Why not Peter Orszag move to citigroup…?

Courtesy author, blogger and friend Ben Casnocha, I read this piece by James Kwak on Peter Orszag moving to Citigroup after resigning as Budget Director under Obama administration and the rant goes like this.

“This is the mindset of the ambitious educational elite: You go to Harvard (or Stanford), maybe to Oxford (or Cambridge) for a Rhodes (or Marshall), then to Goldman (or McKinsey, or TFA), then to Harvard Business School (or Yale Law School), then back to Goldman (or Google), and on and on. You keep doing the thing that is more prestigious, opens more doors, has more (supposed) impact on the world, and eventually will make you more and more famous and powerful. Money is something that happens along the way, but it’s not your primary motivation. Then you get to Peter Orszag’s position, where you can do anything, and you want to go work for Citigroup? Why do our society and culture shape high-achieving people so they want to be executives at big, big companies that are decades past their prime? Why is that the thing people aspire to? Orszag wanting to work at a megabank — instead of starting a new company, or joining a foundation, or joining an NGO, or becoming an executive at a struggling manufacturing company that makes things, or even being a consultant to countries with sovereign debt problems — is the same as an engineer from a top school going to Goldman instead of a real company. It’s not his fault, but it’s a symptom of something that’s bad for our country.”

Here’s my take –

Terrible cliche. I see it as way too presumptuous of the squeaky critics that ordain a simplistic linear transition from domain knowledge to industry vertical, depriving the candidate of the range of options before him.

If it’s the creative mind of the engineer that is being seen as having been manipulated by the lure of a fatter wall street pay check, it’s the very original creativity of that mind choosing with little external prompt to apply its potential in a disparate dimension to experience a radically innovative if not a revolutionary outcome. After the meltdown, perhaps it’s a bit too off-putting to recognize the contributions of financial engineers in developing exotic derivative products like the ABS, CDS and so on, but let’s not forget that what caused the crisis was not the genus of these products, but its specie that got grossly misunderstood, misapplied and miscarried. Not in the least when the very products helped raise a significant portion of the billions of dollars for funding scientific and industrial research by the world’s major corporations that sustained several manufacturing innovations.

It’s ok to trim the flab, but don’t chop off the muscle that holds it together.
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The pursuit of dreams

David Schwartz, the author of Magic of Thinking Big asserts “Successful people are not supermen. Success does not require a super-intellect. Nor is there anything mystical about success. And success isn’t based on luck … Believe Big.”

I can use a twist to that surmise.

Going after one’s belief ain’t easy. Have no illusions about it. The secret of actualizing belief is endurance. In Economics, they say “markets can remain irrational longer than you can remain solvent”. In essence it means there is a high likelihood of you going broke before your bets begin to pay off. The real deal is acquiring the capability to sustain yourselves while being “in the trenches”. That phase – figuring out how long before you get there – is crucial, when belief-morphing-into-reality is still a grindingly slow work-in-progress. Lasting it out without being crushed will be the real determinant.
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Fire yourself. Then see if you are eligible to be re-hired.

The bane of some enterprises – startups included – has been their inability to challenge the incumbent management / founding team’s method of working – or sometimes its vision altogether. They had toyed with a great idea and did go quite a distance with it. Somewhere along the way, they had realized they were going down the wrong road. They stop and look around for sign posts. They saw none, no passer-by to enquire. So what do they do?

A normal traveler would just retrace his steps until he locates a sign post or finds some local guy to guide him. But in enterprise adventures, there’s this big difference – of sunk costs. Covering each mile comes with substantial cash burn and losing your way can be costly too. It gets complicated if the team had some early skeptics whose words went unheeded.

That’s exactly when the team needs fresh, unbiased perspective. If the mistake needs to be owned up, it had better be. Have it reviewed by an outsider and get his opinion. Naturally, it’s easier to take a fresh perspective when you really are new and when the assumptions you are questioning are not your own. We’re all more comfortable challenging someone else’s thinking than stepping back and critically assessing our own ideas and behaviors. That’s what Ed Whitacre did when he needed to shake up GM’s management team post crisis — because the incumbents couldn’t get enough distance to challenge the way things had previously been done.

