The pilots' strike, the government, and entrepreneurs

I missed the NEN summit today because of the Jet Airways pilots' strike. The role of the government in the strike is very interesting. On one hand, it is the government that is seen as safeguarding the rights of workers to unionize, though no one must have imagined that this right would be claimed by pilots earning Rs. 30-50 lakhs a year in a multi-player industry. On the other hand, the government can use the Essential Services Maintenance Act to end the strike and anyway bears the responsibility of preventing any group of people from holding the rest of the country hostage.

There is always such a balance wherever the government gets involved - or doesn't. Till the 1980s, the Indian government interfered everywhere, and the result was very slow growth in both the GDP and in the technological modernity of the country. (I have somewhere a thick Industrial Policy publication from the 1980s, which spells out in detail how the government plans such trivial things as the production of digital electronic watches and microwaves ... you have to read it to believe it.) Today, we are probably seeing in the US the effects of the opposite type of misjudgment - the extreme deregulation of the financial industry.

How does this all this affect entrepreneurs? Well, most aspects of government regulation hinder (and few seldom truly help) entrepreneurs, and they distort their incentives. This must be set off against a few really good causes - such as preventing a oligopoly of industrialists from exploiting workers, even though trade unions can sink businesses to everybody's detriment (think General Motors) and even a simple minimum wage can lead to unemployment.

The balance is a difficult one!

Removing inefficiency as a way out of the recession

While the government tries to "prime the pump" and spend its way out of the recession, the focus should be on the major initiatives that in fact reduce inefficiency most.

Although the term "sacred cow" was created with Indians in mind, we seem to be fairly open this year to take on our sacred cows! We have even venerable institutions like the Class X boards being questioned. The current commissions structure in insurance and mutual funds is being examined so that a fair and transparent mechanism can be established. A new tax code is being written up! And we have the Unique ID project. All this should reduce inefficiency. Hopefully, one days we will also do away with the laws and taxes imposed on the transfer of goods across states, but that's another story.

I think the US too needs big bold initiatives like this. I hope the healthcare reform initiative is a success. But beyond that, even an initiative like a national driving license may be very useful. The US is extremely federal, and the welter of local laws is a big drag on the economy. If you move from one state to another, you lose many days of productivity to get a new number plate for your car, a new driving license, new auto insurance in some cases and so on. All this may have made sense decades ago but doesn't really make sense now.

You can't afford to be stuck with your past. You have to keep improving!

An example of CASED

I thought I should illuminate CASED with an example.

It was 1998 and we were setting up an apparel factory at Bangalore, in the Bannerghata area quite close to IIM Bangalore. A time came when we were trying to decide what to do about backup power generators, because the electricity situation was as bad then as it is now.

So I requested one of my colleagues to do an analysis and come up with a recommendation. He came back and said, "I think we should purchase such and such generator of such and such wattage." He had simply added up the peak load of all equipment and lighting and come up with a number. It had taken him a few hours.

However, on a closer look, the problem was more complex. So we used CASED.

The CRITERIA of a good decision were:
- Initial cost.
- Running cost.
- Maintenance cost.
- Uptime.
- Switchover time.
- Scalability as the factory grew.
- And so on...

The ALTERNATIVES, it emerged were several. For example:
- We could buy a brand name generator.
- We could buy a "local" generator.
- We could buy two smaller generators, so that at least one was always up.
- We could buy an automatic-switchover system.
- We could choose what capacity of generator to acquire. If we acquired a larger generator, it would sometimes run at low load resulting, we heard, in more breakdowns and diesel wastage.
- We could choose not to buy at all - we could lease the equipment. Or we could buy one bigger generator and lease a smaller one that could be replaced as the factory grew.
- And so on...

We looked for SOURCES of information. We found:
- Other manufacturers who told us what they were doing.
- A few dealers who provided even more detailed insights.
- A few of our employees who had experience with other backup systems in the past.
- Our top team, which had some ideas about what business risk we faced (important for the buy vs. lease decision) and about how much we expected the business to grow.
- And so on...

These sources helped us understand the alternatives and their impact better. This "S" step is important because very often you overlook the most obvious of sources.

Then we EVALUATED all the ALTERNATIVES against the various CRITERIA. We made a grid with the alternatives listed in the first column and the criteria listed in the first row and put some measure of appropriateness in the cells of the grid (either scores or Good/OK/Bad, I don't remember which).

Then we finally DECIDED what to do and why. We DOCUMENTED the rationale for the decision as well, but I seem to have lost the documentation. :-)

Seeing the big picture: CASED

I am a big fan of seeing the big picture, the 30,000 foot view. (Why 30,000 feet? Because that is approximately what jetliners fly at these days.) In almost every meeting I attend, I am the one saying, "What are we trying to do here? How will we define success? What are the alternatives open to us?" And so on.

