Dealing with failures

Disappointments and failures – both professional and personal – are a part of anyone's life. How you deal with them shapes your life and that of others around you. People handle disappointments in a many ways ranging from inability to control their emotions with behavior such as stomping feet, shouting and throwing tantrums, to complete denial and building a shell around them so that failures can't be discussed. Both these extremes make life difficult – at work and home. This post analyses the consequences of your response to failures on your career. Response to failures can basically be of four kind

1. Aggressive - Lack of Self-Control, Shouting, Threats.
   
2. Sophisticated and shrewd blame game, Successfully putting the responsibility on co-workers, procedures etc
   
3. Remedial/Corrective – Finding where mistakes occurred and redoing things, correctly
   
4. Innovation & Abandon – Trying a completely new approach
   

I don't consider the silly blame game as a response. You come out looking even more idiotic and unconvincing. A particular response may have a very different consequence for you depending on your career level. For example, you can get away with option a if you are senior enough though it is highly likely that you have destroyed your team's morale. The table below captures the impact of these behaviors on your careers. I think most of behave in a certain way in a crisis because it has got to do with we are than what the issue is. Cognizance of our own behavior pattern is the first step in modifying it to something more appropriate.

Behavior/ Career Level		Aggressive			Blame-game	Remedial/Corrective	Innovative
Junior		Highly detrimental. Can even have immediate negative consequences.			Can be successful if well used. The key word here is sparingly, only when desperately needed. You can't afford to have a reputation for blaming.	Highly suited for repetitive jobs such as achieving the monthly sales targets	Mostly not welcome except for creative / non-repetitive jobs. Example – finding a new target segment. People want to know you can effectively follow directions and established norms.
Mid-Senior		Easier to get by than at junior level.			Not recommended. At this level people are looking at you to take responsibility.	Required as a part of managing others doing repetitive jobs	Needed. Welcomed more than at junior level. Be careful that innovation is not turning into escapism.
Executive		Though it appears that you can get by, there are huge disadvantages to behaving like this. It shows you not in control of a situation & can cause people to lose faith in your leadership			Since you have authority over & are responsible for everything, highly undesirable and ineffective	Needed. Shows that you are in control, and you can lead and teach	Required. Unless you have a different innovative idea for executing the company's vision, your subordinates won't have faith in your leadership.

 

We don't become different people in office. Most of us behave similarly in our personal life too, leading to same consequences. This understanding can help you & I become a better person.

Book Review : The Trillion Dollar Meltdown

I just finished Charles Morris's The Trillion Dollar Meltdown which was published in January 2008. Since the book is based on an area of professional interest, I think it deserves a detailed review and not just an update.

Morris' book was one of the first texts on financial crisis to come to the market. In less than 200 pages the book covers a huge breadth of topics. Starting from the precedents and history of the recessions during the Lyndon & Reagan presidencies, it goes on to talk about the previous market crashes caused by portfolio insurance & the failure of Long Term Capital Management. He describes the current crisis starting of course from the usual CDO's and derivatives, predatory lending practices including the NINJNA (No Income, No Job, No Asset) loans, the cascading effects of high leverage at hedge funds and other financial institutions and the roles of  the raters, insurers and government bond market. He reconfirms my view that loose monetary policy at the time of Alan Greenspan was one of the leading causes of the crises. (Read my previous post here). Morris strongly approves Paul Volker's handling of the problem in 80's. But what really impressed me about the book is that it covers to the global distribution of money, trade deficits &surpluses and also reserves in countries like China, Russia & in the middle-east. By including the power of sovereign wealth fund of these countries and the recent academic debate about China's savings rate & currency valuations, the authors covers the issue from both domestic & international angles. Any review of the book must take into account that Morris was forecasting the future & not analyzing events.

But there are some drawbacks of packing too much into so few pages and shipping the first book and at some places it misses depth. But for a bird's eye of how thing went wrong and where, The Trillion Dollar Meltdown is great book. In fact I definitely recommend it for any bookshelf. Coming from the other side of the table, Morris sees huge limitations of free markets in cleaning up the current mess. According to him the only immediate option America had was to deleverage (and hopefully in an orderly fashion or things would turn really bad). With the benefit of hindsight, here is a passage from the book

The recent woes of the dollar are important for our story because they effectively take the Fed off the board. As credit crunch works its way through banks and investment funds over the next year or so, there will be no soothing fountains of new dollars coming out of Washington. The days of a universal put to the Federal Reserve are finally over.

Clearly even the best of people did not anticipate how many dollars the Federal Reserve and the government would be willing to print. Here are author's views about the $800 TARP in an interview in October 2008.

Book Update: Right now am reading 'The World is Flat' and 'Eat, Love Pray'.

Strategies in a Recession - Proctor & Gamble

Business school cases often consist of how companies adapt their strategies for different times. By that benchmark last one year has provided a life's worth of learning for managers. I have read and observed numerous instances of companies changing strategies to adapt to the consumer's spending habits and changing priorities - the new normal.

Lately, P&G, known for is investment in R&D and known to introduce a new product only when it was 30% better than an existing one, made a significant deviation in response to its falling sales. It introduced 'Tide Basic', a lower cost version of its Tide line of detergent. The product, at least initially, was offered for sale only at value chains. To distinguish it from the regular Tide products, the company has used yellow for packaging.

With rise in the savings rate of American households, while you can debate whether the move to cheaper store brands is due to the recession or has it been happening for a while, there is no doubt over the result. Consumers are moving to cheaper brands. P&G has taken he learning from this to evolve its strategy.

