 discount and stops the discount to cope with demand, people are fine with it. How do you explain this anamoly?

Perhaps the most important implication of Professor Thaler’s work can be found in retirement savings. The “Save More Tomorrow” concept has had a profound effect on savings. When people are asked to save more (affecting their take-home earnings) they resist. The same people, when told that a small portion of their raise would be transferred to a retirement account, are fine with it. In other words, by merely relating increased savings to increased pay (thus never resulting in a lower take-home earnings) people willingly cooperate.

For more on Professor Thaler’s work, please read his books: Nudge, The Winner’s Curse, and Misbehaving.

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Friday, September 29, 2017

Toy Story

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Charles Lazarus founded Toys R Us in 1948.

During the 1980s and 1990s, Toys R Us was the undisputed top toy retailer in the U.S.

Last week, the company filed for bankruptcy protection.

How did this happen?

One of the key factors in failure is inertia. Toys R Us, just like many leading companies in other industries, simply failed to see the relentless assault of technology, the transformation from real toys to virtual toys, and online retailers bent upon rendering traditional retailing redundant. On top of these, it would also appear that the leadership suffered from arrogance – we are too big to fail syndrome.

Faced with ever-mounting problems, the company took the leveraged buyout route to go private in 2005. Private equity firms Bain Capital and KKR & Co. lent a huge amount to convert equity into debt. At the time, both Toys R Us and the buyers made tall claims about making the stores a better place to shop and work.

Finance 101 says that debt is the cheapest form of capital. It is not surprising that some leaders and managers believe in this notion and embrace leveraged buyouts when everything appears to be lost. Even when interest rates may be at historically low levels, debt has an opportunity cost, among others.

Thus, the $6.6 billion debt load was too much for the company. Unable to turn the tide in 12 years, Toys R Us has made a final attempt to redeem itself by seeking Chapter 11 protection.

It is easy to blame discount retailers and online retailers for the plight of Toys R Us.

The irony is that toy sales are increasing. Some of the stores that have reinvented themselves seem to be doing quite well. It is not enough to store a large variety of toys. What is the shopping experience that you can create? Can children (and adults) try out how the toys work before making a purchase? Can sales people be trained to become specialists and offer meaningful suggestions? Most importantly, can shopping be fun?

One of the key success factors for any company is the ability to scan the competitive landscape and initiate proactive measures to place barriers for others. In hindsight, it was not until 1998 (when Walmart surpassed Toys R Us in toy sales) that the company seem to wake up. Since then, Toys R us has seen what one writer calls “management merry-go-round.” The company has tried six CEOs and two interim CEOs to fix the mess. It is obvious that none of them had the wherewithal to turn the company around.

Toys R Us had $444 million in debt due in the current financial year, and a staggering $2.2 billion in debt maturing in the following year. As one analyst notes, the company has been in a perpetual refinancing mode.

When the writing on the wall is clear, companies need to come up with pragmatic, even if uncomfortable, solutions. As an example, consider pricing. How did Walmart overtake Toys R Us in toy sales? By discounting popular toys by over 50% compared to the competition. Online retailers like Amazon are in multiple businesses – they are willing to offer lower prices and drive competition away. The fact that they do not have to invest as much in physical infrastructure and next-to-nothing in inventory are advantages hard to beat.

A simple metric tells the “toy” story.

YouGov BrandIndex measures customers’ perception of a brand every two weeks.

At the beginning of 2017, Toys R Us had a perception index of +12 (on a scale of -100 to +100).

Today the index is 3.

There are many who believe the story is not over – that Toys R Us may still recover.

When all seems lost, there is always hope.

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Friday, September 22, 2017

A different Irma and Harvey

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The destruction caused by the two hurricanes is beyond words, beyond imagination. Reports suggest that it might take months for electricity to be restored. Reconstruction may take several years. Who can estimate the costs? How do you determine the “cost” of a rain forest destroyed? Of millions of people whose lives will probably never be the same again?

When the super-typhoon Haiyan hit the Philippines in 2013, I was in China. I remember the same people covering Harvey and Irma traveling to the Philippines to provide an “on the spot” account. A natural catastrophe of unprecedented proportions was “milked” for what it was worth 24 x 7 – never mind the trauma of those directly affected, with no water and no food for weeks.

The Oracle of Omaha, speaking earlier this week, proclaimed that anyone who was pessimistic about America was “out of his mind.” Maybe. Maybe not.

Professor Stephen Hawking warns that the way we are growing and recklessly using up scarce resources, we may not survive as a species for very long.

