Could “Create a margin of safety” be the toughest of the 8 steps to innovation to master?

Café Coffee Day founder V. G. Siddhartha’s unfortunate demise coincided with my class on “Margin of safety” in “Strategic Management of Technology and Innovation” course at IIM Bangalore. “Create a margin of safety” is the 8^th step of the "8-steps to innovation" book I co-authored. Siddhartha allegedly committed suicide by jumping into the Netravati river near Mangalore. We would never know the exact reasons why Siddhartha took such an extreme step. Given the debt situation of Café Coffee Day group, could it be possible that Siddhartha lost track of margin of safety? And, if a seasoned businessman like Siddhartha can overlook margin of safety, could it be the toughest step to master?

When I discussed this question with my friend and co-author of “8 steps to innovation”, Prof. Rishikesha Krishnan, he suggested I read the book “Failing to succeed: The story of India’s first e-commerce company” by K. Vaitheeswaran. It turned out to be a textbook case demonstrating how difficult it might be to internalize the principle of “margin of safety”. Let’s look at a few anecdotes from the book which illustrate this point. But before we look at it, let’s note that we are looking at a venture story when it hit a downward spiral. The Indiaplaza story contains several ups and many things that the founders should be proud of. Moreover, innovators and especially entrepreneurs should be indebted to K. Vaitheeswaran for the candid narration of his experience. It is so rare in the Indian context.

June 2009:  "A jewellery vendor from Delhi came to our office with a few thugs and abused me with choice expletives in front of all staff members and threatened to beat me up physically if I did not pay up the dues within two days."

"An apparel vendor from Surat came to the office accompanied by a local policeman. The policeman threatened to arrest me if we didn’t settle the dues in one week."

August 2012: "I had stopped drawing my salary from August 2012, and worse, I had made the mistake of using my personal credit cards to spend for the company. Every day private collectors visited our home on behalf of credit card companies and loudly demanded money to embarrass and shame me in front of my neighbours and family. Then I decided to withdraw my Provident Fund (PF) because we desperately needed money."

December 2012: "The last week of December was terrible. On 31 December 2012, New Year’s Eve, a group of drunk people banged on our apartment door loudly and in front of my neighbours, family and some friends abused me for non-payment of dues. I was falling into bouts of depression and my health was taking a severe beating."

April 2013:  "When this deal (a potential acquisition) fell through, the creditors became furious. In a few days, our office was swarming with creditors in person. An electronics merchant, during the conversation in our office, pulled out a dagger and placed it on the table. The managing director of a big publishing and distribution house from Delhi met me in Bengaluru and said that he would ‘throw babies in front my car’ when I was driving."

August 2013: "I was standing inside the Ulsoor police station on Cambridge Road in Bangalore. I waited to be interrogated by the inspector on a complaint filed personally against me by a merchant."

8 December 2013: "I had quit and I was not coming back. I had nothing to show for my efforts over fourteen years except for several court cases against me, social media abuse, being avoided like the plague by people I knew and being branded a failure."

At one point the author says, “Whenever I read about people taking their own lives due to financial troubles, I confess, I can understand and sympathize with a moment of madness.”

Building a “margin of safety” involves asking two questions: “What kind of catastrophic risk is there? And, can I live with it?” From the anecdotes above it looks as if the worst-case scenario was not difficult to imagine in 2009 itself. And yet no major action was taken to protect oneself against such a situation. Hence, I am beginning to wonder if creating a margin of safety could be the toughest of the 8 steps to innovation to master.

How can success be damaging to creativity? A Javed Akhtar perspective

“So do you think that success can be damaging to creativity?” asked Nasreen Munni Kabir in her interview with Javed Akhtar in 1999¹.  “Yes, of course,” Javed answers, “I think it happened in our case. If we had the right scripts, Amitabh would have done anything we offered him, without question. But what did we offer him? After Trishul and Don, we failed him as writers. We didn’t do anything worthwhile.” Why does this happen – i.e. success damages creativity? Let’s explore in this article.

