Corporate Culture

In good times, when you like the core aspects of your job, you don’t really care about your “organizational culture”. You don’t care so much about how they treat you, about how they make you feel. All you care about is that you are enjoying your time there, that you think there’s some value that the job is adding to your life, and you are happy receiving your salary.

When your organization’s “culture” starts mattering is when things aren’t going all that well in your job. It’s when you stop liking the core aspects of your job, and start wondering why you’re doing what you’re doing. That’s the time when all the “cultural” and “feel good” things about your job that come to the fore. That’s the time when any problems that you have with the organizational culture get highlighted, and you start focusing more on that and less on your work (after all, you’re trying to think whether there’s a reason apart from your core work for you to stay in the job).

As an employer, the risk with not paying attention to your organization’s culture is that when one of your employees doesn’t feel that good about his/her job (and this is bound to happen; irrespective of how much one loves his job, one is bound to go through these cycles), if he realizes that he doesn’t like the culture of your organization, it is that much more easier for him to get extremely disgruntled, and think of deserting ship. By maintaining a great organizational culture, on the other hand, even when someone is going through the troughs (in terms of core work), there is value that they see in sticking on to job, and living to see another day in the job, when (hopefully) the cycle would’ve been reversed.

As a prospective employee, if you see a high degree of attrition in a prospective employer, think twice before joining even if the core nature of work really appeals to you. For, the attrition indicates something is possibly wrong with the culture of the place, and that sooner or later that is bound to bite you.

The Importance of Discipline

I’ve never been a fan of discipline. I think it is a major constraint and hinders creativity, and puts too many walls within which you need to live your life. Despite constant exhortations by my father, I never wanted to join the army. Hell, I tried my best (successfully) in order to even avoid NCC when I was at IIT. I pride myself on being some sort of a free spirit who isn’t held back by any arbitrary rules that I create for myself to live my life by.

A really nice article that I read today, however, makes me think twice about this stand. So this article is about “decision fatigue” and is not very dissimilar to what I’d read a long time back (again in the NYT) about the Law of Conservation of Willpower. So this article talks about how every time you need to make a decision it consumes some part of your mental energy. Irrespective of the size of the decision that is to be made, there is some willpower that is lost, and that causes you to be suboptimal in your decision making as the day progresses.

The article really struck a chord with me, and I realize I’m also heavily prone to decision fatigue. Sometimes the smallest decisions take away so much energy from me that I simply put NED. And yeah, on a related note, I’ve got the wife upset innumerable times solely because of my indecisiveness, a part of which can be attributed to decision fatigue. I even remember not going to a wedding reception some three years back because I couldn’t decide which shirt to wear! And no, I’m not making this up.

So on that note, here’s where I think discipline has a part to play in life. By putting certain constraints on your life, you are reducing the number of decisions that you have to make. And that implies your willpower and mental energy will be reserved for those things where it’s really important that you decide carefully. By making a schedule for yourself, you are outsourcing to you-the-planner all the trivial decisions of your life. Yes, you might feel constrained at times. But it saves you so much energy by way of saving you from several trivial decisions.

Of course, feeling constrained can also affect your mental energy in a negative way, and prevent you from giving your best. Nevertheless, this decision fatigue thingy implies that discipline may not be all that bad. Or maybe I need to think about it some more.

The Lingaraj Effect and Financial Regulation

Lingaraj was a driver who used to work for my father. He had a unique way of dealing with traffic jams on two-lane roads without a divider down the middle. He would instinctively swing the ambassador into the right lane – meant for traffic in the opposite direction (the jam ahead meant there was little traffic flow in that direction).

I remember both my father and I abusing him (Lingaraj) for this method which would only make the jam worse. However, he would persist. And we soon found that he wasn’t unique in his methods. It is the favoured method of most Bangalore drivers. Thus, whenever there is a minor jam somewhere, thousands of Lingarajs clog the “return lane” in all directions, and end up making it worse.

