Hypothesis: An unequivocal statement by a manager is an oxymoron.

Proof: I am a manager. I just made an unequivocal statement. So there is an apparent paradox. So putting aside the possibility of why the world didn’t disappear in a big flash of light due to this contradiction (which I would not have liked), there are two possibilities. Either the above hypothesis is not true, or I am not a manager.

Revised Hypothesis: An unequivocal statement by a manager may or may not be an oxymoron.

Optimism levels in a project

This graph shows how different teams in a company feel that a particular project will be delivered successfully i.e. within schedule, scope and cost.

Disclaimer: This project is entirely fictional and any resemblance to any project – live or abandoned is entirely coincidental

Water cuts are a way of life in Mumbai. Each year that the met department predicts a normal monsoon, we have water shortages. And BMC cuts or limits supply of water. A water cut has been implemented in our area as well.

The society has given the residents an option of limited timings of water supply or private water tankers. The latter options costs money. And the residents of the society have voted for that option.

So an important question to be asked is how should the payment be distributed? Should it be a flat amount for all flats or should it vary according to the number of residents in each flat? The justification of the latter option is a no-brainer. Larger families are likely to use more water than a family of two individuals.

Now comes the interesting game theory aspect into this problem. People with larger families would oppose the proportionate fee structure while smaller families would oppose a flat fee structure. In each case one of the parties would feel that they have been given a raw deal.

Now assume that the flat fee structure is adopted. This means that the smaller families will be disgruntled since they are paying a per capita higher rate than the larger families. Thus they will indulge in wasteful water usage to compensate for the higher fee. The larger families will use at least an amount minimum to their needs. However its more likely that they would be a little careless in using water as they are being subsidised by the smaller families. Overall this leads to wasteful water usage for the entire society.

Now let’s assume that the variable fee structure is imposed based on the number of residents in each flat. Here the reverse would happen. The larger families would be disgruntled and would spend water in a wasteful manner while the smaller families would use at least the minimum share of the water. Overall this option too leads to a wasteful usage of water.

Both these options seem to result in wastage of water. So what then is the optimal distribution of payment? Is there a better way of distributing water? The best option which comes to my mind is to implement a water meter system which tracks the actual usage of water (which may be of course more cumbersome and expensive to implement)

Let’s see what the society management comes up with. Till then out with the buckets and drums to store all the water.

Posted from my mobile: Please excuse grammar and typos.
UPDATE: Well, my society decided not to get into the nitty-gritties of Game Theory and adopted the first option instead! Limited water supply from now on. So much for trying to explain Game Theory to them.

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“The only way to maintain a long term competitive advantage is to change faster than your competitor.”

“Operations are activities which are repeatable and do not have a specific start date and end date. Projects are, on the other hand, one time initiatives which are unique, and have a specific start date and end date.”

The link between these two statements?

Projects drive change. Projects bring something new to the organization.

An organization which is strong in selecting the right projects and executing them tightly will have a sustainable competitive advantage over those which do not have this capability.

This makes project managers in the organization very important as a stakeholder in the overall strategy of the organization.

Ergo, all project managers should be worshipped as Gods, or at least given raises.

The PE ratio, as any MBA worth his salt would know, is considered a measure of the growth prospects of a particular stock. The ratio compares the market price of the company’s share to the earnings per share of that company. The higher the PE ratio the higher the prospects of growth. But a high PE ratio could also be possible if the market has over valued the stock. So a high PE ratio may also be considered risky for someone who has invested in that company’s stock. When there is a shakeout in the market, like the one which happened due to the mortgage market, the stocks could all come tumbling down.

In India, the MBA factories are also very competitive and on a fast growth track. Every year, business magazines publish ranking of B-schools. Various parameters are used to find out the top 10 B-schools of that year. Most of the students generally consider these rankings their bible and often prefer a high-ranking B-school (let’s say by placements) even without considering other parameters which turn out to be more important in the long term.

I’ve always taken these rankings with a pinch of salt, but now that I’ve “been there, done that,” I’ve come up with a parameter myself of one possible way to rank B-schools. Let me introduce the StuFac ratio. This multiple can be used at both the institute level and at an individual student level. At the institute level, it is simply a ratio of the average salary of the students to the average salary of the faculty of that institute. For an individual level, the ratio is the salary of the student to the average salary of the faculty. Just like the PE ratio, the StuFac ratio can be a proxy for an institute/student’s growth potential (as well as the risk associated with overpricing of the student).

Now as innovative as this measure may be, I want to make it clear that it is by no means comprehensive. More than an accurate measure, it is just a (egoistic) way to compare different B-schools and students therein. However, as any MBA grad who has spent a few years in the industry would know, after the first job, it is the student’s initiative and hard work which dictates his growth path and not which B-school he graduated from.

P.S. If any B-magazines are contemplating to use this measure for their rankings next year, do not forget to consider a royalty for me.

Since I joined work, there’s hardly been any time to devote time to the blog. Things have been quite hectic on the personal front as well. Even though Mumbai provides a lot of inspiration, I hardly have the energy to convert that inspiration into writing. For now, I’m posting a very interesting section from a book I’m currently reading. It matches my outlook of the telephone which is nothing but an instrument meant to disturb you and take over your life. I’ve realized this is true all the more after I restarted my work life, this time as a manager.

