Thunderous applause and a standing ovation. The audience adored them and would not want the performers to go. Herr Gerard Schwarz, Music Director of the Seattle Symphony, and the Contralto Ewa Podles did something they had never done before. Bowing again and again, they did. But came back to more than reciprocate the claps and cheering to reinterpret nature for Mahler! Just the way it unfolds during bright sunny summers of Seattle… That was five summers ago. The great conductor has retired since then.
It all starts with the chalk art spilling around the Benaroya Hall. Incidentally, the lane besides now bears the Schwarz name. Engulfing the whole place in a blossom of innocent creativity where I first saw children unleashing art in chalk. Except subdued in parts where adult helping hands came into play. The budding artists captured the excitement of anticipation for those boarding or fulfillment of all the ones disembarking an Argosy cruise, straight down the steep road at the waterway.
Alaska ahoy!
Occasional containment of the adventurous spirit for those who get charmed by the Radio Jazz and the cozy comforts of its air-conditioned confines. No sooner you step onto the deck of the Argosy that you get the welcome blast of fresh air into your face. The shimmering waters of the Pacific. Just in case you miss the sparkle of refracting lights, be ready to be surprised by the photographs. The frolicking sea-lions and the swooping bald eagles reminding you of the world above and below. And the acrobatic orcas of the neighbouring San Juan islands that appear from below and then disappear into nowhere. It could even be an adieu to the departing Alaska cruise. Five years since then, I do get my opportunity to board the cruise line taking me beyond the Vancouver island – as far as Skagway. Beholden by the sights & sounds of British Columbian coast as it unfolds into Alaska.
The sea gulls mockingly inviting all and sundry to let go themselves into the elements of nature. And the mockery of those who cannot figure out whether the Mount Rainier or the Olympic Mountains are farther or nearer. And the frozen volcano deriding those who take it on its face value. Saintly & sublime. Come, measure me by my trails. Figure out if you do hear my guts rumble, my lava awaits just the moment to splurge – in its most intense and expressive form. Undoubtedly paling to glory fireworks on Lake Union and Puget Sound, which in turn desperately attempt to synchronize with Radio Seattle music, every Fourth of July.
Drums of Destiny:
The city streets are the biggest theatre, be it bright summer nights of Seattle; cold, wet and windy mornings of London or the year-round muggy Mumbai. Drama never ceases there. The drums of destiny keep beating. Must say Vancouver was an exception and the train ride to Whistler only more exhilarating!
Pathos of all those who beg on the streets of Seattle, London or Mumbai. Not because they beg, but succumb to the desire of easy money. How unimaginative they must be when they wear a placard reading “My father was killed by a Ninja. I need money to learn Karate”. Less obscene is the one who politely approaches you with a request for 20 cents and whichever way is your response, does move away with a respectful thank you nod. Neither of these, is certainly the American way. Not in the least portrayal of misery and desperation that ‘Saint Martin and the beggar’ on display at the Seattle Art Museum (SAM). What to talk of the gleeful merriment of the lonely gull. She seems to have an inkling of the divine awakening within. Thanks to ‘Entheogen’ by Sheldon Skillie at the Stonington Art Gallery, that I now understand their gay abandon better.
Not really an ode to the reincarnated street boys of Mumbai who have turned entrepreneurial. Having realized there is greater margin selling pirated Harvard Business Reviews (HBR) than pestering passer bys for loose change. In some sections of the city, as the road signals go red, they swarm in the melee of cars and you can be sure to hear the knock on your windscreens. Ask them what is inside those pages and they will tell you with eyes gleaming, “It’s all about marketing. Good stuff. Please take it”. Urging to close the deal before the signal turns green. Just as in an Xbox. Bizarre, rather true.
Sleepless in Seattle:
The yin and yang is writ large. It is not about the Chinese fusion cuisine as in Pink communism. The dumb alms leave you exploring all possible notes; the deafening ambulance sounds make you wonder whether it is actually a police chase; sudden upward graph of the Seattle skyline and the silence of the cranes despite the sounds of earth moving equipment.
The raven does get heard once in a rare while. Only an ornithologist can tell whether it’s a mate call or a sheer urge to remind of its existence. Just like the occasional American Indian you spot in the park on the edge of Western Avenue. Perhaps the totem poles have a way to vibe with those of their tribe?!
Then suddenly in one silent road corner you have these protestors wanting to support the cause for the tunnel under the Bering Straits. What then could happen to the summer daytime drivers playing loud music in their convertibles as they drive underground? And remember that will invite Russian auto invasion across the Seattle crossroads. Era of fresh tunes!
