It Happened Because.. (The Art Of Rationalizing)

“Markets drop 29 points on below average monsoon prediction”

“Teddy Bear International’s Q1 profits jump 20% because of new strategy measures taken by the management”

“He failed because he did not listen to what I said”

“Katreena bagged first rank in her class because she attended TDH Tutorials”

“United Pokers Alliance lose by-elections because of anti-incumbency factors.”

“Sam G succeeded because of his x, y, z qualities”

“Great companies have BHAG (Big Hairy Audacious Goals)”

Why do we (and newspapers and authors) have to find a reason for anything that happens? Is it because it is very easy to rationalize any outcome. Sometimes we rationalize to justify our decisions (which are already made). While other times, we rationalize in hindsight (this happened because…).

While doing so, we forget about some basic biases we, as human beings, are infected with –

1. Fooled by randomness – Not every outcome need to have a reason. 50 – 100 points here and there in the stock index can just be noise. In success and failure, there is a luck factor.

2. Silent evidence – So, Steve Jobs is successful because he did xyz, but what about thousands of others who were equally talented and who did similar things but are not successful? What about companies who had BHAGs and all qualities of great companies, but failed? What about 1000s of Warren Buffets who lost their shirts in stock markets.

3. Complexity involved – There need not be just one factor involved in the outcome. However, the universe is so complicated that not all these factors can be factored by our human mind. To make out sense in this world, we try to rationalize and simplify it.

Now, here I am also trying to rationalize why we rationalize.

Why do you want to start a company?

Mauka Singh: I smell big opportunity in this idea of mine which I can execute very well. Man, I am going to change this world and make lot of money.

Rocky the rockstar: Yaar I cannot handle this shit anymore. I want to create something better.

Jignesh Shah: Dhando samajh mein aata hai mereko. Aur mereko wahi karna hai.

Pratap Bhanawat Singh: Papa ka sapna tha to expand this empire. My new company is going to do just that.

Pappu Panwala: I will sell pan and cigarettes and earn my livelihood sirji. No other option. Besides, it is not a bad option.

Jonny Picturewala: You know, I love making movies and you know I can make better movies than what these dumb guys are making today.

Peter MBA: Starting with 20Lacs and 20% increment per annum will make me a millionaire in so and so years. I will start this company and get $5 million VC funding and start paying myself obscene kind of money next year.

David Engineer: My job sucks. All jobs suck. WTF, I want to be my own boss.

Raghu Romeo: Kuch karna hai yaar life mein..

Udar Sharma: I would create an enterprise providing end to end solutions in education and this will in turn help create thousands of jobs for my country. I am going to grow manifold and pay tax to the government and keep helping my country.

Ram Prasad: So much poverty around yaar and nobody is targeting these poor chaps.I will show the world that I can serve the bottom of pyramid and still grow and make profits.

Jockey Singh: I want a more challenging role and I think I have more potential than what I am doing. I think doing a company will let me unleash my potential and create value around me.

Dhanraj: Major paise banane ka aur kya legal tarika hai?

Saharika: Why should I tell you?

Miharika: Saharika started. Thats why.

What is your reason? Do you need one?

Disclaimer: All names are fictional and so are all the stories.

Wrong Investments

We often come across literature motivating us to work hard, always believe in oneself and never give up unless we achieve what we are working for. Such stories would then be appended with examples of how successful people have worked hard and achieved success. Working hard is good. But these stories do not tell about 99 others who keep working looking down and fail. Fallacy of silent evidence. It is important to realise that sometimes things are not just meant to be the way you are trying them to be. It might make sense to take a pause, think and decide if it would be good to change tracks and invest on something else.

Working hard is good but not enough. Look at the Opportunity cost. There might be something else you love more – working on something else, playing with your kids, spending time with family etc. Also don’t fall down for “sunk cost fallacy” making you think “I have invested so much time (and money), I cannot let it go down the drain”, even if you are stuck in the dead-end.

Realize early. Move to the right tracks. Sell the dud stocks even if it means booking losses.

[thinking out loud (after making lot of wrong investments)]

Two Stories About Culture

Two companies were born on the same day with dreams to change the world – Clouders Inc and WWaalls Inc.

