Tag: logs

Comparative advantage and competitive advantage

So there are two reasons why you could be employed. Comparative advantage and competitive advantage. Let me explain.

In international trade, there is a concept called “law of comparative advantage“. Let me explain with the classical (and simple) example. Robinson Crusoe is marooned on an island with Friday. Now, let us assume there are two productive activities on the island – catching fish and cutting wood. Now, Crusoe can catch 10 fish an hour, while Friday can catch 5. On the other hand, Crusoe can cut 3 trees an hour, while Friday can cut 2. Clearly Crusoe “dominates” Friday, and the latter is much more inefficient. So does that mean that Crusoe can just have Friday for dinner one day?

While the intuitive answer might be a “yes”, the law of comparative advantage shows otherwise. While Friday might be inferior to Crusoe in both activities, he is “less worse off” at chopping trees than he is at catching fish. For example, let us say that if left to himself, Crusoe would spend 3 hours fishing and 2 hours chopping wood every day. That would produce 30 fish and 6 trees of wood.

Now, if Crusoe were to spend all his 5 work hours exclusively catching fish, he will have 50 fish and no wood. He can trade the extra 20 fish for 8 logs of wood from Friday (Friday demands 5 fish for every 2 logs of wood, since that’s his opportunity cost). So net-net Crusoe is better off by 2 logs of wood. The trade similarly leaves Friday also better off (compared to the situation if he were alone on the island). Now you see why Friday keeps his job.

So in a “comparative advantage” job, you keep the job only because you make it easier for one or more colleagues to do more. You are clearly inferior to these colleagues in all the “components” of your job, but you don’t get fired only because you increase their productivity. You become the Friday to their Crusoe.

On the other hand, you can keep a job for “competitive advantage“. You are paid because there are one or more skills that the job demands in which you are better than your colleagues. You have a “competitive advantage” in those skills, and that is what you are paid for. Here you can expect to be treated better than your comparative advantage colleague would. You can even expect for some of your “comparative advantage” colleagues to be assigned to you to take your load off on those tasks you don’t enjoy a competitive advantage in. And again I’m not saying you need to “dominate” your colleagues.  All you need is one “axis” along which you are clearly superior. And you’ll get the “competitive” treatment.

Pause for a moment and ask yourself why your job exists. Check if you work because you have a competitive advantage, or if it is merely because of the “comparative advantage” – that your presence frees up time for the more efficient people. If your job belongs to the latter category, I think you have reason to be more worried.

Bangalore trip update

The recent inactivity on this blog was mainly due to my inability to log on to wordpress from my phone and write a post.  I had gone home to Bangalore for an extended weekend (taking Friday and Monday off) and the only source of net access there was my phone, and for some reason I wasn’t able to log on to NED from that. During the trip I had several brilliant insights and brilliant ideas and wanted to blog them and finally such NED happened that I didn’t even twitter them. Deathmax.

The main reason I went to Bangalore was to attend Pradeep (Paddy)’s reception. I think this is an appropriate time to share the funda of his nickname with the world. Before he joined our school in 9th standard, there was this guy two years senior called Pradeep, and for some reason not known to me he was nicknamed Paddy. I vaguely knew him since I used to play basketball with him, and after he graduated there were no more Paddys in school. So when this new guy came from the Gelf, it presented a good opportunity to get back a Paddy into school. It turned out to be such a sticky nickname that not even IIT could change it.

Friday was Ugadi – yet another reason to be home in Bangalore – and was mostly spent visiting relatives. When they heard about my impending market entry, all of them brought up stories of not-so-successful marriages of people they knew well, and put fundaes to me about avoiding certain pitfalls. These fundaes were liberally peppered with stories. Mostly sad ones. Mostly of people who have chosen to continue in their marriages despite them clearly failing. It is amazing about the kind of stuff people I know have gone through, and yet they choose to not run away.

Saturday morning was rexerved for my first ever “market visit”. I was taken to this bureau in Malleswaram and asked to inspect profiles. “There are profiles of hundreds of girls there”, my uncle had told me “so let us go there before ten o’clock so that you have enough time”. The profiles were mostly homogeneous. The number of engineering seats available in Karnataka amazes me. Every single profile I checked out over there had studied a BE, and was working in some IT company. Things were so homogeneous that (I hate to admit this) the only differentiator was looks. Unfortunately I ended up shortlisting none of them.

One of the guys I met during my Bangalore trip is a sales guy who lives in a small temple town without any access to good cinema. So he forced me to accompany him to watch Slumdog (in PVR Gold Class – such an irony) and Dev D. I agree that Slumdog shows India in poor light, but filter that out and it’s a really nice movie. We need to keep in mind that it was a story and not a documentary, and even if it were the latter, I think documentaries are allowed to have narratives and need not be objective. Dev D was simply mindblowing, apart from the end which is a little bit messed up. Somehow I thought that Kashyap wanted to do a little dedic to his unreleased Paanch.

