Downing Blues

India v/s NZ ODI series...my prediction

2009-03-03T12:06:00.001-08:00

A throwback to my old programming days!

if(Umpire != Bucknor)
{
if(weather != rain)
{
India = max(0, # of scheduled matches)
NZ = min(0, # of scheduled matches)
}
else
{
India = average(0, # of scheduled matches)
NZ = min(0, average(0, # of scheduled matches))
}
}
else
{
/* ... India threaten to pull out. NZ dont get their USD25 million ... * /
India = 0
NZ = 0
}

Slumdog OSCAR-naire...and the paradox of Rahman!!!

2009-02-23T10:38:00.000-08:00

So, Slumdog eventually won 8/10 Oscar awards it was nominated for. Most pleasing to me was AR Rahman winning 2 Oscar awards. Due recognition for a true musical genius!

Several of my friends back home are puzzled by all the fuss about this particular work of Rahman's. He has done far better work in the past they say: Bombay, Dil Se, Rangeela. Yet this recognition for Slumdog where his composition has been top-class as usual; but admittedly not his best work.

I explain this apparent paradox using a loose cricketing analogy. Its the classic difference between a beautiful, attractive innings and an effective one.

In 1999, Sachin Tendular made that famous, magnificent hundred against Pakistan in a test-match in Chennai. It remains one of the most memorable innings I have ever seen by anyone at any point in time. He played the pace of Waqar, the swing of Wasim Akram and the spinning guile of Saqlain with aplomb...all the while battling crippling back pain.

But he got out with India 16 runs from the target and the tailenders just collapsed. Pak went onto win and did a victory lap on an Indian ground. Tendulkar received the Man of the Match award but did not come out to collect it...an accepted belief is that he was just too emotional and could not leave the dressing room. A decade later, Tendy says that match still haunts him.

His next best hundred is probably the one he scored in 1992 on a scorcher of a wicket in Perth when he was just 18. India lost that match too...by 300 runs!

In contrast, the 100 he scored again England in Chennai in December 2008 to chase down nearly 400 was a steady, relatively subdued effort. But it won us a test match...and more importantly, proved that Sachin could score on a wearing 5th day pitch and chase to win test matches. It was nowhere near as brilliant as his 1992 and 1999 efforts. Not even close. But eventually, it will count for more.

Because...it was more effective at fulfilling a cricketer's basic aim: to win and to entertain.

To me, thats the difference between Rahman's better work in Rangeela, Bombay and that of Slumdog. The first set of movies targeted a purely Indian audience and frankly, only an Indian audience could have related to these movies.

Everyone can relate to Slumdog. Whatever the reason may be...lets not intellectualize that part too much...cuz frankly I dont think we really know. But one has to admit that the movie does have a global appeal: we all love a story about the underdog who braves it all and comes out on top...wins the money, wins the girl...wins it all!

And this provided Rahman with the platform that everyone keeps talking about to showcae himself. Is it ideal? No. Is it even fair? Probably not. Point is: it is.

Congratulation AR! You've made us so very proud!

The festival of lights...

2008-10-31T10:18:00.000-07:00

Diwali (or Deepavali) is probably the most important festival in Hinduism. Celebreated as the 'Festival of Lights' in Hinduism, Sikhism, Jainism and even Buddhism, Deepavali essentially marks the triumph of good over evil.

Deepavali comes from the Sanskrit words "Deepa" (meaning lamps) and "aawaLi" (meaning a row or line) and translates literally to a row of lamps. In Hindu mythology, Diwali marks the return of Lord Ram to his kingdom of Ayodhya after a 14-year exile in Lanka (Sri Lanka today), his exile culminating in the victory over the evil-figure Ravana. Legend has it that the people of Ayodhya greeted Lord Ram with a row of lamps and the tradition has since survived centuries.

I think its fair to say that as with most religious festivals, the true meaning has been diluted along the way. Its also fair to say that if anything, its been replaced by something far more important. Diwali has always been about family ever since I have come to know if it. A time for parents, siblings, cousins and loved ones to come together and appreciate the one thing in life we tend not to: family.

I've beeen living away from home for well over a decade now but come Diwali, I've always endeavoured to make it back home. An opportune time to get back, reflect and hope for an even better year to come...

A not-so-brief hiatus...

2008-07-29T10:56:00.000-07:00

Its been a while since I penned anything. Thoughts have been ephemeral lately...work's been life. So little contemplation...so little substance...

But so much is happening in the world...and so fast.

Oil prices are falling again...huh, so it never was the speculators all along. I for one, always felt that the booming commodity futures markets could never account for this maniacal rise in the price of the 'black stuff'. What is it then? Hoarding...little evidence of that either. Oil companies profiteering? Perhaps...but only partially...

So could it be simple demand and supply? The Middle East still has plenty of the stuff..but production has scarcely risen in the last few years, while demand has sky-rocketed. Meanwhile, precious few alternate sources for oil have been found/developed. This story is yet to play itself out...

India, my home country, is burning. Bomb blasts have hit 2 major cities in successive days. Home-grown terrorist outfits such as SIMI are the chief suspects...while Pakistan's name is never far from being mentioned in such incidents. Meanwhile, our whore-hungry media is crying hoarse...salivating its way to high heaven at the 'deplorable' security set-up in the country. We need an MS Gill again...catch anyone remotely connected and burn their murderous asses in one big bonfire. MS Gill...where are thou?

Finally...first the football Euro championship, then Wimbledon and now the Tour de France. Viva Espana!

Lord's...oh beautiful Lord's!

2008-04-06T09:57:00.000-07:00

Well, thanks to a good friend, I've been playing at the nets at Lord's Cricket Ground for the past 3 weeks. For those who dont know, Lord's is commonly referred to as the home of international cricket.

I'm not really sure why...the first ever test match was played in Melbourne...and to be fair, while cricket was invented by the English, they've never really been the best at it...and this part of the world has ceased to be the center of the game for a long time now.

Still, ask any cricket fan and he/she will (albeit grudgingly) admit that there is something about the place...an X-factor...that does make Lord's special. Of course, until 3 weeks ago, I'd never been to Lord's. And I have to say, my first visit on a cold, snowy London morning did not disappoint. I've seen bigger gounds, bigger stadiums, grander settings...alright, St. John's Wood is a nice little township on its own, but Lord's sort of creeps up on you...located in the midst of dense suburbia. There's no approach...no far-away sighting to the ground as you approach it.

But the ground is steeped in history...and I guess thats what makes it so special now. You feel it...step on the ground and it consumes your entire being...the sound of the crowds, Kapil Dev lifting the '83 World Cup in that beautiful, beautiful but tiny little balcony...Harmison charging into bowl and nailing Ponting (and perhaps the rest of the Australian team in the now infamous 2005 Ashes) against all odds.
You stand there...breathe deep, close your eyes and its like you've been through it all...I was there!

And today...the sight of all sights. Lord's covered by the white virgin. Snow alas is rare in London...but she embraced the ground today. Timely I'd think...cuz if I could, I would...

London...

2008-02-23T04:31:00.000-08:00

Well, its been nearly 4 weeks since I hit London and the time has gone by so quickly! Between settling in at work, househunting and catching up with old friends and new, I haven't had the time to pause, breathe and take it all in.

Its been a lot of fun so far though. I quite like the city so far...thats been aided by the fact that there hasn't been a single day of rain in nearly a month...that in a city where it always rains. Its been sunny, not too cold and generally very nice.

Few differences between London and some of the big American cities I lived in. Chicago was almost as welcoming, but NYC certainly wasn't. Life is quick, but distances small...getting around is largely a breeze, which helps.

Love my office and enjoying my work. Now lets see if I can convince the band to get ack to jamming again. Till later...

Rupee appreciation: whats the alternative?

2008-01-24T04:08:00.000-08:00

There's been a lot of noise in the Indian economy recently about the seemingly unstoppable appreciation of the rupee (INR). The IT Services sector has been particularly hard-hit, with every USD of revenue earned realising ever-smaller amounts of INR earnings. The fledgling manufacturing sector is hard-hit as well...as is the textile industry.

India is not as export-earnings dependent for the health of its economy as say, China...yet, exports do contribute significantly to our GDP. As a result, there have been vociferous calls by the industry as a whole, for the country's central bank (RBI) to intervene in the currency markets to stem this rise of the Rupee. To do this, the RBI has been buying $$$ by the drumfuls to offset the increased demand for its own currency.

The trade-off is that the Central Bank has been printing extra currency to buy the foreign currency. This has introduced extra Money supply into the economy, fueling inflation. Inflation is then typically controlled by selling “sterilization bonds” to the government, thereby draining the economy of excess liquidity.

Now, this all works seemingly well theoretically but there are significant disadvantages to taking such intervention too far. For one, by buying these bonds, the government ends up investing its capital sub-optimally since it earns very poor returns. This capital could be more efficiently utilized by investing in the private sector, which has consistently shown higher returns than govt. bonds. Alternatively, the money could be invested in infrastructure, alleviating the ever-growing supply constraints of our economy.

Second, these $$$ purchased now need to be invested somewhere and this is typically done in US Treasury bills. Interest rates in the US have been lower than that in India for a long time now, resulting in lower returns on these investments.

Finally, higher interest rates in India and higher returns from Indian equity markets will continue to attract foreign capital inflow. This will continually push the rupee higher, leaving us in an infinite intervention loop! Where is the end?

Rather than fighting this appreciation full-on, we need to utilise these incoming funds to improve the supply-side of our economy. This means infrastructure, education, health services. In addition, access to extra capital must be provided to the private sector to leverage its ability to operate efficiently and squeeze out maximum returns.

An appreciating currency is simply a macroeconomic reality of a growing, open economy such as India's. Eventually, this cannot be fought away. Its upto us whether to pander to domestic fears and continually intervene OR to follow a more balanced approach by investing in the future.

No monkeys...only mothers

2008-01-12T11:37:00.000-08:00

So, it wasn't "monkey". Rather "maa ki".

This is easily the most hilarious article I have read in what has now been a week-long fracas of the whole Harbhajan-Symonds so-called racism row.

A must read...

The Intelligence Bell-Curve...

2008-01-07T02:17:00.000-08:00

This is not a new story. In fact when it broke a few years ago, there was little to indicate the consternation it would eventually cause. In 2005, the (then) President of Harvard , Lawrence Summers, gave a talk on campus in which he allegedly stated that effectively, men are better at math & high-end sciences than women are. At least this was how the story leaked out...which predictably raised eyebrows for some and infuriated others.

As Summers clarified later, he believed that the average woman was just as capable in these academic fields as the avarage man is. The difference was that men have a higher variance. I.e., the deviation from the mean is larger for men. Hence, the smartest scientists in the world are men since this represents the highest positive deviation from the average. This is illustrated somewhat in the figure shown.

Of course, Summers failed to mention that by this logic, the dumbest people on earth are also men since a Bell-shaped curve is symmetric in nature. Deviations are equal in both directions. It was perhaps this acknowledgment (or lack thereof) that really incensed everyone. Why focus on only the smartest of the lot? Shouldn't any such proclamation be balanced with all relevant facts?

Perhaps, Mr. Summers just didn't care. Or perhaps the place he was in was a factor. Harvard typically has within its boundaries the smartest of the lot anyway and Mr. Summers would only have seen these samples. He was eventually forced to leave his position, largely as a result of the controversy this created.

The reason I talk about this now is that apart from the objective analysis, the issue also rakes up layers of emotional fervour and pyschological complexities, particularly amongst the females of our lot. Fervour that for most, transcends the logical explanation. One mention of this to my sister for example, resulted in the proverbial "if looks could kill, you'd be burning in hell" stare. I fear I'll fare no better with my girlfriend either.

And this, perhaps more than anything else was Mr. Summers' undoing. If his intention behind saying this was to present a genuine piece of academia, surely he needed to be sensitive to the soft issues surrounding such an asertion. The world isn't black & white....and a person's thought process isn't necassarily governed by raw facts either. Our internal value system and sense of right-and-wrong often obliterates raw logic.

