2*06 – The one with all the Thumping

Guess where did the name come, well after lot of pushing, I started watching F.R.I.E.N.D.S so the inspiration came from that. But wait the entire story is not about that so those of you who are not really a big FAN of F.R.I.E.N.D.S, can also read on.

I was sitting in my “the very last” lecture at iimk and project presentations were going on, one after the other. Usually these sessions are difficult to sit in, I mean project presentations! People are least interested in the project that their own group did, forget listening to ppt of other groups. So what do you, some people sleep like they don’t care, some people keep on moving in and out of the class and try not to care, some people respect the sanctity of the classroom and sit patiently there, a few try to listen to what is being said by the presenters just because they anyway had to remain in the classroom and have nothing else that can do in a classroom, but everyone is looking at the clock, with every tick of the second you are marginally happy and the diminishing rate of return does not apply here, it’s a increasing rate of utility curve where the utility continue to increase, the more closer you are to the end of the session the higher is the utility of that last of the seconds. Well not anymore!

I wished for the first time in my last ever lecture at iimk that may be the last group had a few more words to say to the class before they say “thank you”, may be some of my ‘kind’ friends who were listening to the presentation had 1-2 questions to ask, may be the professor had something to say to the class before he winds up the session, may be everyone in the class was feeling like I do and may be something was happening for the first time ever that did not happen before, each of us in the class wanted that lecture to go on for a few more seconds, may be minutes and each of us for the first time did not mind if the class overshoots by a couple of minutes. As when the last presentation finished, my eyes did not believed what they saw, my ears wanted to ignore what they were hearing, my mind was trying hard not to waste time in thinking about what is happening, and my heart was beating slowly as if it was saying something to the clock, my goose pimples were trying to hide from being noticed - they did not wanted to appear. I wanted the time to stop, I wanted to be a poet, I wanted to be a photographer, I wanted to be a writer, I wanted to be an artist, because these MBA programs can teach you how to run a 100 crore business but they fail to teach you how to capture moments that matter.

While I was feeling all that, suddenly a cold current ran through my nerves, the heart beat that was going slow jerked up, the mind was puzzled, the two ears were confirming with each other if what they heard was right, the goose pimples couldn't wait any longer...engulfing --almost uplifting-- my body with a feeling that can only be experienced, not described, my whole 2 years flashed in front of my eyes as the last group said “thank you”. That was a dead silence in the classroom, everyone was trying not to look at others, they were looking at the ceiling, the fan, the projector, the board, and then they started thumping the desk. The thumping that did not stop, probably no one wanted this thumping to stop, the thumping was the last hope of each one of us to continue sitting in the class somehow and not leave, the thumping was the only common way out for the emotions that each one of us had, the thumping was the only way to cheer up all those who were feeling bad about the end of the PGP program, the thumping that never looked like it would stop. I did not care if the table break but I desperately did not wanted that thumping to stop.

A Walk to Remember !

One fine afternoon, I and my friend started our journey to the classroom for the first lecture of corporate governance course here in the last term. We started our usual discussion on how we want the course to be (given that it is the last term), how the prof. would be, how much the workload be, given that she will be teaching us for the first time and no one has any idea how she teaches as she has recently joined the institute.

On our way to classroom, walking down the corridor (devoid of any 2nd year student and full of the anxiety of final placements of the batch); my friend notices that the new professor is behind us, possibly towards the same classroom to take the first lecture of her course. He hinted the same towards me, and we came to an instant agreement (rarely arrived at between two MBA grads on any damn topic and that too at a lightening speed!) that we should mark our words and discuss limited stuff in the remaining part of our journey to the classroom. At once I thought why not discuss something really good on Corporate governance and act smart and then I realised that I was suffering from ‘Bounded Rationality’.