There is this meet-up at Benjarong which is likely to contribute enough material to last six arranged scissors posts. I’ll probably elaborate about the discussions in forthcoming posts but I must mention here that several arranged marriage frameworks were discussed during the dinner. The discussions and frameworks were enough to make both Monkee and I, who are in the market process, and Kodhi who will enter the market shortly to completely give up in life.

One takeaway from Paddy’s reception is that if you can help it, try not to have a “split wedding” (and try not to have a split webbing also) – where different events are held at diferent venues, on disjoint dates. In that case you won’t have people lingering around, and you will lose out on the opportunity to interact with people. Note that there is zero scope for interation during the ceremonies, and the only time you get to talk to people is before, and after, and during. And it is important that there is enough before or after or during time to allow these interactions. In split weddings guests are likely to arrive and leave in the middle of an event and so you’ll hardly get to talk to them.

One policy decision I took was to not have breakfast at home during the length of my stay. I broke this on my last day there since I wouldn’t be having any other meal at home that day, but before that visited Adigas (ashoka pillar), SN (JP nagar) and UD (3rd block). The middle one was fantastic, the first reasonably good except for bad chutney and the last not good at all. Going back from Gurgaon it was amazing that I could have a full breakfast (2 idlis-vada-masala dosa-coffee) for less than 50 bucks. Delhi sorely lacks those kind of “middle class” places – you either eat on the roadside or in fine dining here.

Regular service on this blog should resume soon. My mom has stayed back in Bangalore for the summer so I’m alone here  and so have additoinal responsibilities such as cooking and cleaning. However, I think I should be having more time so might be writing more. I can’t promise anything since blog posts are generated by spur-of-the-moment thoughts and I never know when they occur. Speaking of which I should mention that I put elaborate fundaes on studs and fighters theory in my self-appraisal review form last week.

Process

A couple of days back, I was debugging some code. And yes, for those of you who didn’t know, coding is a part of my job. I used to have this theory that whatever job you take, there is some part of it that is going to be boring. Or to put it in the immortal words of a brilliant co-intern at JP Morgan “chootiya kaam”. And in my job, the chootiya part of the kaam is coding. That doesn’t mean that I’m not enjoying it, though. In fact, for the first time in nine years (note that this takes me to a time before I’d started my BTech in Computer Science) I’m enjoying coding.

Coming back, I was debugging my code yesterday. It was one of those impossible bugs. One of those cases where you had no clue why things were going wrong. So I started off by looking at the log files. All clean, and no bugs located. While I was going through them, I got this idea that the strategy sheet might offer some clue as to why things aren’t doing well. Half the problem got diagnosed when I was looking at the strategy sheet. Some problem with cash management.

And when I thought looking at the trades might help. The bug was presently discovered. And then it hit me – that I’d unwittingly followed what seems like a “process”. Everything that I did had been guided by insight and instinct. Yet, the steps that I followed – 1. look at the logs; 2. look at the strategy sheet ; 3. look at the trades – seemed so much a preset process. It seemed to be like one of those things that I’d just ended up reading in some manual and following.

I realize that most “standard processes” that are followed by  various people in various places are stuff that were initially not meant to be processes. They were just an imprint of somone’s train of insights. It was as if someone had a series of insights that led to a solution to whta might have been a difficult problem. And then, he realized that this kind of a process could be followed to deal with all such similar problems. And so he wrote down the process in a book and taught a set of people to implement them. The field thus got “fighterized“.

The argument I’m trying to make here is that a large number of so-called “standard processes” are just an imprint of someone’s insight. They just happened to get into place because the inventor noticed this pattern in a bunch of things that he was doing. They need not be the best way of doing what is supposed to be done. Maybe there isn’t even a single best way of doing it that might work every time.

People who are likely to have worked on processes later in their life cycle are likely to have been people who are process-oriented themselves, and given how these kind of people work, it would have been likely that they would have resisted changes that could make the process worse in the short term. They are more likely to have been incremental in their approach. With a succession of such people working on improving the process, the process of refining the process would’ve ended up taking a hill-climbing algorithm and is likely to have ended up in a local maximum.

Once again, the large changes to the process would’ve happened when someone who was willing to take a large step backward worked on them, and it is again likely that such a person would be driven more by insight rather than by process.

My hypothesis is that most processes are likely to have been largely defined by people who are themselves not very process-oriented, and who thus will expect a certain level of insight and discretion on the part of the person implementing the process. And one needs to keep this in mind while following processes. That it would be good if one were to take a critical view of every process being used, and not be afraid to take a backward step or two in process development in order to achieve large-scale improvements.