In search of "Common Sense"

Dec 14, 2009

Goldratt’s Law of output from processes

Theory of Constraints” should be restated as “Goldratt’s law of output from processes”.

I believe people tend to pay more attention to a “Law” than a “Theory” simply because they understand the consequences of not following or flouting the laws.

We have had many experiences of flouting the universal law of gravitation while learning to walk and suffering the falls. We have gulped water while learning to swim as we could not properly act on Archimedes’ Principle.

Here is my attempt at drafting the law.

“Goldratt’s law of output from processes states that

  1. The process constituent with minimum capacity determines the maximum possible output from the process.
  2. The statistical fluctuations of performance of the process constituents result in the negatives being accumulated and the positives being wasted.
  3. Hence, unless proper mitigating actions are taken, the process output will always be significantly less than the maximum possible defined earlier.”

The five focusing steps would be the pragmatic corollary to the above law. These steps help us to minimize the influence of statistical fluctuations or the common and expected uncertainty that our collaborative work is always subjected to.

A project environment is a special case of process but the law still holds with careful translation.

I am sure there are better and wiser people who will be able to make it simple and more follow able.

The organizations have been routinely and willfully flouting this law with dire consequences. I am sure once the leaders and managers wake up to the universal and unmerciful applicability of this law, the rush to get things right would be bigger than the “Y2K” or the “Sarbanes Oxley” rush!!!

The term “Theory of Constraints” has been around for quite some time (since 1983 at least, more than a quarter of a century). It is yet to become mainstream and people still find it difficult to grasp the full impact and even more difficult to adopt, rather benefit from it in day to day running of organizations.

What is the difference between a scientific theory and a scientific law?

I looked up the Wikipedia to understand the difference between theory and law in science. This is what is mentioned there.

A theory, in the scientific sense of the word, is an analytic structure designed to explain a set of empirical observations. A scientific theory does two things:

1. it identifies this set of distinct observations as a class of phenomena, and

2. makes assertions about the underlying reality that brings about or affects this class.

Furthermore, it is written there…

Theories are abstract and conceptual, and to this end they are never considered right or wrong. Instead, they are supported or challenged by observations in the world. They are 'rigorously tentative', meaning that they are proposed as true but expected to satisfy careful examination to account for the possibility of faulty inference or incorrect observation. Sometimes theories are falsified, meaning that an explicit set of observations contradicts some fundamental assumption of the theory, but more often theories are revised to conform to new observations, by restricting the class of phenomena the theory applies to or changing the assertions made. Sometimes a theory is set aside by scholars because there is no way to examine its assertions analytically; these may continue on in the popular imagination until some means of examination is found which either refutes or lends credence to the theory.

At another place, the following is found…

To be a scientific theory, a theory must be tested a large number of times, by many different scientists in many different places, and must pass the test every time. It must be stated exactly, often using mathematics. And it must fit in with all of the other scientific theories. Science has many branches. Physics, chemistry, biology, geology, and astronomy are some of the major branches of science. A scientific theory in one branch of science must hold true in all of the other branches of science.

As regards, the scientific law following is mentioned:

A scientific law or scientific principle is a concise verbal or mathematical statement of a relation that expresses a fundamental principle of science, like Newton's law of universal gravitation. A scientific law must always apply under the same conditions, and implies a causal relationship between its elements. The law must be confirmed and broadly agreed upon through the process of inductive reasoning.

A law differs from a scientific theory in that it does not posit a mechanism or explanation of phenomena: it is merely a distillation of the results of repeated observation. As such, a law is limited in applicability to circumstances resembling those already observed, and is often found to be false when extrapolated.

Furthermore, under Physical Law it is written:

Several general properties of physical laws have been identified (see Davies (1992) and Feynman (1965) as noted, although each of the characterizations are not necessarily original to them. Physical laws are:

§ True, at least within their regime of validity. By definition, there have never been repeatable contradicting observations.