But why wait for your company to get in trouble and for the board of directors to shake up the management team? The turning of the calendar year is a good time for every manager to take stock and think about what you would do if you were starting fresh. So here’s a thought-exercise you can do: First, take a deep breath and fire yourself. That’s right — take yourself out of your job so that you’ll get some distance from it.

And who knows? Maybe you’ll end up re-hiring you.

Who will buy my salad shooters now?

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Who will stand in for the American consumer?

 

So we know it’s not so easy to swap the all-gorging American consumer with somebody else. Nobody has that kinda’ appetite!  Tom Friedman in his NYT Op-Ed column puts it beautifully –

 

“Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”

 

We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese …

 

We can’t do this anymore.“

 

But then enterprise has to produce and serve to consumers.  How will the new bunch be?  Who could guzzle stuff like an American consumer?  To whom will you sell your salad shooters anyway?

 

Dr.Y.V.Reddy, the man who insulated Indian financial system

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It was George Bernard Shaw who said “We are made wise not by the recollection of our past, but by the responsibility for our future”.

 

A child can ask a question that many wise men cannot answer. Similarly few could explain why great leaders err on the side of caution even as there seemed little to worry.  They are even blamed for missing out on great opportunities. These worries epitomised the rudimentary yet sagely wisdom (that most realized only in hindsight, after he was gone) that underscored the era of Dr.Y.V.Reddy as the Governor of Reserve Bank of India (RBI), India’s central bank.  Dr.Reddy during his tenure as the Guv was criticized for being too stringent with his policies that sucked out liquidity from the system even as the economy was growing at a scorching 9 percent plus.  Yet when credit crisis struck global finance, India remained relatively secure thanks to his early braking mechanism.

 

NYT correspondent Joe Nocera captures many a banker’s opinion in his column “Talking Business – How India Avoided a Crisis”. 

Dr.Reddy post his term is now being lauded by one and all for India’s relative resilience in the face of global liquidity crisis.  The man deserves kudos for not letting Indian banks sin excessively.  By seeing the real estate bubble early, he made regulations more stringent by increasing the CRR and risk weightage for realty loans.  He banned bank loans for buying land and allowed them to lend only for financing construction costs.  He never allowed securitizations and credit derivatives to gain prominence and setting up off-balance sheet vehicles that hide debt.  Thus the Indian banks never could slice and dice debt and palm them off to unsuspecting buyers that fueled the mortgage crisis in the US.  The banks were forced to hold on to the loans they made to customers until maturity.  It meant banks made sure the loans got paid back since that was their only way to ensure liquidity.

When he saw huge foreign fund inflows into India, Reddy feared inflation and he duly pushed interest rates up to more than 20 percent, which of course dampened the housing frenzy. He increased risk weightings on commercial buildings and shopping mall construction, doubling the amount of capital banks were required to hold in reserve in case things went awry. He made banks put aside extra capital for every loan they made. In effect, Mr. Reddy was creating liquidity even before there was a global liquidity crisis.

India’s bankers were naturally furious, just as American bankers would have been if Mr. Greenspan had been more active. Their regulator was holding them back, constraining their growth! They felt Reddy was being too harsh, excessively paranoid and cutting things to the bone. For a while they felt if Indian bankers were missing out on something, but now they know they missed out only on the toxicity.

As Luis Miranda, who runs a private equity firm devoted to developing India’s infrastructure, put it: “We kept wondering if they had figured out something that we were too dense to figure out. It looked like they were smart and we were stupid.”   Joe Nocera rounds it off  as he says “Instead, India was the smart one, and we were the stupid ones.”

Dr.Reddy has indeed acted responsibly for our future.  No words to thank him.  Perhaps he realized wisdom is never on the menu.  But he ended up owning the restaurant !!!

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My Beijing Hero

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The Beijing Olympic games are still on. But I’ve found my hero.  It is neither Usain “Lightning” Bolt nor it is Michael Phelps.  It is the Dutchman Maarten van der Weijden.  The 27-year-old was diagnosed with leukemia in 2001, but came back stronger after his ordeal to compete at the 2003 open water world championships before he was crowned world champion over 25km in Seville earlier this year.  He said the experience of beating cancer helped him win an Olympic gold medal after victory in the men’s 10 kilometers open water marathon swim Thursday.