The funny thing about Lingaraj’s method was that it was “too big to fail”. Having switched to the right lane, we would progress much faster (till the site of the jam, of course) than our law-abiding brethren stuck in the left lane. There, someone who had taken responsibility of clearing the jam (not necessarily a cop) would realize that a necessary condition to clear the jam was to get our ambassador out of the right lane. And we would be given passage to shift to the left lane, and past the jam site, much ahead of those suckers who stuck to the law.

For drivers like Lingaraj, moving to the right lane in the wake of a jam is seen as “arbitrage”. And a necessary condition for it to be an arbitrage is that the offending vehicle is “too big to fail”, as I mentioned earlier. And given that in Bangalore, measures like traffic tickets sent by post aren’t that effective, this continues to be an arbitrage, and hence you still see so many drivers use this “method”.

While stuck in a traffic jam like that one last weekend (I was driving, and I consider myself socially responsible so stuck to the left lane), I realized how similar this was to the financial crisis of three years ago.

Traders noticed an “arbitrage” that didn’t really exist (namely, some AAA rated bonds traded at higher yields than other AAA rated bonds) and proceeded to trade on it. When they got into trouble the regulators realized that they had to be bailed out in order to clear the larger mess. The resemblance is uncanny.

So what should the regulators have done? Basically, drivers should’ve been prevented from getting to the right lane in the first place. Then there would have been no requirement to bail them out. In some places, this is done by installing road dividers, but in my experience I’ve seen that doesn’t help, too. People use whatever gaps are available in the divider to go to the right lane, and contribute to the jam.

The only option I can think of is some variation of postal tickets – having bailed out the drivers for going to the right lane, they need to be made to pay for it. Yeah, postal tickets (sending tickets by post for traffic violations) may not be effective, but that seems like the best we can do to regulate this problem. The upshot is that once we figure out how to solve this problem on the road, we can extend the solution to financial regulation, too!

Name mutilation

Like Bangalore supposedly became Bengaluru a few years back (when HDK was cheap minister), West Bengal is going to change its name to “Poschim Bongo” or some such thing. Now, unlike Bombay-Mumbai or Madras-Chennai, the thing with these name changes is that they are merely globalization of local names. Let me explain.

Bombay (bom bahia or good port in Portuguese) and Mumbai (of Mumba Devi) are fundamentally different. Madras (mad race? ) and Chennai (beautiful) are again fundamentally different. While I disagree with those name changes and still prefer to call those cities by their former names, I see that the change in those names at least has some merit. They wanted to get rid of their colonial British-given names (and i’m sure Tams wanted to prove they aren’t a mad race, though they might have achieved the opposite through this action) and chose local names in the local language.

When Bangalore’s name was supposedly changed to “Bengaluru” a few years back, Kannada newspapers (I used to subscribe to Vijaya Karnataka back then) had a tough time explaining the name change. Because Bangalore has forever been known as “Bengaluru” in Kannada. Even now, when I speak in Kannada I say “Bengaluru” but I say “Bangalore” when speaking in any other language. While it might have been a noble intention by HDK and UR Ananthamurthy and others behind the name change to get the non-Kannadigas to use the Kannada name, the effect has been completely counterproductive.

Till date, I’m yet to meet someone who is not conversant in Kannada to pronounce “BengaLuru” correctly. First of all, most people can’t say the “L” sound and instead pronounce it as “l” (in Kannada that can make a profound difference. for example “hELu” is “tell” while “hElu” is “shit” ). Next (this is the problem with most North Indians), people have trouble pronouncing the short ‘e’ sound. Finally, it’s hard for people to figure out that the first U in Bengaluru is to be pronounced long and the terminal u should be pronounced short. The combination of all these means horribly messed up pronunciation, which makes one wonder why they bothered to “change” the name at all.

West Bengal doesn’t seem to have learnt from this experience of Bangalore. They want to call themselves “Poschim Bongo” it seems. Not being a bong, I’m going to have major difficulty in pronouncing that name, and I might end up pronouncing it in a way that makes most bongs cringe. I really hope they see sense before they make this name change official and opt for a saner name, if they want to change their name at all that is.