First, let’s understand why Javed Akhtar says that success can be damaging. “I think what goes wrong is that we get too scared of failing,” he says, “When you’re too scared of failing, you don’t experiment. And when you don’t experiment, you become trite.”

What Javed Akhtar’s interview brings out is the first step essential for creativity to sustain. It is an acknowledgment that I have stopped experimenting and I am just repeating a formula that has perhaps worked in the past. In fact, by 1999, Javed Akhtar had stopped writing film scripts and found a new source of energy – lyrics writing. He says, “I have learned one thing that the moment I lose interest, I will do something else.”

By 1999, Javed Akhtar was not only writing lyrics for films but was also experimenting with non-film albums. He had done Sangam with Nusrat Fateh Ali Khan (1995), Silsilay with Jagjit Singh (1998) and Breathless for a young man whom Akhtar calls “a talented singer and musician” Shankar Mahadevan (1998).

Javed Akhtar’s perspective highlights two questions worth asking oneself. One, are you doing something that gives you energy?  Two, are you experimenting?

Javed Akhtar’s career as a lyricist took off post this interview in such a big way that the title of the Oxford University Press book was changed later from “Talking films: Conversations on Hindi cinema with Javed Akhtar” to “Talking films and songs”. And perhaps later the conversation related to songs was culled out to create a new book titled “Talking songs” where sixty songs were added to the book.

In short, ask two questions to yourself once in a while, (1) Am I doing anything that gives me energy? (2) Am I experimenting?

Source:

“Talking films and songs: Javed Akhtar in conversation with Nasreen Munni Kabir”, by Nasreen Munni Kabir, Oxford University Press, 2017.

Mot-chat #2: A master-class with Rishikesha T. Krishnan, Professor of Strategy, Indian Institute of Management Bangalore

In this 30 minutes conversation, Professor Rishikesha T. Krishnan, a friend, a collaborator and a veteran in the field of technology management, synthesizes the key concepts in a lucid manner without oversimplifying it. This is the second in the series of interviews I have been doing on management of technology called MoT-chat series.

Rishi is a professor of strategy at Indian Institute of Management, Bangalore. He has been associated with this institute since 1996. He was the director of IIM Indore from 2014 till 2018. He has won a bunch of awards. The most recent one is “Change Maestro and Institution Builder” Award from Industry Academia Conference which he won this year. He was listed as a top management thinker in India in 2013-14-15. And he has won Dewang Mehta Award for the Best Teacher in Strategic Management. He is an avid reader and clocks 50+ books a year. And I had the privilege of working with Rishi when we worked together on our book “8 steps to innovation”.

In this interview, Rishi talks about: How he got interested in the study of management of technology (1:38), key decisions involved in management of technology (3:35), his favorite frameworks in this area like S-curve and portfolio of incremental-platform-radical innovation projects (9:38), challenging areas in Management of technology (13:07), why are decisions related to radical innovations challenging (15:26), Why are Indian companies don’t have the appetite to take radical innovations steps (18:15), any sector or company in India that is doing the management of technology relatively better (20:28), message for MBA students (26:08), books he is reading (27:44).

The interview audio (MP3, 17MB) is available here and the transcript of the interview is available here.

image source: Rishi's twitter account at twitter.com

Empathy tips from Kahneman’s “Adversarial collaboration”

(Reading time: 5 minutes)

Empathy is one of the core elements of Design Thinking. It is easier to empathize while dealing with people we care about. However, things get more difficult when we are dealing with people whom we don’t like or who hold opposite views. It could be a family member or a colleague with whom we get into an argument regularly. It could also be a friend on the social network who holds exactly opposite religious or political beliefs than yours. How do you empathize with people holding exactly opposite views? I feel Kahneman’s idea of “adversarial collaboration” gives us a few clues even though he himself feels that this idea may not even survive. What is this idea of “adversarial collaboration” that Kahneman has proposed? Why does he feel it may not survive? And how could it help us build empathy muscle? This is what I would like to explore in this article.