Gradually we realised that the distance between the prof. and us was slowly reducing and my friend was continuously keeping a watch on the developments like a manager trying to foresee what will happen in the immediate future. And then we started “moderating” our behaviour to look like ‘normal’, of course we are going to be managers soon and hopefully we have learnt that art by now (we hoped!). But again the reality was far different than what we wished it to be, possibly in our last term we did not have energy or enthusiasm and we were crawling to the classroom (a part of the brain trying to justify the remaining part that we need to attend lectures) so the distance was reducing. At the same time the professor is looking forward to meet the budding managers of tomorrow in the first ever interaction that she would be having with the 2nd year students, so she was walking a little fast, maybe she did not wanted to be late for the first ever opportunity to talk to 2nd year students.

Whatever! The distance was decreasing and again the two of us came to another agreement that we needed to speed up, the classroom doors are now visible and we should be able to reach them well before we have to greet the professor. My friend glances backwards a bit trying to hide the fact that he is continuously checking on where the professor is at any point of time. Front and then Back, front and then back, it is like we are almost there, (it is like I made 5 strong points in the GD and I should be just in the next round of the process), like we are sure our speed was just right to be able to get into the classroom before encountering the professor. We were almost confident that even if we cannot make sound arguments in the case discussions this was too basic for us to fail and that even if we do not know how to calculate the financial ratios we were very sure that we calculated our speed quite accurately. We were mechanically doing the same repetitive job, look front and then back, front and then back, front and then back; sounds something like the routine job at work everyday.

Suddenly we realised that the professor was right there behind us and we could very well wish her a good afternoon just by turning back. At the same time we were puzzled as to how this could have happened and we didn’t even realised, that we did not do the same repetitive task well. We did picked up some speed or at least we thought we did or is it the complacency that has occupied our mind before we even started our managerial carrier. How can the distance reduce to such an extent despite my friend keeping a close tab on the “developments”, the shock and surprise can well be described similar to what the financial world had got when they were hit by the sub-prime completely unaware. Well the ‘right sense’ came to our mind like a ‘bail-out’ package and we turned back and greeted the professor. She smiled and said “Don’t worry guys I am not following you”.

Well she noticed that my friend was continuously keeping a tab on the “developments” and it was rather obvious that we were trying to run away. Anyway we got another ‘bail-out’ and we realised that she was carrying a lot of course handbooks for the class and that we should offer some help on the same. Like our financial industry (after the bail-out), my friend too got new boost of energy and rushed towards the classroom door and kept it open for Mad’m to enter and I decided that very moment that I am going to pen it down...... errr "pen it down" or should i say "type it up"..... whatever !!!

Rating Agencies and Accounting Firms – fixing the responsibility?

The first session of corporate governance course started on a good note, why am I terming it as ‘good’, well was some good participation from each corner of the class. During the discussions the prof. made a point that accounting frauds and false rating by rating agencies are some of the important challenges while addressing the concerns of corporate world. Well, people sounded that it is difficult to penalise monetarily the accounting and rating agencies and usual norm is to rotate the accounting firm periodically (the regulation that came in after Satyam) and refer to credit rating of a firm by multiple rating agencies.

Yes, it is difficult to quantify the penalty that should be applied to accounting or rating agencies because they are not running the business, they are dependent on the managers to provide them with the necessary documents (that too only when asked), and that the size of the client company can be even 100 times the revenue of these accounting firms and rating agencies. We cannot ask these to compensate for the fraud in these big firms, the accounting and rating agencies will go bankrupt in just 1 fraud incidence. But does that means there is no way to make them liable, financially responsible for the fraud that could have been averted by ‘due’ due diligence by these firms.

I am not sure if there are already some experimentation done in this regard in some corner of the world but surely one can come up with some logical and acceptable solution.

You can make these firm pay for the proportionate amount of their own worth in terms of damages if there happen to be a fraud e.g. an accounting company with Rs 100 crore in revenue, acting as a accountant for a Rs 10,000 Cr company. Take a case that the client has done some fraud amounting to Rs 5,000 Cr, then the accounting firm should be made liable for 50% of its own worth i.e. it should be asked to pay Rs 50 Cr in terms of damages to the affected stakeholders.

Now the above argument can be contested on the ground that the accounting firm can have 10 different clients and out of which only 1 did a fraud so it is wrong to penalise the firm solely taking into account the fraudulent firm. OK lets modify the above statement a little bit, lets the total worth of all the clients of the accounting firm is Rs 1,00,000 Crore and 1 firm did a fraud of Rs 5,000 Cr in that case the accounting firm can be asked to pay Rs 5 Cr in damages. Well this can be very well too small for a accounting firm and may not make a significant threat!!!

