Who? Me??

I really do not see how is it any different from any other enterprise? I looked up the wiki page for Social Entrepreneurship, here’s what it says -

Social entrepreneurship is the work of a social entrepreneur. A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change (a social venture). Whereas a business entrepreneur  typically measures performance in profit and return, a social entrepreneur focuses on creating social capital. Thus, the main aim of social entrepreneurship is to further social and environmental goals. However, whilst social entrepreneurs are most commonly associated with the voluntary and not-for-profit sectors, this need not necessarily be incompatible with making a profit.

How in the world is this any different from what a good business does? It recognizes a social problem (read loosely as a problem that the society in general faces), and it solves the problem. For any enterprise, over a period of time there will be performance metrics – profit and return merely build sustainability. These would be needed by the social entrepreneur as well. So what makes it any different? Social capital is also created by enterprises. If you go through any of the annual reports that a firm publishes, they have this term – Goodwill.

If good will is not social capital, then what is? I think social entrepreneurship is just a term invented by hacks to make themselves feel good. Or maybe its just a marketing gimmick for generating funds.

PS – Before you hit the comment button to rant, do not misread me. All I am saying is that any good business is as good as any “social entrepreneurship”, then why make the difference? Is social entrepreneurship the new green?

Back in August 2006, I had written a post on Dot Com Bust 2.0 (you can read it at the link provided, sadly rediff BLOGS has a bad way of storing posts (week-wise instead of it being individual posts).

Revisiting that post was an interesting exercise, an excerpt -

Do we see history repeating itself? A sudden surge in this Dot Com 2.0 demand, people are already teeming in to cash-in on this new opportunity. Do I start off a firm of my own and try to do the same. Is this risk / venture enough to sustain me through the impending bust? During my induction at TechMahindra, there was a fellow from the top management who was wizened enough to predict that the next bust is going to come in the year 2009. We laughed it off back then, I am not laughing now. Maybe, the dot com bust might relapse, and why not? Fortunately, IT in India is not just about web development anymore. We will pass through this. But will my dream of starting off on my own do the same?

Full marks and respect for that top executive.

Facebook keeps changing its layout, looks, etc ever so slightly and so constantly that most users do not even notice the changes … until it hits them smack on the head. That’s what I like about these FB Apps, revisit the games after 3 months, and the game has also evolved … it has got more items, more plots … somehow it has become more interesting.

That’s why when I started playing Hero World, I couldnt help but notice that instead of having micro transactions through pay-pal or some such payment gateway, the game also had Facebook credits as a currency source. On further digging, I found that Facebook is offering users to buy Facebook Credits. Users can then exchange these credits with different applications.

Instead of carrying out micro transactions within games, now we can carry them through Facebook itself. Good to see a definitive revenue stream other than eyeballs and ads.

Yesterday I met some friends over snacks at Candies (in Bandra, do look it up if you are in the area). A friend of mine has recently switched to work as a manager in a reputed firm, and he was overall happy with his job (work from home and all the perks).

Then he said something which sparked off this post, he said the amount of money the firm wastes in their day-to-day activities is insane. At first it seemed as if he was talking about how the organization has money to spare … but then to drive his point home, he gave examples. Inane but true. A lot of us are willing to put in that extra buck just so that everything that can go wrong won’t.

The design has to be perfect, the models have to be dressed in a certain fashion, the product has to be the best. In creating these spaces, we are de-risking ourselves … that’s what I like to tell myself. But are we?

Is the price of failure so high that we don’t take action and let others do what needs to be done? So what’s the price of failure for different people? For a person who has nothing to loose, its zero. A start-up for example can afford to go in some communities and have it misrepresented … its ok, bygones can be bygones for them. But take a Coca Cola or a Pepsi (not that these are the aforementioned organizations), and you suddenly have to think about ten thousand other factors. Not a freeing thought, is it?

Would it help if one could see the price of failure as zero?

No, I deliberately wrote it as Hell instead of Bell.