Depending on whether you believe in Oracles or Science, you can place your bets.

Wait. This is not really about the hurricanes.

I want to write about Irma and Harvey Schulter of Spokane, WA.

Irma Schulter is 92. Harvey Schulter is 103.

They have been married for 75 years (they were married in 1942).

The extraordinary thing about this couple is that they have fostered over 120 children, many of whom have been physically or mentally differently abled.

Asked what their motivation was to foster so many children, they say: “ We don’t know. We just did. They were interesting little people.”

Think about it for a minute.

What if each one of us could develop a fraction of the humility, compassion, kindness, and generosity that the wonderful Schulters exemplify?

What if each one of us could develop the sensitivity to think a little less about ourselves and a little more about others – particularly those who are vulnerable, or those who have been ravaged by a natural or human-made catastrophe?

Let me give you a small example.

150 million people die every year from Malaria – most of them in the poorest countries.

What does it take to prevent this relentless scourge?

$5 per person.

That’s right. $5 is the cost of a mosquito-net that has a useful life of at least five years.

The arithmetic is simple.

You need $750 million to prevent those deaths from Malaria.

Just as a matter of fact, $750 million is less than a day’s budget of the U.S. Department of Defense.

I am not suggesting that the U.S. alone should bear this cost.

Imagine that all the 200+ countries of the world agree to give up a day’s spending on defense.

What could that do to improve humanity as a species?

Is it too much to ask?

If Irma and Harvey Schulter, with a modest background, could foster 120 children, can we not make a little change in our mindsets?

As a footnote, the World Meteorological Organization started naming hurricanes alternately with female and male names in the 1970s. Irma and Harvey are due to be retired after the recent havoc they caused.

I wish Irma and Harvey Schulter many more years of peace and happiness.

Their life, simple as it may sound, can inspire many others.
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Thursday, September 21, 2017

Death by PowerPoint

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The typical human brain can hold about seven pieces of new information for less than 30 seconds!”

                                                                                 Dr. John Medina, Brain Rules.

Long before PowerPoint became an inevitable part of corporate and academic life, I had

the good fortune of attending a memorable training program. The Professor was one of the great thinkers of the time. Each day we were given a case study at 4 in the afternoon and were required to make a presentation the next morning at 8. The tools at our disposal were acetate sheets and marker pens in different colors. We had tight budgets and to make the best use of each sheet, we wrote as much as we could on a single sheet. The moment we placed the sheet on the projector and switched on the light, the screen was filled with text, numbers, and calculations. Before the presenter could start, the Professor would ask the presenter to stop, take a seat in the front row, and tell the presenter:” Come over here and sit next to me. We will read it all together.”

In the initial stages, this was embarrassing, humiliating, and many broke down. The gentle Professor took us through the stages of making great presentations. By the end of the course, each one of us gratefully acknowledged the valuable lessons.

Today we live in a different world. No conference is complete without a dozen or more PowerPoints. The same thing goes for classrooms, training rooms, and business meetings. For a few years as an academic, I consciously gave up presentations altogether and went back to the traditional method of writing on a board.

Why are we so anxious to bombard our audience with information overload? To quote David Ogilvy, “most people use PowerPoint like a drunk uses a lamppost – for support rather than illumination.”

Cognitive science tells us that we process 90% of information visually. On top of this, we process visuals 60,000 times faster than we process text. Yet, two of the webinars that I participated in this week had 90% of text. I did not enjoy either of them. Sure, top-notch scholars and practitioners made the presentations. My frustration is amplified as a result. If this is what the best brains in the business have to offer, what can we expect from others?

A Google search for “Death by PowerPoint” shows nearly 6 million results. Every day, some 300 million presentations are made. There are books written about it, a TED talk by J P Phillips, and loads of wisdom from everyone who is someone in the world. I won’t repeat them.

As Chris Anderson, the curator of TED observes: “Presentations rise or fall on the quality of the idea, the narrative, and the passion of the speaker. It’s about substance, not speaking style or multimedia pyrotechnics. If you have something to say, you can build a great talk. But if the central theme isn’t there, you’re better off not speaking. Decline the invitation. Go back to work, and wait until you have a compelling idea that’s really worth sharing.” (Source: HBR, June 2013).

If you want to understand what a great presentation looks like, here are some unusual examples:



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Friday, September 8, 2017

The Ambidextrous Leader

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Conference Board (https://www.conference-board.org) reports an alarming churn at the top of the largest corporations. In the first fifteen years of this century, almost 25% of CEO departures from the Fortune 500 companies have been reported as being involuntary.