Let us look at it differently, say that the same accounting firm has earned a total of Rs 50 Cr (present value) in term of fee towards its accounting services for the fraudulent firm. One can straight away ask the accounting firm to pay the same in damages.

Similar ideas can be put down for rating agencies as well and the final solutions (just and acceptable) can very well be a combination of the above three points or may be altogether a better option. But fixing the liability in financial terms is quite possible and can be done. May be there exists some sort of formulae that even I am not aware of; and the whole effort that I have put in while writing this is useless!

The World is Flat or it isn’t

Room 67: Let us go to Canteen and have some quick snacks?
Room 68: Oh, I just went and come back. BTW you planning to go out for dinner, today mess food is bad :(
Room 67: Let me chk and I will confirm in about an hour.

Thomas L. Friedman has written “the world is flat” where he has mentioned how beautifully the emergence of internet as a means of communication and information exchange has facilitated the birth of Indian IT industry where the projects are executed offshore without jeopardising on the quality but with reducing the costs. I was having this discussion with my friend yesterday about the evolution of Web 2.0 and user forums like mouthshut.com etc. The common starting point is that internet is so easily available that it is the first choice if you want to communicate to your friends, peers forget the unknown people.

The starting of the post is common form of communication between two rooms physically 5 ft away. I was wondering that whether the internet has increased or decreased the distances between individuals. If at one side it has made possible the interaction between two unknown individuals in different continents but at the other side it is replacing the personal communication between other two individuals would have met in person had internet not been in the existence. How do you evaluate the impact of this on human behaviour?

Man is a social animal, a lot is happening on the basis of personal rapport and relations that an individual develops over time, the relationship builds on trust and confidence when you physically meet and talk to someone. Verbal communication is just 1 criteria, you judge an individual by his body language, facial expressions, appearance and related physical surroundings etc. What implications will the internet have on the personal communications with the ‘known’ and ‘near’ people?

Let’s say 5 years down the line I want to watch a movie with my friend and he lives nearby but we do not want to take the trouble of physically going to a cinema hall and stand in a queue, take tickets and then watch the movie with 100 other people. Instead both of us log on to a movie streaming site on internet, enter into the same screen room, connect to the some personal instant message (or voice) window and start seeing the same film at real time and discuss it over the chat/voice window. But what do we do at intermission, I can't tell him that lets go and try some ‘crisy corn sandwich’? Or can I? Well I am talking 5 years down the line and surely we dial the same fast food chain, order what we want to order and it will be delivered over to our doorstep. “Hey do you think that guy has put a little extra cheese in the sandwich today?”

Room 68: Arey, wake me up for 3 pm wala class?
Room 67: Abe kya…. Put an alarm instead na?
Room 68: No bhai, I never know when I will put it off and sleep again, look you don’t have to take any additional trouble, I am leaving my chat window open and speaker on full volume, just ping me until I ping you back saying “yes, I am awake and ALIVE” !!!!

Wait a sec, did you say alive? I mean ALIVE !!

Politics and MR

Three of the Indian states have just gone through the assembly elections and I was reading an article which was discussing how the perception of voters is about the different political parties in that states. The article talked about what people expect from the political parties when they are in power, which issue favours which political parties etc. Wait a sec; did I just say perception of political parties amongst voters!

So here comes the question; is there an opportunity to apply the concepts learn in MR to position 1 political party amongst each other on the perceptual space of the voters? Well there is but whether it can be applied in Indian scenario I am not sure. We have national brands and regional brands here (read national parties and regional parties).

The need satisfied is favourable economic environment, job opportunities, social security and availability of products and services at affordable rates. The need manifest into wants and here comes the problem, our votes want the candidate of their caste/religion. I do not think there is any confusion over the needs, they are universal but whereas those needs manifest into a want of suitable, educated, and eligible candidate in a developed world, in India those needs manifest into a want of candidate of own caste/religion irrespective of his professional and personal records at the nearest police station.