Just as the hardest of negotiators build a bridge for communication first and seek to explore viable options for their counterparts before moving to the subtance of the negotiation, a leader's ability to break down long held beliefs before thrusting his own are crucial to its acceptance. Think Abbie Hoffman (of Chicago 7 fame)!

Femto-fever!

2007-12-16T09:36:00.000-08:00

Femtocells have been proclaimed the new holy grail for mobile operators.

By providing improved indoor coverage and cheaper voice & data call rates, all with no additional handset requirement for the consumer, femtocells could well take the wireless industry to happier times. Tipped as a winning FMS (Fixed-mobile substitution) solution, femtocells promise to capture new marketshare for mobile operators, reduce customer churn and facilitate (finally) the take-up of premium mobile data services.

For a change, the business model looks fairly sound, but technological implementation questions remain. Interference issues always creep up when talking about any wireless solution and femtocells are no different. Network integration, QoS and privacy issues remain as well. My take is that these will sort themselves out...a matter of time.

The last few months have seen a lot of activity in this sphere: the setting up of Femto Forum, a body of vendors, operators and other telecom entities pro-femto. Also, Google's $25 Million funding for Ubiquisys, a femtocell vendor, seems to be in line with its overall mobile services strategy which already includes wireless spectrum bids and the development of a mobile-OS.

Exciting times...

Shantaram re-visited

2007-12-08T07:04:00.000-08:00

Re-reading Shantaram these days after having first read it about 2 years ago. I particularly like the reflection the author provides at the end of each chapter. Sometimes philosophical, sometimes dead real...always poignant.

A couple of gems...

"Redemption's climb is steepest if the good we did is soiled with secret shame."

"Sometimes we love with nothing more than hope. Sometimes we cry with everything except tears. In the end thats all there is: love and it's duty, sorrow and it's truth. In the end, thats all we have-to hold on tight until dawn."

My only friend..The End

Inaugral INSEAD Singapore Cabaret video...

2007-12-03T12:44:00.000-08:00

Found this classic on YouTube. As I've writeen on this blog before, sucessive INSEAD promotions have had a long tradition of putting up their own farewell evening, aptly titled the 'Cabaret'.

At the Singapore campus however, the first 'Cabaret' wasn't held until December '06. There were several performances: some touching, some exhilarating, all memorable. This one struck me as particularly so for the heart that went into making it.

Grease - INSEAD style! ("...Oh...those Singapore nights")

True love anyone?

2007-11-28T23:28:00.000-08:00

Alright now I'm generally not big on little sayings and anecdotes, but I found this one particularly true...

"Only eyes speak the truth...neither the mirror nor the lips. The person who loves you can see the pain in your eyes, while everyone else still believes in your smile..."

Recessionary fears…the good side

2007-11-08T10:07:00.000-08:00

Analyst reports and business journals are awash with news of the onset of a recession in the US economy. Real estate, easily the single-largest storage of US consumer wealth, has seen collapsing demand, severely straining the consumption-led US economy. Increasing oil prices means that consumers are left with reduced purchasing power for other goods. Finally, the credit crunch will entail reduced investments by individuals and corporations, further slowing down the economy.

The business cycle of course, renders a recession inevitable. The last 60 years has seen 10 recessions in the US, with the average recession lasting just under a year. The good news is that the time period between successive recessions has continually increased. Hence, recessions have been fewer are farther apart as the years have rolled by.

Nonetheless, given this inevitability I think it helps to focus on the positive effects of recessionary…and they are significant. I like to think of it as spring-cleaning. Recession punishes reckless investments and comes down hard on needless financial speculation…forcing organizations to discipline themselves once again. It forces managers to tighten their belts and work on removing excess ‘fat’ in their organizations. In addition, recessionary times curb price and wage increases, thereby killing inflation.

In light of this, it is understandable that central banks around the world go only so far to prevent recessionary tendencies. Pandering to investors and business managers only serves to increase their risk appetite, making the eventual recession longer and harder.

Recessions ARE inevitable. Bring them on....we'll continue to learn from them and eventually, prosper in greater numbers.

The flegling Indian Rock scene & SharkTooth...

2007-11-01T04:34:00.000-07:00

Interesting website for all you rock enthusiasts in India. Aptly titled "The Rock Fest that'll never end"...

Shark Tooth has placed a schedule of small to medium size gigs of local Indian bands across several cities. Some of the bands are known to me ==> Medusa, Thermal and a Quarter and Myndsnare , whom I have seen live at Styx in Bangalore back in 2004. Others such as Free World & Something Relevant are new, but judging by the audio samples on the website, appear to be really good.

Particularly liked the riff on the homepage...'Zero' by Christmas in July!

Pop/Bollywood/bhangra dominates the Indian music scene...definitely hurts these bands, some of whom I have no doubt are as good as anything I've heard out of Europe in the last few years. So if you appreciate rock music, put on that black t-shirt, get on that bike and get on over...

Incentives & the Blueline Blues...

2007-10-29T02:31:00.000-07:00

As statistics go, here's one thats as banal as it is disheartening: In the 10 months that have passed this year, the Blueline bus service of our nation's capital has just claimed its 100th victim. 100 people have been scythed, mowed down, run over and killed...by a public bus service. See here for details.

I wont spend any time on verbose adjectives denunciating the state of affairs. As a citizen, I'm certainly entitled to...but we'll leave this to our over-anxious, over-bearing media. They bore us stiff with this already.

Instead, lets look at something more useful: Why is this happening? Most people blame reckless drivers. Blueline blames citizens who often cross roads in the midst of perilous traffic. I'd say the blame is probably 80:20 --> drivers:citizens. So, lets look at a typical Blueline driver, Mr. Gopal, and the incentives that drive him.

Today, Gopal is paid a fixed percentage of the day's earnings. In other words, the more the passengers he transports, the more money he makes. To Gopal, this translates to: the more rounds I can make, the more people I transport, the more money I make. Make more rounds by driving faster...and oh yeah, cut a few corners while I'm at it....approach that bus stand just a bit more quickly. $$$$. To me its as simple as that...you can train the drivers all you want, warn citizens to be careful...but we've got the wrong incentives in place...and THAT, is the real problem.

This point hit home hard while driving back last night from a wedding. I was struck by how disciplined our truck drivers are, at least relative to Blueline. By and large, they stick to their lane, stay off the fast lane and drive at reasonable speeds. And here's why: truckers are given a target per month: transport 500 tons (theoretical number) of cargo. There's no demand for anything more than that...so no credit for anything more. Truckers work out their own pace, which fortunately for us, keeps people on the roads safer.

Of all incentives, studies have repeatedly shown that renumerative incentives are far stronger than moral or coercive ones. So you can coerce drivers and citizens to be careful, you can appeal to the moral concience of everyone concerned, but as long as financial incentives contradict these, the situation will not reverse itself.

The government must regulate this service. Drivers must be paid a flat monthly fee with a reasonable objective of daily/monthly km's covered. De-link their reward from the risks they take...throw in stronger punitive action...and we might ensure that in the coming years, we chip away at this senseless loss of life.

Gold digger seeking 'bad' business deal...

2007-10-14T07:23:00.000-07:00

I found this article about a posting on a New York online dating scene hilarious.

A 25-year old woman posted an ad on an NYC dating site seeking a husband earning at least US$ 500,000 a year.

"I dated a business man who makes average around 200 - 250k. But that's where I seem to hit a roadblock. $250,000 won't get me to Central Park West," she said on the website.

A Wall Street banker, allegedly from JPMorgan Chase, has likened her request to a business transaction and concluded plainly that the deal is wishful thinking on her part. Read the article for the entire story.

Two pearls of wisdom stand out....

1. "...in economic terms you are a depreciating asset and I am an earning asset," he said. "Let me explain, you're 25 now and will likely stay pretty hot for the next 5 years, but less so each year. Then the fade begins in earnest. By 35 stick a fork in you!"

2. "It doesn't make good business sense to "buy you" (which is what you're asking) so I'd rather lease," he said.

Hilarious...

The relative (un)-importance of different stakeholders...

2007-10-06T05:50:00.000-07:00

My younger sister has been feeling pretty disheartened lately. Ever since graduating with a Master's in Technology degree from the prestigious Indian Institue of Technology, Delhi in December, 1999, she has worked for one firm. One firm...which in less than 8 years, has been sold twice, resulting in three different names...three different identities.

It was Hughes Software Systems until 2004. Flextronics, a global electronics design & manufacturing company picked up a controlling stake in HSS in 2004 and named it such. And just last year KKR, the global Private Equity player, made its first investment in the Indian market by picking up HSS aka Flextronics Software for US$ 900 million. After a much-publicized opportunity to erstwhile employees to coin a name for the new entiry, Hans Juergen Leicht's response was eventually chosen and the entity was christened Aricent.

Now, I've talked in some of my earlier posts about the different stakeholders in a corporate organization, often with subtly conflicting interests. Consider the interests of the owners versus that of employees. Senior management's priority numero uno is to generate shareholder value, i.e., generate high returns for the firm's owners. Employees, of course, have a set of expectations as well that dont always coincide with those of the owners. In the long-run, management's job is to ensure that these 2 sets of expectations coincide as much as possible. ESOPs were essentially born out of this thinking. Nonetheless, when times are hard, cracks appear.

To my mind, the entry of a celebrated (some would say ruthless) PE firm into the Aricent equation coupled with the current macroeconomic scenario in India (rising rupee hitting earnings) has accentuated this conflict. Aricent is not a public company but its owner, KKR, is probably more demanding than any public institutional investor would be, particularly in terms of its Return on Invested Capital (ROIC) demands.

To meet these demands, KKR no doubt is driving efforts to ensure that Aricent operates with the maximum efficiency possible. Depending on the firm's positioning, this often boils down to streamlining cost structures, particularly variable costs, as these restrict scale and eat into ROIC margins. "Soft" perks visible to the employee suffers first. So earlier, while working long hours, my sister could pop into the cafeteria at 10 pm and get a quick snack virtually free, today she needs to get such a 'perk' pre-approved. Earlier, she could have availed of a taxi anytime after 9 pm, today she has to wait till 10 pm for the sole service. Morale suffers, frustrattion fosters and with time, a sense of betrayal creeps in.

In a country with a socialist economic background, where today's professionals grew up with their parents working for 1 firm all their lives, loyalty to a firm (and a firm's loyalty to its employees) still means something. And in this pursuit of higher margins, employee discontent does not get the attention it deserves for 1 simple reason: the losses are initially intangible and manifest themselves only in the long-run. And for KKR, who only made this deal to leverage on Aricent's upside potential, and convert every $10 invested to $15 (hypothetical) in a 2 - 3 year timeframe, such long-term considerations merit no action. Pity.

I wish I could consign this to a PE-limited problem. Publicly owned companies tend to obsess over short-term numbers just as much. It takes a brave, honest set of leaders to resist this temptation. Jack Welch provides perhaps the best model when he famously refused to give out obscene Wall Street I-bank-type bonuses to GE's banking subsidiaries. The rest of us though must continue to dream...

US Sub-prime: A case in misplaced accountability...

2007-09-13T03:27:00.000-07:00

The recent heavy numbers of defaults in the US sub-prime mortgage segment means that the banks giving out these loans will lose billions of dollars. This has done two things…

First, it has reduced liquidity in the global economy, sparking recessionary fears. The US Federal Reserve and the European Central Bank (ECB) have tried to respond by infusing billions of dollars in the world economy, thereby increasing Money Supply.

Second, other forms of investments, in particular equities in emerging markets now have an elevated risk profile. Indeed, all forms of capital are more risky. In part, this has caused heavy losses in stock markets around the world.

Economic fundamentals remain strong otherwise, but the length of this downtrend is difficult to predict as we may yet see the worst of these defaults.

In all the analysis and commentary, there hasn't been enough focus on what has been a critical enabler for the entire mess. The fact that many of these sub-prime mortgages were rated AAA by major credit rating agencies – an indication that the bonds were safe.

The fact that the fees of these credit rating agencies are paid by the very banks whose bonds are being assessed creates a clear conflict of interest and remains an issue that will probably not be resolved in the near future.