A PwC report on the 2,500 largest companies denotes the huge cost of forced turnover – a mind-boggling $112 billion loss in market value annually.

Leaders today are under enormous pressure to perform. Short-term orientation is all pervasive, and no one appears to have the time to think about the long-term. Activists and major investors want to see the performance on a daily basis. Even a little deviation from the projections can have catastrophic consequences. Whistleblowers appear to have found a new voice and also the media to spread the message like wildfire. Sometimes, the distinction between the messenger and the message is blurred to the point of irrelevance. Add to all this the constant search for breaking news, the ever expanding reach of social media, and the propensity for alternative facts to spread faster than the speed of thought, and you have the perfect recipe for disaster at every step.

Charles O’Reilly and Michael Tushman wrote in 2004 (HBR, April 2004) about the ambidextrous organization – an organization simultaneously capable of exploiting the present and inventing the future. In recent times, Vijay Govindarajan has added a third dimension in his Three Box Solution (HBR Press, 2016) - jettisoning the irrelevant past

Today, there appears to be a dire need for ambidextrous leaders.

On the one hand, leaders need to be decisive – about everything from disruption to diversity to sexual harassment. If you look at classical decision-making models, they have many steps involved. Information gathering, analyzing alternatives, and thinking through the consequences can all consume precious time. Snap decisions based mostly on intuition may be fashionable but can have serious repercussions.

On the other, leaders need to be good listeners. You can never predict where good news (or bad news, for that matter) is likely to emanate. Even harder to predict is the impact of time on how you respond to the news.

Here is the paradox. With honorable exceptions, decisive leaders are not good listeners. Those who have the patience and the attitude to listen, and to filter out the noise, tend to be ambivalent, waiting for any extra bit of information that might improve the outcome. In other words, listeners are not expected to be decisive in ways that many stakeholders seem to interpret the trait.

In their excellent HBR article (What Sets Successful CEOs Apart; HBR; May-June 2017), Elena Lytkina Botelho et al. suggest four guiding principles:

Deciding with speed and conviction – 12 times more likely to be high-performing CEOs.

Engaging for impact – deftly engaging with stakeholders results in success being higher by 75%.

Adapting proactively – 6.7 times more likely to succeed than those who focus only on the short-term.

Delivering consistently – those who scored high on reliability were 15 times more likely to succeed as CEOs than those who could not keep the promise.

Or look at it another way.

HBR publishes an annual ranking of the best performing CEOs in the world. The model uses a combination of sustained performance (total shareholder return and market capitalization) and sustainability measures (environmental, social, and governance performance). Long-term financial performance is weighted at 80% and ESG performance at 20%.

Guess who were the top three in 2016?

1.    LARS REBIEN SORENSEN, NOVO NORDISK.

2.    MARTIN SORRELL, WPP.

3.    PABLO ISSA, INDITEX.

If you are wondering why these star performers are not in the news, you are not alone.

Perhaps it is time for the leaders of unicorns to take a closer look at what they are trying to achieve, beyond short-term gains.
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Thursday, August 24, 2017

The Tale of a Once-famed Icon


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In the early eighties, just as the personal computer entered the market, a few friends

came together and formed a software company with very little capital. The fact that they were colleagues in an established company and decided to quit en masse raises ethical questions that have not been answered till now. Framed in the context of knowledge management, how ethical is it for a team of technocrats to leave a company in limbo?

Just as Bill Gates happened to be in the right place at the right time, these gentlemen were also in the right place and the right time, albeit in a different part of the world. The government of the day went all out to support the IT sector. Thus, the idealistic entrepreneurs had the good fortune of a scarce resource like land being given to them at favorable prices. They were idealists. Right from day one, they espoused the highest standards of governance and transparency.

Several factors helped the company (and many others) to grow at a blistering pace.

Large corporations in the industrialized world wanted affordable solutions. Thus were born what some critics have called the “sweat shops” of the IT sector. They hired the best available talent in the country, provided great working conditions and soon became the envy of established entities.

To place things in perspective, the initial public offering was nothing to write home about. Almost revolutionary concepts such as Employee Stock Option Plans, generous bonuses, and good management practices were in place thick and fast.

Then came the Y2K problem, like the proverbial manna from heaven. Hirings went through the roof. 24x7 became the new norm. Revenues and profits zoomed. Share prices started rising exponentially. The initial investors suddenly became Rupee millionaires and Rupee billionaires. The company soon debuted on the NASDAQ. The Rupee millionaires became Dollar millionaires. The country had a new generation of entrepreneurs.

