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Showing posts from 2017

The Forgotten Aspect of Forgiveness

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The Biblical story of David and Goliath has been told and re-told a thousand times.

In his best-selling book, Malcolm Gladwell provides a fascinating twist to the tale. We have been told that David is the underdog and Goliath is the favorite. In the end, the underdog overcomes the favorite.

Gladwell says we have this wrong for all of 3,000 years.

David is infantry in those days. His weapon is a sling that has the stopping power of a 45-caliber handgun. He is a master of his craft. And he has faith on his side. He is willing to undertake a mission that no one else wants. He never gets close to Goliath (till he kills Goliath).

Goliath is a monster. Endocrinologists agree that he probably had a rare condition – a tumor on his pituitary that had two consequences – his abnormal size and his blurred vision. He is led on to the battlefield by an assistant – he can’t see! He is great at close combat with a sword but miserable at a distance. He is weighed down by his heavy armor. He urges David…

GE Bids Goodbye to the Electric Bulb

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Thomas Edison “invented” the electric bulb.
The company that he founded later became GE.
After 125 years, GE is dropping the electric bulb from its portfolio.
We don’t learn from history – not even from recent history.
The previous CEO famously brought in an acknowledged expert in strategy and innovation. It may be safe to assume that endless meetings would have been held, senior managers would have gone through intensive training, and new “strategies” would have been developed.
Frank Vermeulen is a professor of strategy and entrepreneurship at the London Business School. In what is surely a provocative hypothesis, he says that “new strategies” are often not strategies at all. He adds for good measure: “We want to be number one or number two in all the markets in which we operate” is one of those. One wonders whether he was referring to the legendary Jack Welch.
As I have written earlier, GE has been on a downward slide for over fifteen years.
Sure, divesting a business that is not doing we…

The Creativity Paradox

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This column is inspired by the work of best-selling author and motivation expert Daniel Pink.
Professor Teresa Amabile of Harvard Business School has studied individual productivity, creativity, and organizational innovation for over three decades. In a landmark study published in 1993, Professor Amabile provides the fascinating account of an experiment.
“She asks a sample of 23 artists to provide her with 20 pieces of their work – 10 commissioned pieces (for which they would have been paid by the sponsors) and 10 non-commissioned pieces (work they did out of their passion). She displays the 460 pieces of art thus collected in random order. Then she invites experts to evaluate the 460 pieces.”
It is not often that you get overwhelmingly significant results in social science. Professor Amabile categorizes her findings asstartling.”
The experts evaluate that the 460 pieces are at a comparable level in technical terms. However, the experts rate the “non-commissioned” pieces of art as being…

TRUST

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This column is inspired by the work of Professor Dan Ariely, the James B. Duke Professor of Psychology and Behavioral Economics at Duke University, and one of the world’s leading experts on honesty and trust.
Trust is the foundation of life. Trust is what makes relations work, trust is what makes businesses successful, and trust is what separates happy societies from others.
Many of you may have had this experience – you are at an airport or at a public place. You wish to use the restroom. Have you asked someone next to you, a stranger, to look after your baggage for a few minutes? Has the role been reversed anytime? At the heart of believing someone we may never have seen before is trust.
We live in an inter-dependent world. We would find it very difficult, if not impossible, to live a life of complete isolation. On top of this, we are not self-sufficient. We need reciprocity to live and work together. Reciprocity in a positive way is advantageous to our survival – and is the basis of …

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 arerational.
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 …

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 n…

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 …

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 sta…