…Now just relax and imagine a less complicated world in which the phone has not yet been invented. In such a world, you write a note to propose lunch or a meeting and you get a note in response. Everyone plans ahead a little bit more. It’s common to take half an hour in the morning to read and answer your mail. There are no loud bells in your life.

Wednesday mornings in this alternate reality are dedicated to meetings of your company’s pension trust investment committee. Imagine for the moment you are one of the employee representatives charged with watching where the money is placed. On this particular Wednesday, an inventor is scheduled to make a presentation to the committee. The inventor has plans to change the world, if only you’ll invest in his new contraption. His name is A.G. Bell.

“Ladies and Gentlemen, this is the BellOPhone!” (The man unwraps a large black box with a crank on the side and an enormous bell attached to the top.) ‘This is the future. We’re going to put one of these on every desk in America. Homes, too! It will get to the point where people can hardly imagine a world without them.” As he warms up to his subject, he begins gesticulating enthusiastically and hopping around the room to make his points. “BellOPhones everywhere you look, all of them hooked up together with wires under the street or overhead. And now this is the really
exciting part: You can get your BellOPhone specifically connected to somebody else’s BellOPhone, even though it may be all the way across the city or maybe in some other city. And when you’ve connected it just by entering the code, you can make the bell ring on the other fellow’s machine. Not just some rinky-dink bell, either, but a real heart-stopper.”

He sets up a second device and connects it to the first, on the other side of the room. By manipulating a dial on the face of the first, he causes the other machine to come alive. It gives off a loud BRRRRINNNNNNNGGGGGGG! After half a second, it rings again and then again and again, deafeningly.

“Now, what’s a fellow got to do to stop this ringing? He’s got to race over to his BellOPhone and pick up the receiver.” He picks up the receiver on the ringing device and hands it to one of the committee members. Then he bounds back to the other side of the room and starts shouting into the mouthpiece of the originating device. “Hello! Hello! Can you hear me? See that, I’ve got his complete attention. Now I can sell him something, or get him to lend me money or try to change his religion or whatever I want!” The committee is stunned. You raise your hand and venture a question, “Since nobody could possibly have missed the first ring, why bother to repeat it?” “Ah, that’s the beauty of the BellOPhone,” says A.G. “It never gives you the chance to wonder whether you want to answer it or not. No matter what you’re involved in at the time it rings, no matter how engrossed you are, you drop everything to answer it. Otherwise, you know it will just keep on ringing. We’re going to sell billions of these things and never ever allow any to be sold that
ring only once.”

The committee goes into a huddle, but it doesn’t take very long to come up with a judgment. You all decide without a dissenting voice to throw this turkey out the door. The device is so disruptive that if you were ever dumb enough to allow it to be installed, nobody would ever get any work done around the office. A few years’ effect of the BellOPhone and we’d all be reduced to buying goods from Taiwan and Korea. And our country might even have a negative balance of trade.

Of course, there’s no turning the calendar back.

This short story summarizes what the phone will ever be. Consider this situation – you are talking with someone, and suddenly the phone rings. How many of you would interrupt the conversation and pick up the phone? To answer someone who might be at the other end of the city, and to ignore (even for a few minutes) the person standing before you? 99 out of 100 people do that. Why do we give more importance to people on the phone than to people standing before us? How would you feel you’re standing in a line waiting to order pizza, and the person at the counter answers the phone to take a home delivery order? Things to think about.

Next post coming up in a few days, another of my pet peeves – meetings. What they were meant for, and what they are used for.

This infograph shows the revenue earned by the weighing machines installed on Mumbai suburban railway stations. Figures are in Rs lakhs (100,000). Further more each machine takes one rupee coin to issue your weight. So this is where all the one rupee coins have disappeared. What’s more, Mumbai’s weighing machines earn more than me.

Last week I had gone to Juhu beach with a few relatives. Those of you who have been there would know about the popular eating area near the beach – most of them making Indian snacks like pani puri, pav bhaji etc. One item which is very famous is the baraf gola. Roughly translated as ice candy, it consists of ice scraped into small bits and then stuck together on a stick. This is then dipped into a thick, sickly sweet syrup of different flavours. Everything ranging from orange, malai, kala khatta, green mango etc is available. The syrup mixture is stored in previously used – and hopefully cleaned – liquor bottles. Still crowds flock there every day to enjoy a moment with their family, friends on the beach and to relish the delicacies being served there.

Now a very interesting thing happens especially in the evenings and night time. There are around 20-30 of these stalls, and each of them sell the same thing (Truth be told, even the food from each stall tastes the same) And since there are a large number of sellers and buyers, the area models a perfect competition. Now since it is a market economy, the forces of supply and demand are bound to work. And that is what is interesting. To attract the customers and survive in the long run, they play the price game. First of all, each stall will have an “employee” carrying a menu card and calling you to try out the food at their stall. Sometimes fights happen when customer are “poached” away from a rival stall. In this market, the customer is king. All you have to do is to go to any stall and ask them how much are they willing to give discount. They will come close and whisper their answer in your ear. And then by haggling some more, you can further reduce the price by a few bucks.

But I wonder the same thing would work in the day time. There are less customers so the pressure on the stall owners to get whatever little of the share would be higher. So do they offer even more discount in the daytime? That is one thing I have yet to discover. So if anyone of you find yourself on Juhu Beach under the bright sunlight, do observe and comment on the supply demand scenario at that time.