§ Universal. They appear to apply everywhere in the universe. (Davies, 1992:82)

§ Simple. They are typically expressed in terms of a single mathematical equation. (Davies)

§ Absolute. Nothing in the universe appears to affect them. (Davies, 1992:82)

§ Stable. Unchanged since first discovered (although they may have been shown to be approximations of more accurate laws—see "Laws as approximations" below),

§ Omnipotent. Everything in the universe apparently must comply with them (according to observations). (Davies, 1992:83)

§ Generally conservative of quantity. (Feynman, 1965:59)

§ Often expressions of existing homogeneities (symmetries) of space and time. (Feynman)

§ Typically theoretically reversible in time (if non-quantum), although time itself is irreversible. (Feynman)

§ Often those who understand the mathematics and concepts well enough to understand the essence of the

A "law" differs from hypotheses, theories, postulates, principles, etc., in that a law is an analytic statement, usually with an empirically determined constant. A theory may contain a set of laws, or a theory may be implied from an empirically determined law.

To my understanding, Goldratt’s law fits the bill and it should be declared to everyone who cares to run organizations.

Sep 1, 2009

Paradigms – blinkers that restrict our ability to see the complete picture, clearly!

Have you experienced frustration at not being able to convey what you want to convey and believe that the other person just does not want to 'see' what you see so plainly?

Do not attribute any malice on the part of the other person. He / she may just be in a different paradigm. The affliction of 'paradigm' does not just affect individuals but even larger groups and even large corporations.

The landscape of scientific inventions is littered with examples of men (or women) who questioned the epitome of organizational effectiveness and innovation and yet today is fighting hard to established paradigms; the greatest example of all times being Galileo's theory of sun centered solar system as opposed to a earth centered one, as was postulated by the Church.

Edward De Bono has explained this phenomenon by pointing out to his findings as a neuroscientist. According to De Bono, human mind is a self-organizing system when dealing with information. The way information is processed by the mind is affected by the earlier received information. In other words, the mind organizes information in a particular pattern and as new information is received, it conforms to the pattern earlier created.

Paradigm is not a very common word; in fact many people still find it difficult to pronounce (it is actually pronounced as paradime and not para-jim or para-gim ). The word originates from the Latin word paradigma which actually means borders, as will be seen later in this article, the paradigm establishes the borders or fixes the limits of thinking (or whatever else may be the case).

Thomas Kuhn first used this word extensively in his book "Structure of Scientific Revolution". In his path breaking work, Kuhn, first a student and later a professor of Physics at Harvard, found how scientists had fixed paradigms and refused to look beyond certain boundaries that they fixed for themselves (usually done subconsciously). Not only that, Kuhn found that scientists had a tendency to alter the data to suit a model rather than challenge a model itself. Simply put, Kuhn realized that people in general tend to have paradigms and usually liked to operate based on these paradigms.

Paradigms can be powerful, and in the organizational context can even prove to be almost disastrous.


Following are some of the examples of how, well known and well regarded organizations, for their innovation track record, fell prey to this affliction.


Most striking is the case of Xerox, the company known for giving the concept of bench-marking to the world. At one point it was at the brink of bankruptcy! How could this happen? How can a company which gave the world a product which is synonymous with its application (we still say 'can you run a few Xerox copies' not a few photocopies) reach this unenviable position? Like a lot of corporate failures there are a multitude of factors which have actually lead to this condition, however we will track one of them only, which is paradigm. In order to understand the power of paradigms that was operational and so strong at Xerox, let us quickly look into the history of the organization. In the early part of the last century, a young man by the name of Chester Carlson had stumbled upon a brilliant idea. He found that when a piece of paper was put on a shining surface after being rubbed with a amber rod and then exposed to bright light it got a image of the paper and that the image could be read if the bright surface was sprinkled with dark powder. What he had actually found was electrostatic photocopying. This was a brilliant idea, and like many other torchbearers, Chester Carlson was ahead of his times. When he went to demonstrate his idea no one was too interested in his idea. It is said that all the great corporations of that day, including IBM, Kodak etc closed their doors on Chester Carlson. Now, if one were to look at why they did that, it was quite simple –they were all caught in a paradigm. An image was something that could be generated only when there was a "negative" – and electrostatic photocopying did not have any negative and therefore it did not fit into the general thinking pattern of the organizations or the people who ran them. Chester Carlson was fortunate however, when a small company called Haloid in Rochester decided to invest his brilliant idea. Guess what! Today we all know of Haloid as Xerox Corporation. (This example has been elucidated well by Joel Barker in his work, Discovering the Future).