The situation is very similar to what happened in the late-90s/early 00’s when major auditing firms signed off on the financial statements of corporations without question since the fees of auditing firms were paid by the very corporations being audited. Think Enron-Arthur Andersen.

One day, we will learn...

Profitability at the expense of Growth?

2007-08-30T14:56:00.000-07:00

Apart from the clichéd ‘shareholder value creation’, all private enterprises have precisely ONE objective: profitable growth, i.e., top- and bottom-line growth. Indeed, hard, liquid profits speak like no other metric. But profitability and growth is not the same thing. The relationship is a complex, multi-layered one.

Top-line growth may provide an organization with scale, particularly if its cost base has a large fixed component, thereby allowing economies of scale and increased profitability. The steel industry, for example, requires massive investments in plants and equipment. Expenses incurred to finance these are amortized across say, every ton of steel produced. As the company grows (measured by number of tones of steel produced), the per-ton fixed cost allocated reduces, resulting in increased per-ton profitability. Conversely, blind growth with massive infusions of capital (presumably with a strategic long-term angle) can have the opposite effect on short and mid-term profitability.

Strong profitability itself can provide the company with more capital, thereby financing growth and in an ideal world, creating the kind of positive-loop that C-level managers dream about. But as Fred Reichheld, Bain & Co’s first Fellow says, ‘Bad Profits’ do exactly the opposite. They stagnate and even reverse growth, demoralize employees and eventually concede market share to the competition. ‘Bad profits’ are earned when companies pursue profits at the expense of customer relationships.

Management guru, Peter F Drucker, famously said that a company must define itself not by the product or service it provides but by the value it creates for its customers. Bad profits do the opposite; they seek to extract the maximum possible value from each customer. Indeed, there are certain industries where the practice is endemic. Think of the Airlines industry. You cancel a ticket 24 hours before your flight and outrageous cancellation charges are levied. Why? The overhead for the airline to carry out the cancellation is minimal. As for lost revenues, studies show airlines are unable to find new customers for cancelled tickets on only 3% of such occasions. The average cancellation charge for all airlines worldwide: 21%!

Southwest Airlines in the US today has a market capitalization that is greater than all other American airlines combined, driven by a relentless pursuit of what I call “good profits”. Rather than levy a cancellation charge, they delighted their customers by allowing them to carry forward paid credit for a period of one year on any route. I know I prefer flying SpiceJet in India precisely for this practice of theirs.

Why then, do organizations continue to follow such practices? Part of the trouble is that traditional accounting practices have no means of differentiating between good and bad profits. Revenues earned from ruthless penalties look exactly the same on the Income statement as revenues earned from the healthier repeat purchases. ‘Customer discontent’ finds no place in the Balance Sheet Liabilities.

While nearly every CEO recognizes the importance of building strong customer relationships, mid-level management is nearly exclusively judged on profit generation, however that may eventuate. This results in an inherent mis-match between stated objectives and incentives to perform. Indeed, mid-level management can’t be blamed for focusing on the parameters on which their performance is judged.

No accountability, no delivery they say. And accountability requires hard, objective metrics of measurement. Profit measurement is refined to a science today: Gross Margin, EBITDA, Net Income, et al. And so are mid-management measured.

But customer satisfaction? Hmm, let see….repeat purchase percentage is one touted metric. But who knows if a customer is coming back because he truly likes your service, or because he is just plain lazy or indeed temporarily has no other choice? C-SAT surveys, another oft-used practice offers little more than conjecture since they do not relate to how a customer will truly behave.

There are other surrogates around. The ‘Net Promoter Score’ which is essentially the percentage of your customers who are your ‘detractors’ subtracted from the percentage who are active ‘promoters’. Simple enough conceptually, but I’m a little worried that the Garbage-In-Garbage-Out syndrome may apply here: the feasibility of accumulating accurate input data is questionable.

As long as customer satisfaction/loyalty remains objectively immeasurable, management will not be made directly accountable. And cases such as AOL and Delta Airlines, big pioneering companies that have fallen by the wayside due to a failure to differentiate between good and bad profits will continue to occur.

Part-II: Applying the Prisoner's Dilemna to real life...

2007-08-20T04:00:00.000-07:00

So, lets talk about Mrs. Pratibha Patil's ascendancy to the Presidentship of the world's largest democracy and its applicability to a Prisoner's dilemna-like scenario. I wish her all the best but have no reason to believe she will do a good job. Lets hope she proves me wrong.

While the President's position in India is considered largely ceremonial, she does enjoy certain crucial powers. She is the supreme commander of the Armed Forces; she appoints key positions such as the Chief Justice of the Supreme Court, the Chief Election Commissioner, the Attorney General, State governors, etc. She has the power to declare a National emergencey and indeed, can even also dissolve the Lok Sabha (lower house of the federal government comprising elected representatives).

There are checks & balances to each of these of course. Nonetheless, a peek into how she was appointed is warranted. Lets look at all the parties concerned.

Mrs. Patil, of course, ran for reasons best known to her. Lets give her the benefit of the doubt...perhaps she feels truly capable of carrying out the task. The primary protagonist of the story, the Indian National Congress (INC), virtually denied her a potential Prime Ministerial Post a few years ago. They treat this as more than sufficient compensation. And hey, the first woman president of India...nominated and even championed by the INC makes for great press, as most of our forgettable TV channels went on to prove. The rabid Shiv Sena doesn't even pretend to care about the larger issue: Patil is a Marathi woman. Thats it...what more dare anyone ask for? JAI MAHARASHTRA...and oh yeah, Jai India too.

Enough of the politics. Lets look at achievements objectively. During the run-up to her nomination, having never heard of the lady before, I listended hard to pick up on what her past was all about. It struck me as odd that in elaborating on Patil's past achievements, a laundry list of her prior posts was all her promulgators could come up with. Thats right. Maharashta Assembly member for over 2 decades: great achievemnt. Governor of Rajasthan: yet another feather in the cap! Perhaps this is just a reflection of out political ethos: making a post is an achievemnt in itself.

On a serious note though, we have a right to expect our president to have at least one achievement that indicates demonstated qualities of leadership, diligence, execution and team-play. Perhaps this exists, but if noone could articulate this, then it effectively doesn't. And that to me, makes Patil's designation to the Presidentship of India Pareto SUB-optimal. Sub-optimal period.

Part-I: Applying the Prisoner's Dilemna to real life...

2007-07-29T12:07:00.000-07:00

I read an article recently that talked about how Game Theory, a neoclassical micro-economics concept, could be applied to a whole range of human scenarios & subjects, including political science, evolutionary theory and artificial intelligence.

Game Theory of course, talks about how economic agents behave when the respective benefits and costs of their different actions depend upon the choices of other parties. It is quite often applied in oligopolistic markets, where each party faces a few strong competitors.

Rather than delving into the depths of Game Theory (of which I assure you, I know very little!), let me focus on the now-famous 'Prisoner's dilemna', the applicability of which particularly struck me. Now, elaborating on the essense of the Prisoner's dilemna in the written form of the English language is a task that even Prof. Pushan DUTT would cringe at. So let me illustrate the concept with a well-known scenario.

Jack and Jill commit a burglary and are arrested. They are taken to separate rooms and interrogated. Neither knows what the other is saying. If both Jack and Jill stay silent, they will both serve a 1-year jail sentence. If Jack stays silent however, and Jill confesses, Jack gets a 10-year sentence while Jill gets freed for her cooperation. Jack knows this and reasons that Jill will most likely think only about herself. Hence, it is certain that she will confess. Jack decides to confess as well and with Jill confessing too, both get 5-year jail senternces. The scenario is illustrated in the figure.

In the scenario, Jack has to keep in mind all available options to Jill since the the result of his actions are influence by Jill's actions. In this, it is clear that both parties have no option but to confess and hence, a collective equilibrium (Nash Equilibrium in economics parlance) scenario is for BOTH to confess.

This result is called the "Prisoner's Dilemna" because the final result is clearly sub-optimal! If both parties colluded and stayed silent, they would both get off with just a 1-year sentence!

There are infinite business examples where this game is commonly played out. Lets say Colgate and Crest have roughly equal market share of toothpaste sales in a given region. A tube costs $4 to produce and sells for $10, thereby reaping earnings of $6. As sales begin to stagnate, both parties get anxious. Ideally, they should BOTH stick to the current sales price. However, the fear of Crest slashing prices forces Colgate to slash its price to say $7, thereby reducing profits by 50%. Crest of course, does the same and now both parites record earnings of only $3 per tube. This is clearly sub-optimal, compared to the earlier $6 earnings, but in a sense, neither party has any other option. This is indeed, the Nash Equilibrium.

And herein lies the crux of the issue...where strict economics meets social and human behavioral patterns head-on.

"People are strictly selfish...(and) will seek to maximize their returns with little or no consideration to other parties, save for family". Famous words by Richard Dawkins in his popular, controversial book 'The Selfish Gene'.

Makes for dismissive reading if you're an optimist. But how applicable is the concept when rationalizing people's everyday behavior? And if true, why do most people continue to act selfishly when it clearly undermines the collective good?

On July 25, 2007, Ms. Pratibha Patil was sworn in as the first woman president of the republic of India (13th overall). In my follow-up post, I'll look into how the process epitomized a Prisoner's dilemna and how we continue, time-after-time, to fall into this trap. Till then...

INSEAD July '07 Graduation Day!

2007-07-20T12:27:00.000-07:00

Late post this is indeed, but I reckon Graduation Day deserves it. Well, July 5th 2007 marked the official conversion to designated suit-people for 425 of us!

My mom and sis managed to make it over to the forests of Fontainebleau which certainly made it extra special. Add to that the fact that 5th July was mom's birthday as well made the day just about perfect.

Well, as I've mentioned earlier, the Graduation was held in a tent on campus, something that put off several of the participants. I have to say though, that the ceremony itself was very well organized and the content was just right.

Brief speeches by Dean of the MBA program, Antonio Fatas, a man well-respected by the MBA community and Frank Brown, Dean of INSEAD, a man towards whom the student body sentiment is...lets say undecided, kicked things off. Speeches by student council presidents from both campuses and an entertaining speech by a current student, nominated by the class, followed.

Then the process of distributing degrees to over 400 students, some of whom had gone through the same ceremony barely 24 hours before in Singapore! It was interesting to see some of my friends walk up and receive their degrees on stage. Most were very proper, preferring to calmly walk up, take the degree and get off. Some were more animated. Narang brushed the perspiration off his brow for making it, Sheinal's joy knew no bounds, Sood gave us the 'namaste'...once too many times, I'd say. I let an air guitar rip. It was fun.

Cocktails followed, with the usual mix of faculty, students and most importantly, family. It was amazing to see so many family members turn out. There were mothers, fathers, brothers, sisters, wives, husbands, girlfriends, boyfriends, uncles, nephews, grandparents...oh, it was an amazing mix. McGauran's dad hitting on Valli's mom...genes.

The ceremony also started things off with a huge round of applause by students and faculty to all the family members, those who had made it and also those who could not. Be it financial or psychological, I know for a fact that without my family behind me, I never would have gotten here and the same holds true for most, if not all of us. So while we celebrate our success, here's a toast to my dad, mom and sister. You guys are amazing and I love you.

Less than 24 hours to Graduation...

2007-07-04T15:33:00.000-07:00

So, it finally is here. Tomorrow is Graduation Day. Tomorrow at this time, I will officially be part of the Alumni fraternity. Sounds weird...

August 28, 2006 seems like just yesterday...and yet, a lifetime ago. I can barely believe it, yet it has started to hit me. Irrespective, I'd like to think we've all come a long way in a very short time. I've met several people who will be friends for life...whom I will seek to meet with at every opportunity presented. And THAT, more than anything else, has been the making of a successful program here to me.

We're all going to take a bit of time to move past this. Its been fun and exhilarating and tough. More on that later...

I look forward to fond farewells tomorrow...

'Been a long time since I Rock N' Rolled...!

2007-07-01T10:12:00.000-07:00

...it really has. For the music psycho I am, there has been precious little excursion on my part ever since I ventured into the heartland of La France. Have not heard anything new that excites me, have not jammed at all, in fact, have barely heard much music.

