A New Business Model

The last few months have exposed the vulnerabilities of widely prevalent business models.

The de-facto model, thanks to Finance 101 is to maximize shareholder wealth.

Thus, even as global economies have shrunk, stock markets have risen.

The billionaire class has added to its wealth during the pandemic.

Meanwhile, millions have lost their jobs.

Hundreds of millions do not have enough to eat one meal a day.

Large organizations in the travel, tourism, and hospitality sectors have either collapsed or are on the verge of collapse. Established companies are seeking government bailouts.

The contradictions have brought to the surface everything that is wrong with the notion of shareholder wealth.

How can organizations that have been around for fifty, eighty, or a hundred years not have enough money to retain their employees for a few months? How does one explain the rationale, if any, behind a 185-year old company asking a significant chunk of its employees to leave within a week of a national shut-down being announced?

Maximizing shareholder wealth has gone too far. It is time to say “enough.”

I am not for a moment against shareholders getting their due. My objection is to the obsession with short-term goals and shareholder value at the expense of other business goals.

The pandemic has already taken a heavy toll. Why can we not use the opportunity to re-think the traditional business models?

My suggestion for a sustainable business model that can withstand the shock of the next disaster (that may be just around the corner) is:

1.  Put People First: Organizations cannot exist without people. It is fashionable to think of AI, Machine Learning, and Robotics to take over routine tasks and jobs. As of now, people, and not technology, are at the heart of any business. Please show me one large organization that is vibrant and thriving but has no employees, and I will be happy to change my view. People represent a very special resource – one that walks in every day and walks out every day. Minus their people, most organizations would be worthless. Therefore, please place your people at the top of your business model. Have adequate retained earnings for the rainy day, week, month, or year. Use periods of disruption in activity to retain your people and enhance their skills.

2.  Put Customers Next: Engaged employees lead to satisfied customers. Make customer satisfaction and loyalty a priority. Loyal customers alone can sustain your business in the long term. The colliding forces of rapid change and ubiquitous information mean that customers are not interested in “the perfect solution.” They want their “jobs” to be completed with minimal effort.

3.  Put Society and the Planet Third: Do not indulge in any activity that harms the society that provides you the freedom to operate. In whatever you do, be aware of the short-term and long-term impact on the planet. Our ancestors handed over this planet to us in pristine shape. We have destroyed the planet in every possible way. Please, for the sake of the next generation and beyond, stop extracting more from our fragile planet than what you can place back.

4.  Put Shareholders Last: I do not mean any disrespect to shareholders. Without investors, organizations cannot grow. Placing people, customers, society, and the planet as priorities should serve shareholders very well in the long-term while discouraging fly-by-night operators who are in the stock market for quick returns.

It is a great time for organizations to reset their priorities and create the right environment for a bright future for everyone.

I am aware that some of you may think this is not very different from the Triple Bottom Line (Profit, People, Planet) concept. My simple question to you would be: Without using a search engine, please name five organizations that follow TBL in letter and spirit.

Are you willing to unlearn and relearn?


The Collapse of Compassionate Leadership

The year 2020 will probably go down in history, not for anything achieved but for bringing out the deep fault lines in humankind.

Most importantly, the year represents the near-total collapse of compassionate leadership across the world.

The year began with the people who matter already knowing that a new, highly infectious disease was rapidly spreading its tentacles in many countries.

Recent evidence suggests that some cases emerged in Europe and the Americas in 2019, besides the original hotspot, Wuhan in China. No surprise here considering the number of people who travel around the globe every day.

Agreed that the disease has revealed something new almost every day over the last few months, what was known quite early was the nature of the virus, opportunities for transmission, probability of transmission, and susceptibility. For an excellent analysis in mid-March, please watch this TED interview – https://www.ted.com/talks/the_ted_interview_adam_kucharski_on_what_should_and_shouldn_t_worry_us_about_the_coronavirus?language=en.

If an ordinary citizen could access the interview in March, indeed, the leaders of the world could have utilized the expertise to drive decisions.

What we witnessed instead were extremes of emotion-driven decisions: outright denials, name-calling, panic, and nation-wide shutdowns without a shred of evidence to support that such measures would be beneficial.

In the process, our vulnerabilities are visible and scary.

