Cheatswagen!

The “people’s car” company Volkswagen is currently in news for the wrong reasons. But before getting into the wrong side of the company, let’s get the big picture of the world’s second largest car company in 2014. The VW group sells its vehicles in 150 countries. It owns marquee brands like Bentley, Lamborgini, Bugatti, Audi, Skoda and SEAT besides, of course, the Volkswagen brands including some all time popular brands like the Golf, Beetle and Passat. Not that, they make only cars, they do make commercial vehicles under different brand names as well as motorcycles like the Ducati. The group clocked annual revenue of $ 262 Bn, $ 12 Bn in profits and employs about 600000 people. Yes, VW is truly a people’s car company catering to the needs and aspirations of millions ranging from the daily commute to flaunting the opulent mean machines around the globe.

Back to the more recent news. After the US investigators accused the company of cheating the emission tests on their cars, the company has accepted that it has indeed deployed a software algorithm that can show the pollution levels within acceptable levels while actually emitting many times higher levels of pollutants. It is found that this has been happening since 2009 on many of their diesel models affecting at least 11 million Volkswagen cars. Yes, 11 million, not a small number. Accepting the crime is probably the second best thing the company could do after being caught rather than defending. Well, they fired the CEO and took many other steps to contain the situation.

German engineering is renowned for its precision and reliability. Now, they prove to be good at engineering legal compliance. Or is it moral engineering? Like many of us they too know that when being good is difficult make sure you look good. Is it something attributable only to one company or one country? The answer is no. We can say that it happens with companies and not with individuals. Well, companies are run by people like us.  

Most humans cheat, regardless of nationality or ethnicity. It is not a western thing or an eastern thing. It is not a capitalist or socialist phenomenon. It has little to do with urban or rural difference nor has it do with rich or poor. This is not to say that everyone is equally capable of cheating. As in other human capabilities different people have different threshold and risk limits. Some resist cheating beyond a certain level and some go too far depending on various factors. These factors could among others, include the skill levels of the person to carry out such acts without attracting the public scrutiny.

Individuals can improve skills and companies can hire skills. Public companies do plan and provide for legal and reputation risks. There are legal departments and image consultants advising and protecting them. There are insurance companies that undertake such risks for a huge premium. In legal parlance, the materiality is what matters and not the act itself. For instance, in the case of VW, imagine they were caught in this cheating act within three months in 2009 and it affected a few batches of cars from the production line, this would have been listed as a technical lapse requiring a fix and at best the recall of a few cars. Therefore, smart companies manage their risks by staying below the radar of materiality either by limiting the quantum of such instances or by controlling the time limits of defective delivery.

Most of us intrinsically know the Lincoln dictum that ‘you can fool some people all the time and all of the people some of the time, but you cannot fool all of the people all the time’.

But what does it mean really?

The average human beings (majority) are capable of cheating only some people for all the time or all people for some time. And it is only the super intelligent or super foolish people attempt to cheat all people for all the time!  If you find it a disappointingly pessimistic, I can present it very optimistically for you. The average human beings are capable of being honest with a few people all the time or with all the people for some time; only the super intelligent or super foolish can be brutally honest with all the people all the time! Would you like to socialize with the minority, or go with the average Joe?

 
‘Character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing.’ – Abraham Lincoln

Revisiting Human Capital

There was a time when human beings were just that-human beings distinguished from other animals. Then came the industrial revolution and the ‘capitalists’ took centre stage of civilization. They distinguished humans from ‘capital’ eventually leading to the Marxist class war.  The struggle continued between the capitalist class and the labour class to establish relative prominence. In the recent decades some management practitioners tried to place the labour class (of course within the labour class there are many sub classes-uber, upper, middle, lower and ‘BPL’-Below Poverty Line) as part of the capital stock and started calling human beings as ‘human capital’. 

Most classical economists and even some of the modern economists like Thomas Piketty would not approve this extreme turnaround in thinking. Some socialists thought that the reason for all economic value is labour or human endeavour and capital is just a consequence of labour.

Which one to pick- the capitalists or the socialists? Is that a catch 22 situation?

We do not have to necessarily reduce every duality into Newton’s third law of motion. Everything need not have an equal and opposite force, at least in the realm of thinking or human imagination. We all know that capital, tools and ‘apps’ have greatly enhanced the human potential and made life a lot easier for most people, though making parents of gizmo-loving millennial children a lot anxious. Terming capital an exploitative weapon is at the least biased thinking in a progressive society. Human thinking, imagination and efforts led to path-breaking inventions and vast accumulation of capital, albeit in the hands of a few, not always in the hands of the inventors though. Counting human beings as part of the capital stock is to equate the producer with the tools of production or at the least, poor economic accounting.

In an interview published in the now long extinct ‘Illustrated Weekly of India’ the late Osho (Acharya Rajneesh) once jovially said ‘Jesus saves, Moses invests and Rajneesh spends’. In a society there are people who save, others who invest and almost everyone who spends. Probably, the Acharya did not want to give any particular significance to any one of the three or wanted to justify all that money spent on the multitude of Rolls Royce cars. Yes, savings and investments lead to creation of capital. But capital is of what use if there is none to buy the products of capital, including the Rolls Royce cars?