Which is why when the traditional "INSEAD Cabaret" evening came around, a few of the guys got thinking about putting up a small sequence of songs, mostly Rock-ish. We practiced for just one 2-hour session the evening before the show and got on stage the next day more on hope than any real confidence or conviction.

The INSEAD Class of July '07, as expected, turned out to be totally supportive. We started slowly with a rocked-up version of "Hit me baby one more time".

Next came Blur's Song 2. Finally, the anthem "Smells like Teen Spirit"...which totally rocked the house! Our band was thrilled at how the crowd got involved!

LONG LIVE THE INSEAD SPIRIT !

The Raging Strategic & Technological battle in Telecom...

2007-06-19T15:58:00.000-07:00

I cant think of an industry today where the individual elements of the supply chain are being forced to defend their own interests, often in direct conflict with those of other elements more than in the telecom industry. Battles are being fought on every front: strategic, tactical, technological...you name it.

Of the several battles that are currently being fought, the most interesting one is that between the promulgators of Fixed-Mobile convergence and the drivers of Mobile substitution of Fixed services. To make this all a little less esoteric, lets think of this as a 6-year old would.

When you were growing up, you had a fixed phone line in your house. Somewhere along the way, cellphones invaded our lives to the stage where they are omnipresent today. When we leave INSEAD, many of us may choose not to install a fixed line in our homes at all. Why do we need it? Cellphones do the job well enough now...even indoors. But hang on...what job? Voice telephony is well supported by cellphones, but what about data? I.e., your internet connection. A-HA! Whether you use DSL or WiFi, you need a fixed wireline connection. For the ordinary consumer like you and me, this means 2 different connections, 2 different bill statements, 2 different serive contracts. What a pain! Enter the chaotic, confusing world of Fixed-Mobile convergence.

Fixed services operators such as British Telecom are keen not to lose their revenues to mobile players, in the fear that eventually wireless internet access will be as fast and convenient as wireline. Hence, they are strongly pushing for Fixed-Mobile convergence (FMC) solutions such as the BT-Fusion product. But what is FMC and how does it work? By allowing a single device to access both a wireless and wireline network, they hope consumer demands for a single device and connection will be met, thereby mitigating complete takeover of fixed services by the wireless world! And Fixed service players aren't the only ones. Internet companies such as Google and Skype are pushing for this too, keen to see their services permeate the wireless world. Think about it. It is COOL to have a Skype chat application on your cellphone.

Fighting all of this of course, is the mobile wireless industry. From a business point of view, the Wireless space in the developed world is completely saturated now. Growth is only coming in from emerging markets. To squeeze margins out in the developed world, mobile players must try to leverage the general trend towards a world with no wires. Consumer behavior patterns and preferences are on their side. But to go back to the initial need for wireline, i.e. internet access at home, they must tackle this head-on.

The answer was provided several years ago with the advent of 3rd Generation (3G) mobile telephony, which promised high data rates. As is always the case though, the technology itself is never the problem. The problem is the business case. Trouble here: demand has been low, making the deployment of a full-fledged 3G network financially non-viable. This issue MUST be resolved if the mobile world is to win this battle of Mobile substitution of Fixed services over FMC. So if a full 3G network is not viable, why not build a different network, one that is less capital intensive. Enter: small Base Stations that can be installed within a single house and cost a fraction of a conventional mobile network: pico/femto-cells. Brilliant!

A simple idea that may yet provide us with a final, telling twist in the tale. The play is underway...all the actors are in place and we the consumers are watching. May the best man win!

A long hiatus...

2007-06-16T10:02:00.000-07:00

Its been a long hiatus...too long since I penned something down. Feel like I'm letting my blog down here. Cheesy as that may sound, bloggers share a very personal relationship with their blogs...no, their mindspace (No Pun intended).

So why the break finally? Well for one, my future looks a little more secure with last week's job offer tickling in. Dubai V/S The UK (read, NOT London). That appears to be the choice at this point in time. I dont care though...its a good day

Alas, P5 is here...

2007-05-08T09:00:00.000-07:00

Period-5/5 begins today! The last of our 5 periods here at this wonderful institute. Feels weird in that it doesn’t feel special or different…yet.

Yesterday, when I boarded my flight to head back to the calm comfort of campus life in the picturesque town of Fontainebleau, it felt like just another trip. I have to admit…I didn’t let it just flow. I tried hard to feel something…for this moment that without doubt marks the beginning of the end. The end of what has been, at least for me, a wonderful year.

Perhaps I didn’t feel the moment because so much still needs to be done. For one, I need to get a job. I can’t close this chapter without that…all right, I’ve said it. It does matter. But more importantly, friendships built over the last 8+ months need to be consolidated, relationships cemented, stories re-shared and eventual goodbyes voiced without regret and with earnest hope that these will indeed not be permanent.

Eventual job locations will matter for most of us of course. As one of my close friends destined to spend her immediate future in Milan mentioned recently, with very few Italian speakers in our intake, there won’t be a rush for her city and that may render her without much company from the batch. London’s good though, with many of us destined to end up there. Paris, Singapore, Dubai work as well. It won’t be the same though and I think everyone knows that.

Anyway, we’ll deal with that when the time comes. For now, I have 8 resplendent weeks ahead of me. We all hope to make the most of it…

Wireless at its productive, convenient best!

2007-05-02T09:29:00.000-07:00

Heathrow is officially the busiest airport in the world today. As I was made to calculate in a recent interview with a top Strategy Consulting firm, the capacity of the airport in terms of number of passengers flying out per year is nearly 55 million! 5-5 M-I-L-L-I-O-N!!!

To put that into perspective, the population of the UK is a shade above 60 million. Pretty astounding. With a significant portion of these being business travellers, someone calculated the number of man-hours spent each year in commuting to the airport. Imagine the lost productivity. Its a problem...and an opportunity as well!

Picking up on this, T-Mobile has announced an ingenious undertaking by deploying Wi-Fi hotspots along the Heathrow Express. From a technology standpoint, this also includes a first in terms of wireless access through the WiMax technology on the underground train service.

I dont know what the productivity increase will be. Frankly, I dont care. I just enjoyed the thought of someone using technology to come up with a creative solution to a known pain point. Interesting, inspirational stuff...

Is niche really just small...is special commoditized?

2007-04-24T16:01:00.000-07:00

I have already talked about how much I have enjoyed The Industry & Competitive Analysis elective this period. Prof. Cool really does bring the course to life with a combination of his deep knowledge and unique style of delivery. We have talked about several things in the course: Supply-chain management, vertical integration, network effects, critical mass attainment, disruptive technologies...just to name a few.

Still, one thing will remain etched in my mind for a while. "Niche is small". Most companies proclaiming themselves as niche are in fact just...well...small. No two ways about it, according to dear Prof. Come to think of it, this rather rigid rule applies surprising consistently. Begs the question, do organizations choose to play niche or is it just a consequence of their lack of size? Ponder away...i suspect its more complicated...could make for a long, dreary exercise in intellectuality.

So, here's a more interesting question: can specialty be commoditized? I look at my class and here, everyone is bright, driven, disciplined and ambitious. Its the norm. I once remember those being strong, worthy qualities. But in this ocean of relative equality, have we essentially commoditized ourselves? Sure seems so, which is a real pity because I dont care how closely matched people are, each person still does bring his or her unique experience and perspectives on a whole host of issues.

And while in another couple of months, we would all be on our way out of INSEAD, my close friends and colleagues will have their own special place. We wont commoditize ourselves and to most of us, that still counts for a lot!

The Ding-effect...the Good and Better sides

2007-04-08T14:48:00.000-07:00

The Ding-effect...tame and even capricious it may sound, yet under-estimate it at your peril!

Indeed, the Ding-effect has descended upon the P4s like a hailstorm in June, unexpected in its arrival and brutal in its intensity. You apply to a company...you get dinged. You get a first round interview call...you then get dinged. Now you even get dinged by companies you never applied to! Lord O lord, there are dings galore.

Three weeks ago, the question I faced was: which of the TOP companies are you applying to? Two weeks ago it was: which companies are you applying to? A week ago: which of the top companies dinged you? Today, do you have any interviews at all...? Didn't think so!

Well, I find varying reactions amongst the student body. Me, I look at it this way. Sure these are insecure times, but in all honesty, most of us knew that the search for employment was not going to be a cakewalk. I welcome this insecurity. It is challenging me to really think about what I want to do...not for the next 3 or 5 years, but for the next 20 years! The party's coming to an end...and two years from now, when I DO have a great-paying job and still feel unsatisfied, perhaps I will look back at these uncertian times and learn to finally value my job and life to the extent it deserves

The McBain Consulting Group!

2007-04-03T14:31:00.000-07:00

Thats the name one of my classmates plans to assign to a Consulting firm he will set up as soon as he graduates. And I tell you, he finds quite a few backers amongst his brethren!

Confused? Allow me...The idea is essentially borne out of a deep sense of frustration that several of the current student body feel after being denied interviews by some of the world's top consulting firms. Hence, the idea is to form one of your own and name it by combining parts of names of the big '3'.

"We'll take them on at their game and bring their world crashing down...in the process showing them what they rejected". Hmmm...lofty thoughts indeed, but ones well understandable under the circumstances.

I interviewed with Google today and it was an interview of a kind. Having been informed to 'strictly' not arrive in a suit, I proceeded to have more of a barroom chat than an interview...we were in the guy's hotel room, eating chocolate cake through it all!

On another note, half of this period is over and I just realised how little I have focused on my classes so far. The job-search takes so much time...some real, some perceived. Which is a pity because I am taking a course that has probably been the best in terms of the quality of class and content. Industrial and Competitive Advantage is a Strategy course that essentially talks about how firms need to first analyse the profitability of the industry they operate in and then go about creating a competitive advantage for themselves in their chosen industry.

The basic topics were covered in a previous course, but the prof is doing an excellent job of illustrating these concepts and how they are repeatedly (mis)applied in the real world. Brilliant! This is exactly what I came to INSEAD to learn and it feels good to finally be there.

Now only if this growing itch of gainful employment would sort itself out...

The (Over)-Importance of Institutions...

2007-03-25T08:47:00.000-07:00

I have come across the word "Institutions" several times over the last month and a half, in the context of sound macroeconomics. The only parameter that economists find has a positive correlation with a nation's economic health is the existence of strong institutions.

Geography does not matter. Natural resouces, perhaps counter-intuitively do not matter either. Indeed, natural resources in a country with weak institutions often leaves the country worse off. It breeds corruption, an over-reliance on the wealth generated from the resources and a consequent neglect of more sustainable sources of growth. Two cases in point: Saudi Arabia v Singapore. One sits on the largest known supplies of oil reserves and the other has...well...trees. I wont pain you with the economics of it...you get the picture.

Another theory is that the further you go from the equator, the more prosperous the countries become. Norway and Sweden are amongst the most properous of nations, while sub-Saharan afica and parts of Asia are the poorest. Hmmm....seemingly outrageous in that there is no underlying logic. Yet, it largely holds true. Does one buy it? NO! It is merely a reflective rather than a causal realtionship.

All of this raises the question: what are good institutions? OK, so this comprises of a strong & independent Central Bank and Judiciary, an efficient & incorruptible civil service, growth driven government policies, strong basic & professional educational institutes, sound financial markets, competitive product/service sectors, etc, etc. Seriously though, for the develoing world, targeting this "wish-list" will consume all output in itself.

Perhaps a more sensible approach for the government is to start with the 'no-brainer' stuff, such as cutting down on licence requirements to set-up an industry, speed up procedures to import valuable raw materials and tax breaks to export-based industries, etc. Do this and your industry and entrepreneurs will be free from their shackles. It needs a few strong, practical leaders at the top to set the ball rolling. The wish-list can be followed up with later. Keep things simple and simple things will be done right, they say. Perhaps...just perhaps this applies here too.

Bienvenue recruitment!