In the word's of the new CEO McDonald it is, "purpose-inspired growth" strategy of touching and improving more consumers' lives in more parts of the world…more completely." According to this HBR interpretation the company now plans to touch more lives with its emerging economy focus and bring on more affordable products. To me that implies that there is another organization that has realized the its growth drivers now lie in emerging markets and it needs to adapt its style ( and its product portfolio for the consumers). Even is the developed markets consumers are becoming extremely sensitive about how they spend and companies have to adapt their product portfolios.

Books Update - Five people you meet in Heaven (Mitch Albom). I am motivated to read the more popular, Tuesdays with Morrie

Predictably Irrational (Dan Ariely)

New India Film Festival and Interview with Nandita Das (MoMA)

I had my fill of Indian Cinema at the New India film festival at Museum of Modern Art. Five movies (so far) with three of them introduced by actors/directors. The souvenirs include autographs of Nasserudin Shah and Nandita Das.

Nandita Das, an actress I greatly admire was here to talk about her debut as a director in Firaaq (Search/ Quest) which showcases the aftermath of riots in Gujarat. Here is the text of my interview with Nadita Das published at desiclub.com

Movie Update: Firaaq (Nandita Das), A Wednesday (Nasserudin Shah), Oye Lucky Lucky Oye (Abhay Deol), The Voyuers (Bengali, Buddadeb Dasgupta) and Quickgun Murugun (Tamil/Telugu).

Lessons from Jim Rogers' life - a gift to us & US

Take a guess as to which country is being mentioned in the following paragraph.

The country X enjoyed a huge bubble in the _____. When it burst in _____, prices collapsed, sending the economy tumbling. Regrettably, the government and the 'central bank of the country X' kept trying to halt the natural, cleansing effects of this recession by propping up many of the companies in trouble. Just as a forest fire serves to clear out deadwood and underbrush so that the forest can renew itself, recessions help to ensure healthy future growth. In 'the country X' , the business that should have been liquidated became "zombie companies" surviving, albeit barely, on government's artificial support. Everything was Band-Aided with quick fixes. While this delayed a decline, it also postponed the country's recovery. A country can actually spend more money trying to stave of a recession than the recession might cost.

You probably think that I am talking about USA. However this is a passage describing 'the lost decade' of Japan by Jim Rogers. Though Jim mentions in passing that America followed the same route in 1970's, he might as well be presaging what may be coming ahead, considering the way the American debt & fiscal deficit has ballooned. To use a cliche, "History repeats itself." As Jim mentions, a country can spend more money trying to avoid a recession than the recession might itself cost. Sounds even more familiar. After all, only last week the Fed chairman Ben Bernanke pointed out that US needs to control is spending & deficits. Of course he did not talk about the fact the balance sheet of the fed itself has been increasing in size as it has been buying just about anything - mortgage backed securities, corporate debt and the T-Bills issued every few days by the US government.

But, lets come back to Jim Rogers, the guy who made enough money to retire at the age of 37. The book in question, " A Gift to My Children - A Father's Lesson for Life and Investing," is packed with knowledge and wisdom. In his own words,
the book is different from his earlier books in the sense that its about the larger lessons distilled from his experiences. Lessons about thinking for yourself, using common sense, learning history, philosophy and languages and making the world a part of your perspective. Lessons, which we all could use. In less than 100 pages Jim packs lessons that can use at all stages of your life and earlier you learn these lessons, the more you can get from them.

As a aside note, according to Jim, 21st century belongs to China. He does not like India and Russia as investment options. So much so that he has moved to Hongkong & is making sure that his two daughters know Mandarin.

Slumdog Millionaire: When the movie is better than the book

Last November (2008), I watched Slumdog Millionaire. I don’t think I can express how I  felt. Maybe it was one of those bad days when things are not going too well in your world. The movie was heavy with the harsh realities of the life of more than a third of the Indian population. I left the theatre with a strong desire to do something to make a difference and a desire to read the book on which the movie is based. This post reviews the book and the movie (maybe I will post an update on what I have done since then if it does end up making a difference in some one's life).
Slumdog Millionaire is based on the novel, Q&A written by Vikad Swarup, an Indian diplomat. Vikas Swarup, in an interview, mentioned that when Danny Boyle, the director of Slumdog Millionaire, told him that he would preserve the body of his book, Swarup should have realized that Danny would kill the soul. This heightened my expectations of the book. Such a dramatic and powerful movie can only be based on really well written-book, or so I thought. Maybe I should mention that I belong to the old school where books are better than movies, even if the movie has won six Oscars.

Anyway I got a chance to lay my hand on Q&A, now republished as Slumdog Millionaire last week, and I have the following comparison to offer. The movie is indeed based on book’s content and follows the structure of the book, as a series of questions on the popular show -Who wants to be a billionaire? That’s where the similarity ends. The book is no more than a collection of loosely bound short stories while the movie is solid commentary on Indian society with a focus on urban Indian poor. Unfortunately the book does not develop its characters, focusing instead on a series of disparate events, some of them unbelievable. While the movie floors you not only with its characters, but also by vividly capturing the life of Dharavi, believed to be Asia’s biggest slum, in the heart in India's financial capital Mumbai. If the purpose of the author was to make a generic commentary on India, he needed even more meat on the bones, which the book does not have. The author’s way of capturing the role religion plays in Indian society, through a protagonist with the name ‘Ram Mohammed Thomas’ (RMT) is far more unrealistic & ineffective than the movie’s depiction of a mob.
There are lots of other changes that the movie’s screenplay makes, small big and other small. It omits stories of RMT aka Jamal Khan (the name of the movie’s protagonist) as a bartender and his adventures in Delhi at an Australian Diplomats house. It also twists the story line, introducing an under world don while omitting a contract killer. Overall, the screenplay effectively makes a collection of short stories into a coherent movie, one that rises above its individual characters while reflecting the reality of life of the urban Indian poor. It however does this while ensuring that the characters are well developed. In this case the movie is far better than the book.