In weeks and some cases in just a few days, millions lost their jobs and livelihood. Governments had to announce massive “stimulus” packages. The pandemic exposed the limitations of public health care, even in industrialized countries. Worse, people with other conditions such as cancer or heart disease or other life-threatening conditions had no access to health care at all. People in elder care homes were left to fend for themselves in the disingenuous premise that the virus would not reach them. In a gut-wrenching spectacle, millions trudged home on foot thousands of miles. “Stay home, stay safe” is a brilliant slogan that conveniently forgets that millions have no homes in the first place. Frequent hand-washing appears simple until you realize that millions do not have access to water (or soap).

The apathy on display will remain a permanent blot on our collective failure to show fundamental human values like compassion and empathy.

With no therapy available and a vaccine yet to be developed, what the world needed was evidence-based decisions. We would have been much better off with the truth, education, and an appeal to our innate strengths of harmony, society, and co-existence.

What we have got are half-truths, outright lies, mud-slinging, and an appeal to our destructive instincts.

Liberal democracies have used the pandemic to concentrate power in a few, a farewell to institutions and a system of checks and balances, leaving ordinary citizens in a constant state of fear.

Thanks to our stupidity, the virus has had a free run, killing over a million people in nearly 200 countries and leaving a scar of unknown proportions on the survivors. Worse, we may witness more deaths due to other diseases that have not received attention. An entire generation may have to grapple with mental health and stress-induced issues.

Why have our leaders failed us so badly?

Why have we failed as a species?

What do you think?


Does Loyalty Matter?

I am deeply grateful.

The good wishes you have sent me are truly uplifting.

We have an abundance of literature on customer loyalty, brand loyalty, and employee loyalty. I am unable to find much on organizational loyalty – the extent to which organizations need to be loyal to stakeholders – or is this a taboo?

Let me share two stories.

My only brother graduated from an engineering college in the 1960s. In those days, an undergraduate degree was enough to become a lecturer. He joined his Alma-mater as a lecturer. Under a Quality Improvement Program, he completed his Master’s and Doctoral degrees. He served the institution in various capacities. After he retired, the institute appointed him on a contractual basis. He completed 50 years of service in the institution he had graduated from before saying “enough.” He has impacted two generations of students. I feel immensely blessed to be his brother.

A friend, Nutan Kala Joshi, has completed 40 years with one university. My wish for her is that she should better my brother’s record. In the process, she would have helped two generations to become better people. I cherish my friendship with her.

In an age where people change jobs faster than they change their apparel, it is refreshing to see examples of ordinary people quietly being the harbingers of purposeful change.

In the twilight of life, I have come to this conclusion:

Like honesty or integrity, loyalty too is a binary phenomenon.

Loyalty isn’t grey. It is black and white.

You are either loyal completely, or not loyal at all.

You can’t be loyal only when it serves you.

The construct applies at all levels – from the individual to families to organizations to societies and nation-states.

And lest we forget, it is a two-way street.

What do you think?


Online Classes: Meet your Learners’ needs

During the current Pandemic,  education is moving toward the online model. Most educators are finding it challenging to ensure that students are learning what they are supposed to learn. The online model creates various types of noise (acoustic, electric, internet-related). The very nature of online renders communication to be one-way – the learners are passive participants.  We are trying to fill the gap with assigned readings, quizzes, assignments, etc. But research shows that in such models, the learning is very little in terms of remembering and using the information they are absorbing.  Although I completely agree that there is a vast difference between In-person education and online learning, let’s look into some pointers which we can include to ensure we meet each learner’s needs.

Research shows that human beings, regardless of gender, age, and culture, learn best when they are involved actively in the learning process. They learn best when it is self-directed when they feel useful and meaningful and in a motivating, hands-on learning environment. Regardless of their age, each individual has their ideas to contribute. Before we get into the choices educators have when designing and developing their next presentation, training or class, let’s understand a little about the six preferred learning styles of individuals*

1) Visual. Visual learners need to see simple, easy-to-process diagrams or the written word. PowerPoint presentations and flip chart graphics are beneficial to these learners.

 2) Aural. Aural learners need to hear something so that it can be processed. They may prefer to read aloud if presented with written material. They enjoy lecture format learning.

 3) Print. Print learners process information by writing it down. They take a lot of notes, notes that they may never look at again.