2007-03-14T17:09:00.000-07:00

Alas, P4 is upon us! Its recruitment season now in INSEAD. Sample this:

Monday: Marakon Associates, Google
Tuesday: The Boston Consulting Group
Wednesday: Bain & Co., American Express
Thursday: Booz Allen Hamilton, UBS
Friday: McKinsey & Co., LEK Consulting, Roland Berger Consulting

Next week is not looking any better. The next 2 weeks will be spent working through Motivation letters and appropriate CVs for each of the applications. Painful as this may seem, I suppose its a pain worth welcoming. For as long as this pain continues, there is hope my escaping my current unemployed status.

Speaking of which, went through a Mock Interview session today conducted by a group of London-based consultants. I was warned that this wasn't like other "Mock" interviews. The guys were good at what they did and dead serious. It turned out to be hugely intense and frighteningly real. Can't imagine the real deal being much tougher.

All building up for the days coming up...

Good signs on improving the Supply side?

2007-03-02T01:37:00.000-08:00

This is following up on my post on Feb 20 regarding the possibility that India's economy may be Overheating and the urgent need to think long-term by improving India's productive capacity. The Union budget for the 2007-2008 budget was released this Wednesday.

The following made for heart-warming reading...

"Finance Minister Palaniappan Chidambaram said spending on education would be increased by 34.2% in the coming fiscal year, while health and family welfare spending would rise by 21.9%"

The move attempts to boost one of the three key contributors to an economy's productive capacity: Labour. A first good step. Lets hope the strategy is executed well.

Overall, the budget has been well-received with a strong emphasis on increasing output in the agricultural industry, a sector that still employs two-thirds of India's population. Given that I am currently keying this at a transit lounge at the Chennai airport and my flight to Bangalore is 45 minutes away, more on this later...

The inter-dependencies & uncertainties of growth...

2007-02-28T01:44:00.000-08:00

Macroeconomics deals with the structure and behavior of a nation's and increasingly, the world's economy as a whole. It is a fascinating field that every working professional should have some knowledge about since it affects our lives in more ways that we can truly comprehend.

A series of models are used to answer questions such as what determines a nation's savings? What determines how much a given economy can sustainably grow at and how much it actually grows at? How is this equilibrium maintained? What determines a nation's foreign reserves and its competitiveness in international markets? And increasingly, the growing international integration of all markets, commonly called globalization is complicating the national economic equilibria, inducing an increased level of uncertainty. Indeed, there is no such thing as a pure national economy any more.

Case in point: Oil is the most valuable natural resouce in the world today for the health of the global economy. Over 40% of all energy needs are fulfilled by oil. Oil prices had been relatively stable at USD 15 - 20 for several decades until a few years ago. Since then, oil prices have tripled.

Given that the US, for example, imports large quantities of oil, this would presumbaly have destroyed its Net Exports function, leading to a dramatic reduction in output. Instead, the world as a whole is growing at 5.1%, levels never been seen before. This has happened because most developed countries have been able to offset the oil impact, more or less, by importing inexpensive manufactured goods from China and outsourcing once "non-tradable" activities to countries like India. Partly thanks to this and I stress only partly, Alan Greenspan will always have the legacy of having met his country's low inflation targets whilst also maintaing low interest rates!

Which is also why the ball is now squarely in the developing world's court. China and India in a sense, have it made. The growth potential is there to be taken. So far, China has done an impressive job of improving its growth sustainability level by investing in infrastructure and human capital. India lags well behind, but probably has marginally better institutions. Either way, both countries have an historic opportunity to lift themselves and the plight of their people. The next few years are crucial and its going to one hell of a ride!

India Overheating?

2007-02-20T09:15:00.000-08:00

The Economist is currently running a series of articles on whether India's economy is showing signs of overheating; eco-talk for demand outstripping the country's productive capacity, leading to inflationary pressures.

Its been interesting for me to see some of my classmate's reaction to this. Some are convinced and others aren't. Even more interesting has been to see some of the reactions in the Indian media and blog community, much of which as one can imagine has not been very receptive to the articles.

My 2 cents on this is the following. It is too early to say at this point in time whether India’s economy is over-heating. There is no doubt that several sectors today are facing severe inflationary pressures. In fact, over the last 3 weeks, the RBI has raised interest rates twice, but with increasing inflation, real interest rates are still quite low and the economy will continue to remain flush with liquidity. This certainly raises the prospect of an overheat, at least in the short-term.

However, I dont think this is the bigger concern. The large concern is going to be how we bridge this demand-supply divide in the long run. India is a developing economy, but our current GDP per capita, even when adjusted for PPP, is low. This is a boon today as it will allow us to grow for the next 5-10 years, in spite of the crippling infrastructure, poor education and health levels, etc. Once the GDP gap begins to narrow, further growth will need to be squeezed out, basis-point for basis-point. And this will only come from increased productivity --> tighter governance, better public services, a massive education drive, infrastructure investment and strong and independent institutions. This perhaps, more than any immediate inflationary concern, is our biggest challenge.

"Crack the Case"...

2007-02-11T09:55:00.000-08:00

I spent this Saturday afternoon today working though a "Crack the Case" exercise along with 50 other students conducted by the reputed Strategy Consultant firm, Bain & Co.

This was an exercise at working through a case wherein a Private Equity firm is considering the buyout of a hardware company that manufactures grids and false ceilings.

The two divisions had vastly different dynamics in terms of existing market share, profitability, future growth prospects, distribution inefficiencies, etc.

We had to work through essentially two questions:

1. Should the PE go ahead with the buy?
2. If so, what steps should it take to increase sales and reduce costs? Essentially, how can it improve the firm's competitive advantage?

A total of 2.5 hours were given to analyze significant quantities of data, arrive at a set of key value drivers and finally, a set of recommendations to address the stated questions.

The evening ended with a 5-minute presentation on the fruits of our labour followed up by a 5-minute Q&A session. Overall, a very good experience.

The larger gain however, was a peek into the daily workings of an established strategy consulting firm. This is what they do day in and day out and the biggest take from the exercise is that each of us gets to go back and ask ourselves: Do I really wanna do this? Do I want to work with firms and industries such as waste management, that I really care little about?

The motivation to work for a Strategy Consultant firm, I have concluded, comes primarily from the thrill of the intellectual challenge. No question about it. 'Course, the great renumneration doesn't hurt. One also has the power to preside over the strategic direction that companies take. The drawbacks involve working with industries that you neither know nor care much about. Also, one does not get to execute one's charted strategy and coming from the telecom industry, where I sent most of my time executing, this is a significantdifference and one that I must think long and hard about.

Of camaraderie, Singapore & dreams...

2006-12-19T20:44:00.000-08:00

So, we're done with P2! Yeah, believe it or not...40% of the program is over and as all of us danced our asses off in the end-of-period party last night, a rather queer song reminded us of this: Bon Jovi's 'Livin' on a Prayer...we're halfway there!"

Because incredible as it may seem, we really are! We are nearly hafway there and for portions of P1, I really was living on a prayer. The faces that I first saw seemingly yesterday are all nearly 4 months old now and I think we're all a bit taken aback at time's capriciousness. On a sadder note, a number of my friends are leaving; heading out to Fontainbleau over the Christmas break. While I will be there in a couple of months myself, it still marks the end of a mini-era. The era of our time together in Singapore. A time that at the monumental risk of repeating myself, has been the proverbial blink of an eye.

And what of Singapore, this setting of our congregation? A developed, super-clean mecca of prosperity in the heart of Asia? A place so uniform in its displacement that it lacks 'character'? A night-life full of ugly lady-boys and pretty girls? We all have our views...me, I've enjoyed being here thoroughly. Still, people make a place livable. They determine the memories you conjure up and this fundamental truth has always stood the test of time. No exceptions here. Everyone is amazing and friendly and the camaraderie that has developed was one of many personal reasons to seek out an MBA at this point in my life.

There will be other challenges in the coming months, not the least will be the business end of the job search. My ramblings on a proposed offer of a Put option by INSEAD on my tuition are unlikely to materialise, hence this subject will gain importance as we go along. Fo now though, I am going to kick my shoes off, lie back and dream! For its a wonderful thing is dreaming...

Here we go again...

2006-12-13T11:06:00.000-08:00

In about 9 hours, I have my first exam of my second period at INSEAD. The course being "examined" is essentially Operations Management.

This was one course I was not really looking forward to when the period started, but one that got progressively more interesting as the 6 weeks passed. The course talks about various topics such as Capacity/Inventory economics, Queuing theory to resolve QoS/Cost trade-offs, Process Control Strategy and the like.

While it may sound a trifle abstract at first, its amazing in its applicability in virtually all facets of life. The course ended on a slightly philosopical note, with an interesting analogy...

Hedging yourself 'Microsoft' style...

2006-12-10T08:23:00.000-08:00

All right, say you're an active investor in the equity or commodity markets. Your investment portfolio includes several growth and value stocks. You are contemplating an investment in a risky start-up and have no way of telling what your future returns will be like.

One way to reduce (hedge) your risk against drastic capital losses would be to purchase a PUT option on your stock. This would allow you to sell your stock at a pre-decided strike price upto a period of time, hence limiting any potential damage. Options are a form of derivatives. As the name suggests, Derivatives are financial instruments that derive their value from the underlying asset (stock, gold, oil, etc). Options, futures, swaps, forwards, etc are all types of derivatives and judicious use of these is an intricate field of its own.

Coming back to our investor, sounds like a great deal for him, n'est ce-pas? He gets to reap the benefits, without baring proportionate risk. Just a minute though. Who sells these options? And how does the game benefit them?

Indeed, corporations regularly put out options on their stock. During the 1990s, Microsoft regularly sold PUT options on its stock to investors. This meant that MS had an obligation to buy back its own stock at the pre-decided strike price, when its stock price fell below the strike price. This represented a loss to MS, again only if its stock fell below the strike price. Needless to say, its stock NEVER fell below the decided strike price.

What did happen though, is that for four years in the mid-1990s, MS earned $2 Billion just by selling Put options on its stock. Think about that! USD 2 BILLION in 4 years, and its not even their core business. MS earns revenue by selling software, for Pete's sake. Investors kept buying the options and MS kept outperforming market expectations.

Other than earning this capital, this move also paid huge returns to MS's shareholders. When a company sells Put options on its stock in huge volumes, it is a strong signal to the world that damn-it, our stock will NOT drop! It is a signal that our stock is currently under-valued. Capital gains inevitably follow and this stock appreciation is great news for all stakeholders.

All of this got me thinking. I wonder whether INSEAD will allow me to purchase a Put on my education. If, in 7 months time, I am jobless, they would have to 'buy' pack my tuition! Sound strange? Trust me, its only a matter of time...

OB redemption?

2006-11-24T02:49:00.000-08:00

All right, I know Organizational behavior is part of the core curricula of every B-school worth its salt. But c'mon, I found "Leading People & Groups" (euphism for OB-I) to add little or no value in what was otherwise a terrific set of of core courses in P1.

Apart from the fact that most of what was said was obvious, the course lacked basic structure and direction. In all, a disappointment. Fast-forward to P2 and with "Leading Organizations" representing OB-II, I reckon most of us had already formed our opinions about the course's value. While the first few classes did not make a terribly great impression, I have to say the classes have become more interesting per session. And yesterday's class, where we talked about Cross-cultural differences, was one of the best sessions of all in P2. From the starting well-known piece...

"Heaven is where the police are British, the lovers Italian, the mechanics German, the chefs French, and it is all organized by the Swiss."

"Hell is where the police are German, the lovers Swiss, the mechanics French, the chefs British, and it is all organized by the Italians."

...to students sharing slides about the Myths and Truths about their countries, the session was one of the rare occasions when I felt the 90 minutes fly by.

Particularly interesting, was the presentation by the lone Chinese student in our batch. A slightly reserved individual, he provided a piece full of humour AND information! Sample these...

- All Chinese people do not eat dogs!
- Never tell a Chinaman that you KNOW China.
- Address your Chinese colleagues by their full names.
- Finally, you are a foreigner. Always remember that because the Chinese will.

Great job, Youye!

Of results, incompetence and nostalgia...

2006-11-16T06:28:00.000-08:00

Well, here I am back from a self-imposed hiatus. Not sure why I did this, but there is a LOT that has happened in the last week.