One of the founders who was the CEO did something unprecedented. He stepped down on reaching the “Government Retirement Age” of 58. Another founder stepped in as CEO. Over the next decade or so, the company saw the founders rotating the CEO position. In hindsight, this was a colossal mistake.

The company that had so assiduously cultivated an image of transparency and governance appeared fallible after all. When it became apparent that the CEO position was reserved for the promoters, a few talented people at the top left. Things came to such a pass that the retired CEO came back to resurrect the company. In typical dynastic style, normally witnessed in politics, the CEO brought on a family member. Again, in hindsight, these decisions are open to question.

In 2014, for the first time, a non-promoter professional became the CEO. A grand vision came very quickly. For almost two years, the company turned in good though not spectacular performance.

Early in 2016, the first signs of trouble surfaced. Without going into all the details, the problem was the alleged severance package given to some top executives, issues of corporate governance, the fancy hikes in top-level compensation while offering measly increases at the bottom of the pyramid, questionable acquisitions, and in a sense, a perceived deviation from the values of the founder-promoters.

Soon the problem turned into a no-holds-barred war of words between the board of directors and one of the founder promoters.

Last week, in a sudden move, the CEO quit. An interim CEO is in place. The CEO has cited pressures from some quarters as the distraction and the reason. Strangely, the CEO who stepped down is now the Executive Vice Chairman. The Board already has a Chairman and a Co-Chairman. The Executive Vice Chairman will receive a salary of $1 a year.

In the two days since the CEO quit, the share price took a beating. The company lost its coveted place among the top ten most valuable companies in the country.

Since this is only a blog, I have left out many details. What fascinates me is the uncanny parallel to family businesses across the world and a reminder as to how the mighty might fall.

Contrary to what many may think, a large majority of public corporations across the world are still family businesses at their core. Of course, the corporations have hundreds of thousands of shareholders. The promoters still wield considerable influence and expect to be heard.

Perhaps the most challenging question that such businesses face is the question of succession planning. Empirical evidence shows that rarely do these businesses retain their original values or intent beyond the second generation.

In the present case, the first error appears to have been to bestow the CEO position as a kind of entitlement on the promoters.

The second error appears to have been the founder CEO returning from retirement. In one action, the iconic stature had a mighty fall.

The third error has been the inability of the board and the promoters to sort out their differences through dialogue. Washing dirty linen in public is never a nice spectacle.

The most important error, in my humble view, has been the organization’s failure at innovation. With nearly a 100,000 talented people, surely it was well within the organization’s capabilities to come up with world-class products. That it chose to focus on providing services to large corporations is a sad commentary on the fallacy of the tall claims made time and again.

Finally, leaders, however great, need to know when enough is enough.

Let us face it. Each one of us will have our day of reckoning. It will be in the larger interests of everyone if one realizes that one can only do so much and leave the rest to others. Dishing out sagely wisdom ad infinitum is a sure recipe for disaster.

I do hope the organization can sort out the issues and once again be on the path to success and glory. More importantly, I do hope that leaders and entrepreneurs learn to shed their egos. No one is perfect. Or does someone doubt that?

Perhaps they do. This morning brings a report that the promoters are plotting a coup to replace the board. Can it get more bizarre than this?
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Tuesday, August 1, 2017

Does Collaboration Stifle Creativity?


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For decades, we have been exposed to the virtues of collaboration, cooperation, and coordination – or team work.

Scholars have built models to explain team performance and team effectiveness.

Organizations spend millions to get to the notion of the “ideal team.”

The foundational concept in team work is synergy – the idea of the whole being greater than the sum of the parts.

How real is this notion?

New research (Campbell et al.; Hot shots and cool reception? An expanded view of social consequences for high performers; Journal of Applied Psychology, 2017) suggests that collaboration may, in fact, stifle creativity by imposing social costs on high performers. The authors argue that cooperative contexts prove to be socially disadvantageous for high performers.

In other words, the innovators and hard workers may feel miserable and socially isolated in a typical team environment.

A team has people who bring different skill sets to any situation. Empirical evidence suggests that mediocre employees, rather than rising to the challenge, in effect drag team performance downwards by isolating top performers, spreading nasty rumors, sabotaging the total effort, and even stealing credit for the high performers’ work.

Still Skeptical?