This organization founded on very innovative idea grew into a formidable empire, which put up state of the art research center at Palo Alto, called PARC ( or the Palo Alto Research Center). Unfortunately this jewel in the crown could be put on sale in the new restructuring plan that is being discussed). This research center at one point of time was among the most fertile grounds for innovative ideas, paralleling the IBM Watson research center and the Bell Laboratories. However the organization had by then been infested by the very common organizational malice of inertia.


As the ex-head of Corning had rightly put, in an organizational life cycle

  • Size leads to structural inertia
  • Age leads to Social inertial and
  • Success leads to pride and arrogance.


What the visionary CEO was hinting is that, when an organization begins to grow (success led growth) it grows in size and as it grows, it collects "mass", thereby increasing the inertia – both with respect to internal needs as well as external demands. Added to this, a deep sense of arrogance develops in the organization, which in turn creates a powerful paradigm within the organization.


This was exactly what happened in the case of Xerox. And the paradigm paralysis of Xerox was to lead to other successes, not for them but for others. Researchers working at PARC had found a computer operating system which was user friendly and used an instrument called mouse as an input device. This invention found no takers in the top management of Xerox and the idea had to be scrapped, since basically the idea did not fit into the fundamental paradigm that Xerox had developed over the years. Steve Jobs, was to later exploit this idea and turn it into a multibillion dollar empire called Apple Computers. Apple Computers introduced the first ever GUI or the Graphic User Interface operating systems. Apple Computers' Mac and MacOS became a big hit in the market. The organization and the product were considered as classic examples for technological superiority and marketing savvy.


Like in the case of the Xerox, Apple was caught in success trap or the shortsightedness developed by organizations when they become hugely successful. The unresponsiveness (or in other words its rigid paradigm) of Apple computers regarding its property operating system was to lay the seeds for creation of another great organization – the Microsoft Corporation. Along with Intel the Microprocessor leader in the world, Microsoft was to take the battle of the personal computers where Apple left off because of its tunnel vision. In a classic Japanese style attack, ie focusing on product superiority and sheer volume rather than product innovation, Microsoft captured the world PC software market. From the operating system to application software Microsoft systematically and successfully decimated the competition; becoming almost a monopoly and incurring the sanction of FTC.


Microsoft developed the arrogance of successful organization and almost fell into the trap of its own paradigm (of personal computers and developing software for the same) that when internet hit the market place, it almost lost the race by pooh-poohing it. However, good sense (and more so good fortune) prevailed and the organization was able to stage a late, but remarkable comeback into the internet based products.


To summarize, Xerox created a paradigm and imprisoned itself. Somewhere along the line, the company decided to be just a document company and lost out in the process a series of golden, profitable business opportunities. As is apparent from the above description, Xerox could perhaps have been the largest corporation in the world. It could have been a Apple, and a Microsoft. The ability of the organization to focus on its core competency to derive exploitation (in this case document management) and at the same time explore the opportunities presented from within or by market, is a key ingredient for long term survival. This is the classic dilemma facing every successful innovator.

Jul 16, 2009

Innovation management through following nature's renewal rhythm

"In many cases, the 'innovation' is less a matter of doing something new than of stopping doing something that doesn't make sense anymore." – a comment made by a fellow student of innovation management at "Birds of Feather – Innovation Leaders" Webstorm hosted by Brightidea.

I sort of agree with this comment - Unless there is zeal to renew to the extent of paranoia, it is very difficult to displace what "is" already in place.

The process of creating space for "new" by constantly discarding "old" should help. Do people make organizational policies with "review after" dates?

