Math, anyone?

A favorite clip of mine.. Can you beat the logic? And btw, it isnt meant as a tirade against anyone;)!

Blame the B -Schools

Peggy Cunningham, the Director of Dalhousie's (Halifax, Canada)) MBA program echoed the thoughts of millions of others in this interview when she said that B-schools are to be blamed for current crisis and B-schools have ended up creating greedy monsters.

I tend to agree with her in largely. (If you dont, loook into placement fair historically in last 7 years at IIM-A). However I would add one tag to that. It is basically Bankers (& Finance MBAs) who are to be blamed for this. Of course, it doesnt mean rest of the world is as innocent as it can be. The overall greed still is the root cause of all evil - however Bankers (and I include Financial services giants as the leaders of this group) had the great evil genius brains to innovate bad financial instruments, make the rest of the world poor while they continue to grow rich - thus not bothering about true creation of wealth.

Captialism & Socialism - Mini Lecture Series - Parts I thru V

Re- posting notes from Capitalism & Socialism - Mini Lecture Series (I thru V).

• Part I - Introduction
  
• Part II - Failure to complement
  
• Part III - Greed & Impatience
  
• Part IV - Immature policies
  
• Part V - Liquidity Trap
  

Shareholder value is a myth - says who? Neutron Jack!

Jack Welch, the idolized management guru, Neutron Jack who mercilessly shutdown businesses which didnt add shareholder value, the same Jack who possibly influenced several MBA classrooms with his 'investor/shareholder returns should be focus of the business' thought gave an interesting interview in FT.

Jack says:

"On the face of it, shareholder value is the dumbest idea in the world," he said. "Shareholder value is a result, not a strategy...your main constituencies are your employees, your customers and your products."

I still believe that there should be a minor tweak to the order of main constituencies - customers should come first, followed by employees and finally products. If every company strategizes "customer care" as a core competency and willing to risk short term gains, success is definitely on the cards. But then, getting to that decision and living by that commitment needs lot maturity.

The Satyam Marriage

Per today's Economic Times, one of India's highly unreliable business gossip dailies, the current list of Satyam suitors include IBM, KKR, iGate and Fidelity in addition to Tech Mahindra, Spice and L&T. Let us forget that ET news is as unreliable as it can get and do a quick and dirty analysis of who will win over Satyam finally. Of course, all the MBAs from various financial markets will publish voluminous analysis - especially that they have nothing else better to do anyway.

The analysis will have to be done typically 5 angles - investors of original Satyam, buyers/current investors, the employees of Satyam, clients of Satyam and the Govt. (appointed board)...

Investors of 'original' Satyam - this is a easy set of people to be ignored. In the current scenario, any type of purchase is not going to recover the lost money, especially all the goodwill asset value. However the undoubted optimist will still hope that it will be a large public company (read IBM) that will buyout Satyam with a share-exchange plan in place. Institutional investors will oppose any PE buyout because they know all they will get is few peanuts if that was the case.

Buyers/Current investors - Given Satyam clientele, the large workforce, processes of Satyam, IBM might see lot of value in the acquisition. Particularly after HP has lapped up EDS/MPhasis and Obama creating issues for offshoring jobs, IBM might want to solidify its commanding presence in low cost labor. For Tech Mahindra, it is a great time to scale huge right away. iGate's story is still vague - am not sure they have done a due diligence of what they will do if they acquire Satyam - more or less they would get eaten away by the magnitude of Satyam's operations. L&T, Spice are not right suitors according to me. They neither have a good vision nor the capacity to manage a large ITeS organization for now. However, the most important suitor is KKR. No matter what KKR says, the end result is that it will break Satyam into smaller pieces and sell them off one at a time within 5 years or less.

Employees of Satyam - Currently the employees are the strength of the company. However, it is also to be noted that the employees dont have much bargaining power, given the economy. In this kind of situation, the employees would prefer taken over only by an IT Services organization - IBM, Tech Mahindra, iGate - in that order. For them moving to IBM is the safest option - they get a better branded tag and also move into a safe, comfortable and familiar territory. The employees' big fear would be to be taken over by KKR. For a KKR buyout will clearly result in quick layoffs of the excess fat right away and KKR would never hesitate to take tough decisions in tough times.

Clients of Satyam - This is a tough set to deal with. I am sure that the clients would not prefer a L&T/Spice takeover. The clients might be ok with an IBM takeover, with IBM's established reputation. From their point of view KKR may not be a bad choice either - however, the clients know that if KKR steps in, their bargaining power will go down for sure.

Govt/Board - Now what would the board declare as a victory? Am sure that the board would definitely not accept a PE takeover as a victory. For one, the PE pricing will be the most conservative and PE buyout will create lot of uneasiness for various stakeholders. For the board, a sale to Spice might be a full victory -an Indian company transitioned to a Indian company. IBM may be a close choice as well - safe zone.. and IBM has a history of mess-up in a lot of things and will live up to that reputation - a mess in Satyam acquisition will be soon forgotten.

Considering all above, as one can sense, IBM comes to close enough to satisfying lot of factors and a suited suitor for Satyam, though in my opinion, KKR would possibly be the right buyer at the moment. Satyam, in spite of having a strong workforce, is definitely struggling with a immature senior management and a bloated labor force to some extent. KKR would be the right choice to put the company back in shape.

IBM is popular. KKR is a fit. But we should not forget a lot of other players in this game - institutional shareholders, LIC, NASSCOM, other Indian IT Services majors, media and finally Raju (!). 

Lets see who wins the Swayamwaram.

