Tag Archives: portfolio management

Absolute vs. Relative : Is there a universal truth?

23 Jul

blind men elephant relativity

We all know the story of the six blind men of Indostan – who, on touching various parts of an elephant’s body, had different descriptions/ definitions of the “object” – all correct in their own right, all with their version of the truth, but all just not the complete/ absolute truth.

It reminded me of a conversation I had heard between my daughter Riddhi and her friend Kaveri as I was chauffering them back from school. Describing one of the differences between the IGCSC and the ICSC systems, Kaveri said that the former had the Percentile system of grading. And she said “that is scary, coz someone will always fail…but its also easy, coz you just have to make sure you are as good as most of the people – not necessarily the best!” Coming from a 13 year old, I really found that insight very interesting.

Got me thinking about relativity in its various avatars – and when you start thinking about it really, they span science, philosophy, human behavior, corporate culture, branding….a whole host!

Avatar 1 – Einstein’s Theory:

Ofcourse the best known context for Relativity is Einstein’s theory. For those who want to learn about it and related concepts, apart from Wikipedia, this is a nice visual series kind of explaining simplistically how it applies. (Click on this link and the subsequent 3 segments for a full explanation)

I just thought I’d do a check for how well most folks understand it/ know about it. The poll had interesting results – Most science students have studied it and remember the crux of the matter. The majority of non science students remember peripheral/ associated concepts. Younger kids have not been exposed to this. And ofcourse, there are a surprising number that haven’t the foggiest 🙂

Understanding relativity

I thought the funniest answer to my poll question “What, according to you, is the Theory of Relativity. (Shortest answer you can think of)” which my friends and family were supposed to answer without googling was Meeta’s.

She said – “depends” :), and then went on to surmise that the reason I was conducting this poll was because I now had “time on my hands” – uggghhh..

Manoj and Avinash both cited (apparently Einstein’s “funny” version) too – When you sit on a hot stove for two minutes, it feels like two hours. However if you sit with a beautiful girl for two hours, it feels like two minutes

Ajay, the scientist/ researcher par excellence said “Einstien theorized that time, space, speed etc. are all “relative” in the sense they depend on each other and not constant. The only exception being speed of light in vacuum which he theorized was a universal constant. Some examples I remember were: if a person travels at a certain speed through space and returns to earth after a few earth years, his siblings on earth would have aged more than him.”

Corollaries of relativity can be observed in optics experiments – calculation of focus and centre of curvature using “parallax error” – parallax error essentially comes down to space-time and relativity.

So, yes, a full spectrum. And, ofcourse we have arguably the nuclear bombs attributable to this same theory of relativity and the famous E=mc square equation, a fact that apparently made Einstein a very sad man.

Avatar 2: Performance Management

Probably the biggest source of angst that one always comes up against in an organisation, specially during evaluation/ appraisal time is – “are you measuring me on absolute terms or on relative terms”. Or, “OK, these are my areas of improvement, but tell me one person who doesn’t have these!” This, of course, also makes the basis of the infamous bell curve.

It is unfortunate actually, but while performance evaluations are more or less absolute (maybe I should say “relatively absolute” – an oxymoron if there ever was one! But, after all, the “absolute” evaluation is also being done by someone and so, the rating is relative to the evaluater’s point of view!), the outcome of these results is increments/ promotions which become very very relative! So, most corporate systems almost force fit an order – or ranking – thereby very often ignoring the very concept of multiple skills/ intelligences (the minute you create ONE number out of a series of variables – like in the multi-attribute rating/ ranking system, you make everything unidimensional!)

The famous/ gory-ish joke doing the rounds here is that of 2 men and a lion.

Lion and Men Cartoon

Two guys in a jungle come around a corner and meet a lion head-on pawing the ground.
One guy ever so carefully reaches into his knapsack and slowly takes out a set of Nike running shoes, never once breaking eye contact with the lion.
The second guy hisses: “What are you doing, you can’t outrun the lion” And the first guy says: “No, but all I have to do is outrun you”!