At least, this process is continuously on in NATURE. Birth, growth, death, renewal is a cycle followed consistently in nature. We are here of the face of earth for at the most 80 years. Someone else will come in our place with no baggage of past experience and see the challenges with fresh set of eyes. Innovation will happen!

If we want to see continuous innovation in front of our eyes, we need to mimic NATURE.

Nature abhors stagnation!!

Lot of effort is spent on creating something new and trying to get it accepted against lot of resistance. I guess a little effort spent on clearing off the old, irrelevant, stuff that does no longer make sense might create space and automatically new stuff that makes sense and is relevant might just flow in.

Nature also abhors vacuum!!!

(WHAT'S A WEBSTORM? - WebStorm is the easiest way to brainstorm with colleagues over the web. It's quick, easy and fun and anyone can join. To get your own WebStorm go to: http://www.brightidea.com/webstorm/)


Mar 17, 2009

Overcoming Cognitive Myopia

Since, earlier it was considered that it is the lack of data which resulted in poor decisions, it is now expected that more and more data would result in better and better decision making.

The cost of data acquisition and first level information processing has gone down drastically over the last few years. There are many fragmented IT initiatives across various functions in the organization resulting in information 'silos'. The combined effect is information overload. Most of us, individuals and organizations are actually drowning in data.

Several factors complicate data management. These include data scarcity, profusion, quality, relevance, limitations, accessibility, transparency and consistency. Experts estimate that 10-30% data flowing through corporate systems is bad i.e. inaccurate, inconsistent, incorrectly formatted, entered into wrong field out of value range.

To compound the fact that there is information overload and not all the data and information is accurate, is the way our mind deals with the available information to arrive at decisions and choices.

Paul Schoemaker, author of Profit from Uncertainty, describes what he calls "cognitive myopia" in terms of how we, as humans, deal with risk and uncertainty as characterized by the tendency to:

  • Anchor on readily available information
  • Let recent events that are vivid in our memory unduly influence our judgment
  • Overweigh information that supports our point of view
  • Fail to recognize implicit assumptions
  • Suffer from high sensitivity to the way facts are framed and presented
  • Underestimate rare events and their risks (being ill-prepared for their potential occurrence)
  • Overestimate dramatic events and overpay to mitigate their risks
  • Have extreme aversion toward risk
  • Suffer from context effects when choosing among risk options
  • Have excessive confidence in our ability to predict the future and fail to consider alternatives sufficiently
  • Exhibit an undue dislike for ambiguity

To deal with information overload and create value one needs to convert a huge amount of data into useful information that can be acted upon.

What we can realize from above that exclusive dependence on Intelligence for our decision making would result in lot of erroneous choices which can be thought of as the root cause of many a crisis that we see around us.

Is there an antidote to the above affliction?

In the last post we discussed about the difference between 'Intelligence and Intellect'. Intelligence is the mechanism by which our MIND gains / gathers information and knowledge from external sources. Intellect is the faculty that helps us make sense of things around us by helping to establish effect-cause-effect relationship of our observations around us.

The three habits of effective thinker as described in Goldratt's latest book 'The Choice' could be the starting point to build our defenses against the above root cause of many of the problems that we see around us.

Mar 4, 2009

Intellect v/s Intelligence – are we aware of the trap?

The fall of Human Intellect
A Parthasarathy

(My understanding of the message in the book)

Swami Parthasarathy is an acclaimed exponent of Vedanta and a tireless crusader for reviving the logical thinking capability amongst humans. This book is an important part of his body of work emanating out of his research of ancient philosophical teachings and wisdom of thinkers from the East and the West.

Unlike other creatures, humans need instructions or have to be told how to lead their life. Other creatures' life follows a fixed pattern which is already set at birth and they do not have a choice to exercise to change the pattern. E.g. a tiger will always be ferocious carnivore whereas a lamb will always be a timid herbivore no matter how different is its upbringing. Only the humans have the option as well as the necessity to exercise a choice of action between various alternatives. The choice could be as mundane as which set of clothes to wear on a particular day to as important as whether to marry or not and if yes, with who.