Many people make the mistake of going straight to action. Or they start to debate some minor detail. For good planning, it is imperative to do the following:

1. Understand at a high level what the big picture is. Agree on the CRITERIA for success.
2. Understand what the ALTERNATIVE ways to do this are. Make sure you have understood all the alternatives.
3. When you think you have understood all the alternatives, go look for some more!! Make a list of all the SOURCES OF INFORMATION that you can think of and go learn some more.
4. Then, and only then, EVALUATE the alternatives against your criteria to find the best one.
5. And only then, DECIDE and DOCUMENT and DO.

I call this the CASED approach - Criteria, Alternatives, Sources, Evaluation, Decision and Documentation. I made this acronym up for myself when I found that American engineers at Stanford were much better than me at being creative designers. I studied them closely and realized that they would get very upset if someone jumped to a decision before all the alternatives were well considered. While they stayed on guard against "analysis paralysis", they strongly believed that the key to good creative design was an explosion of alternatives before you began to narrow down the search space to arrive at your single decision.

Try CASED when you next get a chance!

Eat your own dog food!

The phrase "eating your own dog food" means yourself using a product or service that you offer. If a company eats its own dog food, it means it has confidence in the things that it produces and/or sells. Microsoft made the term popular by using mostly Microsoft products internally. Similarly, at Nagarro, our internal portals, bug tracking systems, project management systems, HR systems and websites are all built and maintained by us. We eat our own dogfood.

I am continually reminded of the importance of this. Yesterday I called the customer service desk of Airtel Broadband. "Please put in your landline number starting with the STD code" said an automated voice. So I did. Then it read the number back to me. "Is this correct? Press 1 if correct, press 2 if not". And so I pressed 1. After navigating a maze of menus, I was transferred to a customer support representative. "What is your landline number?" he asked.

That was bad, but not the worst thing that happened. Just to see how customer-friendly this customer-oriented company has managed to make its frontline people (the actual "customer service moment of truth") I decided to give the operator a hard time. "But I just entered the number", I said. "I want your land line number", he said as though I had not heard the first time. "Listen", I said, "I'm telling you I just entered it less than 60 second ago. Then the machine read it back to me and asked me to confirm it. Why must I enter it again?" "I don't understand what you are saying", he said. And he didn't. Not for a long time.

When he finally understood, he acted as though it was totally natural for me to have to give the number again. "Sir, you must have entered it in the IVR." IVR standing for Interactive Voice Response, the automated voice system. "So?" I asked. "Sir the IVR is for other things. You of course have to give it to me again." He was talking as though he was addressing some idiot, rather than being even mildly understanding or apologetic.

I think things might have been different if he had been trained from the other side - how it feels to be on the outside calling into Airtel Broadband.

Once in a while, put aside that corporate lunch and eat your own dogfood!

Steve Jobs speaks

I happened to see the YouTube video of Steve Jobs giving a commencement address at Stanford. It was very moving and inspiring. Here was an incredible visionary trying to inspire young people, trying to get them to set their doubts aside, to jump out of the beaten path, and to move towards their personal dreams.

Funnily enough, I also felt an affinity with Steve as he spoke - because we do exactly the same thing at Proton day in and day out.

You must see the video. You can find it here.

Teachers' Day

Saturday was Teachers' Day. I received many SMSs, emails and even calls from you students. Thanks for all the affection.

Some months ago, my PhD advisor at IIT, Prof. Subhash Wadhwa, died of oesophagal cancer. It must have been caused by acid reflux, it manifested itself first as difficulty in swallowing and then it quickly consumed him. He was quite young still.

What I liked about Prof. Wadhwa that even while pursuing research he believed that application of the research was equally or more important. And he cared more about individuals than about industry or research or academic systems.

I also admired him for returning to India after a PhD and some years of working in Ireland, simply to be with his parents. This was far more uncommon at the time than it is now. In fact, this was partly the reason for his empathy with me when I first returned to India in 1996.

I owe him a great debt as he helped me along towards my PhD even as I was straining under the workload of a startup company. He was always encouraging and never harsh or negative. PhD advisors are seldom that way.

Isn't it good to be remembered by people in an affectionate way even after you are gone?

We met a few times towards the end. The meetings were not sad, they were full of jokes and laughter even though our hearts were aching. He gave me some advice: "Respect your body, don't push it too hard for too long. Be sure to eat well, don't keep up the youthful habit of skipping meals when you are no longer young. And be sure to take time out for the things that are really important."

Ho umr-e-khizra bhi to kahenge ba-waqt-e-marg
Hum kya rahe yahaan abhi aaye abhi chaley!