Managers who have run teams must surely know this model. A friend of mine works in one of the top IT organizations this country has, every year he worries incessantly about how he is going to survive appraisals. Not his own, he is consistently in the top 10% of the firm, but his teams.

They carry out appraisals using the bell curve in this organization … that means in any project team, someone has to be top performer, someone has to be average and someone has to be in the bottom 10% … survival of the fittest in this corporate jungle … that’s the rule.

The problem with this rule is that managers are forced to take under-performers and average team members as opposed to top performers. This is so, because when appraisal time comes, he cannot appraise everyone as a top performer. So if he has more than 10% of his team putting their hearts into the project, then after a year, someone will get an unfair assessment … someone will be disappointed in his superiors. Someone will get disillusioned. And that someone would be reporting to the manager who appraised him.

The only solution available for the manager then, is to select a mediocre team and hope that they deliver the project. An entire organization that runs on mediocrity!

My question to HR personnel then are two-fold -

1. Why the bell curve?
2. What will you do if the curve becomes skewed (towards the top performer side)?

Or No pain, no gain … the adage holds, is what empirical data says. A working paper by Harvard Business School presents its findings on human capital, performance incentives and ownership models.

Do different kinds of firm ownership drive the adoption of different managerial practices? HBS professor Raffaella Sadun and coauthors focus on the difference between the two most common ownership modes, family firms and firms that are widely held, namely that have no dominant owner. They find that the greater weight attached by family firms to benefits from control induces a conflict of interest between family-firm owners and high-ability, risk-tolerant managers. Key concepts include:

• Family firms systematically offer low-powered incentive contracts to external managers compared with widely held firms. The differences are economically large.
• Where incentives are more powerful, managers exert more effort, are paid more, and are more satisfied.
• Firms that offer high-powered incentives are associated with better performance. This result holds even after controlling for the type of ownership.
• Economies where family firms prevail because of institutional or cultural constraints are also economies where the demand for highly skilled, risk-tolerant managers languishes.

What this study suggests, is that to have high performance managers, organizations should employ the high powered incentives (this may not be as simple as cutting the current CTC of an individual into fixed and variable components). The last finding suggests that economies (and even societies) where family firms are prevalent (take Marwaris or Sindhis), the risk-appetite may be lesser. The first set of findings is also interesting since it is related to satisfaction.

So the next time you are considering a job, maybe these tips might help you evaluate that job slightly better -

1. Is there a variable component, is the calculation of that component completely transparent?
2. Will you be empowered enough to take risks and get the job done?
3. How mediocrity based is the leadership? (As in, is the leadership attracting the best talent, or the talent which can be ordered around)
4. Is your work ecology risk tolerant Or does it always stick to the safe path?

A friend’s company recently published this article on Harvard Business Review. Here’s an excerpt -

New research by our firm, Catalyst, shows that among graduates of elite MBA programs around the world—the high potentials on whom companies are counting to navigate the turbulent global economy over the next decade—women continue to lag men at every single career stage, right from their first professional jobs. Reports of progress in advancement, compensation, and career satisfaction are at best overstated, at worst just plain wrong.

The report stated that there is not much correlation between child bearing and career growth for women, there was not any significant indicator as to why women are at a junior position v/s men on the same career path. The only indicator which showed bias was the entry roles offered to women, where they had to prove their worth to the organization before being taken for higher roles (10% women were accepted at higher level roles v/s 19% men were accepted at higher level roles).

To know more of the scenarios that is in corporate India, I did some secondary research (read googling) and came with some interesting articles. This one says that the condition of women in India Inc. is no different, some excerpts -

Surprise? Not really, as experts say that a bare three per cent women occupy senior positions in private companies across India. And most of the companies only have five to six per cent women employees. What is more, a national daily quoted Pallavi Jha, former chairperson of the Confederation of Indian Industry (CII) (Maharashtra Region) as saying; "A study on women graduates of the Indian Institute of Management, Ahmedabad, showed that more than 70 per cent do not pursue a career."