We exercise "CHOICE" under the influence of two very different and distinct faculties which we posses: Intellect and Intelligence.

The vital difference between the two approaches of making CHOICE is "thinking" and "non-thinking".

We, the human beings, each one of us of the six billions who populate the hospitable planet earth, are gifted with a faculty or a mechanism called 'Intellect'. The degree of usage of this faculty differentiates one individual from the other. Like muscles in the body, this faculty also needs to be used and exercised to increase its strength else it can become totally atrophied and render an individual useless. Use of intellect is an important skill which needs to be introduced at early age. It becomes very difficult for an individual to learn to use this faculty at later stages in life and then the knowledge comes after suffering many knocks.

In fact, we can claim that we are factory-fitted with this faculty from birth. We demonstrate the presence of intellect from our early child-hood when we try to make sense of things around us by asking questions. This is the faculty in action when we are inquisitive; we enquire, investigate, explore, reason, and find logic. What we call 'making sense' is actually establishing effect-cause-effect relationship of our observations around us. This faculty is the force behind the scientific method of experiment and empirical observations which helps in seeking the causes behind physical principles through abstract reasoning. The scientific method involves creating a hypothesis to explain the various observations and then predicting more effects based on this hypothesis. If the observations support with presence of these effects then the hypothesis is proclaimed as a law of nature. This law holds till someone comes up with observations which run counter to the predicted effect or creates more evolved hypothesis which explains wider and contradictory set of observations. Over the ages, scientists have used their intellect to almost conquer the nature to make our lives easy and comfortable with their discoveries and inventions. On the one end of the spectrum, scientists have created understanding of sub-atomic particles and on the other end; they have created understanding of various occurrences in the distant parts of the universe. The quest more and more understanding still goes on.

The basic principle of usage of intellect is to not accept any explanation just on hear-say but to investigate and confirm the cause-effect relationship to our own satisfaction based on irrefutable facts and observations. Intellect helps us not to be a blind follower or a fanatic because it allows us to be always open to new facts which might influence what we consider as a done thing.

This is "Thinking".

Intelligence is the mechanism by which our MIND gains information and knowledge from external sources. Most of our education is focused on imparting information on wide variety of subjects throughout our formative years till we complete graduation and even post-graduation. The analogy of data fed into a computer could be apt for the mechanism of building intelligence. All the information stored in a computer does not enable it to function independently. It cannot use that knowledge on its own. We need the intellect to think, plan and programme our life with the available knowledge.

Intellect and intelligence do not share any cause and effect relationship between each other. Intelligence per se does not enrich intellect. Intelligence can be equated to the horse power in a car and the intellect, the steering wheel which can control and direct the vehicle. Ironically, the entire focus throughout the world is to gain intelligence while the intellect remains poor as ever, undeveloped.

The trap is created by our MIND when it forces us to believe that intelligence is the intellect. We could say that our Mind has a Mind of its own.

When intelligence masquerades as intellect, we function under a delusion that the cause and effect relationships that we have figured out are perfect and we need not re-examine, re-evaluate them even in the face of fresh and old evidences which might be contradicting our conclusions, beliefs, dogmas etc.