One thing they could try would be to knock that “west” off their name (I believe the Times of India has been campaigning for this). West Bengal was the primary reason that I got my directions and geography horribly wrong till I was some eight years old. I used to assume that “West Bengal” was at the western edge of India! Especially since Bangladesh is no more called “East Bengal”.

Given that they are mostly commie, one thing they could try is probably to go the East Germany or North Korea way, and name themselves “Democratic State of Bengal” or some such thing.

LJ

Today, maybe for the first time in over two or three years, I logged in to Livejournal. Nowadays, at my home, LJ is for the exclusive use of the wife, and I haven’t been there at all since moving my blog here. And the first thing I did was to look at my LJ Friends page.

There was a post about ubuntu by randomwalker, which I put well left to. And then there was a friends-only post by al_lude  (no use linking that here since you won’t be able to read it unless he’s friended you on LJ). And now I know the one thing I’ve been missing about LJ ever since I moved here. The friends-only post!

I realize that in the last couple of years or so, I’ve been writing less because all those posts that would’ve been written as “friends only” posts on LJ are now not written at all. I do intend to re-start writing that kind of stuff. I’m thinking of Google Plus as a medium for doing that. For that one reason I really hope G+ takes off and more people begin to use it, so that it becomes more meaningful.

The Trouble with Mental Illness

  • The “patient” has an incentive to overestimate the extent of his illness, since he can “get away” with certain things by claiming to be more sick than he is
  • People around the patient have an incentive to underestimate the extent of illness. They think the person is claiming illness only to extract sympathy and get away with things that would be otherwise not permissible
  • The second point here leads to internal conflict in the patient, as he can’t express himself fully (since others tend to underestimate). Feelings of self-doubt begin to creep in, and only make the problem worse
  • There are no laboratory tests in order to detect most kinds of “mental illness”. Diagnosis is “clinical” (eg. if 8 out of following 10 check boxes are ticked, patient suffers from XYZ). This leads to errors in diagnosis
  • The method of diagnosis also leads to a lot of people in believing that psychiatry is unscientific and some reduce it to quackery. So there is little the medical profession can do to help either the patient or people around him
  • That diagnosis is subjective means patients have incentive to claim they’re under-diagnosed and people around are incentivized to say they’re over-diagnosed
  • I don’t think the effect of a lot of medicines to cure mental illness have been studied very rigorously. There are various side effects (some cause you to sleep more, others cause you to sleep less, some cause impotence, others increase your mojo, and so on ), and these medicines are slow to act making it tough to figure out their efficacy.
  • There is a sort of stigma associated with admitting to mental illness. Even if one were to “come out” to people close to him/her, those people might dissuade the patient from “coming out” to a larger section of people
  • If you were to be brave and admit to mental illness, people are likely to regard you as a loser, and someone who gives up too soon. That’s the last thing you need! And again, the underestimate-overestimate bias kicks in.
  • Some recent studies, though, show a positive correlation between mental illness and leadership and being able to see the big picture. So there is some hope, at least.

I don’t know what to name this bias

So yet again I’m at that point in my life when I’m pondering about my career, pulling up my socks and asking myself uncomfortable questions. I’m asking myself what it is I really want to do, what it is that I really enjoy, what is the best way I can monetize my skills and the like. I’ve been pondering between radically different alternatives – from staying on in Wall Street to becoming a hippie; from becoming a professor to starting a company. I’ve been thoroughly confused and have been talking to a number of people about this.

The one common strand I extract from my conversations with all these people is that most people give you advice that is aligned with what they are doing. When I talk to the prof, he talks to me about becoming a prof, and about why I’m suited for it. When I talk to the corporate whore, he tries to convince me that there’s no way out from corporate whoredom and that I must simply embrace and accept it. When I ask the hippie, he thinks it’s no big deal if I keep switching jobs, and that I’m being dishonest with myself continuing to do something I don’t enjoy. And the entrepreneur tries his best to push me into becoming an entrepreneur.

Given my thoroughly confused state of mind, all this has been mostly adding to the confusion, but now that I’ve managed to extract this common strand, I been able to add the appropriate amount of spices to all the advice I’ve received, and making more sense of it. While I continue to figure out what’s the best course of action for me, I wonder what it is that makes people want other people to be like them.