First, we got our results from P1. I did pretty much as I had expected, which implies that I am satisfied. Passed all subjects comfortably. No danger of failing anything and equally, no danger of being in the Dean's list. Now, grading in INSEAD is relative to how everyone else in class performs and the scores are distributed over a Z-curve. I.e., the grades are spread out over a normal distribution. This necessitates a clear and equitable differentiation amongst the student body's grasp of concepts and overall performance. May explain why so many of the tests were so darned hard. Most of the people I have spoken to are either happy or philosophical about their results. Oh, there was this controversy about the relative weightage of case write-ups and final exam being changed last minute in one of the courses. I have my opinion about this, but more on it later.

Next comes the finalization of our CVs for the official handbook. Now, I must admit I had heard the Career placement office was not the most effective one going around. But their level of utter incompetence in organizing basic meetings is astounding! CV group meetings have been arranged with subsequent individual follow-ups. But with a class size of 150 students, all of whom are successful, confident and demanding professionals, you gotta figure quality time with each candidate is a must. Or at least basic reserach to guage demand. Hastily arranged 15-minute sessions, in all catering to about 20% of the class is NOT the way to go about changing apparently justified perceptions; perceptions that lend credence to the cliche that perception equals reality.

As for P2, half the classes for Finance-II are over. HALF THE CLASSES! Wow! Seems like we were applauding our P1 profs post-last-class just yesterday. Still, the cases come and go...burying us all ever deeper in the avalanche of information that refuses to abate. I'm enjoying Finance, enjoying Operations to an extent and not much else. I wonder whether I've peaked midway through P2?

The P5s have 2 weeks of classes left and we see a cloud of forlornness descending ever-increasingly upon the confines of the Lily garden everyday. Many are ready to move on, many already have, but a few face a very uncertain future...indeed, an uncertain life. My sense of sympathy is tempered by the realisation that I face precisely the same fate in the not-so-distant future now...

Case studies galore...

2006-11-08T11:11:00.000-08:00

When I used to think of a typical B-school curricula prior to arriving @ INSEAD, the "Case Study" approach is one that came to mind instantly. The erudite around me claimed that case studies are used extensively as a tools of illustrating important and fundamental concepts.

Well, P1 was the very antithesis of this. Most of the P1 courses were quantitative in nature and there was a truckload of theory being shoved down our throats as well. Be it Marginal analysis & Oligopolistic traits in Microeconomics or Portfolio theory & WACC in Finance, the focus was on understanding concepts the old-fashioned way. All this, hopefully by design, left little time for case studies, although we did work on about half a dozen cases.

P2 though, is a different story. Several courses such as Strategy, Operations, et al are purely case-study based. This is good in that the quantity of raw study required is less, but the load of case studies is starting to build up. While credible cases from HBS, INSEAD, etc are being used, I have found most of the case discussions in class to be rather mediocre. Perhaps I'm jumping ahead of myself here, it is, after all, only the second week. Still, we seem to be covering precious little new ground hand the whole feeling is one of being quick-sanded.

There are, of course exceptions and I say this as I've just finished reading a case study on RyanAir, the low-cost Irish airline, lead today by the colourful, if not controversial, Michael O'Leary. If my statement sounds rather lame, consider one of his recent quotes...

"The European Commission are "morons", BAA "overcharging rapists", Britain's air traffic conrol is "poxy", British Airways as "expensive bastards" and travel agents are "fuckers who should be taken out and shot".

Now, when was the last time the CEO of a successful growth company dared to be so...well...obtuse? It was a moribund trait, one that Mr. O'Leary has re-kindled. Coming to the serious stuff though, RyanAir's achievement in converting itself from virtually a flying club 20 years ago to a company that today has a market capitalization higher than that of British Airways, is admirable and certainly worth studying. An oasis in the desert for now though...

Growth and Greenspan’s “irrational exuberance”…

2006-11-01T06:24:00.000-08:00

I managed to get my hands on an Indian business newspaper this morning. In spite of having been away from India for a mere 2 months, I found the content pretty surprising in that it was virtually unanimous in content and tone.

The celebration of India’s continuing rise as an economic power: IT has been good for years now, pharma has followed up the IT success story, telecommunications is flourishing and manufacturing is starting to find its feet too. Retail looks all set to explode, even if the government hasn’t yet given the go-ahead for foreign direct investment. Still, local players look set to kick-start this, albeit probably in a duopoly mode. The financial markets are generally perceived as sound and viable, although reforms in the banking sector are overdue.

Great stuff, all of this! It certainly made me feel proud, but alas, a trifle curious as well. Curious about how sustainable this growth is; curious about the “economic value” being added; curious about the effects of this on all strata of society. Well, that last point we know: a majority of Indians have not benefited from this growth, but let’s be realistic for now. These things take time and in all probability, this prosperity will start to trickle downward soon. Granted.

Tucked away in the corner of the daily lay a transcript of a brief interview with the Chief Economist of the Asian Development Bank, Ifzal Ali. Overall, the man echoed the same sentiments I was reading elsewhere, but he seemed seriously concerned about the sustainability of this growth, given our creaking public infrastructure. Its not the conditions of our roads, electricity, water, etc that concerns him as much as the fact that there is a lack of political will to solve these huge issues. And given the capital-intensive nature of these investments, it is only the government who can make a difference here. I suppose coalition politics and our infamous “anti-incumbencey” factor, an unwritten rule (at least at the state level) that the 2 leading parties always swap positions at each election, put pay to real progress in this direction.

If his fears seem implausible, consider this: in my first 2 months at INSEAD, no less than half a dozen fellow students from around the world have approached me with a single-pointed question: Will India’s infrastructure improve in the immediate future? Not to judge anything by what people say, but as the COO of my previous company always used to say: perception is reality.

So what thereof? Its hard to see a Ford-like endeavour occurring wherein private entities go out and clean things up themselves. Shareholder concerns are paramount nowadays unlike in the 1930’s, and any chairman looking to make such a move would be voted off the board before he could say “Crikey”.

Which brings us to the point of whether we are in a state of “irrational exuberance”? I’m not sure. I reckon that’s being a tad too cynical. Still, given our collective penchance for over-estimation, I think the press ought to probe these issues further. We’re all aware of this, but awareness is not the point here. The Indian media, particularly in recent years, has acted as a catalyst for social and political reform. I believe it is one of our democracy’s functional entities. Pressure builds more pressure and pressure for change begets change. Turn the screws and we might yet quell Mr. Ali’s and my fears!

Back for P2 and an all-too-short break...

2006-10-30T03:22:00.000-08:00

Well, here I am...just 5 days after P1 got over, back in the library trying to sort through the amount of reading to be done for the Marketing class tomorrow.

Having said that, my first impression of P2 is that the intense theoretical concepts may not be as much as was the case in P1. Rather, there will be a lot more group work and assignments. Only time will tell...

All in all, while the break was relaxing, the opinion all round is that it was too short. Well...

We're done with P1!

2006-10-25T05:20:00.000-07:00

We're done with P1! The exams got over today and the passage of Period-1 seems like the proverbial blink of an eye! Deeper introspection, however, tells me that these have been two amazing months.

I have met so many interesting people and the diversity in INSEAD continues to amaze me everyday. Really! One can get a little tired of hearing this, but if you remain objective and open to new experiences, you learn so much by just talking to people! And put together 153 people building on this, the effect is exponential!

Just as the last exam got over today, the social "reps" of our class (regular students like me) did a great job in arranging for a party right outside class. You could see the stress lifting off everyone's shoulders, bidding us a forlorn farewell alongwith a secret promise to return in 2 months ;)

Yes, I use the word stress intentionally because I have to fact it, the last few days have seemed like an eternity and have been stressful. Many of us had tucked the experience of exams away into the deep archives of our minds...never again to be re-lived. So, this week was an awakening.

The exams were tough overall, but I think I should pass them all. We've got wagers running on who's going to make it to the Dean's list: the "geeky" lot to the cynics amongs us, but really a bunch of very smart individuals in my book - top of the class. It will take something to make it to the Dean's list here and I tip my hat to the lot that does. I, in the meantime, rest safely in the knowledge that I stand nigh a chance to influnce that outcome. Then again, old habits die hard.

Period end party is in just over half an hour, so I gotta run. See you all in P2!

4 down, 1 pain-staking more to go...

2006-10-24T03:12:00.000-07:00

Well, thats 4 of the 5 exams done...as of 43 minutes ago. What can I say? Crashed and burned in Prices & Markets and Finance. Accounting went OK...as did LPG. But then again, with the system of relative grading in place, you really never know how you've done.

Some of the stories coming out of the P4s is scary, even if you DO take it with a spoonful of salt. Appears to be a negative correlation between one's performance and one's eventual grade...particularly with varying means and standard deviations forming the grading Z-curve. Speaking of which...Statistics is the final exam tomorrow and I reckon I better read up a bit...lest it goes the way of P&M.

Tomorrow at this time...AH!

We got "PUSHANed" !

2006-10-16T21:35:00.000-07:00

All right, my Prices & Markets prof, Pushan DUTT is turning out to be one of the most interesting, dynamic professors I have ever studied with. Helps that the man knows his stuff too.

To illustrate my point, he came to class yesterday, a little "drug-abused" (the legal ones of course, as he wasted no time in informing us). But its not just the things he says...I have seen my fair share of pretenders. The man relates his innuendos with the flow of the class brilliantly!

For those who aren't aware, he comes across as a typical bread-to-the-bone Calcuttan. Calcutta is a city in India and he exhibits several traits typical of Calcuttans. High intellect, chain-smoker, an obsession with economics and economists...I could go on.

Consider some of his recent comments in class...

1. "My 6-month old daughter has 2 toys in her hand and still tries to pick up a third one. I dissuade her by explaining the opportunity costs of going for the third toy -- she loses the first one."

2. "Porn is an extremely interesting industry for economists to study (Yeah right!)"

3. "Game theory is a hammer and the whole world is shiny brass nail"

4. "I hate Microsoft. Don't ever piss them off though. They will stemroll you over."

And my personal favourite...

5. "Computers don't have big, ugly levers banging on the screen the way typewriters did. But if you do see them, you need to think about smoking something else!"

Good stuff ! I'm gonna feel bad once his last class is over...

Karaoke night...

2006-10-15T22:33:00.000-07:00

A few of us went out for a night of karaoke last week. The outing had been on the cards for a while and there was more than a level of expectancy for many of us.

The place was called K-box, located bang in the center of downtown S'pore. I arrived with a couple of friends while the rest of the gang had already settled in. I must admit, when I first entered the place, I thought I was in the confines of one of S'pore's several dodgy bars. Dark, dungeoneque and a trifle decadent. See, I have been to karaoke bars in the US and they look very different...you have a corner for yourself, sure...but here, you got an entire room to yourself.

At first, I thought it was rather cut-off...but there was a coziness about the place that began to grow on all of us as time went by. Apart from my friends, there were a couple of tourists as well: a New Zealander named Richard who sang just like the Bee Gees front-man and looked a lot like someone I still haven't put my finger on. Damn, I hate when that happens. Anyway, we walk in and everyone was sitting there slightly purplexed as this guy was screaming out a song in Mandarin. Others were still trying to figure out how to use the remote.

The party then really kicked off with the ladies offering their rendition of an old "No Doubt" number. Stamatia, Laura and Shirine really let it rip and got things moving for the night. Ricard and I took turns with a couple of numbers and things were really flowing. After a while, someone realised that a few of the guys had been really quiet. So, Wajih was pulled out of the comfortable cocoon of his couch and thrown to the deep end. Only problem: once there, we had to kinda work hard to get him back! He just sang and sang and sang. To make things worse, our friend Kunal had this strage inkling that Wajih needed help with the song (Yeah right!). It was great stuff though. And since this is also Aussie-Kiwi week, I'll just say: Good on ya mates!

Satnam had also been conspicuously quiet, particularly since we are rather accustomed to his baritone voice constantly harping :-) All that changed once the G N' R number "Sweet Child O' Mine" came. Man, the guy went ballistic...just remember to keep the microphone close to your mouth next time mate. No, but he was awesome.