Re-imagining people as human beings rather than resources or capital may be reinventing the wheel or even going far back in the past when the wheel wasn’t yet invented. What would that mean to HR practitioners? For one, this may prompt organizations to start viewing people as different from other asset classes. Assigning a price tag or even a rental value to human beings is devaluing human ingenuity and freedom of choice. Companies can hire the ‘services’ of employees, buy ideas and even inventions, still retaining the freedom with the seller.

In the not so distant future, 'hiring' people may sound derogatory and probably illegal just as trading slaves became illegal; 'full time employment' too may become impractical, if not illegal. Who can utilize a human mind full time, if at all available for hire? Surely, the owner cannot; leave alone the buyer. Employment is becoming ‘employmind’ expanding human possibilities and making human accounting evermore error-prone.

Is there a killer app waiting to solve this accounting problem?  

“Business is about profit, yes and it is about more than profit. At its best, it is expanding the possibilities of humanity.”- Jon Miller

Trials and the Tragedy of Errors

A fair trial is the right of the victim and the accused. Yet, we all intuitively know that not all trials result in a fair judgment. One may even be pardoned to imagine that most legal trials in India result in errors. Occasionally, we make an outburst about a judgement gone wrong or perceived to have gone wrong. Yet we take it on our stride and believe that life is a chain of trials and errors.

Courts are meant to dispense justice. However, the long chain of the justice system is often a test of smartness or skilful work by a whole lot of intermediaries in the chain right from the local police who registers a complaint or a First Information Report. A small twist by an intentional or unintentional error in the FIR can change the entire course of trial and even the outcome. Similarly the collection and presentation of evidence and trial of witnesses at different trial courts can make or break a case. Truth usually doesn’t stand up on its legs. It always needs some artificial limbs provided by interested and sometimes uninterested parties. ‘Satyameva Jayate’ is a fascinating aspiration like many other ideals. Truth manifests differently to different people and at different times. OK, that is philosophy.

Let’s return to reality.

An article in the recent Fortune magazine (August 1, 2015) adapted from Geoff Colvin’s book titled ‘Humans Are Underrated’ cites an interesting research study. Parole decisions are made by judges in some countries, such as Israel, where researchers investigated how those decisions are influenced by a routine human act like lunch. Over the course of a day, the judges approve about 35% of prisoners’ applications for parole.  But the approval rate declines steadily in the two hours before the lunch break. Immediately after the lunch, it spikes to 65% and then again declines steadily. If you are a prisoner, the number of years you spend behind bars could be affected significantly by whether your parole application happens to be the last one on the judge’s stack before lunch or the first one after!  

Data-driven algorithms have proved superior to human judges in such decisions. Rationally we prefer a computer that doesn’t take a lunch break to a judge who takes a lunch break whose body metabolism and mental agility or emotions depend on many external factors. Yet, we may not reassign such jobs from judges to machines. Why? The issue is not computer abilities; it is the social necessity that individuals be accountable for important decisions.

Corporate situations are similar too. Will the manager who writes the appraisal of five employees at a stretch apply varying judgements based on when he is taking a lunch break? Quite likely! You may want to pray that your appraisal comes up in the morning list and not closer to the lunch break. It can potentially make or break a career, or affect your salary increase or promotion. It is not a question of fairness. It is a matter of hunger! Seriously, ask your boss, ‘hungry, kya?’

Well, lot of transactions have been automated in many companies, making a day’s job easier for the average employee and the HR Department. But not many decisions are automated or moved to self-service mobile app. It appears, the higher the impact of a decision the greater the chance of error. Alas, human judgement after 200,000 years of evolution, still remains in the realm of trial and error!

 
‘The ability to observe without evaluating is the highest form of intelligence.’- Jiddu Krishnamurti

Kings, Royals and Scoundrels

Headline news about the suspension of Chennai Super Kings and Rajasthan Royals from the Indian Premier League attracted much attention and lots of online and offline conversations. Not surprising in a country where cricket is daily fodder for millions and millions for the cricket stars. Skipping the discussion on the cricket business and administration in India this post is about our deep fascination for kings and royals. To start with, out of the eight IPL teams five of them have names to do with kings or royals! Besides the Chennai Super Kings and Rajasthan Royals, we have Kings XI Punjab, Royal Challengers Bangalore and Kolkata Knight Riders with a tinge of royalty as knighthood is conferred by the king or the queen.

Is that sheer coincidence or smart branding that appeal to the millions of cricket fans, marketers and punters? There seems to be some reflection of the average mind’s aspirations.

In dynastic monarchies people don’t have a choice to go for a different system without a public rebellion. But what do people in democracies do? They too create their royalties. There are many countries that retained the institution of monarchy even after they adopted parliamentary democracy with popularly elected governments. UK, Sweden, Denmark, Netherlands, Spain, Japan, Australia are all such examples. India has done away with the institution of monarchy. But we still carry too many royal symbols and a monarchic mindset, even when we are anarchic in our daily lives. It may sound quite illogical to have a popularly elected government also having a monarch as constitutional or titular head of the nation. But who claims to be logical when all of us are mostly instinctual, habitual and superstitious when it comes to personal choices and social rituals?