He compared his gold medal triumph to his personal battle against cancer as he waited patiently for the leaders to set the early pace before a late burst saw him claim gold in a time of 1 hour 51 minutes 51.6 seconds.

“The leukemia has taught me to think step-by-step…. When you are in hospital and feeling so much pain and feeling so tired, you don’t want to want to think about the next day or week – you just think about the next hour. It teaches you to be patient when you are lying in a hospital bed and that was almost the same strategy I chose here to wait for my chance in the pack.” said the brave Dutchman who raised 50,000 euros (US$74,000) in 2004 for cancer research by swimming the giant Ijsselmeer lake in Holland.

The Art of living hour by hour.  Tell that to me, a Ph D from the school of hard knocks !

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“Prof.Randy Pausch, R.I.P”

 

Randy Pausch, the Carnegie Mellon professor who became a YouTube phenomenon with his “Last Lecture”’  died Friday of complications from pancreatic cancer. He was 47. He died at his home in southern Virginia. 

Pausch told USA TODAY during an interview at his home in March that the now-famous lecture was never meant for public consumption, nor was it for his colleagues or students. It was for his two sons and daughter: Dylan, 6, Logan, 3, and Chloe, 2. “If people are finding inspiration, OK, but the book is for my kids,” Pausch said.

“I knew what I was doing that day,” he wrote in the introduction of his best-selling book, also titled The Last Lecture. “Under the ruse of giving an academic lecture, I was trying to put myself in a bottle that would one day wash up on the beach for my children.”

Quoting Steve Seabolt, V.P –strategic marketing and friend and colleague of Randy Pausch at EA giving the intro –

“….it really pisses me off that Randy’s so smart—actually I called him, we decided about, what, four weeks, ago and we heard the news (of his fewer days ahead) went from bad to horrific. It was on a Wednesday night and I said look – we have two choices. We can play this really straight and very emotional , or we can go to dark humor. And for those of you who know Randy well, he was like oh, dark humor! So I called him the next day and I was like, dude you can’t die. And he’s like, what do you mean? And I said, well, when you die, the average of IQ of Seabolt’s friends is going to like drop 50 points. [laughter] To which he responded, we need to find you some smarter friends. [laughter] So you’re all smart because you’re here, so if you want to be my friend, I’ll be over in a corner of the reception room.”

 

Excerpts from the inspirational lecture –

 

“We can’t change the cards we’re dealt, just how we play the hand. If I’m not as depressed as you think I should be, I’m sorry to disappoint you.”

 

…..Alright, so what we’re not talking about today, we are not talking about cancer, because I spent a lot of time talking about that and I’m really not interested. If you have any herbal supplements or remedies, please stay away from me. [laughter] And we’re not going to talk about things that are even more important than achieving your childhood dreams. We’re not going to talk about my wife, we’re not talking about my kids. Because I’m good, but I’m not good enough to talk about that without tearing up. So, we’re just going to take that off the table. That’s much more important. And we’re not going to talk about spirituality and religion, although I will tell you that I have achieved a deathbed conversion. [dramatic pause] … I just bought a Macintosh. [laughter and clapping] Now I knew I’d get 9% of the audience with that …

 

 

OK, let’s talk about football. My dream was to play in the National Football League. And most of you don’t know that I actually – no. [laughter] No, I did not make it to the National Football League, but I probably got more from that dream and not accomplishing it than I got from any of the ones that I did accomplish. I had a coach, I signed up when I was nine years old. I was the smallest kid in the league, by far. And I had a coach, Jim Graham, who was six-foot-four, he had played linebacker at Penn State. He was just this hulk of a guy and he was old school. And I mean really old school. Like he thought the forward pass was a trick play. [laughter] And he showed up for practice the first day, and you know, there’s big hulking guy, we were all scared to death of him. And he hadn’t brought any footballs. How are we going to have practice without any footballs? And one of the other kids said, excuse me coach, but there’s no football. And Coach Graham said, right, how many men are on a football field at a time? Eleven on a team, twenty-two. Coach Graham said, all right, and how many people are touching the football at any given time? One of them. And he said, right, so we’re going to work on what those other twenty-one guys are doing. And that’s a really good story because it’s all about fundamentals. Fundamentals, fundamentals, fundamentals. You’ve got to get the fundamentals down because otherwise the fancy stuff isn’t going to work.