 4) Tactile. Tactile learners need to do something to learn it. They are likely to avoid written instructions and dive right into a hands-on attempt to work it out. 

 5) Interactive. Interactive learners need to discuss learning concepts. Breakout discussions and Q&A formats support this type of learning.

 6) Kinesthetic. Kinesthetic learners learn through movement. Training exercises and role-plays help. Giving people the flexibility to stand and move about the classroom also helps these learners.

The above can be the guidelines for an educator to cater to the needs of different learners. So how can we include them in our online classes?

  1. Understand your learning style: Your preference will influence your way of delivery. Knowing your style will help you develop your delivery method my mixing up other forms of learning. Be creative.
  2. Find out what your learners know: If possible, know your learners by giving them time to discuss what they know or have heard about a particular topic. A session can begin with a quiz. Older learners can access material in advance or watch a presentation or video before the class.  
  3. Create a friendly environment: Research proves that giving learners a friendly, informal learning environment helps them learn better. Some liberty in terms of allowing them to speak in the class by taking turns, or present their views through screen share, etc. can give them a good feeling. It may be a worthwhile idea to provide snacks or beverage breaks.
  4. Create a Strategy: Involve learners, so they get to
    1. See: Include charts, graphs, diagrams, videos, pictures, or experiments in your presentations.
    2. Hear: Hear your insights as well as the insights of the peers by allowing them to either discuss their views in the classroom or giving them assignments that they can compile and share. Videos of famous people, subject experts, and opinion-makers can also be shared.
    3. Write: Either make them write critical points during the lecture or encourage them to take notes.  Allowing and encouraging learners to use color pens, highlighters, even colored papers, etc. can make learning fun.
    4. Experiment: Quiz, Assignments, Projects, etc. can help tactile learners to learn better.
    5. Talk about: The interactive learners learn best when given a chance to speak.  Encourage learners to share comments, ideas, insights, and opinions with the whole group. Each class can have a fixed allotted time for the learners to share their views or learnings or just a quick question and answer time.
    6. Move: Let the learners repeat the concept using some movements, exercises, role plays – these can work wonders for the kinesthetic learners.
    7. Choose: Let them decide what they choose to do. You can encourage learners to make videos of their learnings or just record discussions and share them with the group. Various methods can be,
      1. paired or small group discussions,
      2. large group discussions,
      3. quick collaborative games,
      4. presentation with personal views or learnings,
      5. making and taking quizzes,
      6. projects,
      7. role-plays, etc.

The big question – What technology should I use?: Technology is the gateway to virtual education. The success of virtual learning depends on the extent to which learners can actively participate. It is tempting to use free software to deliver content. Such an approach is a recipe for disaster. Please invest in a proprietary technology that facilitates the inclusion of real-time interaction, raising of hands, questions, assignments, discussion forums, and feedback. The keyword is an investment – after all, the future of a generation rests on the decisions we make now.

*(taken from http://www.managingamericans.com/Workplace-Communication-Skills/Success/Six-preferred-learning-styles-for-adults-424.htm):

Doing What Matters in Times of Stress. Part 1 Grounding

Work taken from: Doing what matters in times of stress: an illustrated guide. Geneva: World Health Organization; 2020. Licence: CC BY-NC-SA 3.0 IGO.

Disclaimer: This presentation was not created by the World Health Organization (WHO). WHO is not responsible for the content or accuracy of this presentation. The original English edition shall be the binding and authentic edition.

Doing What Matters in Times of Stress. Part 1 Grounding (Hindi)

Work taken from: Doing what matters in times of stress: an illustrated guide. Geneva: World Health Organization; 2020. Licence: CC BY-NC-SA 3.0 IGO.

Disclaimer: This translation was not created by the World Health Organization (WHO). WHO is not responsible for the content or accuracy of this translation. The original English edition shall be the binding and authentic edition.

Introduction: What is Stress and How does it affect us (Hindi)

Work taken from: Doing what matters in times of stress: an illustrated guide. Geneva: World Health Organization; 2020. Licence: CC BY-NC-SA 3.0 IGO.

Disclaimer: This translation was not created by the World Health Organization (WHO). WHO is not responsible for the content or accuracy of this translation. The original English edition shall be the binding and authentic edition.