Amit had been harping all night about a song called "Can't touch this"...come to think about it, he's been saying that to me ever since I met him. What the hell? Do I look queer? So, anyway, when the song finally arrived, it was his turn to take the stage...and a great job he did too. Kyu had been kinda quiet all night as well, but he found his liking with U2's "With or Without You". I had the mike in my hand and the dude kept tugging at it! Awww, but we throated that soung out together. Great stuff !

Meanwhile, the resident metal-head, Gerritt, seemed a little disgusted by all the "happy shit" he saw around him! "Give 'em some Black Sabbath man", is all he kept saying. And congenial as we were, "Paranoid" was duly played.

Finally, things marooned to a fever pitch with a string of songs that everyone, to a man/woman, related to. We all kinda huddled together and sang a flurry of numbers together. In all, great stuff and great memories! On a parting note, since many of these friends are also currently running for Student Council elections, I wish them the very best. The pitch and your overall presentation today was awesome guys! Let the good times roll...

P1 coming to an end and a time for reflection...

2006-10-10T00:30:00.000-07:00

In less than two weeks from now, we face the finals of our first of five periods. As always, I remain perpetually amazed at the ability of time to fly by. Does seem like just yesterday that I had arrived at INSEAD, gotten introduced to my groupmates...

How do I look at these first 6 weeks? Tough one. From a coursework point of view, after being virtually crushed by the workload in the first few weeks, things have eased up a bit now in terms of the pace of the coursework. Then again, the finals are around the corner.

For many of my classmates, this period has been a breeze. Not surprising, considering their backgrounds...investment bankers, management consultants. For me, while the course has not been very tough, the sheer pace and volume of material presented in class has been challenging. The good point is that I have learnt a lot, both from the coursework and my classmates. And the experience has been nearly everything I had expected.

That said, there has been no time at all to reflect and allow the knowledge to sink in. And I get a feeling that business education requires a significant amount of reflection. As an example, I think I need to come out with a set of "take-aways" from each of the five courses. Perhaps I will get aound to this eventually. I see this as a potential disadvantage of a 1-year MBA...although professionals with a good depth of prior experience should be able to get nearly as much out of such a program as with a conventional 2-year program.

Well, random thoughts...penned down in the midst of a "Leading People & Groups" class where we are beating to death a case about whether a fictional company should launch a shampoo that is a POTENTIAL health rish. Except that the case is not trivial at all...and as I am writing this, there is a very sensitive issue that is being debated. More about this in my next post...which I already know I am gonna enjoy talking about!

Games end in a damp squib...

2006-10-08T07:43:00.000-07:00

Well, so much for the Games! What a dud of an end...

Last week saw us engaging in a set of 4 "games". Laid out in the Microeconomics charter, these pertained to the "Game Theory" I had talked about briefly in an earlier entry.

Essentially, Strategic thinking, wherein you base your every move after analysing your opponent's reaction three steps ahead! Both parties attempt to arrive at a "Nash equilibrium", or a mutually beneficial state of affairs. If this sounds eclectic, think of the movie "Beautiful Mind", starring Russell Crowe. He played the character of a brilliant, schizophrenic matematician named John Nash.

The games were meant to be played in a spirit of implicit collusion between the Singapore campus, the France INSEAD campus and the folks at Wharton. In other words, while you cannot explicitly indicate your strategy to your opponent, you both agree to maximze cumulative profits.

Except that someone (and we all suspect them Wharton guys), looked to only maximize their own profits and most S'pore teams got smashed. Of course, this was only the first round...we were all set to jump right back when the games were called off. Too bad...

Of anecdotes and their effectivenes...

2006-10-01T09:19:00.000-07:00

Here's an anecdote one of my professors shared in class on Friday to make a larger point about a concept called Gaming Theory; effectively strategizing. I promise you, its worth reading!

Two B-school students have an exam Monday morning. They study hard all weekend and Sunday night comes along. They decide to go out for a drink, end up stone-drunk, hit the sack at 7 am and sleep through most of Monday. Realising they have missed the exam, they approach the professor on Tuesday with the story that they drove out far from the city and ended up with a flat tire.

They couldn't get back to school in time and plead with the professor to allow them a re-take. The professor agrees. In the re-take exam, the first question is pricing policy related and both students negotiate this quickly. Emboldened, they move onto the next question which is worth the remainder of the test! The question states rather simply: "Which tire?!!!"

The students end up giving different answer and the cover is blown.

The larger point of course, was to illustrate the utility of concepts that followed this narration. Concepts that many of us will now remember well for quite a while to come. Way to go, Prof. Dutt! This memory is filed into storage...

BAH comes visiting & more learnings...

2006-09-29T11:08:00.000-07:00

This week saw campus visits by a few more companies, again primarily to recruit P4s. Still these presentations provide an invaluable opportunity (to P1s such as myself) to learn about the respective companies first-hand. One of them held particular interest for me: Booz Allen Hamilton.

Yes, this is a consulting firm as well and I know I expressed some apprehensions about consulting firms being a fit for me in one of my earlier posts. Yet, there were several reasons why BAH looked good to me, not the least of which was a strong technology focus and emphasis on telecom. So, I walked into the presentation with a sense of keen anticipation. For a change, I had researched the company well in advance and had a fair idea about what to expect and where to probe.

The presentation was conducted by a Senior-VP (China Operations) & Partner, a very proper Englishman who had spent his entire professional life in the Energy sector. I found his presentation exceptinally good. Crisp, clear and very informative. A model consultant! He pointed out the pros and cons of the organization and made an objective, precise comparison between BAH and other leading strategy consulting firms. One of the pros caught my (and incidently, everyone else's...) immediate attention.

A significant drawback of working as a consultant is that while you get to strategize and plan plently, you rarely get the satisfaction of seeing out the implementation of your plans. Quite often, a consultant is not even aware of the full outcome of his suggestions. This can be pretty frustrating, particularly if you have been in the "implementing" business all your life (as I have) and relish the thrill of execution.

This appeared to be a differentiator for BAH. BAH consultants apparently, work regularly with industry management on the implementation of their initial assignments: and nowhere else does this hold true than in telecom. Several such instances were quoted, including the strategic reasoning behind the recent merger of two major wireless vendors. Now, consultants aren't supposed to reveal the identity of their clients, and our visitor stuck religiously to this decree...but I'm guessing Lucent-Alcatel. Impressive...

Well, more food for thought and I am on an information-accumulation phase right now. Speaking to the P4s, I get the feeling one of these information pieces is going to be vital in the not-so-distant future.

Jammin' n' quizzin'...

2006-09-25T02:40:00.000-07:00

All right! I'm really happy today...no, I didn't have a great meal; no, there isn't a break from school and no, I didn't just speak with my girlfriend. This weekend, a few of my classmates and I finally got around to jamming for the very first time.

We managed to rent a studio downtown, complete with lead & bass guitars, a drum set, microphone, speakers, amps, the works. And then...it was time to rock n roll! Started out with "Smells like Teen Spirit", and "Paranoid", 2 songs about as archaetypical as you can find, but not bad songs to get the old music waves flowing. Then forayed into a host of other songs as well and finalizd another 2 for our next session. There was another band from school as well and we ended the evening jamming all together on probably the biggest rock anthem after "Stairway to Heaven": "Sweet Child 'O Mine". Awww, it was 4 hours of rock bliss...just G-R-E-A-T!

At the end of it all, the guys were all so ecstatic that we were running across roads violating traffic signs, shouting, gesturing and basically, making a complete ass of ourselves. For those amongst you wondering what the fuss is all about, please keep in mind that we are in SINGAPORE. I'll leave it at that. Anyway, its pretty mild in the realm of rock n roll decadence.

Speaking of "...Teen Spirit", few of the guys didn't know why the song is named as it is and I'll take the liberty of elaborating on this point as I did with them. Teen Spirit was the name of a cheap deodorant for women back in the mid-80s. Apparently, many of the girls in Kurt Cobain's high school used this deo regularly. I don't know whether the smell turned him off or on, but that is the story. Anyway, it was all great fun...really was. And the music wasn't bad either...for our first trial.

On a completely different note, I just went through our first "test" in the form of a Prices & Markets quiz. Its really not a big deal but the event, at least for me, is symbolic of our coming. In a program of just over 10 months, there is no such thing as a senior batch and we'll all be out of here before we realise it. So, such events, trivial as they are in absolute terms, demand a certain significance when taken in the right context.

Cheers to that and many more to come !

India, diversity and lessons from OB...

2006-09-20T23:47:00.000-07:00

Its been 3 weeks of classes and many of the students are starting to really open up. Speaking of the term "student", this place takes this term to a whole new level. There are some pretty impressive people going around as students here. These are people with SERIOUS achievements under their belts. Its a whole new paradigm and the bar is so very high.

I just had an interaction with one of these "students" that epitomizes this. This is an individual who has spent a significant part of his life travelling around the world and has some amazing insights to share. So we got talking...and turns out, he has spent some time in Bangalore, India as well (but of course!). Having lived there for the last three years myself, we got talking.

Now as is customary in such exchanges, one does have to hear the culture-shock related incidents. Bad roads, lots of people, inefficient bureaucracy, corrupt cops...you get the picture. Except in this case, it wasn't so for the plain white-man-bitching reasons. This was a guy who was genuinely frustrated at how these things were preventing India from reaching its true potential. No seriously, if YOU, the reader of this blog, are tempted to roll your eyes and move on to another blog, hold on...and hear our discussion out.

What plagues India today? Lofty question...this one. Especially coming from me...I don't even pretend to understand the all the socio-politic-economic complications behind this question. Still, lets pretend I am a 10-year old looking at this issue purely from my perspective. Population? Pollution? Poverty? Corruption? Can I apply an 80:20 here? Perhaps doing so would be naive...but allow me.

We can't do anything about our poverty. As my micro-economics professor says, this is effectively a "sunk-cost". Population, we live with...lets call this the "fixed cost". Pollution is a bi-product. So, what can we change? You get the picture...Corruption might not be the worst place to start. Of course, nothing new or ground-breaking in what I profess here. But how? This was the subject of my conversation with my classmate.

We have today an excellent Prime Minister. A man whose credentials and capability is unquestioned. But I do not envy his position. He spends his time working with a coalition of cast-based parties, religious interest groups, communists...you name it. The flip-side of democracy, they call it! Well, its a pretty significant flip-side, wouldn't you say? Whats the other side like? Or is blaming democracy just an excuse. India's political landscape today bears a striking resemblance to pre-WWII Germany. Several parties, most without a tangible ideal, and NONE with any real hold. So, they either struggle along with a coalition OR put up no fight at all when an entity such as the Third Reich comes along. Now, presumably, nothing like that is brewing in India, but aren't there lessons to be learned here, my classmate enquired?

Any Indian will counter this point, as I did, that the diversity in India is such that a voice is needed for each. Hence, society's diversity is reflected in its government. That is fine...but here's a point: should this diversity come together only in an entity as high as the country's parliament? Something is WRONG here. And there may be arguments against this: remember I am trying not to over-intellectualize the issue.

We need to push this amalgamation process to a lower level...sort out the differences innate within diversity down at the state and maybe even district level. Perhaps the honchos who run the show at our top house would be focused on what they really need to be that way...just perhaps.

More thoughts to follow on this and of course, a trivial blog entry will barely begin to touch the surface. But let me just end with an intriguing fact my OB (Organizational Behavior) prof shared with us, which makes for an interesting analogy with India's demography: For all the talk of the benefits of diversity, the AVERAGE world-wide performance of homogenous teams around the world is significantly better that that of heterogeneous teams! This is not a conjecture or opinion: it is a fact. But here's hope: the very best teams in the world ARE diverse and heterogenous in nature...its all about sorting one's differences out, respecting one another and looking beyond...and it CAN BE DONE!

Team Profile and professionalism...

2006-09-19T06:33:00.000-07:00

Ah, the Team profile preparation for LPG (Leading People & Groups) is finally over! This was meant to serve as a handbook detailing the goals, rules, processess, etc of my study group for the first 2 periods. The cover page of our endeavour is shown here and man, does it ROCK!

