August 22, 2007

Beyond manufacturing: The evolution of lean production

This McKinsey article happened to be a good read on the Lean principles outside of manufacturing...

Many non-manufacturing sectors are rapidly adopting lean techniques. Soon they will no longer be a differentiating factor in themselves; the important thing will be how well you implement them.

Lean principles
were originally developed in industrial operations as a set of tools and practices that managers and workers could use to eliminate waste and inefficiency from production systems—reducing costs, improving quality and reliability, and speeding up cycle times. Toyota Motor pioneered lean practices, and much of their allure today stems from the fact that the phenomenal performance of this automaker, in one of the world’s most competitive sectors, rests to a considerable extent on its ability to develop and perfect these practices over the past five decades.

Recently, lean techniques have moved from manufacturing plants to operations of all kinds, everywhere: insurance companies, hospitals, government agencies, airline maintenance organizations, high-tech product-development units, oil production facilities, IT operations, retail buying groups, and publishing companies, to name just a few. In each case the goal is to improve the organization’s performance on the operating metrics that make a competitive difference, by drawing employees into the hunt to eliminate unneeded activities and other forms of operational waste.

The biggest challenges in adopting the lean approach in nonindustrial environments are to know which of its tools or principles to use and how to apply them effectively. In emerging markets such as China or India, manufacturing managers trying to implement the lean approach also face these challenges. Differences in everything from culture to infrastructure mean that managers can’t apply the lean tools and techniques used in manufacturing operations in Moline or Munich to nonindustrial environments or to manufacturing plants in the developing world; the approach must be tailored to the realities of specific environments.

The four articles listed below show how managers have met the challenge of applying the lean approach in a variety of operating contexts. In the public sector, for instance, we’ve seen managers use lean tools and frameworks with existing resources to deliver more and better services. Applications-development organizations—the units that write new software for the IT operations of large companies—have adopted an overall end-to-end perspective for the coding process. In China multinational and domestic companies are achieving positive results through frequent kaizen events (group problem-solving sessions) that help Chinese workers to participate in discussions more directly. Finance departments have successfully used lean principles and tools in accounting and budget processes, reinforcing a fundamental point of the lean philosophy: everything starts with the customer.

Finally, as the lean approach percolates into ever wider circles of operations, it ceases to be about best practice and starts to become a part of the fabric of doing business. Operating executives in many sectors are adopting lean techniques rapidly, so soon they will no longer be a differentiating factor; the important thing, in the heat of competition, will be how well companiesimplement them. This next level of the lean journey is managing the softer side of the equation—less about tools and frameworks, more about building the energy and engagement of employees from the shop floor and the office pool upward, tapping into their ideas, focusing them on constant problem solving, and keeping them open to change and flexibility.

Learning to let go: Making better exit decisions

An interesting article from McKinsey...

Psychological biases can make it difficult to get out of an ailing business.

When General Motors launched Saturn, in 1985, the small-car division was GM's response to surging demand for Japanese brands. At first, consumers were very receptive to what was billed as "a new kind of car company," but sales peaked in 1994 and then drifted steadily downward. GM reorganized the division, taking away some of its autonomy in order to leverage the parent company's economies of scale, and in 2004 GM agreed to invest a further $3 billion to rejuvenate the brand. But 21 years and billions of dollars after its founding, it has yet to earn a profit.1 Similarly, Polaroid, the pioneer of instant photography and the employer of more than 10,000 people in the 1980s, failed to find a niche in the digital market. A series of layoffs and restructurings culminated in bankruptcy, in October 2001.

These stories illustrate a common business problem: staying too long with a losing venture. Faced with the prospect of exiting a project, a business, or an industry, executives tend to hang on despite clear signs that it's time to bail out. Indeed, when companies do finally exit, the spur is often the arrival of a new senior executive or a crisis, such as a seriously downgraded credit rating.

Research bears out the tendency of companies to linger. One study showed that as a business ages, the average total return to shareholders tends to decline.2 For most of the divestitures in the sample, the seller would have received a higher price had it sold earlier. According to our analysis of a broad cross-section of US companies from 1993 to 2004, the probability that a failing business will grow appreciably or become profitable within three years was less than 35 percent. Finally, researchers who studied the entry and exit patterns of businesses across industries found that companies are more likely to exit at the troughs of business cycles—usually the worst time to sell.3

Why is it so difficult to divest a business at the right time or to exit a failing project and redirect corporate resources? Many factors play a role, from the fact that managers who shepherd an exit often must eliminate their own jobs to the costs that companies incur for layoffs, worker buyouts, and accelerated depreciation. Yet a primary reason is the psychological biases that affect human decision making and lead executives astray when they confront an unsuccessful enterprise or initiative. Such biases routinely cause companies to ignore danger signs, to refrain from adjusting goals in the face of new information, and to throw good money after bad.