  • Our mind is the seat of emotions and feelings. It creates in us likes and dislikes. There is no logical reason behind the likes and dislikes; they are just there because our mind wants it. It takes the help of our intelligence to give us an illusion that the likes and dislikes are supported by sound reason and judgment where as the fact remains that these are rightly termed as whims and fancies.
  • Another disturbing attribute of the mind is worry and anxiety. The mind is worried over what has happened in the past and anxious as to what will happen in the future. Again the mind uses our intelligence to make us believe that the basis for the worries and anxieties are real and we need to take them seriously. This causes sustained mental agitation and sorrow.
  • Our mind creates in us a feeling of insufficiency which, we wrongly believe, can be completed by acquiring something external to us. This is the basic form of desire.
    Desire is defined as a stream of thoughts flowing from us to the object of our desire. Desires go through several modifications. When we feed the desire and the thought-flow thickens, we develop greed, avarice. And when our desire, greed is fulfilled and we gain what we want we are faced with fear. We become afraid of losing what we have gained. If however, our desire, thought-flow is interrupted, intercepted by an object or being, the thought-flow gets deflected. The deflected thought-flow is called anger. As desire, greed and anger well up we get into delusion. Our emotions mounting up to this stage develop into arrogance at those below our level of achievement and envy at those above our level. Thus the feeling of insufficiency results in host of emotions invading our personality. Desires, besides developing into their modifications also multiply in number like bacteria. They cause agitation and sorrow in the mind. All through life the human mind moves from desire to desire to find fulfillment. No sooner a desire is satisfied, many others spring forth. Our mind takes the help of intelligence in equating quest for happiness with blind pursuit of desire fulfillment.
  • Based on the support of intelligence, our mind throws us into two powerful motivations in life, actually manifestations of desire only: - acquisition and enjoyment. We want to acquire whatever we desire from the world. And after acquiring we long to enjoy what we have acquired. We look at people who have acquired a lot with awe and believe that their enjoyment quotient will also be proportionately high and get into a rat race.
  • Another deadly quality of mind is its attachments and possessiveness for the objects and beings of the world. Attachment is love polluted with selfishness. In this case it becomes difficult for even intelligence to come to any defense. Mind just has this quality.

This is "Non -Thinking".

We need to examine how we go about making our 'choices'.

Do we really 'think'?

Are we under the spell of our 'MIND'?

Are we trapped?

Go figure….Vedanta Treatise is another book by Swamiji

Feb 15, 2009

Leadership character and quality will make or mar Satyam’s chances of regaining lost glory

Satyam is experiencing an unprecedented crisis. The uncertainty surrounding what future holds for each of the stakeholders – Associate, Investor, Customer and Society (AICS in SatyamWay lingo!), is causing lot of anxiety. Initial days saw lot of knee jerk reactions and panic actions taken by some of the stakeholders like cancelling / postponing of long term contracts, electronic media going on in a hyperactive mode Etc.

Now that some definitive actions have been taken due to active involvement of the government in appointing the board of directors, auditors, investment bankers, CEO Etc with surprising but refreshing alacrity, begins the real test of character of leaders who are going to chart the road ahead. There is lot of interest amongst the various suitors who would like to have the various assets that Satyamites have built over a period of time. There is enough reason to believe that sufficient efforts will be put to make Satyam viable again.

But, whether it will reach the glorious heights again depends on how the leadership at Satyam responds to this crisis situation.

The crisis at Satyam needs two types of responses.

The first is along the lines normally suggested i.e. communicate, be candid, have a plan, be ready to modify the plan as needed etc etc. This response is like routine text-book hygiene steps in any run-of-the mill crisis arising from events outside the control of people in the organization. The leadership team not knowing these basics is not worth its salt.

The second is related to the root cause of current crisis. This crisis has been precipitated by gigantic fraud (If it wasn't a gigantic fraud, it would have been a colossal farce) committed by a set of people most unexpected to do kind of things that have been done. This has resulted in a crisis of confidence and the new team appointed by the government would be wondering, who among the old crew they can trust.

Our Satyamway says "Every Satyamite is a leader". It is a time where each one of us has to introspect whether we would be able to step forward and play the role.

"Caesar's wife must be above suspicion"

The current set of designated leaders need to bear in their mind that, whether they like it or not, their proximity and close working with the self-confessed fraudsters rubs lack of credibility onto them. The implicit trust that they have hitherto enjoyed amongst the stakeholder community has been reset to zero. This is demonstrated by the government by summarily sacking the independent directors. Although, they might not have any inkling of the fraud and they are world renowned professionals in their own right. It is due to operational complexity reasons that the current set of designated leaders are allowed to continue in their roles. This arrangement will logically last till the new owner of the organization brings its own dispensation.

Many of the designated leaders are at their place because they truly deserve to be there and their position is based purely on merit, diligent hard work and track record. But some of them are there at their designated station by being there at the right place, at the right time, i.e. by chance and not necessarily by their merit. Some find themselves in their situation by ingenious / devious design of their own or by leaders who wanted a coterie around them.