Avatar 3: Heisenberg’s Uncertainty Principle

“We have to remember that what we observe is not nature in itself, but nature exposed to our method of questioning.” – Werner Heisenberg

heisenbergsuncertaintyprinciple (credit: http://nargaque.files.wordpress.com/2009/12/heisenbergsuncertaintyprinciple.png )

The uncertainty principle essentially (and simplistically) states that the more you try and define something, the more undefinable it becomes. So, in quantum mechanics, or actually in all matter behaving like waves, your observing a sub atomic particle actually impacts/ changes what you are observing. It hinges on the observer effect (or position vs. momentum). For a simple explanation, click here

The question that arises then if perception of the particle is dependent on the observer, what is absolute???

Avatar 4: Universality and The Absolute Truth

An absolute (or universal) truth, is an unalterable and permanent fact. The existence of absolute truths has been debated among many different groups of people. An interesting debate-type article on the absolute truth can be read here . Per wikipedia, In philosophy, universalism is a doctrine or school claiming universal facts can be discovered and is therefore understood as being in opposition to relativism. In certain religions, universality is the quality ascribed to an entity whose existence is consistent throughout the universe. When used in the context of ethics, the meaning of universal {from Gk. katholikos) refers to that which is true for “all similarly situated individuals. In logic, or the consideration of valid arguments, a proposition is said to have universality if it can be conceived as being true in all possible contexts without creating a contradiction.

Avatar 5: “Good – Better – Best” Brands

Ofcourse Marketing uses this. In that discipline, it connects to the concept of “value” and how the price-quality equation is relative to the consumer. So, most product categories of a company have a “good-better-best” strategy. There is very often a “value” brand, followed by a “mass” or “middle ground” brand, and then a premium one. Whether it is Old Navy – Gap – Banana Republic; Camry/ Prius/ Corolla – LandCruiser – Lexus; Rin – Surf – Surf Excel; or for retailers The Store Brand – Mass Brand – Premium Brand – it really relates to the question of who can pay what price for what perceived value!

Marketers nowadays are evolving to debunk the good-better-best theory and talk better-better-best – but these are all variations on relative value to consumers.

Actually, many second brand acquisitions result from a desire to create a good – better – best lineup in the range.

Avatar 6: Competitiveness

My 80 year old dad, when he gets on his car, becomes a road-maniac. He gets completely bogged down by the guy/ gal next to him who is outgunning him. This leads to road rage, and his very natural desire to get one up over the teenager, while conveniently forgetting his age! My young nephew, probably being that very guy whom dad is outgunning, ofcourse behaves similarly on his motorbike!

Road Rage

It is a natural human tendency – we want to do better than the other people. Very often, performance eval time notwithstanding, our own benchmarks are relative. I have to confess, I do it to my very non competitive daughter – whenever she brings home results, my invariable question is – what was the highest? This is just fact – it is how we behave! Maybe it is a natural byproduct of being social animals – after all, being part of a community/ society means that our behaviors (and maybe our standards) are defined by our environment – so, much like Mr. Heisenberg’s Uncertainty principle, our very existence implies that we seek relativity…

A construct I wrote about in a previous post, the Johari Window, actually touches on many layers of relativity in people’s perceptions – about themselves and others.

Think about advertising – a very famous detergent ad in India goes “Bhala uski kameez meri kameez se safed kaise!” (how is it that his shirt is whiter than mine!) Ofcourse the same brand then indulged in very direct competitive ad, naming their competitor too – and was loudly decried!

The more I think about this, the more examples come to mind – I really could go on and on. But, I thought I would leave you with a really funny cartoon from my favourite facebook page – I fucking love science…enjoy!

einstein relativity

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Creative/ Innovative Business Processes – Oxymorons?

2 Apr

bruce n spider

Every day of the week – I hear my kids grumbling. Basically they don’t want to go to whichever class it is that they are taking these days – tennis/ music/ swimming/ dance/ drama. They don’t like it/ they are not good at it/ the coach is too strict/ they don’t like the people – grumble grumble grumble…My take on this is – that they in most cases they haven’t acquired enough expertise at that skill to really enjoy it. And my earnest blandishment to them is always – come on, unless you practice again and again, you will not acquire that threshold level of ability, and will never ever have fun doing it – its a hump, u just need to “try try again” but once you get it, voila!