Here are the top reasons for high performers leaving organizations – from a study involving over 5,000 executives:

1.    Rapidly changing priorities – it is very tempting to catch on to the latest fad; the bolt from the blue; the “aha’ moment – the reality is that lasting progress requires loads of patience and perseverance. If you keep the goal post moving all the time, it is unlikely that anyone will score a worthwhile goal. The lesson that we can learn from organizations that consistently outperform their peers is to have clear short-term, medium-term, and long-term goals, and to avoid being distracted for any reason.

2.    Tolerance of mediocrity – while it is true that all employees cannot be high performers, one of the fatal sins of leadership is to condone mediocre performance. Sure, honest failure needs to be accepted, indeed encouraged, but when leaders don’t spot the difference between laxity and hard work, trouble cannot be far away. The “democratization” of incentive schemes is a flaw frequently reported in the literature. If high performers perceive that their efforts are in vain, they will walk away.

3.    The absence of fit between job and person – most organizations try to find people to fit into jobs. They would do well to identify critical jobs and identify the best person to perform the job. The analogy is that of having a custom-built sports car and using it as a golf cart. When high performers find they are being used to do something that practically anyone can, they are frustrated – and leave.

4.    Poor utilization of available talent – study after study indicate that organizations rarely use more than 50% of their potential. Imagine an organization chasing linear growth when the entire industry is moving exponentially. Can you realistically retain your best people?

5.    Nepotism – this invariably touches a raw nerve. Let us face it. We are humans. We are fallible. We have our likes and dislikes. Much as we might want to think otherwise, nepotism is hard to hide. High performers prefer organizations that are fair and square.

It appears that individual talent no longer counts for much. Susan Cain (Quiet: The Power of Introverts in a World That Can’t Stop Talking; Crown; 2012) calls this the New Groupthink – the notion that great ideas can be generated only in an exuberant, boisterous workplace where the loudest voices prevail. The rapid transformation of the workplace into “open office” plans with little or no privacy is a telling example of this concept of “collaboration.” Thank you, star performers, we don’t need you. We can do much better with ordinary folks collaborating all the time.

Step back for a minute. Think of some of the greatest ideas that have emanated through history and think of some of the most acclaimed people in any domain:
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Start with Galileo and Copernicus and the Solar System.

Look at Euclid’s theorem.

Or Newton and Gravity.

Or Einstein and Relativity.

Or Edison and his inventions.

Or Picasso and Michaelangelo and their paintings.

Or Beethoven, Mozart, and Chopin with their masterpieces.

Or think of the philosophers – from Sankara (who propounded non-dualism), Aristotle, Jesus, Buddha, Marx, Sartre, Russel, Descartes, Kant, Nietzche, Cicero, Dewey, or Johannson.

How large were their teams? Who were their collaborators?

I am not for a moment suggesting that each one of us could have done what the souls above gave to humanity. Nor am I suggesting that collaboration per se is harmful.

All that I am respectfully submitting is the virtues of collaboration are vastly overrated. Great insights often require solitude, not noise. We will seriously undermine the efficacy of collaboration if we choose to ignore or overlook the limitations inherent in groups.

As I have written earlier, some of the great corporations of today have altogether abandoned the deeply ingrained models. Holacracy and Teal are the new paradigms. Jobs are no longer relevant. Roles are critical.

Beyond structure, we can make collaboration work by following a few simple rules:

1.    Brainwriting – a new concept which in simple terms is the written version of brainstorming. No member of a team can speak. Everyone writes ideas on post-it notes or another convenient medium. If you wish to eliminate bias, you can insist on printing – everyone uses the same font and size. Each idea is written on a separate note. All the notes go into a basket and then displayed in random order. People have time to study, understand and vote for the three top ideas. The idea that gets the most votes (and by default the greatest buy-in) gets the first shot. As an intermediate step, we can also have a window for developing on others’ ideas.

2.    Defining roles instead of jobs – a person may perform an activity related to marketing in the morning and accounting or finance or service activity in the afternoon. The transition can be during a day, a week, a month, or any convenient time frame.

3.    Air Cliché – list a few clichés (Bark up the wrong tree, Beggars can’t be choosers, Fish in troubled waters) and ask team members to write down possible ideas tied to a cliché that may solve the problem on hand. When complete, ask members to make paper airplanes and toss them to another team. Repeat till you have a consensus on the best course of action. Avoid hierarchy. The process is based on the premise that many of the best ideas come from a fun-filled, playful environment. (for more on this, please refer: James Rogers: The Dictionary of Cliches; Ballantine; 1985).

The next time you form a team, I do hope you can realize synergy.
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