“I have always hated quarrelling,” says Nobel Laureate Daniel Kahneman in this 2-minute video titled “Adversarial Collaboration”. “I have always despised scientific controversies,” he adds, “Because they become very personal and people very quickly get into a point-scoring mode where the truth is unimportant. That has struck me as quite destructive.” For those who genuinely seek the truth, he has proposed “adversarial collaboration”. And he admits, “It is not widely used and I am not sure that this idea would survive.”

Over several decades, Kahneman studied cognitive biases and concluded that human intuition is biased and not trustworthy. Gary Klein, on the other hand, studied expert intuition from people such as chess masters and firefighters and concluded that it is a marvel. Kahneman and Klein decided to work together to answer the question: In what context is expert intuition trustworthy and in what context it is not trustworthy. This collaboration lasted for 6-7 years. At the end, they published a joint article titled, “Conditions for intuitive expertise: A failure to disagree”. In short, they had found common ground.

What is my biggest takeaway from “adversarial collaboration”? It is the importance of context curiosity. The key hypothesis here is that every view is meaningful in some context. A drug addict, a terrorist, a money launderer – everybody carries a world-view which is meaningful in some context. In the extreme case, that context is limited to only one person. Understanding that context is empathizing. Hence, context curiosity forms an important element of empathy.

Understanding context would require a willingness to listen with openness. Listening to people who hold views opposite of yours is not easy. And hence perhaps Kahneman feels this idea of “adversarial collaboration” may not have takers. Listening with openness implies a willingness to say, “I could be wrong”. That’s harder than one can imagine. In Kahneman’s words, “People who think poorly of your work and your ideas, get on your nerves. And you have to overcome that.”

In a world where the polarization of views is increasing day by day, it is easy to encounter people who hold views exactly opposite of yours. I feel that is an excellent opportunity to build your empathy muscle. Are you willing to listen with openness? Alternately, are you willing to say, “Let me find out what is the context from which this view is coming from”? Please try it out and see for yourself.

Image source: YouTube video “Daniel Kahneman: Adversarial collaboration”

Kahneman's video “Adversarial collaboration”: (duration: 1:52)

Another video: Daniel Kahneman: Adversarial collaboration (duration: 2:14)

MoT-chat #1: Interview with Zunder Lekshmanan, CTO, OpenTurf Technologies

I am teaching a course at the Indian Institute of Management, Bangalore starting next month titled “Strategic Management of Technology and Innovation”. The course has motivated me to interview technology managers, academicians, consultants and get fresh perspectives on the Management of Technology (MoT). Hence the series MoT-chat. Here is the first interview on MoT-chat series – of my friend Zunder Lekshmanan, Chief Technology Officer, OpenTurf Technologies.

In this interview, Zunder talks about what it means to run a VTO’s Office(2:05), how he monitors, tracks and assesses emerging technology trends (7:38), how he performs experiments (10:34), builds use-cases (19:46), makes build-vs-buy decisions (30:40), How he builds partnerships (32:42), What strategic bet means to him (36:26), His experience in starting a technology company (38:48), Role of Under-The-Carpet (UTC) R&D (43:04), His style of motivating senior engineers (45:06), Role of structured learning (47:06) and the meaning of being a “Cracked Pot” (50:45).

The audio in AMR format is available here (5MB) and in MP3 format is available here (25MB). The transcript of the interview is available here.

Here are a few nuggets of wisdom from Zunder:

• In my view, technology, whether it succeeds or not, it’s the ability to get things out and feel it in the hands of customers.
• I rely on the fastest time to market.
• (On an interesting technology trend) I first see if there is an application area where I want to use it.
• (Apart from experimenting myself) I also go to experts, people who have worked with me and still are in the industry, I take their views.
• The success of the use-case is based on consumption.
• In my books, CTO has to meet customers.
• (In my start-up) I made the same mistake as many people, saying, “Build it and they shall come.”
• UTC (Under-the-carpet R&D) was so successful for me that business guys used to ask, “Zunder, what’s cooking?”
• Just don't be satisfied with the status quo.
• You should have a sense of indiscipline somewhere.
• “Cracked Pot” means don’t hold anything, don’t take permanent positions. Let the water flow.