Indian dishwash process

I experience a similar feeling but a bit in reverse while executing household chores – now that my girl Friday Tulasi is no longer with me, I have to wash dishes, sweep and swab the house and cook a lot more than I ever did before. But, since I perform these jobs infrequently, I am sure I don’t really employ the most efficient way of doing them – in every subset of the task actually – whether it is the washing, the stacking, the drying or the storing! I do it well, but if I did it everyday – I wd do it so much better.

And this is actually what makes the process industry. As we know, processes are made up of steps and sub steps that can be repeated endlessly – this is the reason they can be documented, then taught and then performed by a wide variety of people – and that’s also why they can be outsourced.

In EmPower, we had an interesting scenario in which our 3 operations department were actually at different levels of “processizability” (yes, I just coined that word). And therefore covered pretty much the whole spectrum. The “Process” oriented departments needed the basic skill/ expertise of the process – in some places it was domain knowledge of healthcare/ in some cases it was good knowledge of Microsoft office functions/ in some cases it was English writing and summarizing (unfortunately, 30 million dollars or no, Summly didn’t work for us (we tried it much before yahoo bought it :)!); and then they needed the skill of taking a series of task steps and performing them as documented. The characteristics that merited excellence in performance here were the ability to undertake these same tasks faster/ better/ cheaper – so, process improvement; productivity efficiencies; and ofcourse quality were the metrics of evaluation. This is where the normal process engineering measures like lean and six sigma were applicable – and folks did green belt and black belt projects…So focus was on automation/ tools to make work better/ business process management techniques etc..

sixsigma cartoon

From the demand side, what these functions necessitated were task orders that were essentially the same/ similar business problems, for many different businesses/ brands/ industries – with some minor twists. So, you couldn’t throw in a “new” angle to the problem – the client had to choose from an almost predetermined menu of choices – a bit like a buffet meal. They got solutions that worked like clockwork – because over a period of time we had gotten so good at doing them.
Also, the business problem itself was not so much exploratory/ unstructured but a repetitive one – and the focus was on the “what” not so much the “why” and “how”.

On the other end, we had a department which got faced with business problems that no one knew the answers to – it was about finding out reasons/ detecting patterns – so fairly exploratory/ research and analytics oriented. The brief was “tell us what we don’t know”! The evaluative metrics therefore became frameworks/ client satisfaction/ hypotheses generated and methodology of proof provided and presentation simplicity and clarity…

The issue for us in order to scale however was – how would you processize this – the consulting companies have done versions of this – they templatize frameworks, have standard modus operandi – and I think, pretty much by the sheer bank of experience of solving problems over the years, have quasi answers to most questions they will see. But, when you are using a very new, very evolving medium – in our case Social Media – and part of the brief is to find out “what the client doesn’t know” – it was tough to use previous experience.

Having said that, we still injected processes – there was one for brief capture, then for what to research, then a source database for where to research, the research process was documented and continuously kept getting evolved, then there were processes for analytics and then one for story writing. Our teams followed all these in most cases – but interestingly, for this department, the places where one output scored over another – by leaps and bounds – was when the folks doing it actually “broke the process” i.e., went beyond the bounds of it – and injected some of their own thinking/ innovation into it.

I guess that made the difference between the first and the second type of functions – in one, the process WAS the solution, in the other, it was the means to get the solution – and a means that we attempted to replicate in order to scale, but the solution would get much better – the more creative you got at it.

This made for many many fights between the market facing and the operational folks – obviously, for the client facing folks, the attempt was to throw the ball out of the park – always! Great ambition – and one that would ensure that the client was delighted and came to you for more – the ops guys however had to battle doability/ bandwidth/ kind of resources and ultimately the cost of this creativity – vis-à-vis the meager returns they got out of it. Their point – you want innovation, you pay for it – the whole point of processizing something is that it can be repeated in a human agnostic way – that also reduces the price due to efficiencies built in and the resource cost which you can keep arbitraging – but then you cant expect creative/ innovative thinking! If you want a Ferrari or a Bugati, you jolly well pay for it – if you want cheap, buy a Nano!