Company A

Employees for Clouders Inc found the following sheet along with the offer letters they received –

Our organization inspires entrepreneurial culture where creativity is valued over conformity, cooperation is believed to lead to better results than competition, and effectiveness is judged at the system level rather than the component level. The key elements of our culture are

* People and empowerment focused
* Value creation through innovation and change
* Attention to the basics
* Hands-on management
* Doing the right thing
* Freedom to grow and to fail
* Commitment and personal responsibility
* Emphasis on the future

We blend this with our constructive values built on four pillars – Achievement, Self-actualization, Humanistic-Encouraging and Affiliative. Constructive cultures urge members to work to their full potential, resulting in high levels of motivation, satisfaction, teamwork, service quality, and sales growth.

Company B

Founders of WWalls Inc. had not studied the business formally and were not aware about what organization culture stood for. Nevertheless they listed down some points –

What are our priorities? Our strategy is to delight customer by providing mind-blowing services and sell our products if they want them. Our strategy is not to sell products to maximize profits. All priorities shall be driven from this strategy of the organization.  It is important that strategy is imbibed into the organization. With clear set of priorities defined, members can prepare checklists for themselves and take better decisions which are in the best interests of the organization.

– How are people rewarded? Solely on the basis of performance. Number of hours or number of weekends put in does not matter. Even the processes are not that significant in evaluating the performance. Although, it is difficult to judge the performance, we shall strive to be as good as possible in evaluating. Good people shall be rewarded with a fat paycheck. No stock options, no fancy promotions. Only fat paychecks. If they wish, they can buy the stock of the company with the paycheck received. More results == fatter paycheck. Simple formula. We just need to get better at calculating the results to arrive at that fat paycheck. People who do not deliver are asked to leave.

– How are people managed? Managers shall manage people by context and not authority. “Customer is shipping the product tomorrow, we are in deep shit and we got to be moving this somehow today” is better than “Work your asses off, I want to get it done today”.

– What are the rules of the organization? Ideally, there shall be no rules. Just one dictum “Act in the best interest of the organization”. Practically also, there shall be no rules. Just one dictum. No leave policy. No dress code. People are free. Just deliver the results and act in the best interest of the organization. In case you make an important decision, inform others in case you think it has to be known to somebody. In any case, you decide everything based on your priority and one dictum.

– What are actions taken for people development? People are responsible for their own careers. Organization just provides company of the best people to work with. No formal training to develop individual. People we hire are smart enough to develop themselves.

– Are these set values permanent? Nothing is permanent. We will keep working on this set to make it better.

What Happened later?

Ten years later, one of these companies was world leader in its category. The other one was struggling to cross $5 million mark. Which one do you think was the successful company and which one was dud?

Disclaimer: All companies are fictional and any resemblance to existing companies is just a coincidence. Thanks to wikipedia for reference.

Uses of an Elevator

It was a boring meeting – kind of a broadcasting where a lecturer speaks to a group of people without caring the reception of the content among listeners. So I decided I would rather do something better then sleeping. Getting an idea from Malcolm Gladwell’s Outliers, I decided to list down the uses of an elevator. Heres the list:

1. Transportation – No brainer. An elevator is used to move either up or down.

2. Killing someone – As in like in movies. Let a 10-ton elevator fall on someone and he will not wake up ever.

3. Using Fan – So ACs are not working? No big deal. Get into an elevator and switch on the fan!

4. Privacy – No comments!

5. Experience free fall – Elevator malfunctions and u fall freely. Havent experienced it so do not know what happens in the end.

6. Playing – Only for kids

7. Scribbling – For naughty types of people who think that they are great artists.

8. Racing with it – Lets see who reaches first on the eight floor first – me on the stairs or you with the elevator.

9. Movie making – A murder mystery revolving around it.

10. Using power – If you want to waster some power. Just keep running it up and down.

12. Catching a thief – You catch a thief in your surveillance camera, switch off the power and call police.

13. Practical for mechanic and electrical engg – self explanatory

15. Learning numbers – Board the lift with your kid and keep rocking between 25th floor and ground floor staring at the LCD screen. Call out the numbers loud for better effect.

16. Know the temperature – Some elevators have temperature sensor

17. Scenery view – in the types with transparent glasses

18. Advertisement – OOH is catching up and one can earn a lot putting posters/TV in elevators

19. Notice board – It has been brought to notice that you have been (mis)using the elevator quite often. Any miscreant will be treated strictly and punished with a life sentence. And mind you, this lift can carry just 8 people. The ninth people will go to hell and take other eight along with him.