It is commonplace young parents calling their new-born babies ‘little prince’ or ‘princess’ even when they know that they don’t belong to any royal family. There seems to be an aspirational fantasy in the royal reference. Parents of these ‘little princes’ or ‘princesses’ are, by logical extension, elevating themselves as kings and queens. Not a bad deal! Who doesn’t have a sub-conscious desire for domination? Who doesn’t want to be law maker than law abiding? Who doesn’t like to be privileged, flattered and protected by ‘black cat commandos’ and bullet proof cars? When you are king you tend to feel above the law. The cricket royals created their own kingdoms, their own rules and flouted the nation’s laws while millions cheered them along with the paid cheerleaders. They fulfilled our primordial desires.

Are the royals and self styled royals just another power form like any other scoundrel? Much of available evidence in history including the recent events tends to give yes for an answer. In fact, we use royalty in our daily lingo in association equally with the good and the bad. When we get some special privileges we feel ‘royally treated’ and when we get cheated or misappropriated we feel ‘royally cheated’ too. Yes, the royals do cheat. That may be one reason why we all want to be royals! If not as capable of cheating others as the royals might do, at the very least we want to cheat our minds to a fantasy world of the royals.

Now look at the plight of a real prince born into a reining royal family. Charles, the Prince of Wales has been eternally waiting for the throne. Well, not really eternal; he is only 66 years old- not old enough to inherit the crown from his young mother! He says, ‘all the time I feel I must justify my existence’. Prince Charles wasn’t born when William Shakespeare said ‘uneasy lies the head that wears a crown’. My two cents to Shakespeare: uneasy lies the head that aspires a crown!

If you still aspire for the throne, remember what Napoleon Bonaparte had said.

 ‘A throne is only a bench covered with velvet.’

Losing is an Option

One of the early books that I bought from the pavements of Churchgate in Bombay (yes that’s how Mumbai was known when I was a student in the 1980’s) was titled ‘Born to Win’ authored by Muriel James and Dorothy Jongeward. I was in my last semester of Masters in Management at Tata Institute of Social Sciences. I carried this book with me when I went to attend the final job interview with Mr. P.S. Pai, the then President of Wipro Consumer Products (consumer products division was the biggest business of Wipro those days- not IT or Software!) in his office at Nariman Point. I sat down in front of him and quietly kept the book on the table. Mr. Pai, a highly successful business leader of his times, noticed the book title and looked quite pleased with the theme of winning. The interview started with Mr. Pai commenting on my carrying the book with a broad smile and I ended up grabbing the job with the company- the highest paid campus job offer that year was from Wipro!

Winning looked everything to me those days, because that is what everyone around me told and that’s what was taught in the classroom. Even later in my professional career, I heard many leaders emphatically saying that winning is the only option, or losing is not an option. In other words, losing cannot be treated even as a possibility-if you lose it has to be treated more as an accident or disaster! 

Times have changed and many books have been written about winning.

The question, ‘what does it take to win?’ is stated as the trigger for Jack Welch and Suzy Welch to write a book titled ‘Winning’ in the year 2005 (besides, of course, the contract money and royalty that followed the book). This is a brilliant and practical book written more in context of competitive business and organizational leadership. The first book I referred was written much earlier in 1978 and deals more with positive psychology that can help everyone to be authentic, responsive and fulfilled human being. In that sense, the book goes beyond the powerful hook on the cover page.

Let me not digress. My theme is not winning, it is about losing!

When I say ‘losing is an option’ what do I mean? Surely, I have no intention of eulogizing a defeatist attitude. What I mean is that treating losing as an option early in the game prepares one to play the game with greater emotional balance, taking greater rational preparation and finally respecting the opponent and more importantly respecting oneself. Everyone knows that an ace sales person always takes losing as an option. He is not crippled by losing a business deal. He knows that in any contest there is a certain win-lose ratio and he is only trying to play to his strengths knowing reasonably well what his competitor can do. In a fair contest, if you lose you don’t lose your respect and if your competitor loses you don’t lose respect for him as well. That’s because you have factored losing as an option.

With losing as an option one can choose which battle to fight and which one to let go. Accomplished   sports professionals always make such choice. They don’t participate in every tournament and they tend to treat losing as part of the strategy. Leander Paes knows this. So are many other long lasting sports professionals. Successful CEOs know this. So are successful professionals from all walks of life.

A winning attitude is not about winning or losing. It is about winning and losing. It is about how you treat winning and losing. Wise parents train their children how to treat winning and losing. Great teachers, mentors and leaders help their students, mentees and colleagues treat winning with humility and losing with dignity. There is always more to learn from losing than from winning.

‘As a tennis player, you have to get used to losing every week. But you have to take the positive out of a defeat and go back to work. Improve to fail better.’- Stanislas Wawrinka ( Swiss tennis player who won the 2015 French Open title beating World No.1 Novac Djokovic)

Yes, choosing to lose better is a winning strategy. What do you think?