The trade offs were actually spectacularly different – business processes in general have higher probabilities of client satisfaction. The client’s expectations are well understood – both by you and her, and since you have done this many times before, you can execute well. Think of the fast food chain restaurants (we have our own versions here called “darshinis” – those are probably the best processized service outlets I can think of – every task is pre-known, documented, broken down; every person is assigned one (or more) of those sub tasks – these are all sequenced in a particular manner – even exceptions (like if your chicken wings are taking too long, the KFC front desk folks offer you either coke or crispy chicken) are envisaged and recorded. At our darshinis, the job sequencing is brilliant – one person takes orders, another puts banana leaves for u to eat, the third serves you, the fourth serves you a different set of dishes, the fifth offers you seconds, the sixth offers you water again and the seventh comes and takes the banana leaves after you are done – and cleans up the mess – to start all over again! Fast, cheap, efficient…great client satisfaction

veg selling process

I see examples of it in my vegetable shop – this is an open market stall – has the freshest veges, and an assembly line service operation – every client is asked what they want/ helped in selection – with the salesmen actually filtering out the not so fresh veges/ weighing done/ upsell – cross sell done/ money totted up and checked out – all done in matter of minutes. On top of which, these guys greet you with a smile, generally remember what you bought the last time (all in their heads – no computer/ loyalty database); send a man to help drop your heavy load to your car, ask about your maid Tulasi who they know has gotten married; know when you buy a new car – and even give you a discount when you don’t have exact change! Customer satisfaction? No, delight!

On the other hand, the customers who have asked you for the holy grail “creative insights” – take much longer and harder to get satisfied – coz they don’t know themselves what will satisfy them. So, then it’s a looong engagement process to align expectations, take them along in your journey – keep them abreast of your findings so they are always in the know – on short repeatedly and iteratively manage them…client relationship leading to client satisfaction maybe..But, the flip side is, if they are satisfied, it may be a “higher level” of satisfaction as you pulled out a rabbit out of a hat – almost!

For us therefore, both ends of the spectrum had their place in the sun in our portfolio – the “research and analytics” innovation stuff was the flagship service we would sell – its what gave us entry into clients and got the big names in (after all, for the largets spenders on research and analytics in the world, you had to show results out of the ordinary – only then would you acquire them as clients). And these innovative services were also then the loss leaders ☹ (which is a little counter intuitive but well what to do) The process services on the other hand were not only the bread and butter – ie, got us the bulk of our revenue, but also were the jam – ie provided us the profitability – we needed both therefore to make a good mix…

But I really worry about this – can you processize innovation? You can processize the process that leads to innovation maybe, but I really think the two are polar opposites. I know Gary Hamel and the like have attempted to devise enterprise processes to fuel innovation – even some 10 years ago, my company had undertaken a big exercise under his aegis (I actually think all that came out of it was “foreign jaunts” for many delighted managers) 3M is maybe one of few companies – oh yeah and Google I would say where this seems to have been done well. Any others?

To me, innovation – real innovation, atleast the IDEA – is about a smart brain spotting a clever idea – a gap/ a better way to do it/ a customer need – it’s about making connections that another brain/ other men have NOT made – it’s about that unusual lens you have applied to existing data and patterns to detect something unprecedented – THIS is difficult to processize/ train/ impart…..What you CAN do is like I said devise processes for generation of ideas/ to constantly make those ideas be visible/ to enable working on those ideas – and sure, in many cases, genius is 99% diligence/ dedication and 1% inspiration. But u can processize the diligence – u can’t the intelligence!

But wouldn’t it be nice if u cd undertake / implement the innovative stuff also ina processized/ profitable way – I guess too much to ask for?

In the meanwhile, if you agree that innovation and processes are oxymorons, and if u are the kind of person who likes interesting twists in language, here are a few lists. A few that tickled my fancy were:

“act naturally”
abundant poverty”
“crisp tender”
“buffalo wings”
intimate stranger”
and my new favorite – “ethical hacking” 🙂