Irrespective of the reason why they are designated leaders, each leader needs to be conscious that her / his actions now will decide whether they would be considered worthy of trust now onwards.

I guess there is a need for a great catharsis for Satyam to regain TRUST of different stakeholders. We do not have eternity to reach there. There is a small window of opportunity within which a lot needs to happen else Satyam will be relegated to tier 3 or 4 and not considered fit ever to compete with likes of IBM, Accenture, EDS, Infosys, Wipro, TCS, Cognizant etc, if not actually dismantled and pieces sold to different buyers.

There is a need to take a very high moral ground to recoup the lost image with respect to corporate governance and moral standing, quickly.

There is an interesting post on HBR Editor's Blog - Rebuilding Trust. The author says, while there's no single way to create trust, humanist psychologists agree that the best way to generate it is to show competence, integrity, respect, and consistency. Certainly it's no coincidence that these are the qualities of timeless leadership. The TRUE leaders would conscientiously act demonstrating their competence, integrity, respect and consistency with a fresh vigor because they really care to win-over the trust of their stakeholders again. Whereas, the pseudo leaders, who are there by chance and devious design, will not be able to sense the changed scenario. They will continue acting as if it is business as usual. They will continue to be surrounded by their favored coteries, continue to play their petty corporate games and shun honest communication with team members at large. Some of the pseudo leaders would go into shell not knowing what to do and what to communicate.

I have TRUST in the wisdom that inspired the slogan "Every Satyamite is a Leader". I see following SIMPLE link to visibly stand by this commitment in these trying times.

Every Satyamite will be a leader

When

Every (designated) "Leader" in Satyam becomes* a Satyamite.

* become = try to be in the shoes of, empathize with, understand the situation in which a troubled Satyamite might be finding herself / himself in.

A basic decency, compassionate and logical treatment is a fundamental right for any Satyamite. Once the leaders get into this mindset, it will be easy to get ideas and thoughts to build trust afresh. The Choice needs to be exercised actively.

Sunlight Is The Best Disinfectant

The serious fraud has placed Satyam is such a precarious position that it has had to mortgage its buildings and other assets to borrow funds to cover the short term expense requirement. The maximum cash required is to meet the salary expenses. Satyam has historically has had a very high "Associate Cost to Revenue" ratio (62% compared to industry norm of 50-55 %). It is also a fact that the top strata of leadership at Satyam has been customarily paid much more than their compatriots in the industry. (Ref List of highest-paid executives compiled by Business India magazine). The entry level salaries offered to ELTPs and Management Trainees are, on the contrary, amongst lowest in the industry. This can be seen from the fact that there is difference of multiple of 100 between the salaries of the entry level management trainees (Indian Rupee 350,000) and the highest paid individual (Indian Rupee 35,000,000 or USD 700,000).

The loss of revenue from customer attrition is going to put pressure leading to a thought of layoffs. As things stand today, there is a visible campaign to reassure the associates that there are no immediate plans for large scale lay-offs, but there is no plan articulated how this will be handled and what kind of sacrifices will be expected from whom.

Infosys has come out in media very explicitly how they would be handling recession and slowdown in the economy. In a recent interview, Mr. NR Narayana Murthy, Chief Mentor of Infosys, explained how they are going to ensure that instead of lay-offs, it would be tightening of belts by the leadership in terms of pay cuts. Infosys will do in such a manner that leaders will lead by example and younger people can adopt it. Infosys leadership has always set a bench mark by personal sense of probity.

It would be clear to anyone who understands systems thinking or holistic thinking that an organization is like a living organism. The different units / divisions are like parts of the body. The system exists, thrives and survives not as a collection of parts but rather because of interactions between the parts. Each part is essential and important for proper functioning of the system.

In times of crisis, like scarcity of nutrition, it necessitates that the body survive with whatever limited nutrition is available and become lean and trim. This does not mean that it should cut-off limbs or throw away some parts which appear to be extra (e.g. a human body has two kidneys but can do with just one of them). It means that it dips into its reserves and burns excess fat. It would not be difficult to identify what fat means in our context.