 

And the other Jim Graham story I have is there was one practice where he just rode me all practice. You’re doing this wrong, you’re doing this wrong, go back and do it again, you owe me, you’re doing push-ups after practice. And when it was all over, one of the other assistant coaches came over and said, yeah, Coach Graham rode you pretty hard, didn’t he? I said, yeah. He said, that’s a good thing. He said, when you’re screwing up and nobody’s saying anything to you anymore, that means they gave up. And that’s a lesson that stuck with me my whole life. Is that when you see yourself doing something badly and nobody’s bothering to tell you anymore, that’s a very bad place to be. Your critics are your ones telling you they still love you and care.

 

After Coach Graham, I had another coach, Coach Setliff, and he taught me a lot about the power of enthusiasm. He did this one thing where only for one play at a time he would put people in at like the most horrifically wrong position for them. Like all the short guys would become receivers, right? It was just laughable. But we only went in for one play, right? And boy, the other team just never knew what hit  them. Because when you’re only doing it for one play and you’re just not where you’re supposed to be, and freedom’s just another word for nothing left to lose, boy are you going to clean somebody’s clock for that one play.”

 

To Prof.Pausch, I bow in reverence and bid him farewell – “Randy Pausch, R.I.P”

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Ok founder, now get the hell outta’ here!

Remember VMware, the company as recently as January, had appeared to be rocketing into Silicon Valley stardom?

The company was founded in 1998 by Ms. Diane Greene and her husband, Stanford University computer-science professor Mendel Rosenblum, to develop software that allowed a single computer to run as multiple “virtual” servers simultaneously, with several different operating systems and numerous applications such as databases going at the same time. Mr. Rosenblum remains an adviser to VMware. The company was later bought by EMC, the Massachusetts data storage giant. EMC acquired VMware in 2003 for $635 million and retained 86% of its stock.

On Aug. 13 last year, EMC spun VMware out as a distinct stock offering and the company was an instant hit, recording the biggest technology initial public offering since Google’s in 2004. Its stock shot up from a $29 offer price to $51 at the first day’s close of trading. Within a few weeks, VMware’s market capitalization placed it as the world’s fourth most valuable software company. But VMware’s stock price, which peaked at nearly $125 on Oct. 31, has been in a tailspin in recent months and the company faces increasing competition from Microsoft, Oracle and Sun.  Going by the recent downward revision of its earnings guidance, VMware’s stock fell $13, or a little more than 24 percent, to $40.19 at the close of trading.

And then? Instant justice. Reacting to the decline in its fortunes, the Board of Directors fired co-founder and Chief Executive Diane Greene, replacing her with a former Microsoft executive Paul Maritz apparently to help the company combat its growing competition and take it to the next level.

Often founders find themselves in the crosshairs when performance suffers or a founder’s style clashes with that of a new boss. Shares of Sun Microsystems climbed immediately after founder Scott McNealy announced he was leaving the CEO post. Jones Soda founder Peter van Stolk left amid languishing profits saying, “I didn’t want to be one of these guys who hang on too long. As the company grows, different skills and requirements are needed to move the thing forward, and they aren’t necessarily entrepreneurial skills.”

This Harvard Business School case study concluded that “An inherent paradox in succession is that a founder who has been doing a good job actually increases the chance he or she will be fired.”

But there can be such a thing as showing a founder the door too soon. Often, a clear transition hasn’t been mapped out. Other times, the founder has specific relationships with vendors that are vital to the company’s operations. Sometimes, the Street just likes the person.

There are of course conflicting reports of EMC’s high handed interference that Ms.Greene detested.  But I find the inherent flexibilities (or are they liberties) remarkable.  If Board finds the CEO can’t take the company to the next level, be she a co-founder – she can still get canned.