Here are a few things Zunder refers to in the interview:

• Algorithm, an AI newsletter published by MIT Technology Review
• ThoughtWorks technology radar
• Zunder’s blog “Be a cracked pot”
• Zunder’s first book on Amazon: The road to Leh discovering heaven on earth, 2012
• Zunder’s second book on Amazon:  As the crow flies: Chronicles of a middle bencher, 2018
• While it didn't get covered in the interview, Zunder is a fan of Google's 4E model - Earn, Entice & Defend, Expand the pie and Experiment  

Understanding self-deception through “Nayantara’s necklace” (Part-2)

In the previous article titled, “Understanding self-deception through Nayantara’s necklace – Part-1” we looked at a cyclic three-stage process of self-deception. The three stages are (1) Feeling “I am imperfect” (2) Identification of object causing imperfection (3) Striving to acquire the object. The process is deceptive because it creates an illusion that I am progressing towards perfection. Many of us may be trapped in the cycle of self-deception most of our life. Of course, one needs to investigate and find out. Does life offer opportunities to step out of this cyclic trap? Yes, all the time. Let’s go back to the short film “Nayantara’s necklace” directed by Jaydeep Sarkar and see how life created opportunities for Alka (Tilottama Shome) to reflect and step out of self-deception at least for a little while.

Questioning absoluteness:

Alka has dinner with her school friend Girish (Gulshan Devaiah) who is now a CEO. During their conversation, Alka projects the image of a “perfect Alka”. She says she travels abroad two-three times a year, loves five-star hotels and they are planning to visit the US the following year etc. In her image of perfection, these travels, five-star hotels, etc. are absolutely essential. Girish, on the other hand, admits that he feels exactly the opposite. He finds the five-star hotel ambience superficial. In fact, what he likes are mundane things like watching TV at home, sitting with kids who are doing homework, etc. Girish’s job demands that he live in five-star hotels and he does that under these circumstances. However, he doesn’t consider this lifestyle absolutely necessary.

Interactions like these where we meet or read about people for whom what we consider absolutely essential is not so important are not uncommon. And they create opportunities for us to reflect on the absoluteness of our necessities.

Questioning perfection:

When Alka returns home from the dinner, she discovers that Nayantara’s (Konkona Sen Sharma) husband has shot his wife, son and himself. They were in huge debt and bank guys were after them. Alka learns that Nayantara, the person whom Alka idolized, was subjected to physical abuse all the time. Seeing all this, Alka’s image of perfection gets shattered and she returns the borrowed necklace back in Nayantara’s car. Nayantara and her family perhaps at one point could afford a lavish lifestyle. Circumstances had changed. However, the necessities didn’t. Perhaps it created conflict resulting in extreme action.

The image of what is perfect is governed by absolute necessities – be it religious rituals, political ideologies, scientific theories or spiritual states. Once we see that there is nothing which is absolutely necessary, everything becomes context dependent. What then is the meaning of perfection? Every moment the context is different. What is meaningful in one moment could be different from what is meaningful in the previous moment. It demands openness every moment.

To summarize, we are saying that self-deception consists of constant striving towards an image of perfection which is a collection of absolute necessities. The illusion of progress is powerful and deceptive. However, the absoluteness of each of the necessity is questionable. And life creates opportunities all the times for us to question the absoluteness of these necessities. It needs openness to listen and observe.