In contrast to other important corporate decisions, such as whether to make acquisitions or enter new markets, bad timing in exit decisions tends to go in one direction, since companies rarely exit or divest too early. An awareness of this fact should make it easier to avoid errors—and does, if companies identify the biases at play, determine where in the decision-making process they crop up, and then adopt mechanisms to minimize their impact. Techniques such as contingent road maps and tools borrowed from private equity firms can help companies to decide objectively whether they should halt a failing project or business and to navigate the complexities of the exit.

The psychological biases at play

The decision-making process for exiting a project, business, or industry has three steps. First, a well-run company routinely assesses whether its products, internal projects, and business units are meeting expectations. If they aren't, the second step is the difficult decision about whether to shut them down or divest if they can't be improved. Finally, executives tackle the nitty-gritty details of exiting.

Each step of this process is vulnerable to cognitive biases that can undermine objective decision making. Four biases have significant impact: the confirmation bias, the sunk-cost fallacy, escalation of commitment, and anchoring and adjustment. We explore the psychology behind each one, as well as its influence on decisions (Exhibit 1).

Analyzing the project

Let's start with a brief test of a person's ability to analyze hypotheses. Imagine that someone deals four cards from a deck, each with a number printed on one side and a letter on the other.4 Which pair would you choose given an opportunity to flip over just two cards to test the assertion, "If a card has a vowel on one side, then there must be an odd number on the other side"?

Most people correctly choose the U but then incorrectly select 7. This pattern illustrates the confirmation bias: people tend to seek information that supports their point of view and to discount information that doesn't. An odd number opposite U confirms the statement, while an even number refutes it. But the 7 doesn't provide any new information—a vowel on the other side confirms the assertion, but a consonant doesn't reveal anything, since consonants can have even or odd numbers on their flip sides. The correct choice is the 8 because it could reveal something: if there is a vowel on the other side, the statement is false.

Now imagine a group of executives evaluating a project to see if it meets performance hurdles and if its revenues and costs match the initial estimates. Just as most people choose cards that support a statement rather than those that could contradict it, business evaluators rarely seek data to disprove the contention that a troubled project or business will eventually come around. Instead, they seek market research trumpeting a successful launch, quality control estimates predicting that a product will be reliable, or forecasts of production costs and start-up times that would confirm the success of the turnaround effort. Indeed, reports of weak demand, tepid customer satisfaction, or cost overruns often give rise to additional reports that contradict the negative ones.

Consider the fate of a US beer maker, Joseph Schlitz Brewing. In the early 1970s, executives at the company decided to use a cheaper brewing process, citing market research suggesting that consumers couldn't tell beers apart. Although they received constant evidence, in the form of lower sales, that customers found the taste of the beer brewed with the new process noticeably worse, the executives stuck with their low-cost strategy too long. Schlitz, once the third-largest brewer in the United States, went into decline and was acquired by rival Stroh in 1982. Like-wise, when Unilever launched a new Persil laundry detergent in the United Kingdom, in 1994, the company tested the formula on new clothes successfully but didn't seek disconfirming evidence, such as whether it would damage older clothing or react negatively to common clothing dyes. Consumers discovered that it did, and Unilever eventually had to return to the old formula.

Deciding which projects to exit

At this stage, the sunk-cost fallacy is the key bias affecting the decision-making process. In deciding whether to exit, executives often focus on the unrecoverable money already spent or on the project-specific know-how and capabilities already developed. A related bias is the escalation of commitment: yet more resources are invested, even when all indicators point to failure. This misstep, typical of failing endeavors, often goes hand in hand with the sunk-cost fallacy, since large investments can induce the people who make them to spend more in an effort to justify the original costs, no matter how bleak the outlook. When anyone in a meeting justifies future costs by pointing to past ones, red flags should go up; what's required instead is a levelheaded assessment of the future prospects of a project or business.

The Vancouver Expo 86 is a classic example.5 The initial budget, CAN $78 million in 1978, ballooned to CAN $1.5 billion by 1985, with a deficit of more than CAN $300 million. During those seven years, the expo received several cash infusions because of the provincial government's commitment to the project. Outrageous attendance estimates were used to justify the added expense (the confirmation bias at play). Predictions of 12.5 million visitors, which would have stressed Vancouver's infrastructure, grew at one point to 28 million—roughly Canada's population at the time. Moreover, Canadians had seen budget deficits for big events before: the 1967 Montreal Exposition lost CAN $285 million—six times early estimates—and the 1976 Montreal Olympics lost more than CAN $1 billion, though no deficit had been expected.

Contrast that with the story of the Cincinnati subway. Construction began in 1920. When the $6 million budget ran out, in 1927, the leaders of the city decided that it no longer needed the subway, a point suggested by studies from independent experts. Further construction was stopped, though crews had finished building the tunnels.6 The idea for the subway had been conceived in 1884, and the project was supported by Republicans and Democrats alike, so this decision was not a whim; World War I and shifting demographic needs had altered the equation. Fortunately for Cincinnatians, during the past 80 years, referendums to raise funds for completion have all failed.

Proceeding with the cancellation

The final bias is anchoring and adjustment: decision makers don't sufficiently adjust future estimates away from an initial value. Early estimates can influence decisions in many business situations,7 and this bias is particularly relevant in divestment decisions. There are three possible anchors. One is tied to the sunk cost, which the owner may hope to recover. Another is a previous valuation, perhaps made in better times. The third—the price paid previously for other businesses in the same industry—often comes up during merger waves, as it did recently in the consolidation of dot-com companies. If the first company sold for, say, $1 billion, other owners may think that their companies are worth that much too, even though buyers often target the best, most valuable company first.

The sale of PointCast, which in the 1990s was one of the earliest providers of personalized news and information over the Internet, shows this bias at work. The company had 1.5 million users and $5 million in annual advertising revenue when Rupert Murdoch's News Corporation (NewsCorp) offered $450 million to acquire it. The deal was never finalized, however, and shortly thereafter problems arose. Customers complained of slow service and began defecting to Yahoo! and other rivals. In the next two years, a number of companies considered buying PointCast, but the offer prices kept dropping. In the end, it was sold to Infogate for $7 million. PointCast's executives may well have anchored their expectations on the first figure, making them reluctant to accept subsequent lower offers.8

Axing a project that flops is relatively straight-forward, but exiting a business or an industry is more complex: companies can more easily reallocate resources—especially human resources—from terminated projects than from failed businesses. Higher investments, which loom larger in decision making, are typically tied up in an ongoing business rather than in an internal project. The anguish executives often feel when they must fire colleagues also partially explains why many closures don't occur until after a change in the executive suite. Divestiture, however, is easier because of the possibility of selling the business to another owner. Selling a project to another company is much more difficult, if it is possible at all.

When a company decides to exit an entire business, the characteristics of the company and the industry can influence the decision-making process. If a flagging division is the only problematic unit in an otherwise healthy company, for instance, all else being equal, managers can sell or close it more easily than they could if it were the core business, where exit would likely mean the company's death. (Managers might still sell in this case, but we recognize that it will be hard to do so.) It sometimes (though rarely) does make sense to hang on in a declining industry—for instance, if rivals are likely to exit soon, leaving the remaining company with a monopoly.

Becoming unbiased

Several techniques can mitigate the effects of the human biases that confound exit decision making. One way of overcoming the confirmation bias, for instance, is to assign someone new from the management team to assess a project. At a multinational energy and raw-materials company, a manager who was not part of an initial proposal must sign off on the project. If the R&D department claims that a prototype production process can ramp up to full speed in three months, for example, the production manager has to approve it. If the target isn't met, the production manager too is held accountable. Making executives responsible for the estimates of other people is a powerful check: managers are unlikely to agree to a target they cannot reach or to overestimate the chances that a project will be profitable. The likely result is more honest opinions.

"Overoptimism about the likelihood of success and other universal human biases often influence important strategic decisions. See "Distortions and deceptions in strategic decisions."

Well-run private equity firms adopt these practices too. One leading US firm assigns independent partners to conduct periodic reviews of businesses in its portfolio. If Mr. Jones buys and initially oversees a company, for example, Ms. Smith is later charged with the task of reviewing the purchase and its ensuing performance. She takes her role seriously because she is also accountable for the unit's final performance. Although the process can't eliminate the possibility that the partners' collective judgment will be biased, the reviews not only make biases less likely but also make it more likely that underperforming companies will be sold before they drain the firm's equity.

Another tool that can help executives overcome biases and make more objective decisions is a contingent road map that lays out signposts to guide decision makers through their options at predetermined checkpoints over the life of a project or business. Signposts mark the points when key uncertainties must be resolved, as well as the ensuing decisions and possible outcomes. For a contingent road map to be effective, specific choices must be assigned to each signpost before the project begins (or at least well before the project approaches the signpost). This system in effect supplies a precommitment that helps mitigate biases when the time to make the decision arrives.

One petrochemical company, for instance, created a road map for an unprofitable business unit that proposed a new catalyst technology in an attempt to turn itself around (Exhibit 2). The road map established specific targets—a tight range of outcomes—that the new technology had to achieve at a series of checkpoints over several years. It also set up exit rules if the business missed these targets.

Road maps can also help to isolate the specific biases that may affect the corporate decision-making process. If a signpost suggests, for example, that a project or business should be shut down but executives decide that the company has invested too much time and money to stop, the sunk-cost fallacy and escalation-of-commitment bias are quite likely at work. Of course, the initial road map might have to be adjusted as new information arrives, but the changes, if any, should always be made solely to future signposts, not to the current one.

Contingent road maps prevent executives from changing the decision criteria in midstream unless there is a valid, objective reason. They help decision makers to focus on future expectations (rather than past performance) and to recognize uncertainty in an explicit way through the use of multiple potential paths. They limit the impact of the emotional sunk costs of executives in projects and businesses. And they help decision makers by removing the blame for unfavorable outcomes that have been specified in advance: the explicit recognition of problems gives an organization a chance to adapt, while a failure to recognize problems beforehand requires a change in strategy that is often psychologically and politically difficult to justify. Before the invasion of Iraq in 2003, for example, it was uncertain how US troops would be received there. If the Bush administration had publicly announced a contingency plan providing for the possibility of increased troop levels should an insurgency erupt, the president would most likely have had the political cover to adopt that strategy.

When companies are finally ready to sell a business, the decision makers can overcome any lingering anchoring and adjustment biases by using independent evaluators who have never seen the initial projections of its value. Uninfluenced by these earlier estimates, the reviews of such people will take into account nothing but the project's actual experience, such as the evolution of market share, competition, and costs. One leading private equity firm overcomes anchoring and other biases in decision making by routinely hiring independent evaluators, who bring a new set of eyes to older businesses in its portfolio.

There are ways to ease the emotional pain of shutting down or selling projects or businesses. If a company has several flagging ones, for example, they can be bundled together and exited all at once or at least in quick succession—the business equivalent of ripping a bandage off quickly. Such moves ensure that the psychological sense of failure that often accompanies an exit isn't revisited several times. A onetime disappointment is also easier to sell to stakeholders and capital markets, especially for a new CEO with a restructuring agenda.

In addition, companies can focus on exiting businesses with products and capabilities that are far from their core activities, as P&G did in 2002, when it divested and spun off certain products in order to focus on others with stronger growth prospects and a more central position in its corporate portfolio.


Although canceling a project or exiting a business may often be regarded as a sign of failure, such moves are really a perfectly normal part of the creative-destruction process. Companies need to realize that in this way they can free up their resources and improve their ability to embrace new market opportunities.

By neutralizing the cognitive biases that make it harder for executives to evaluate struggling ventures objectively, companies have a considerably better shot at making investments in ventures with strong growth prospects. The unacceptable alternative is to gamble away the company's resources on endeavors that are likely to fail in the long run no matter how much is invested in them.

You can also listen to this article on your iPod - Here is the link to the MP3 version of the same.

When to exit a failing venture

An interesting article from McKinsey...

Standard economic theory treats human beings as rational, calculating machines, but behavioral economics holds that the machine often breaks down. Businesspeople, no less than others, are subject to cognitive biases that can undermine their objectivity—particularly in emotionally traumatic and potentially career-destroying decisions to exit foundering businesses or cancel struggling projects.

"Lightning damages temple" - That was close!

Here is an article from today's Deccan I understand what happened to me.

Chennai, Aug 21: A portion of the Raja Gopuram, of the famous Kapaleeswar temple in the city was damaged after it was struck by lightning Tuesday evening. The Nasi Thalai on the gopuram broke and fell on the Lakshmi idol adorning it, damaging it partially. No one was injured in the incident.
A special parihara pooja was performed following the incident. The routine rituals and poojas were not delayed, a temple official said. According to temple sources, the lightning struck the Raja Gopuram at 6 p.m. The devotees noticed that the Nasi Thalai was broken and had fallen on the Lakshmi idol The asbestos sheet under the temple tower was also partially damaged.

Devotees lined up in long queues to see the damaged portion of the Raja Gopuram and participated in the poojas performed. “The damaged Lakshmi idol and Nasi Thalai will be repaired on August 23,” Mr Devendiran, executive officer of Kapaleeswar Temple said speaking to this newspaper. The joint commissioners of the Hindu Religious and Charitable Endowment (HR & CE) department Dhanapal, Jayaraman, Nalli Kuppusamy Chetty, chairman of the board of trustees, deputy commissioner of police A G Maurya and other temple trustees inspected the tower.

The Kapaleeswarar Temple in Mylapore is a very ancient temple. The original temple was submerged under the sea and a new temple was built in its place. There are separate sannadhis for several deities such as Vinayagar, Annamalaiyar, Murugan, and Saneeswaran. There are several other deities such as Durga, Dakshinamurthy, Chandikeswarar located within the main Sannadhis of Kapaleeswarar and his consort Karpagambal. The temple tank lies opposite the tower. Karpagambal is said to have worshipped the Lord in the form of a peacock and hence the area came to be called Mylapore.

Also, find the link to this article on Deccan Chronicle here.

Second Life???

Yesterday was the most fateful day of my life...something I would never want to see ever again. Read on to know what I mean...

It was 18:00Hrs IST, when I left my office on my journey back home. It started to drizzle and it slowly began to rain. The the thunders I heard were something I never heard before. The lightening was so bright and the rods of lightening were really long and powerful.

Powerful lightening?? I was driving and had stopped at the signal, when this disastrous lightening struck. I just remember the sound of the thunder and the brightness of light....nothing else! I went into a total blackout for a brief period of time. I opened my eyes with a heavy chest and a pain in my heart. It felt like my heart was being pressed from all sides, and I was perspiring very heavily with a little difficulty in breathing.

I hit my chest heavily, and forcefully took in bursts of oxygen through my nostrils. I regained consciousness and was able to maneuver my car to the roadside. I didn't know what came over me, and I felt like I was possessed. This was the worst moment in my life thus far.

I called up my dad (he is a doctor) on his mobile, and he told me to stop driving for sometime and take rest. I checked by heart rate - It was beating at more than 120bpm for more than 20minutes! I was feeling unnerved and was very irritated. I drove slowly and reached home at about 20Hrs IST. My dad checked my blood pressure, and the systolic reading was showing 94. He told me that this was due to the lightening. The lightening must've struck quiet close by, that it affected my heart's functioning for a brief period (Thankfully!!). The breathlessness also was due to the same - The lightening eats up oxygen in the air, and it gets really tough to breathe (Thankfully, my car saved me)

I read multiple postings later on the internet, and came across multiple articles that briefed on what all could happen if one is affected by a lightening strike. To know more on the effects of lightening on human body, read this link.

So, here are some tips for you the next time a thunderstorm approaches:
  • Go inside a home or large building, if you can.
  • Avoid using electrical appliances such as telephones, computers, or television sets.
  • If no building is available, try to get into a car. The metal frame will conduct the lightning safely into the ground.
  • If stuck outside, do not take shelter under a tall, isolated tree.
  • Stay away from open water.
  • If you are trapped in an open field and you feel your hair stand on end, lightning is about to strike. Drop to your knees and bend forward putting your hand on your knees. Do not lie flat on the ground.

August 21, 2007

N.R.Narayanamurthy's pearls of wisdom at NYU Stern

May 28, 2007 13:58 IST

N R Narayana Murthy , chief mentor and chairman of the board, Infosys Technologies, delivered a pre-commencement lecture at the New York University (Stern School of Business) on May 9. It is a scintillating speech, Murthy speaks about the lessons he learnt from his life and career. Read on, its very inspiring.

Dean Cooley, faculty, staff, distinguished guests, and, most importantly, the graduating class of 2007, it is a great privilege to speak at your commencement ceremonies.

I thank Dean Cooley and Prof Marti Subramaniam for their kind invitation. I am exhilarated to be part of such a joyous occasion. Congratulations to you, the class of 2007, on completing an important milestone in your life journey.

After some thought, I have decided to share with you some of my life lessons. I learned these lessons in the context of my early career struggles, a life lived under the influence of sometimes unplanned events which were the crucibles that tempered my character and reshaped my future.

I would like first to share some of these key life events with you, in the hope that these may help you understand my struggles and how chance events and unplanned encounters with influential persons shaped my life and career. Later, I will share the deeper life lessons that I have learned. My sincere hope is that this sharing will help you see your own trials and tribulations for the
hidden blessings they can be.

The first event occurred when I was a graduate student in Control Theory at IIT, Kanpur, in India. At breakfast on a bright Sunday morning in 1968, I had a chance encounter with a famous computer scientist on sabbatical from a well-known US university.

He was discussing exciting new developments in the field of computer science with a large group of students and how such developments would alter our future. He was articulate, passionate and quite convincing. I was hooked. I went straight from breakfast to the library, read four or five papers he had suggested, and left the library determined to study computer science.

Friends, when I look back today at that pivotal meeting, I marvel at how one role model can alter for the better the future of a young student. This experience taught me that valuable advice can sometimes come from an unexpected source, and chance events can sometimes open new doors .

The next event that left an indelible mark on me occurred in 1974. The location: Nis, a border town between former Yugoslavia, now Serbia, and Bulgaria. I was hitchhiking from Paris back to Mysore, India, my home town.

By the time a kind driver dropped me at Nis railway station at 9 p.m. on a Saturday night, the restaurant was closed. So was the bank the next morning, and I could not eat because I had no local money. I slept on the railway platform until 8.30 pm in the night when the Sofia Express pulled in.

The only passengers in my compartment were a girl and a boy. I struck a conversation in French with the young girl. She talked about the travails of living in an iron curtain country, until we were roughly interrupted by some policemen who, I later gathered, were summoned by the young man who thought we were criticising the communist government of Bulgaria.

The girl was led away; my backpack and sleeping bag were confiscated. I was dragged along the platform into a small 8x8 foot room with a cold stone floor and a hole in one corner by way of toilet facilities. I was held in that bitterly cold room without food or water for over 72 hours.

I had lost all hope of ever seeing the outside world again, when the door opened. I was again dragged out unceremoniously, locked up in the guard's compartment on a departing freight train and told that I would be released 20 hours later upon reaching Istanbul. The guard's final words still ring in my ears -- "You are from a friendly country called India and that is why we are letting you go!" The journey to Istanbul was lonely, and I was starving. This long, lonely, cold
journey forced me to deeply rethink my convictions about Communism. Early on a dark Thursday morning, after being hungry for 108 hours, I was purged of any last vestiges of affinity for the Left.

I concluded that entrepreneurship, resulting in large-scale job creation, was the
only viable mechanism for eradicating poverty in societies.

Deep in my heart, I always thank the Bulgarian guards for transforming me from a confused Leftist into a determined, compassionate capitalist! Inevitably, this sequence of events led to the eventual founding of Infosys in 1981.

While these first two events were rather fortuitous, the next two, both concerning the Infosys journey, were more planned and profoundly influenced my career trajectory.

On a chilly Saturday morning in winter 1990, five of the seven founders of Infosys met in our small office in a leafy Bangalore suburb. The decision at hand was the possible sale of Infosys for the enticing sum of $1 million. After nine years of toil in the then business-unfriendly India, we were quite happy at the prospect of seeing at least some money.

I let my younger colleagues talk about their future plans. Discussions about the travails of our journey thus far and our future challenges went on for about four hours. I had not yet spoken a word.

Finally, it was my turn. I spoke about our journey from a small Mumbai apartment in 1981 that had been beset with many challenges, but also of how I believed we were at the darkest hour before the dawn. I then took an audacious step. If they were all bent upon selling the company, I said, I would buy out all my colleagues, though I did not have a cent in my pocket.

There was a stunned silence in the room. My colleagues wondered aloud about my foolhardiness. But I remained silent. However, after an hour of my arguments, my colleagues changed their minds to my way of thinking. I urged them that if we wanted to create a great company, we should be optimistic and confident. They have more than lived up to their promise of that day.

In the seventeen years since that day, Infosys has grown to revenues in excess of $3.0 billion, a net income of more than $800 million and a market capitalisation of more than $28 billion, 28,000 times richer than the offer of $1 million on that day.

In the process, Infosys has created more than 70,000 well-paying jobs, 2,000-plus dollar-millionaires and 20,000-plus rupee millionaires.

A final story: On a hot summer morning in 1995, a Fortune-10 corporation had sequestered all their Indian software vendors, including Infosys, in different rooms at the Taj Residency hotel in Bangalore so that the vendors could not communicate with one another. This customer's propensity for tough negotiations was well-known. Our team was very nervous.

First of all, with revenues of only around $5 million, we were minnows compared to the customer.

Second, this customer contributed fully 25% of our revenues. The loss of this business would potentially devastate our recently-listed company.

Third, the customer's negotiation style was very aggressive. The customer team would go from room to room, get the best terms out of each vendor and then pit one vendor against the other. This went on for several rounds. Our various arguments why a fair price -- one that allowed us to invest in good people, R&D, infrastructure, technology and training -- was actually in their interest failed to cut any ice with the customer.

By 5 p.m. on the last day, we had to make a decision right on the spot whether to accept the customer's terms or to walk out.

All eyes were on me as I mulled over the decision. I closed my eyes, and reflected upon our journey until then. Through many a tough call, we had always thought about the long-term interests of Infosys. I communicated clearly to the customer team that we could not accept their terms, since it could well lead us to letting them down later. But I promised a smooth, professional transition to a vendor of customer's choice.

This was a turning point for Infosys.

Subsequently, we created a Risk Mitigation Council which ensured that we would never again depend too much on any one client, technology, country, application area or key employee. The crisis was a blessing in disguise. Today, Infosys has a sound de-risking strategy that has stabilised its revenues and profits.

I want to share with you, next, the life lessons these events have taught me.

1. I will begin with the importance of learning from experience. It is less important, I believe, where you start. It is more important how and what you learn. If the quality of the learning is high, the development gradient is steep, and, given time, you can find yourself in a previously unattainable place. I believe the Infosys story is living proof of this.

Learning from experience, however, can be complicated. It can be much more difficult to learn from success than from failure. If we fail, we think carefully about the precise cause. Success can indiscriminately reinforce all our prior actions.

2. A second theme concerns the power of chance events. As I think across a wide variety of settings in my life, I am struck by the incredible role played by the interplay of chance events with intentional choices. While the turning points themselves are indeed often fortuitous, how we respond to them is anything but so. It is this very quality of how we respond systematically to chance events that is crucial.

3. Of course, the mindset one works with is also quite critical. As recent work by the psychologist, Carol Dweck, has shown, it matters greatly whether one believes in ability as inherent or that it can be developed. Put simply, the former view, a fixed mindset, creates a tendency to avoid challenges, to ignore useful negative feedback and leads such people to plateau early and not achieve their full potential.

The latter view, a growth mindset, leads to a tendency to embrace challenges, to learn from criticism and such people reach ever higher levels of achievement (Krakovsky, 2007: page 48).

4. The fourth theme is a cornerstone of the Indian spiritual tradition: self-knowledge. Indeed, the highest form of knowledge, it is said, is self-knowledge. I believe this greater awareness and knowledge of oneself is what ultimately helps develop a more grounded belief in oneself, courage, determination, and, above all, humility, all qualities which enable one to wear one's success with dignity and grace .

Based on my life experiences, I can assert that it is this belief in learning from experience, a growth mindset, the power of chance events, and self-reflection that have helped me grow to the present . Back in the 1960s, the odds of my being in front of you today would have been zero. Yet here I stand before you! With every successive step, the odds kept changing in my favor, and it is these life lessons that made all the difference.

My young friends, I would like to end with some words of advice. Do you believe that your future is pre-ordained, and is already set? Or, do you believe that your future is yet to be written and that it will depend upon the sometimes fortuitous events?

Do you believe that these events can provide turning points to which you will respond with your energy and enthusiasm? Do you believe that you will learn from these events and that you will reflect on your setbacks? Do you believe that you will examine your successes with even greater care?

I hope you believe that the future will be shaped by several turning points with great learning opportunities. In fact, this is the path I have walked to much advantage.

A final word: When, one day, you have made your mark on the world, remember that, in the ultimate analysis, we are all mere temporary custodians of the wealth we generate, whether it be financial, intellectual, or emotional. The best use of all your wealth is to share it with those less fortunate.

I believe that we have all at some time eaten the fruit from trees that we did not plant. In the fullness of time, when it is our turn to give, it behooves us in turn to plant gardens that we may never eat the fruit of, which will largely benefit generations to come. I believe this is our sacred responsibility, one that I hope you will shoulder in time.

Thank you for your patience. Go forth and embrace your future with open arms, and pursue enthusiastically your own life journey of discovery!

August 17, 2007

Chennai OpenCoffeeClub - For the Entrepreneur in You!

It was 3PM IST on August 5th, when a group of about 20 entrepreneurs got to meet up at one place. The "Subway" on G.N.Chetty Road, T.Nagar, Chennai was buzzing with activity when it witnessed the first meeting of the OpenCoffeeClub in Chennai.

This being the first meeting of entrepreneurs - both, aspiring and seasoned, it was more focussed on introducing ourselves as an icebreaker. We discussed everything from what we do to what one would need to do to bootstrap a new venture.

We had Liffy Thomas from Indian Express who dropped by to cover our meeting on the newspaper. The article below is a scanned copy of the one that came on the newspaper.

The next meeting is happening on the 2nd September at Amethyst. If you are a bootstrapper or thinking of starting a venture, do join us. Below is the map of the location:

August 16, 2007

Webinars and Alternative Communication offerings...

For those of you who are bootstrapping a startup, here are a couple of really valuable offerings in the area of collaboration, desktop sharing, voice conferencing and more...all for FREE!

Yugma and WebHuddle, two offerings I've tried in the recent past is just the right ones for you.

Yugma has to offer the following cool features...
  • Instant real-time desktop sharing
  • Virtual meetings and web conferencing
  • Whiteboard, annotate and share files
  • Windows, Mac and Linux compatible
  • Invite up to 10 people for free
  • Free teleconferencing
Its not all! It also lets you do your business without any spyware/addware, and is really secure. It also offers widgets for your company's website..

WebHuddle, on the other side is something similar to Yugma, and offers its own set of value-addons. You may want to check out the WebHuddle demo site here.

What men want?

Ahh! This video is no way related to my previous posting :-)

What makes me run?

I've been running on and off since the past one and a half years now. Having practiced martial arts for more than 12years, the one thing I've always known best is that I perform when I'm pushed...sometimes by others and sometimes by myself.

Today, running bug has caught me and I'm finding it tough to let go of this thing..Various factors made me start running...Ram's push and mentoring, Hari's enchanting talks-on-the-run, and many others. But today, I've discovered something thats making me push myself....its my Garmin Forerunner 305. Looking at my performance when compared to others, makes me run today.

The run we Chennai Runners did last Sunday was something that has lit the fire in me. I hope to better my timing and endurance.

For those who are still double-minded about running, don't hesitate...get a pair of running shoes and hit the roads...

August 14, 2007

Independence Day

I sometimes get this strange feeling about how we need to pronounce the word "independence" when it is used with the word "day". Should it be pronounced as "In-dependence" or should it be pronounced as "In Dependence"?

The dictionary meaning of the word "independence" reads as "Freedom from control or influence of another or others." Every year, August 15th makes me think - "What freedom am I enjoying today? Do I have the freedom from control and influence?". Every time this thought comes, I end up with a NO answer.

Till August 15th 1947 we were ruled by the Britishers. After August 15th 1947 we have been ruled by our "own" people. The feeling has never changed.

Tomato Soup - Something different @ Svensons in Singapore

A stroll down the Orchard Road in Singapore was more than a time-pass activity to me. It was about 6:30PM on the 1st of August, when I reached my hotel - Traders Hotel Singapore. The hotel is located in a strategic location - perpendicular to the Orchard Road, and pretty close to Little India (a 15minute drive).

Me and my pal (from school days) , who visited me, took a stroll down the Orchard Road, and I enjoyed every bit of the walk. We walked through huge malls, discussing his research activities and my pursuits outside of my day work. We happened to step into this restaurant called Svensons on Orchard Road, which was a party place for all those birthday babies.

I took some cheese munchies, a tomato soup and a pasta. But this tomato soup is something that caught my attention - it was served in a pumpkin-shaped container, which was a garlic bread itself!

You must definetly try this out if you happen to visit Singapore the next time!

August 01, 2007

Karthik @ Singapura

Busy days during the past one month has made my blog to look like a location awareness tool :-)
This is the post (hopefully) that will be of that sort. I just got to Singapore, and plan to go hunting for a decent dinner now.

Hope to get into a good Southeast Asian restaurant and see if they do offer a palatable veggie spread!

More updates to come..