If I talk about getting a survey done to identify the current positioning gap in the voters perceptual space and then positioning a political party appropriately depending on which social or political issue is most able differentiate amongst all the parties. However, the question that should be answered first is whether there is a need to differentiate the political parties by using perceptual maps. In India the political parties are not competing on functional aspects but on trivial issues. The consumers (voters) are not evolved enough to evaluate the promise offered by these parties rationally and take a sound decision. Rather the political parties have made sure that the voters who vote remain in the lowest level of their maslows hierarchy of needs and do not look beyond the religion and poverty.

I feel that these politicos understand the management more than us, i.e. we always talk of moving the customers up the value ladder but the politico has rightly identified that the best way for their survival is customer remain in the most basic level of their needs and only look for the core product offering. So I think MR has its application in Politics but we do not require it in Indian scenario.

Social Loafing and Diminishing rate of return

A very strange title, it may not make someone read the whole post; or will it? Well, to make people read it, I am keeping it short. Without referring to anything specific I want to tell you that I encountered the two concepts recently. Let’s say you are required to do a job for a social cause and you want to do it (so you had committed yourself to it) but then you know there are many who are volunteering to do the same job, your effectiveness decreases. OB guys will say social loafing and economist will say the marginal production (incremental job done) curve follows a diminishing rate of return. Do you know Tragedy of the Commons?



Take another example, Mr K usually gets numerous opportunities to attend conferences and he may substitute the next opportunity of attending a conference with a weekend retreat. Mr Y who usually does not get a chance to attend any conferences may compromise on his regular business and even willing to travel moderate distance to attend the same conferences. The utilities of both the events are different to both the individuals. Sometimes I feel (privileged) people have a tendency of discounting the true value of the most basic things in our life. Or continued success may give someone a false impression that one is fully equipped to overcome any sudden changes in the environment. No wonder strategist’s have modified five forces of Porter to include ‘Complacency’.

Songs – melody or contextual melody

Which one has more effect on you, the melodious songs or the songs with a context that you are familiar with? Which songs do you frequently listen, songs with some history (about the singer, band, or movie) or song that you just like listening? Is it only the song OR the associated video that makes it more interesting (Yes, i do not like the second half of chiggi-wiggi)? Sometimes you like a song from a unknown language so context is out of the question (remember las ketchup or Alizee); or is it not? You may be influenced by what others have said about that song, the stories that you hear about that band, that singer (the whole fuzz about Attaullah Khan, created by T-Series), does it not affect you? Sorry, for asking too many question but this is what I have been thinking for a while.

So let me give you a clearer picture. This is about my liking for songs, I feel that I am more likely to like a song if I see the corresponding movie (ehh may be applicable to bollywood movie). Though I am not sure if the vice versa holds. To give you an example, when I first heard ‘Love Aaj Kal’ songs I didn’t like them, but then after I have seen the movie, I started liking the songs. So there comes the question of context? Is it that after I know the context in which the song is being played in the movie, I start to move in the FLOW of the song.

Again is it only the context or just because I have heard the songs so many times now, I have developed an affinity to them, and I started liking them. I say this because I liked so many English songs after hearing them for over 100 times! This happened during my graduation, as it was the time when I heard English songs for the first time in my life. There are songs which I did not like in the beginning and then as I heard them every day (Thanks to my neighbours) I developed a taste for them. Most of my English songs collection has the same story. The context is not there, but there is a ‘late’ melody. I mean I did not found the songs melodious in the first 10-15 hearing.

And then the context can also have two meanings, the context of the movie and the contextual situation when you heard the songs for the first time. The songs may pop up good old memories in you whenever it is being played. For e.g. Asoka and DCH songs remind me of my first semester at IIT and Fashion songs remind me of my Summer Internship when I was on my way to Pune from Mumbai (I watched that movie in the bus). Why am I writing this????

Well I am not really sure what made me like the ‘Love Aaj Kal’ songs when I first disliked them and I kept thinking, unable to reach conclusion, I thought why not confuse others :) Do you really know why you like a particular song?