I must mention that this is not a recent phenomenon. Back when I was in college, I remember talking to a senior who went into consulting, and he convinced me that I should do that, too. The banker talked about how banking is perfect for my skills. Till I was in 10th standard, I had no clue about the existence of IIT until a rocket scientist uncle told me about it, and about how going there would be the best thing I could do.

Of all the people who have given me career advice, perhaps the only person who didn’t clearly show this kind of bias was my father. He was an accountant, and he used to work as a regulator. And right from the beginning he made it clear to me that I should neither become an accountant nor should I work for the government.

And I’m trying to think of what kind of advice I dish out. Perhaps because I don’t have one clear “career axis”, I don’t really show this kind of a bias. Or maybe it’s hereditary.

Fighterization of Government

The problem with the proposed Jan Lok Pal bill is that it’s highly personality dependent. Given the kind of powers they want vested in the Lok Pal, it is clear that the proponents of this bill (Anna Hazare and co.) have simply assumed that a “good and incorruptible person” will occupy this post. What they don’t seem to have considered is that governments usually mess up in such appointments and it’s not guaranteed that a “good and incorruptible person” will always occupy this post. And that for that precise reason it’s dangerous to create an institution whose performance is highly dependent on the person occupying the post.

I’m reminded of two “high offices” to which people are appointed by the Central Government. Both these offices have gained prominence due to their occupation by high-quality people who did much to enhance the stature of this office, but have been undermined later by the government (UPA 1 and UPA2 in this case) appointing people with shady backgrounds to this post.

The first is the office of the Chief Election Commissioner. While this post has existed since the time of the first general election, the office was brought to prominence by former CEC TN Seshan. He was followed by a few other respectable gentlemen (James Michael Lyngdoh comes to mind). But then who did the UPA appoint to this post? Congress crony Navin Chawla, who in his earlier avatar as an IAS officer had been indicted by court as being “unfit to hold public office”.

The other case refers to the Central Vigilance Commissioner. By definition, this is a vigilance office and one of the implicit duties of this job is “vigilance”, which implies action against corrupt practices. You can think of this post as being a sort of a “mini Lok Pal” (for bureaucrats only, politicians being excluded). Again, when this post was created it was assumed that “honest impeccable incorruptible persons” would occupy it. And who did the UPA try to put there (before the Supreme Court struck down the appointment)? PJ Thomas, who had been indicted in a scam about 10 years ago.

There is no guarantee that people like Chawla or Thomas could come to occupy the post of the “lok pal”, which will completely undermine the purpose of the institution. I hope the thousands of people who are blindly supporting the “Jan Lok Pal bill” (and this includes you, Bharatiya Janata Party) take this little technicality to note. I exhort them to ask themselves if they’ll be ok having Navin Chawla or PJ Thomas as the Lok Pal. If they think it’s ok even if such people were to occupy the post, they can go ahead wiht their support. My assumption, though, is that most people haven’t really thought about this angle and are blindly supporting the anti-government agitations.

Coming to the title of this post, what we need is to create institutions that are not personality-dependent. We need to create institutions and systems with appropriate checks and balances such that even if people of “lesser integrity” were to occupy it, it wouldn’t be possible for them to significantly undermine the office. We need to effectively “fighterize” these posts in order to ensure that it’s not possible to sabotage them by means of a few bad men occupying them.

And the way I see it, the institution of the Lok Pal as envisaged by the Jan Lok Pal Bill (or by the government-sponsored bill for that matter) is highly personality dependent. And that is one of the reasons I’m opposed to this current Anna-Swami-Baba movement.

Going to Chennai

There’s something about traveling to Chennai that depresses me. Usually I’m a big fan of traveling, at least I think I am. Usually, before any trip, when I’m getting ready to leave, I feel happy. There’s some kind of happy expectation that there’s going to be lots of fun to be had in the trip. Except, when I’m going to Chennai.

I’ll be leaving home in about an hour’s time to catch a bus to Chennai. We’ll be there for a day and a half, and I’ll be meeting lots of people and hopefully having a good time. There’s nothing inherently unpleasant or uncertain about this trip. Heck, we’re even going to get picked up at the bus stand by someone holding my name board – it doesn’t get better than that.