While I profess my relief at having realised this task's completion, I must confess it has been a keenly interesting experience; indeed one whose utility many of my classmates have probably not realised yet. I can safely say that when I finally went to bed in the wee hours of this morning, I stayed up for nearly half an hour thinking about all that had gone into the preparation of the profile doc. The final document is impressive, but that is beside the point.

The process of its preparation brought out a few skeletons that had already begun to embed themselves within the confines of Section A1, Group 12. Issues of equitable contribution, punctuality, etc came to light in the most stark manner possible and I for one, am glad this has happened now. Personalities, cocooned behind the masks we all brought with us to INSEAD and the group, were pulled off rather urgently and genuine identities emerged, nearly all for the good. Lines were drawn and accepted.

In spite of this (or perhaps due to this), the professionalism of my group mates has really come to the fore...not once did anyone get defensive. We all came to INSEAD hoping to learn and grow in every possible way and cheers to the guys for displaying their magnanimity in practising this!

We have miles to go before we sleep...

Buddy lunch and its ramifications...

2006-09-16T04:23:00.000-07:00

A couple of days ago, 2 of my batchmates and I were invited to lunch with a "senior" of ours (December 2006 class). Daniel introduced himself as a French-American (which I must admit, left me very curious as to the kinds of contradictions Daniel must have had to face over the last few months). Tact and a rush of sanity prevented me from broaching the subject...

Anyway, the lunch was a class-wide initiative by the senior class to increase contact between the 2 batches. I looked at it as a terrific opportunity to learn the dynamics of how INSEAD works...in terms of electives, campuses and of course recruitment. I have started my course in Singapore, but at some point will transfer to the France campus. Now exactly when this should be done seems to depend on so many variables, it puts the Demand curve well-nigh to shame! In addition, of course, there is the small matter of the INSEAD-Wharton exchange program to consider as well.

Daniel had several interesting points to share, not least of which was the apparent lack of academic challenge in Wharton ! Now, I realise that a 2-year MBA cannot be compared to INSEAD, but the comment was extra-ordinary. Apparently, the only students who head to Warton are those committed to gaining employment in the US (mind you, this might be a very generalized statement...much like the results of my recent MBTI test). Of course, noone is exactly handing me a Wharton exchange on a plate, but I was wary of this move to begin with. His comments have nearly pushed me to the edge.

As has become customary these days, most of the discussions I have are opening doors. When, if ever, will some of them start to close? Patience, boy. In addition, there was the not-so-comforting thought that the P1 load will feel like a holiday compared to P2/3. I look forward to P4 already.

Enough for today, I gotta rush to Holland Village and check out a local Singaporean rock band perform...saw them last week as well and man, do they ROCK !

Myers-Briggs Type Indicator and Mrs. Fields' cookies...

2006-09-14T03:41:00.000-07:00

This week saw our class having to take the well-known MBTI (Myers-Briggs Type indicator) test. For those unaware, this is a well known psychometric test used to approximate different personality traits. Seemingly innocuous, it is used by companies around the world. It attempts to answer things such as whether a given individual is an extrovert or an inrovert? Do you rely only on hard data to make decisions or are you an intuition person who believes in overall impressions and that certain X-factor? Do you find high levels of planning and organization an asset or a liability?

I had taken the test once before rather casually and honestly, remember nothing of the result. This time, though, I tried to be as honest as possible and the restult that ensued did not partiularly surprise me: ENFP ==> Extrovert, iNtuition, Feeling, Perceiving.

Now, rather than just explain these results to us, the prof. undertook, what I feel, was a very effective way of driving home the truth behind some of these readings. I mean, c'mon, most of us gave very little credence to such tests. But the prof put together some groups of people with similar results and other groups with very different results and asked them to talk things out. Of course, we did not know each others results beforehand.

Groups with extroverts seemed to have plenty to talk about and ended up discovering similar interests (such as getting outdoors, etc). Groups of introverts ended up spending several minutes looking at the roof wondering what they were gonna eat for dinner ! The discussions with the most depth, however, transpired between a mix of extroverts and introverts. Simple...yet remarkably effective. To me, this was just another example of the effectiveness of simplicity. Keep things simple and moving, they always say.

The other intersting experience was a case study regarding different leadership styles. Putting it simply, some leaders (and organization cultures) are process-oriented while others are people-oriented (Of course, the very best today employ right doses of both). Now, we all know how important it is to "feel" for your employees, but they can be no arguing that a pure people-centric approach is not scalable. Processes are a necessity as companies expand even though its such a bitch sometimes. Anyway, the discussion was about 2 cookie selling companies in the US in the 1980s: Mrs. Field's cookies v/s David's cookies.

I'm not gonna go into the details of the actual case, except to mention that Mrs. Fields people-centric approach, considered revolutionary (...or stupidly naive) in the 80s opened up a new management mantra, one that is regularly used by companies today. The prof ended the discussion by welcoming two sales-ladies from the actual Mrs. Field's franchise in Singapore of today ! And they proceeded to serve a cookie each to every student in the class...free ! WOW ! The whole class was blown away...talk about the Midas touch and I suspect Mr. Minarelli earned himself a few admirers today...

Consultantcy firms come visiting and a few learnings for me...

2006-09-12T18:58:00.000-07:00

In addition to hosting the first set of classes, last week also saw several visits from some of the world's top Management and Strategy consultantcy firms in the world. McKinsey & Co., Bain & Co., The Boston Consulting Group, Arthur D Little: you name it, they were here. Their primary intention was to recruit from the Class of December '06 (my seniors), but we were invited to partake in their presentations as well.

In recent years, Consulting has become such a pre-dominant occupation, it is considered a part of the "top three" sectors for professional managers; industry and finance being the other two. Firms and profit-seeking economic entities regularly need "experts" to analyze every facet of their business. Be it something as specific as inventory turn-over or something as fundamental as strategic market placement, it is often the consultant who brings in his expertise to help get companies back on track.

Now, having been in the telecom industry all my professional life, I was keen to get a feel of the Consulting lifestyle. I had heard several stories, ranging from the excellent renumeration schemes to the horrific lifestyles. Since consulting firms earn reveneues primarily by "billing" their employees, utilization becomes a key driver for success, much in the way services outsourcing works. Hence, firms are constantly looking to bill consultants. Having said that, a consultant's job is unmatched in terms of the exposure he gets to different fields, organizations, geographies, etc.

My personal goal and primal motivation for seeking an MBA remains the desire to work in a Strategic Planning role for a telecommunications company. To this end, the erudite around me claim that a couple of years of Strategic Consulting might be just the thing for me. The exposure and wisdom that this offers could place me very comfortably in my eventual (desired) position. That doesn't sound too bad, even if the hours do suck. But see, here's the problem: say, I get picked up by Bain & Co., who have tons of consulting assignments in the Airlines industry. Whether I like it or not, I will have to consult for the Airlines industry. Now, I know about as much about the Airlines inustry as my dog does about Lord Zeus. Not a problem: I will learn. But wait...what happens to that Strategic Planning role for a telco? Hmmm...deeper disussions and thought processes await my attention...

A night-out in Singapore...

2006-09-09T05:35:00.000-07:00

Had my second night out in Singapore since I arrived and I like what I see. Singapore has an assured, vibrant night-life. There are quite a few areas, some more reputable than others.

A few of my INSEAD classmates and I headed out to Clark Quay, a bustling oasis of restaturants, bars and nightclubs. After an eternity of searching for the "ideal" restaurant, we settled for an open shack by the river. The food was terrible, but the ambience was nice. There was an even a coolish breeze blowing, which was a break from the normally humid climate. Post-supper, we headed into one of the better known clubs - The Attica. My 2 Greek friends were quick to point out that this was named after the ancient Greek locale. Not that there was any particular resemblance to the original, but who cares...

Now, Singapore's nightclubs are curious in terms of the mix one finds within. You see plenty of Oriental (read - chinki -- I apologize for the political incorrectness, but the desi in me fails to conjure up a better description) girls, most of whom are there to have harmless, clean fun. And then there is the atypical middle-aged European (read - British)...balding, overweight and eyes full of lust. Mind you, thats not all you find, most of the people are like me...but somehow, this combination sticks out like a fur-coat in Jakarta. Its interesting to stand by the corner and observe (VOYUER sic !).

Having said that, the music is good and entry is pretty inexpensive. Definitely worth a chekout...I look forward to more such breaks of socializing in the midst of the hectic study schedule. Ah, cheers to that !

First week over and reality has hit us all !

2006-09-08T05:58:00.000-07:00

Well, the first week of classes just got over and I now know first-hand, what doing an MBA in a year means from a top B-school really entails. The FMV (Financial Management & Valuation) class today went so fast, I thought Mike Tyson had punched (and bitten) me.

Barely had I come to terms with Time-Value-of-Money that we were dissecting the concept of Zero-coupon bonds. The same class had us calculating the Yield-to-Maturity for such Debt securities. Man, I need to catch up and fast. The amount of reading to do per day is almost ridiculous. And of course, we get these pleasures at a cost of Euros 45,000 no less !

Yet, there seems to be an eclectic mix of quantitative courses (FMV, Accounting), some analytical ones (Prices & Markets) and some "softer" courses such as "Leading People & Groups". The latter, subjective as it may seem, is probably most important in the long run. The professors are amazing. Wow ! They are all seasoned, honed to the nail.

All in all, I am really happy with my decision to come to INSEAD so far (D-UH -- no brainer !) Whichever way it goes, this is gonna be a hell of a ride...

A new beginning...

2006-09-07T18:32:00.000-07:00

Though this post comes about 2 weeks late, it is still relevant. My first days at he INSEAD Business school and what do I say about it?

Course I only got to know I was through about 3 weeks before class was to start...not the ideal preparation, but then better to have at least that than say a day !

I am getting adjusted to life here and classes (and the accompanying massive workload) is just around the corner.

Campus is terrific, if just a little small. Housing is a nightmare ! Everyone is smart, but a lot aren't really sure what they wanna do. The diversity is unmatched. Truly amazing...I have a Swedish techie, an Irish accountant, an Austrian consultant and a Greek marketer as my groupmates.

Virtually no American students which is sad, cuz I think they still make the best MBAs. No Chinese either which is so intriguing, I think someone ought to research that.

Inertia

2005-09-09T03:55:00.000-07:00

Its been an eternity since I have put pen to paper. It seems to me that somewhere along the maze and maddening confusion that is life, I have lost the courage to write. Courage...such an intense word and yet, I could'nt be more confused about what this entails. The erudite amongst us claim that the essense of 'courage' lies within. Facing one's own demons, shortcomings and the like. But what thereof? Even if our rather capricious nature allows us to muster up this 'courage', an inward-looking courage, how do we leverage its force to create a form of visible difference?

A quarter of a million people have been killed in the now-infamous tsunami...and yet, my very refernce to it as such betrays an indifference; not indifference per-se, rather a symptom of my helplessness. Helplessness, you say? The plethora of NGOs and fellow techies working hard to make a difference would be utterly disgusted with such a proclamation.

Which leads me to the central issue: do I care enough? With brutal honesty and after naked introspection, I know I do. I know I do. And for the sceptics amongst you, dare you charge me with attempting to convince myself. And yet, my lack of any further action fuels their sneers. So should I stop wallowing and kick this pernicious virus of inertia that stops me from getting on my two feet and acting? Inertia is omnipresent. Does it excuse my inaction? To the idealists, it does not. But we do live in a pragmatic world, not an ideal one. Or does such a standpoint epitomize escapism?

For those of you still tuned in to this madness, I applaud you ! As generous as you've been, the question must surely be on your lips: where in god's name is all this going? I assure you that Apollo himself would'nt have a clue. Must there be a point to everything? I'm letting my hair down here and as Robert Plant once screamed: I want to RAMBLE !

My Tribute to The Doors

2005-08-26T00:42:00.000-07:00

There are things we can see, and there are things we cannot...and in between are the DOORS.

The Doors of perception. The Doors that corrupt us all. The Doors that fail to discriminate. The Doors that cloud our minds and our souls. As I go through life, one of my eternal aims will remain the opening of these doors, so I can see the end of the night. See The End free of my perception, free of fear.