Understanding self-deception through “Nayantara’s necklace” (Part-1)

Mindfulness involves an investigation into self-deception. Hence, learning to recognize self-deception is crucial while experimenting with mindfulness. In this article, we explore the process of self-deception using the short film (20 minutes) available on YouTube titled “Nayantara’s necklace” (2014) directed by Jaydeep Sarkar and co-written by Aparnaa Chaturvedi and Ankur Khanna. It features brilliant performances by Konkona Sen Sharma and Tilottama Shome. Spoiler alert: The article reveals the plot of the film.

Let’s begin by looking at a bit simplistic three-stage cyclic model of self-deception. The three stages are (1) Feeling “I am imperfect”. (2) Identification of the object causing imperfection and; (3) Striving to acquire the object. At the heart of this cyclic process is an image of the self (self-image), which is getting updated all the time. Let’s see how this works through a few scenes in “Nayantara’s Necklace”.

The film presents the anxieties and aspirations of two friends living in the same apartment complex – Nayantara, who is more stylish, has just returned to India from Dubai and Alka who hasn’t been outside the country, hasn’t visited a five-star hotel etc.

1. Feeling “I am imperfect”:

During a conversation, Nayantara tells Alka, “Babes, you’re damn naïve!” which is perhaps not new to Alka. She believes that she is not smart and stylish like Nayantara. In all likelihood, such a remark shrinks Alka’s self-image and makes her feel “small”. In fact, Nayantara doesn’t have to say it explicitly. All she needs to do is to flaunt her style and say, “It is natural”. That’s enough.

If we look at Nayantara as a metaphor for society, then we hear such remarks all the time from our family members, friends, teacher, boss, colleagues, etc. “You are stupid”, “You don’t even know this?”, “You are a below average performer” etc. The net effect is a feeling “I am imperfect” and it hurts. The hurt is real i.e. we feel pain similar to how we would feel during a headache. 

2. Identification of the object causing imperfection:

When Alka asks, “You must have travelled the entire world, right?” Nayantara answers, “Usually two-three trips abroad happen every year”. Through this Alka identifies an object that is the cause of imperfection – lack of trips abroad.

An object causing imperfection could be skin colour, weight, social status, position in the company, salary, car model, size of the house, strained relationship, net worth, etc. I guess you get the point. For a scientist, it could be peer recognition and for a spiritual seeker, a scripture such as Bhagavad Gita could say – To be perfect, you have to get rid of ALL desires (verse 2.55) or acquire a state of no-desire.  In short, everyone can find some object as a cause of imperfection.

3. Striving to acquire the object: 

Once an object is identified as necessary to become perfect, one automatically strives to acquire the object. For Alka, the efforts begin by acquiring the looks and manners required to dine at a five-star hotel. During a dinner with her school friend, she begins to project an image of perfect Alka, the one who spends her life in five-star hotels and travels abroad two-three times a year just like Nayantara.

Where is self-deception in this? One, the conclusion that “I am imperfect” is premature. And two, the cause of the hurt is questionable. The deception lies in perpetuating a story of an "imperfect me", misattributing the cause to an external object and then justifying the striving for a "perfect me".

Here is an alternate hypothesis. The hurt is real. However, the hurt is caused because there is an assumption of absolute necessity neurophysiologically embedded in the brain that says, “It is absolutely necessary to be perfect”. Hence, whenever I hear or imagine anything that damages my perfect image, it hurts. The neural reflexes fire automatically. I misattribute the pain to an object outside.  The real cause is the absoluteness of necessity embedded in my memory. 

What’s wrong with dressing well, five-star dining, trips abroad? Nothing. Question is: Is it absolutely necessary? That’s the question. If one can afford it or if the job demands it, why not? And even if one can't afford it now, one can work towards it. However, when we assume that these things are absolutely necessary no matter what the context is, then it may involve deception. That’s the suggestion.

Unless the absoluteness of these necessities is seen to be meaningless, the feeling of imperfectness will continue to hurt us. And the cyclic process continues. In part-2 we will see how life offers opportunities to learn about the nature of self-deception and how learning might take place.

Nayantara's necklace: