Saturday, September 19, 2009

Normal Accidents

Normal accidents: living with high-risk technologies By Charles Perrow
(Book Commentary)

Some books are undeservedly forgotten, but none are undeservedly remembered”- Anon.

This was the Quote in the book marker when I ordered my first book @ (circa 1998). I happen to get hold of a book called “Normal Accidents” by Charles Perrow written way back in 1984.
If that quote had an author, perhaps I would have contested - certainly it is a undeservedly forgotten book. I was impressed by the oxymoronic title it carried and I liked it.
Science or popular writings did not get very famous those days (some exceptions like Made in Japan, Pepsi to Apple, Tao of Physics etc). The author did write an afterword for his latest edition that includes Y2k – but then, I would rate that as a meek rejoinder.

Basic theme of the book is that, as we move on, accidents are common part of life – yet, he quips that, disasters and catastrophic events are really hard to arrange. So many things have to come in unison to make such things happen. While that observation gives a whiff of relief, as you go on, an eerie feeling comes to you that, the unison events can be totally unrelated and too insignificant on a standalone basis, but can haunt us for generations to come.

Any first rate book first explains the framework no matter how abstract it is and then introduces key concepts and definitions, then moves on to the main theme.
Just to get off a rapid start on the run way, author chose the Three mile Island nuclear disaster first and then gets in to definitions in Chap2. It deals with complexity, coupling and catastrophe, system and component failures, complex and linear systems, tight and loose coupling. All are well explained with examples.

Author’s coverage areas are indeed wide. He deals with Nuclear, Petrochemicals, Aircrafts<>Airways, Marine, Earth bound systems (Dams, Quakes, Mines and lakes), Exotics (Space, weapons and DNA).
His Nuclear, Marine and Airways are really good. If we remember that it was written in 1984, you may not worry too much on DNA part for many things have transpired since then.
Earthbound, he tells very interesting anecdotes. Certainly, it broadens the sense of perspective and also lends a transient solace that, things are just about as the “same” elsewhere as in Software : )
I am refraining quoting any specific ones in that book for many of the narratives are worth reading.

Finally author classifies all in 3 categories.
1. Abandon them => because is beyond our capabilities
2. Redesign them => regardless of the short term costs
3. Regulate them => regardless of the imperfections in the regulations

It is difficult to be optimistic after reading this book –since our collective understanding of such complex things are on a very flimsy footing. But, the major take away is that, it would breed a sense of humility. It comes from the obvious realization that our understanding is really dwarfed by ignorance.

Thanks for reading so far,

Friday, September 18, 2009

The NEW age of Innovation

The NEW age of Innovation by CK Prahalad & MS Krishnan
(Book Commentary)
Book Name: The New Age of Innovation
Authors: CK Prahalad and MS Krishnan
Pages: 278 Pages
Publisher: Tata McGraw Hill

Certainly, authors have simplified the main message with a comprehensible equation.

N = 1

What they mean is that, “one customer at a time” (N=1). Resources (R) are leveraged across the globe (G) Hence R=G !. Resources, as the authors assert need not be owned – access and correct usage of them is vital. The book has heavy Indian flavor since major share of case studies are from Indian companies. Customer is no longer passive - be it buying tire, shoes, soaps or high-tech items. What they call as “co-create” during the buying process. One of their clear predictions is that, B2B and B2C would eventually converge as N=1.

This book, specifically takes a pot shot at current state of affairs at IT (Indian) industry. For example on Page-49
The economic model in most of the IT firms in India has not kept pace with the changing nature of the service they provide. As a result, revenue growth is tied to the # of employees – legacy of the cost arbitrage business model. For a firm to go from $2billion in revenue (60,000 employees) to $10billion, it has to recruit approximately 240,000 more employees in a short period of time. Needless to say, the time is ripe for fundamental re-examination of this biz model. We must add that, we do not know a single senior manager in the IT industry of India who does not understand this problem at an intellectual level. However, all their business process – be it estimation work, assignment of people to project, pricing, performance evaluation and profit forecasting – are tied to traditional model and optimized for that model”.

Since flexibility and fluidity is the name of the game, from authors’ standpoint IT architecture and its support is very critical to strategy (inputs from traditional, non-traditional, formal, in-formal) all to be processed and Biz analytics plays a key role in their philosophy.

This is indeed a far cry for IT folks. As of now, every move focuses on standardization and large projects, and here they are telling the exact opposite. Let us do a thought experiment.

Even if we take this prescription less-than-half-serious, it would mean exposing the nearly the entire potentially billable population of the firm to any potential client who can pick and choose a handful of people or just one (N=1 remember?), interview them, some short listed, some selected, some conditional bank – that is, picked up after some specific training and good number of rejects. Not be outdone in pricing, it would be based complex concoction of skills, performance, time allotted to the client, market factors for that skill-set etc. I wonder what can be discussed in Quality Meetings (assuming they would still exist) and broad set metrics that would provide indications on skills, productivity etc. Aside staffing team would have to be fully re-trained on Biz analytics and constant change - perhaps, they would be like stock traders on the floors!
It is a frightening prospect at least in near term for its overwhelming complexity it entails.

Authors do bribe us with compelling examples like, ICICI Insurance, Tutor Vista (Education), Pomafin-Finland (Shoes), and TVS Group, TCS, Satyam and a host of others.
Some of you might have read the famous essay; IT does not matter[1] by Nicholas G Carr. Theme there is that, IT is a commodity and what you do with it determine your destiny. To expand this school of thought, in this latest work, the Big Switch, he goes on to quote Electricity evolution as an example where, producer of anything also generated electricity to remain competitive. But, once transmission and cost per unit became so cheap after consolidation, industries piled on and went ahead with their main production agenda taking the electricity for granted as just as a utility or input. Similarly, quips Garr, IT is a utility we just take it for granted from various providers in the near future.

Whereas this duo presents a case where IT does matter – especially from biz analytics standpoint. It may appear exact opposites. But to me, they seem to be saying the same thing at higher level of abstraction.

Another point they make is that, the distinction between Service and product would blur beyond recognition. They take iPOD as a case study.
They are identifying 4 core drivers. (1) Connectivity (2) Digitization (3) Convergence (4) Social Networks. They form the inputs for creating value.
Innovation they insist that it not episodic but a continuous exercise of value creation taking advantage of the four core drivers.

Locus of Innovation has three grades.
ð Build Products
ð Build Solutions
ð Build Experiences for the customer

Needless to add, authors advocate highest level of innovation.
Authors also explain the Social Architecture of the firm which is also one of the key pillars.

Turnaround is typically a transformation that is tragically delayed. This book is about a transformation agenda. Lots of thought would have to go in to customize them on a per company basis, but in the end, it may be well worth the effort.

This book may not be classified as seminal book on Innovation, but certainly a work with terrific case studies that are well articulated. Authors’ passion to convert the digital divide to digital dividend is clear. In any event, one should not miss this book.

Thanks for reading so far.....



[1] Harvard Business Review , May 2003

Hot, Flat and Crowded By Thomas Friedman (Book commentary)

Hot, Flat and Crowded By Thomas Friedman (Book commentary)
As usual, this would qualify as half book review and half my own commentary. I did envy author's access to the top global talent. When you meet enough number of first rate folks in their respective fields, the job of writing becomes lot easier. Unlike a theoritical physicist or some serious original thoughts books which are of course too difficult to read, let alone comprehend, this is juicy and targets a common reader like me. I recall an African proverb which says, "It takes a village to write a book", given the awesome access Tom has more than a village ......
Also, he is far more passionate in this book (compared to previous ones)

Key mesg:
1. Growing demand for scarce resources (like fossil fuels) for energy supplies.
2. Massive transfer of wealth to oil rich countries and their petrol dictators
3. Disruptive climate changes
4. Energy poverty (between have's and have-nots)

Certainly, he is unimpressed by the current generation's careless usage of energy.
He quotes Nate Lewis's remarks.
"You remember how when you were a kid, mom would ask, what do you want to do when you grow up?" "You would reply, I want to change the world!"- he adds sadly, I guess we did :-(

Tom's chapters on petrol politics were engaging. To quote him: Maximize the demand, minimize the supply and make up the difference by buying oil from the countries who hates you the most. I cannot think of more stupid than this - it is like funding the rope to hang ourselves.
I liked his chapter titled "Stone age did not end because.....".
He quotes late Zaki Yamani. The conversation went something like that. "Remember boys! the stone age did not end because we ran out of stones. It ended because, people invented alternate tools like Iron and Bronze." Yamani knew that, if oil consuming countries got their activities together and produce renewable energy at a scale or drive the energy efficiency exponentially high - then, oil age would end with millions of barrels still underground, just as the stone age ended with lots of stones on the ground.
Yamani knew that, cost of oil VS renewable energy is everything. OPEC needs to keep the prices exactly at the level where cartel would yield maximum returns.
Such a fine balance reminds me of my botany teacher telling me the amount of honey that a given flower ought to carry has to be carefully balanced. If it is too much, there is no need to go anywhere, the pollination would not occur since bee would not go next tree. On the other hand, if it is too little, then it would not even visit that flower.
His observations on gas price and freedom chart is very good.

His examples from Satyam computers on rural data centers, Montana's elk hunting, electricity consumption reduction of the humble vending machines, pantanal freshwater lake
were impressive. It looks like, western Siberia and smaller area of Alaska about has about 1/3rd of carbon in world trapped in the form of frozen peat bogs. If the perma frost were to thaw, much of the carbon would be converted in to methane which is more potent than CO2 as greenhouse gas. Certainly, he is against the idea of Carbon neutral and remarks that, it is like half of employees use computers and the other half use paper,pencils and Abacus. Actually, he has been very considerate in his example, one of the radio host 91.1FM said, that is like reserving a portion of the swimming pool for pissing.

His main point is that, mankind is no special. We better comply to the nature's law else we would be extinct. Watson of Ecotech makes a telling point to the author.
"Mother nature is completely amoral. It is chemistry,physics and biology -and all are sum of those 3 things!". She does not care if we go to church or about poetry or about arts.
You cannot negotiate with her nor can evade her rules. All you can do is fit as species and if you don't learn to fit, soon you would be gone.
"Everyday, you look in to the mirror, you are seeing an endangered species!".
(With 6 billion in size and growing in geometric progression, I wonder about extinction. But misuse+abuses we are doing it is not difficult to imagine).

He ends with a nice story which is worth a recall......................

A CEO was having to baby-sit for his young daughter. He was trying hard to read but was totally frustrated by constant interruptions.
When he came across full page of earth from space, he got a brilliant idea. He ripped it up in to small pieces and told his daughter to put it up again.
He expected it to take at least half an hour. But, only a few minutes gone by, the child appeared with a big grin on her face.
"You have already finished?" he asked. "Yep", she replied. "How did you do it?".
"Well, I saw there was a picture of a man on the other side, so, when I put the person together, the earth got put together too".

Thanks for reading so far.....

Thursday, September 17, 2009

Gently Falls by Sudha Murthy (Book Commentary)

Gently Falls by Sudha Murthy (Book Commentary)
Sometime around 1985 (yes, about two decades back), one of my friends gave his wife a memento on their first wedding anniversary which reads thus:
"No matter how much a man criticizes his wife's judgment, he never questions her choice of husband". Apparent humor apart, admittedly there is a hint alpha male dominance, but if you take a software perspective, it is an eminently re-usable quote. Just change his to her and wife to husband etc, you can sell that card to the fairer side. Well, that was 80's - mostly dominated by arranged marriages with a hint of a few love marriages here-n-there.

In 90's, I recall another one of oft used cards which reads thus....
Marriage is relationship in which dependence is mutual, Independence is equal, and obligations are reciprocatory". Seems to be fair and equally poised - at least in that card.

Now, on to 21st century.....Rama Bijapurkar, in her book (book's name is "We are like that only") makes a telling remark: Women are more educated and enterprising now a days. It is true that, mother-in-laws are more tolerant and husbands are less repressing, but is it is not the social revolution that is taking place, but it is economics! The concept of family has changed from social unit to economic unit. Model is around pragmatic business relationship rather than around romance. Role of a woman would vary depending on the class of income and the idea is to maximize the unit's income not the woman's or any specific member.

Well, we can witness an interesting morphing that seems to occur every decade....... wondering what next decade has in store for the 20's something!

Happen to read the book, "Gently Falls, the Bakula" by Sudha Murthy. Story is set @ Hubli<>Bombay belt. No major complications and comes to an end in such way that makes you seriously think. Two classmates (Shrimathi and Shrikant) are neighbors separated by Bakula tree. Both make it to state ranks in the PUC exams, there by earning accolades for the school. Needless to say who was the first and who was the second rank. This man goes to IIT Bombay and the topper chose to specialize in History locally. Amidst much family's resistance from the boy's side and misgivings from the girl's mother, they anyway get married very simply. He gets a job in an IT firm. He rose very fast to a senior position in matter of just over a decade - of course, with truncated onsite assignment in USA. Upon returning he is even more entrusted with huge responsibilities (like NYSE listing) and the job consumes him nearly all of his mind share. Very subtle instances are narrated how her interests/aspirations (doing PhD in History) gets stream rolled. I am skipping Mother/sister in-laws episodes. Story ends, when he is back from USA with great news that he has become Managing Director of that firm - only to hear from her that, she is leaving for USA to pursue her higher studies and has no intent of returning :-(

In that book, author refers to the fascinating story of Bhamati. Long ago, there was a young sage who wanted to write commentary on Dharmasastra. He was so engrossed in the work; he has forgotten the outside world. His mother used to look after him and she realized she was getting older. She went to next village, selects a girl. As an obedient son would, he went to that village and got married. Even after marriage sage was fully immersed in his commentary work. One day, his mother died and this young girl took over the duties. She took care of him much like his mother. One night, when he is done with his work fully, he noticed an old woman sleeping on the floor. He tried to recall but could not fully recognize her and hence he woke her up and asked, "Lady who are you? And when did you come here?” Lady politely replied, "I am your wife and I am here for the last 40 years!” The sage was wonderstruck and then asked her very respectfully, "Lady what is your name?” She said "Bhamati". Sage went back to his work and wrote on the first page "Bhamati". Till today, the name remains famous and author goes on to say her sacrifice/contribution is indeed more compelling than anyone in the story - rightfully so.