Project Management Quotes

Stephen Seay compiled this wonderful list of quotes on Project Management. I thought this is a interesting read and must be passed along. So here you go:

Good estimators aren't modest: if it's huge they say so.

The sooner you begin coding the later you finish.

A verbal contract isn't worth the paper it's written on.

What is not on paper has not been said.

If you don’t know where you’re going, any road will take you there.

If you fail to plan you are planning to fail.

If you don't attack the risks, the risks will attack you.

A little risk management saves a lot of fan cleaning.

The sooner you get behind schedule, the more time you have to make it up.

A badly planned project will take three times longer than expected - a well-planned project only twice as long as expected.

If you can keep your head while all about you are losing theirs, you haven't understood the plan.

When all's said and done a lot more is said than done.

If at first you don't succeed, remove all evidence you ever tried.

Feather and down are padding - changes and contingencies will be real events.

There are no good project managers - only lucky ones.

The more you plan the luckier you get.

A project is one small step for the project sponsor, one giant leap for the project manager.

Good project management is not so much knowing what to do and when, as knowing what excuses to give and when.

If everything is going exactly to plan, something somewhere is going massively wrong.

Everyone asks for a strong project manager - when they get him they don't want him.

Overtime is a figment of the naïve project manager's imagination.

Quantitative project management is for predicting cost and schedule overruns well in advance.

Good project managers know when not to manage a project.

Metrics are learned men's excuses.

For a project manager overruns are as certain as death and taxes.

If there were no problem people there'd be no need for people who solve problems.

Some projects finish on time in spite of project management best practices.

Good project managers admit mistakes: that's why you so rarely meet a good project manager.

Fast - cheap - good: you can have any two.

There is such a thing as an unrealistic timescale.

The more ridiculous the deadline the more money will be wasted trying to meet it.

The first 90% of a project takes 90% of the time the last 10% takes the other 90%.

The project would not have been started if the truth had been told about the cost and timescale.

To estimate a project, work out how long it would take one person to do it then multiply that by the number of people on the project.

Never underestimate the ability of senior management to buy a bad idea and fail to buy a good idea.

The most successful project managers have perfected the skill of being comfortable being uncomfortable.

When the weight of the project paperwork equals the weight of the project itself, the project can be considered complete.

If it wasn't for the 'last minute', nothing would get done.

Nothing gets done till nothing gets done.

Warning: dates in the calendar are closer than you think.

There is no such thing as scope creep, only scope gallop.

Anything that can be changed will be changed until there is no time left to change anything.

If project content is allowed to change freely the rate of change will exceed the rate of progress.

If you can interpret project status data in several different ways, only the most painful interpretation will be correct.

A project gets a year late one day at a time.

A project isn’t over until the fat check is cashed.

Powerful project managers don't solve problems, they get rid of them.

Global Savings Glut

Would like to post a couple of interesting links for those who would like to explore more information on how the global debt crisis began.

The first link is that of my favorite Nobel Prize winning columnist Paul Krugman's NYT Op-ed. He discusses Ben Bernanke's famous 2005 speech on Global Savings glut and explains it in layman's terms.

Revenge of the Glut

The second link is that of the original speech by current Chairman of Fed Reserve Ben Bernanke, who explains his view on how the emerging Asian markets, especially China exported Capital amongst other things to western world, thereby causing a savings glut.

Global savings glut and US Current Account deficit

Those of you interested in exploring more (similar) articles, ping me.

Stockbrokers :)

An old but relevant joke:

Stockbrokers are called so because they advise/help us in investing in stocks that make us go broke!

B School & Placements

One thing that many of us haven't yet got right is the fact that going to B -School is NOT going to a placement/career fair. But that is the way the B-School advertisers, media and even alumni have projected it. And it will stay no matter what anyone says.

One crore + salaries are abundant in B-school placements in India. Every IIM boasts for at least 1 if not more 1CR+ salaries. The media goes ga-ga about it. And IIMs, the institution that is responsible for generating talent that will help India move forward, has just become a placement factory like any other private B-school, only with better results. Doesn't it look queer when a MBA grad from IIM, with 1 or 0 years of experience gets a 1 CR salary? Either something is wrong with the company/industry that is hiring him/her, or he/she is so exceptionally talented - in which case we can use that person to help us get out of such economic crisis as the one we are facing.

The pressure of students in IIMs about placements, and the reports that they drink their sorrow just shows what wrong set of candidates the institutes have admitted in the first place. Aren't these students just trained to cope with crisis and provide leadership to situations? Instead of fighting for placements, losing hope and drinking in sorrow, aren't these top notch exceptionally talented MBA grads supposed to provide leadership to themselves, their institutes and be creative to steer out of crisis?

What is the point in hiring those with great 1CR salaries, when they are fighting like cocks for jobs? Even amongst the IIMs, there is a bitter cold war across the A,B,C,L institutes to "claim" companies for placements. They have also been playing by moving their placement dates up and down to get the companies "first". And worse, they have gone to connect with thousands of companies, who have been ignored and ashamed by the same institute all these years.

What is worse, one can blame this "placement focused" attitude and curriculum of IIMs as the base for killing enterpreneurship and arming students with skills to survive and compete.

The management boards of IIMs should come together to declare that they would stop babysitting their students for placements. Going to a B-School is to arm onself with skills that will help him/her to be successful as a leader and create a vision. It is not a placement fair. And of all places, institutes like IIM should start setting right examples.

Recruiters can wake up and stop being irrational in recruitment. And for Godssake, the usually stupid media can stop evaluating B-schools in terms of top salaries and placement statistics.