I think here is a lesson for many smug founder entrepreneurs that stay anchored as CEOs refusing to acknowledge their role has become less relevant.  So is here some learning for Boards to play a proactive role – that of an activist – in ejecting those CEOs to save the day for customers and shareholders.  I am not saying that is the case at VMware, a truth that will be revealed only in the days ahead.

But I certainly like the spunk.  And the insecurity that comes with it spurring many a CEO to deliver or else.  Steve Jobs was fired by the Board of Apple and we all know how he got back and delivered.  Hope Ms.Greene shall have her go too.

 

Motivator #1 – your goal

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If you want to run a marathon you don’t just go out that day and run 26 miles. If you want to be a tremendous success in business you don’t just wake up one morning and are running a $100 million company. Whatever you are looking to achieve in life the steps along the way and the overall mindset of success are critical. We need to celebrate each day’s success and build on it for the next day. We need to start thinking of ourselves as successful and then live into that reality. We do create our own reality and by thinking we are a success or thinking we are not that is exactly what we are.

Most people recognize a champion only when he steps up the podium, but he actually has become a champion far before it. In fact, he has become a champion years before that glorious moment; because to reach that moment, first and foremost he has to become a champion in his daily life. He has to train hard for years, control his diet, and deny a lot of pleasures to prepare for the contests. While other people can live whatever way they want, he must live a disciplined life. Most people only see him in the glorious moment, but it is this lifestyle that actually brings him to the podium.

I think of my own early years.  I had spent over 15 years of my life working for different companies.  I was lucky to have a mixed bag for superiors – a few that were brilliant and others downright mediocre.  I was happy to learn an awesome lot from the former but having to put up with assholes was awkward.  In fact that drove me to start out on my own even as I was hardly prepared for the associated risks. By then I had acknowledged the omnipresence of mediocrity and recognized that brilliance is hard to come by.  The funny part was, I wasn’t too sure into which crucible I fell.

But I was certain about something.  If I were patchy in some area, I certainly would like to improve.  I was ready to admit and change. Soon I will be good at it because I worked at it.  That’s a trait you don’t find in assholes.  They are dodgy and they shirk a lot, passing the buck at every slip.  Do not hope to achieve great things if you don’t want to pay the price in the first place.  The journey to mastery is long and difficult. You need sustained motivation to walk it.  Set yourself a goal and pursue it arduously.  That is your motivator #1.

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Comfortable being misunderstood

Jeff Bezos is about my age, 44.  So he would be to many of you too.  What sets him apart? 

Achievement. 

His company Amazon.com first changed the way we bought, read or reviewed books. In 2007, his business pulled in revenue of nearly $15 billion, up 38 percent from the previous year. Amazon’s stock keeps rising, and Bezos becomes ever richer. His estimated worth is about $8 billion.  The 13-year-old company is the biggest online retailer in the world, but recently Bezos has taken Amazon beyond retailing; it now sells its computing, warehousing, and delivery services to other companies. Even tiny startups can rent just about anything Amazon does. And the company made news with its debut of the Kindle, a slim electronic book reader with iPhone-like cachet.

I bring in a small nugget here.  Amazon was incorporated by a divorce attorney!  Here he comes clean on several such interesting stuff.

Thanks to Ben Casnocha, I read that interview. But what I liked most was his reply to two specific questions [by Conde Nast Portfolio.com] –

“One of your big initiatives, a search engine called A9, fell flat. What happened?

If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table. Companies are rarely criticized for the things that they failed to try. But they are, many times, criticized for things they tried and failed at.

Did you ever get criticized for some­thing you tried that worked out?

When we pioneered customer reviews, it was incredibly controversial. I got letters from publishers saying, “You don’t understand your business. You make money when you sell things. Take down those negative customer reviews.” We’ve never done anything of real value that wasn’t at least a little bit controversial when we did it. But if you want to be a pioneer, you have to be comfortable being misunderstood.”

Are you comfortable being misunderstood?

Here is my little take on pioneering where I said “So much of the pioneer’s time is preparation, so much is routine, and so much retrospect, that the path of her genius contracts itself to a very few hours.”

For more, just click the tag “Life” under the title `Categories’ to your right.

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