Well, in the main story, per author, Shrimathi's threshold-of-indignation was not like Bhamati and that is why such an end was precipitated. Narration was very simple (is it because it was translated from Kannada?). Story line had enough scope of mega descriptions, but author kept them to a bare minimum.

My grandma used to say, "A man prefers his wife to be smart enough to understand him and stupid enough to admire him". Gee, there is a load of wisdom in that line and I would agree with her. To the same grandma, if I were to ask what sort of hubby she would have preferred? ....I am sure she would have said the same thing with the genders exchanged!

Thanks for reading this far......

Tuesday, September 15, 2009

FREE by Chris Anderson

Mark Twain once said, “The difference between the right word and an almost right word is the difference between lightning and the lightning bug”. Somehow, I felt it was a hyperbole just to make a point. On similar lines, author seems to say, difference between FREE and charging some paltry amount (say one dime or one paisa) could be that much.
Perhaps, on thinking hard, I would agree for I have seen at least one episode of this occurrence. For long, Railways reservations forms used to be FREE. Ever since they started charging very nominal amount most of the problems vanished.

Chris’s main point is that, FREE is a viable biz model in the overall scheme of things. He gives plenty of examples and case studies as well as a good appendix on how it works. When you look at things which are done and deemed as “successful”, it takes some hard work and imagination to explain it in case of business. In case of science, eventually you can come up with a model like benzene rings, but it may be lot harder (like Feynman explanation on Super fluids, Einstein’s Theory, Darwin’s Evolution theory). In all these cases, they themselves took the trouble of telling what it takes to disprove their model. They also tried hard to disprove the model. Likewise, I would love to see, where and when FREE model was employed with lots of potential upside, but it bombed and why? No such examples were to be found in this book. I later reconciled myself saying that for a $30 book, it is too much to expect since it would prove very valuable.

In social systems, there is a concept called “light house effect”. If you build a light house based on the contributions from the community members and if some of them did not contribute in any form to the project, there is no way to deny them the use it brings. Most of the focus in such studies would hover around what is minimum set of people or percentage of people in the group who would have to chip-in so that, the project takes off. If numbers are too less it gets abandoned very quickly. Chris’s point is that, in the “electrons world” unlike “atom world” percentage of contributors required seems to be as low as 1%. He calls that as “FREE RIDER NON-Problem” and gives Wiki as a solid example.

Theodore Levitt, in his landmark article “Marketing Myopia” remarked “If Railways defined their business as Transportation business instead of Railways, they would have certainly taken advantage of the Airways”. A similar sentiment is expressed here about Ryan Airways,” they have defined their business not as an airline seats biz but as travel biz”. Certainly, it is a good observation but only in retrospect, like taking the same question paper for second time after preparation.

His views on piracy are worth re-reading. Also, his examples of Craigslist, Encarta, Roomba vacuum cleaner, Jell-O-o, Gillette, and radio broadcasting are impressive. For sure, he is a master in providing solid examples with a good story line.
There are special sections on “How can ………… FREE” where the dotted lines represents Air travel , Car, DVR etc . Totally there are 14 examples. Most of the case studies are worth giving a thought for it may bring in some crucial insight to pricing decisions in the area we operate on.

Last chapter (Chap-16) focuses on doubts about the model. There, he takes head-on some of the myths and misconceptions of FREE model as quoted by some famous folks and tries to confute it. This section too deserves a closer reading.
Author recounts his experience with a friend who works for Google in his office. When he explained what he does as an editor of “WIRED” magazine, he witnessed a “mounting disbelief” from his friend because his friend was doing exactly the opposite. It was a good example where one’s poison could be other’s food.
When the availability/resource model moves from scarcity to abundance, it appears humans have not yet developed a good strategy to take advantage of the situation. His observation on Google and its CEO’s worry is worth pondering. FREE as a model works too well for few folks leaving others in dust.

FREE as a pricing concept has been there for ages. But, when to apply and how to get most of it is still an art (to the point of black magic) rather than an exact science. So, I would modify the standard Prayer like this.

“Oh God, Give me the serenity to give things which I have to give FREE anyway; courage to charge for the things which I can – and the wisdom to know the difference
Well, you would get plenty of examples for gaining serenity and courage from this book. 

As to wisdom, you would have to try for yourself : )

Thanks for reading thus far.