At Satyam, sometimes, there has been lack of sagacity on these lines. Even before this scandal broke out, the talk was in the air of how the leaders are being forced to take "tough decisions" due to recession and slowdown in economy. Unlike at Infosys, these tough decisions involved mindlessly putting control on costs and displacing associates and even forcing them to resign to avoid notion of lay-offs.

It is a fond hope that the designated leaders draw their lessons from visibly available examples to follow. And since the financial crisis at Satyam is more pronounced, it would be interesting to see if even a single leader comes forward and publicly declare to work for a nominal salary of $ 1 till the company returns to profitability and stability!!!. In fact, people will fall off their stools, if any of the designated leaders offers pumping in cash earned by selling shares obtained via stock-options over last few months. The fun of entrepreneurship in the current opportunity can only be enjoyed by risk taking and putting money where one's mouth is.

It would be great if more transparency is practiced as regards the financial condition of the company. It would not harm if high level projected cash balances, cash flow are shared online so that associates get confidence in the words being shared through in-house communication mailers. The stinginess at Satyam in investing in state-of-the art web 2.0 infrastructure is going to be a major weak point in these trying times. A mature and user friendly blog, wiki, enterprise search and expertise location platform would have been ideal for ensuring that peer-to-peer communication happens smoothly and communities are formed around common professional as well as personal interests.

I wonder if our internal team would be able to take it up on a war footing!!

"I've learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel." - Maya Angelou

"Remember, people will judge you by your actions, not your intentions. You may have a heart of gold -- but so does a hard-boiled egg."

As the organization comes out of the daze, there is going to be a frenzy of activities. We can already see the sign of times in the flurry of internal mails from support units which are spamming our mailboxes.

In our zeal of going ahead and diving into ACTION, there are many things that might be wrongly done. We are in a situation where we absolutely cannot afford the luxury of missteps. The things that can be wrongly done can be divided into two categories

  1. Things that should be done but are unfortunately NOT done
  2. Things that should NOT be done but are nevertheless done.

The first category of mistakes means missing out on vital actions because they appear to involve tough choices, which managers and associates tend to postpone or plainly ignore. The impact is directly felt in terms not meeting the commitments and expectations of our stakeholders. The result is that the stakeholders consider us "UNRELIABLE".

The second category of mistakes means that a lot of time, energy and resources are wasted without having any impact on the betterment of the stakeholders. This category is very insidious as it gives the initial comfort of being busy but ultimately does not help in delivering the results. The impact is that the stakeholders look at the song and dance being executed ostensibly in their name without any salutary effect and hence consider us "INEFFECTIVE".

The beauty of above categorization is that it covers ALL the possible things that can go wrong and there is NO overlap. It can be very SIMPLE provided we set up the right kind of metrics / measures. (Our first language is metrics, right!!)
It need not be gibberish but something simple and sensible which any ELTP should be able to understand without much clarification and should invoke right behavior which is good for the whole organization not just some vague part / unit. The current metrics framework has been built on a fundamental flaw. The basic assumptions here is that the parts of the system of Satyam are independent and their interactions need be handled through 'business judgment' whenever a conflict is thrown up through 'Reviews and Escalations" as well as "Testing and Validations". If the organization is considered as a single whole system and the interactions of the parts are taken into consideration then the metrics would be very simple and quite different the ones currently in vogue.

Here is the wish - May god give our designated leaders wisdom to distinguish between the above two and courage to draw a strict line to prevent any such missteps!!! Looking forward to a reliable and effective Satyam under their able and inspiring stewardship!

All make believe leadership; comforting song and dance without the above essential elements will break associates' hearts. They would slowly start losing interest and faith in future of Satyam, and begin looking out for opportunities outside as economy picks up in months from now and jobs become aplenty.

I ain't sayin' you treated me unkind
You coulda done better but I don't mind
You just kinda wasted my precious time
But don't think twice, it's all right
-

Bob Dylan