A study conducted in 2007 revealed that this discrepancy is not only observed in the lower echelons of company management, but even more so at senior management levels.

Out of the 9,000 people on boards of the BSE-listed companies, only five are women. Indian companies seriously lack women in senior management roles, HR consultants say.

If one has to change this, then who does the responsibility lie with? The women to achieve more? The men to give women a fair chance? The organizations to level the odds for both the genders? The education system? Or the society to change their mindset?

It was the summer of 2005, I was in the quest for knowledge in the mostly empty libraries of IIM-Indore. That’s one of the main reasons to be there, if you don’t want to be disturbed, then the library is for you … nobody goes there

I found Soft War by Larry Ellison. It was an interesting read, but throughout the book, there are potshots at Microsoft and the personal PC concept. Oracle says that the era of the personal PC is over and its time everything moved onto the web with machines as dumb terminals. Although I agreed with most of the things he was saying, I could not fathom how could the PC fade into oblivion? One of the main reasons why I thought this not possible was because of games. As a gamer, I thought that PCs are here to stay, games require too much hardware support to have a successful online game.

Five years later, I stand corrected and oh so much humbled! With games like WoW, 9 Dragons, Silkroad, Eve Online, League of Legends, DotA, most of the game titles which we know are planning (if not already) a MMO version of their game. What really makes sense to the game companies is the ease of distribution and control they get over the piracy that soon ensues after a successful release. Add to that a pay-per-use business model that is inherent to the cloud architecture, and organizations really stand a chance to make a thriving profit. I am thanking the stars because creators are looking at replayability as one of the critical success factors in making an MMO.

I still have some nagging doubts about the cloud (I guess because of a higher total cost of ownership), but its there to stay, for games to go online and create a variety of possibilities. I wonder when people will start having company reps within these games ala social media.

I walk into a brick and mortar store (say a book store), browse through some books, finally decide on my selections, head to the counter, make the payment and come out a happy customer. All that the vendor needs to do here is –

   1. ensure that he is well stocked with books I like
   2. have a search mechanism in place to find the right book for me
   3. have someone manning the counter

The beauty here is that if the book were torn or something, I do get a chance to examine the goods before buying them. I decide to buy the goods only after I say its ok, who would I trust more than myself? Thus, I perceive the transaction as fair, and I pay the book store and head home.

Now consider a second scenario, I walk into a bookstore, and I inform the vendor that I am looking for, say a Jack Reacher novel. The vendor shows me his collection, but much to my chagrin the particular title I am looking for is not with him. The attendant assures me that they have run out of stock and will restock in 5 days. However, they would be more than happy to inform me once the book arrives. I hesitantly leave my no. with them and think that it’s good to have book stores who inform their customers about books they want.

Apply the same paradigm to an online shop. Rarely would I come to this shop for idle browsing, if I do have a title in mind, then I would be interested in skipping directly to it. If at this juncture, the store informs me that it is out of stock and will not accept my order, however they will be more than glad to inform me when the book is in stock – I won’t be that pleased. I will grumble and grudgingly close the browser.

If the decision making involvement is the same, if the outcome is the same, then why the difference in behaviors?

While at work today, an interesting discussion cropped up. Whether there is any correlation between Employability and Self-Esteem. Although a lot of work has been done on these two topics independently, I could hardly come up with anything which tied these two together. Interestingly, many firms have tried to come up with Employability Index and Self-Esteem Index, so why not see the behavior of these two?

Before we laugh off Wally, I want to say at the highest point of Employability, the Self-Esteem is the true identity of the individual’s skill sets. It is very difficult to find people like these, whose estimate of their self-worth is equal to the actual difference they make. I remember a study that I had participated, in a sample size of 40 individuals, only 2 of them were close to their self-worth, the rest either thought very highly of themselves or undersold themselves.

Where would you choose to be?