Introduction: What is Stress and How does it affect us (English)

Work taken from: Doing what matters in times of stress: an illustrated guide. Geneva: World Health Organization; 2020. Licence: CC BY-NC-SA 3.0 IGO.

Disclaimer: This presentation was not created by the World Health Organization (WHO). WHO is not responsible for the content or accuracy of this presentation. The original English edition shall be the binding and authentic edition.

The Debris of Lessons Not Learned – 1

FORTUNE magazine named Henry Ford as Businessman of the Twentieth Century.

In the late 1960s, the Ford Motor Company decided to introduce a sub-compact car. The design team led by Lee Iacocca had the task of meeting the “2000 and 2000 challenge.”

The car had to cost no more than $2,000 and weigh no more than 2000 pounds.

The Ford Pinto was a spectacular commercial success.

The first trouble for the Pinto occurred in 1972. A lady was driving the Pinto with her thirteen-year-old daughter as the other passenger. Another car traveling at 30 miles an hour hit the Pinto from the rear. The gas tank exploded. The lady died and the daughter suffered devastating injuries. In the suit that followed, the court awarded the family $560,000 and the injured daughter $2.5 million in compensatory damages.

A few years later, the Pinto was in the news again. A truck allegedly carrying prohibited substances hit a Pinto from the rear. The gas tank exploded. All three women in the car died.

The Problem

What came out during the trials was a design flaw in the Pinto. The positioning of the gas tank was such that it was susceptible to explode in a rear collision.

The Solution

Prevention is better than cure. Designers could easily enhance the Pinto’s safety by a relatively simple alteration costing $11 per car. As Ford’s internal records showed, the alteration never happened.

Cost-Benefit Analysis

In deciding not to carry out the $11 alteration, the managers at Ford relied on a tool widely used in the industry and being taught even today in business schools across the world – cost-benefit analysis.

Exhibit – Ford’s use of cost-benefit analysis in the Ford Pinto

Benefits and Costs Relating to Fuel Leakage

Associated with the Static Rollover

Test Portion of FMVSS 208


Savings:  180 burn deaths, 180 serious burn injuries, 2100 burned vehicles

Unit Cost:  $200,000 per death, $67,000 per injury, $700 per vehicle

Total Benefit:  180 x ($200,000) + 180 x ($67,000) + 2100 x ($700) = $49.5 Million


Sales: 11 million cars, 1.5 million light trucks

Unit Cost: $11 per car, $11 per truck

Total Cost: 11,000,000 x ($11) + 1,500,000 x ($ I 1) = $137 Million

From Ford Motor Company’s internal memorandum: “Fatalities Associated with Crash­-Induced Fuel Leakage and Fires.” Source: Douglas Birch and John H. Fielder, THE FORD PINTO CASE: A STUDY IN APPLIED ETHICS. BUSINESS AND TECHNOLOGY. p. 28.1994.

Subsequent analysis of the cost-benefit shows that Ford’s “break-even” point was $3.96 per car. Scale economies might well have achieved this level.

Disturbing Questions

While some judicial pronouncements accept the reasoning behind the cost-benefit approach, others don’t. In one instance, a jury awarded punitive damages of $135 million.

The case is a reminder of the limits of economic reasoning while dealing with human lives.

1.  Is it morally and ethically acceptable for any organization to place a pre-determined dollar value on human life and injuries?

2.  How do you measure the trauma and possible life-long suffering that affected families undergo?

3.  Can a justice system that places a mighty cash-rich corporation and a middle-class customer with limited means on an equal footing be fair?

What Next?

Fifty years down the line, we still do not have definitive answers to these questions.

What have we learned?


Negligence in quality and safety continue to plague practically every industry.

We will examine these in subsequent columns.

Meanwhile, I will leave you with this thought to ponder over:

In a survey covering 3,500 senior executives from 29 industries and 70 countries, the skill that recruiters are least interested in graduating students happens to be microeconomics.

For all the tall talk of preparing leaders of tomorrow, has any business school stopped teaching microeconomics? Or cost-benefit analysis? At the very least, are faculty aware of the limits of such models?

If you have an answer, I would love to hear from you. Before you post anything, please read all about the Ford Pinto. Thanks to the ubiquity of information, the entire story is available online.