But still, I’m not at my most cheerful. There’s something that’s making me feel sad. That’s because I’m going to Chennai. Oh, and I should mention one thing. I feel this way only when I’m taking an overnight train or bus to go there. The times when I’ve caught the early morning Shatabdi to get there (of late, that’s my most preferred means of transportation to Chennai) I’ve felt quite happy and upbeat.

I think it’s the association with college. I think I’ve mentioned here that I don’t count my years at IIT as my happiest. I was an inherently troubled soul back in those days, and the only thing that I would look forward to back then was the monthly trip back home. And when that trip back home was over and it was time to go back, gloom would descend.

I remember it would be the same dinner my mother would make every time I’d to take the overnight train. There was this fixed time we’d leave home, and the same route we’d take to the station. And till about a year or so back, when I started taking that route quite frequently (for different purposes of course), traveling towards Majestic via Bull Temple Road and Goods Shed Road would remind me of those days when I’d be going back to Chennai.

A lot of things have changed. On most occasions my trips to Chennai nowadays are for happy purposes. Yet, when it’s late night and I’ve to leave for Chennai there’s a vague feeling. That lump in the throat. There’s a bottle of Thums Up that the wife has just placed on my table. Hopefully consuming it will clear the lump.

Letting the rupee float

I’m midway through Shankar Acharya’s Op-Ed in today’s Business Standard, and I realize that along with the interest rate, the exchange rate (USD/INR) is another instrument that the RBI could possibly use in order to control money supply and the level of economic activity in India. Let me explain.

Given that mad growth in petroleum prices have been fundamental to growth in inflation, and that high petroleum prices also impact the oil marketing companies and the government negatively, and that we import most of our petroleum needs, letting the rupee rise above its current level is a mechanism of reining in “realized petroleum prices”. If we were to let the rupee rise, inflation would get tamed (due to imports becoming cheaper), the government’s fiscal deficit would come down (subsidy will be reduced), but exporters will get shoved, and that can depress economic activity in the country. So letting the rupee rise is similar to increasing interest rates.

There are people who question whether the RBI should be controlling exchange rates at all, and wonder if it would be better if it were to float freely. I’ve also taken that view on several occasions in the past, but now that I think of it, there are liquidity concerns. USD/INR, EUR/INR, GBP/INR, etc. have no way near the kind of liquidity that exchange rates between two “developed currencies” (USD/EUR or USD/JPY) have. In other words, the amount of trade that happens in USD/INR is much lower than that of say USD/JPY.

Given this lack of liquidity, if let to float fully, there is a danger that the USD/INR rates can fluctuate wildly. Higher volatility in rates means higher hedging costs for both exporters and importers, and given that our foreign trade is fairly high, a wildly fluctuating exchange rate does no good in policy formulation. From this point of view, it is important that short-term volatility in the exchange rates is curbed, and to that extent I support the RBI’s decision to intervene in the FX markets.

However, if there is a sustained pressure on either side  (say the exchange rate trades for a sustained period at the edge of the “band” that the RBI is allowing the rupee to float in), the RBI should buckle and shift their bands, and let the markets have their way. While short-term volatility is not great, distorting market signals is worse.

An analogy that comes to mind is circuit breakers in the Indian stock market. Earlier, these circuit breakers were in place for all stocks (basically, they dictate that if the stock price fluctuates by more than a certain amount in a certain time period, trading in the stock will be halted for a certain amount of time). However, recent regulations have removed these circuit breakers for stocks on which derivatives are traded, which are the more liquid stocks. The circuit breakers, however, are still in place for the less liquid stocks

It’s a similar story in the FX markets. Given that USD/INR is still not too liquid (in terms of volumes), it is important that we have circuit breakers (i.e. RBI intervention). Once it reaches a certain “critical mass” (in terms of volumes ), however, the RBI can step away and let the rupee float.

(I haven’t looked at any data while writing this. All judgments are based on my perception of how certain numbers shape up)