Not always fresh & juicy:
The Pike Place market is not just about real fish and the pigs. The drama and merriment. It is also not the organic but hybrid fruits alone. Without any doubt juiciest in the world. It is an orchestration of all the musical talent oozing out from the world over. No brew would be complete without the African American singers performing outside the first ever Starbucks. “We gonna be alright”, is indeed very reassuring. Generosity of the onlookers far more forthcoming. But wait, you also have the occasional retching inebriated to the dismay of mothers and wide eyed toddlers in prams, wondering why grownups cannot behave. And a few obsessed, who must somehow dig out “I Love New York” in a mound of “I Love Seattle” T-shirts.
Boeing Vs Microsoft:
Yes, its been five years since the city celebrated the joy of Dreamliner’s (787) birth. There is still no hiding the grief of the aerospace industry. It bemoans that the digital world silently worked its way to get the best talent. The brightest flock from round the world around Redmond. It has been also that long since some ran from right here the greatest music ‘Live Earth’ show on the planet. Unlike the chess players, at the Seattle Public Library, making swift moves and talking in hushed tones – the aviation industry must quietly follow its destiny.
The Red Barn is the home to sights & sounds of European, British, Russian, Japanese and American heroics in the sky. It resonates the dare devilry of Red Baron, Kamikaze and much more. Whether they were Axis or Allies in the two great wars. Also resting in peace is the stately Concorde, after overcoming many a barrier as does the Air Force One. The sea-plane groans but more drones as it takes off or lands onto the waters. Before too long they must all end up in the Museum of Flight. Its already the turn for the recently retired space shuttle to find a parking slot.
Not too far from where the Chief Seattle greets 
enthusiastic visitors to Space Needle, the amphibious duck-riders create quite a mirth. Today Boy King Tutankhamen is a state guest in there. Glittering in his yellow metal-ware, dating three thousand years ahead of the Klondike goldrush which brought in the first hordes into the city. In a few months he heads back to Tahrir Square which has of late had more than its share of action. Only the joyous gull stays on. It is and shall be witness to the past, present and future of the Seattle spirit. A vast, timeless centrifuge that churns new shades of notes which musicians can only dare imitate. The white speck of a gull on an azure blue Seattle summer sky, should be all to keep the Chief’s benign smile.
*Postscript:
From Xbox to Xbox 360 to Kinect is a story of not just software development but vision, as well. How a gaming device was incubated to arrive at the future of man and machine interaction. Thereby producing a new motion sensing system that does away with the game controller in the favour of the player’s own body. A Star Trek kind immersive experience.
The Natural User Interface (NUI) brings your living room alive in a social & accessible way. Removing the last barrier between you and the entertainment you love. Making the hardware almost invisible to the user.
It was artists, musicians, painters, researchers, engineers, people from Hollywood and several nationalities who made this vision come true – indeed a diversity in thought and creativity!
Back in the Pacific Northwest, Washington – British Columbia region, where the whales rule the high seas, I am confounded by potential challenges entailed in classifying them as humans. There is yet another thread in the diversifying diversity weave, again from a recent story from The Economist. No, it is not about Higgs boson! Morals and the machine: Teaching robots right from wrong. Yes this will be a big one to handle too, for diversity practitioners, in not so distant a future.
Whale & dolphin watch – The cetaceans are coming – Dilemma 1:
- Cetaceans like whales and dolphins, have a high degree of intelligence, and also have self-awareness like the humans.
- Their brains are as anatomically complex as those of humans. They also contain a particular type of nerve cell known as the spindle cell. In humans this is associated with abstract reasoning. Moreover, these are much bigger than those of great apes, thought of as humanity’s closest intellectual cousins.
- They have complex cultures, which varies from group to group within a species. They have distinct and differentiated use of vocal signals and tools. Seem to have awareness of themselves as individuals. At least some can recognise themselves in a mirror.
- According to Dr Thomas White, a philosopher from Loyola Marymount University in Los Angeles, a person need not be human. He believes that a person is a being with special characteristics who deserves special treatment as a result of those characteristics. So other species can qualify. Hence cetaceans can have moral rights appropriate to their species, though different from those accorded to humans.
- The term ‘stocks’, with its implication that whales and dolphins are a resource suitable for exploitation, is being overtaken by ‘populations’, a word that is also applied to people.
- A group of killer whales that lives near Vancouver, passing between waters controlled by Canada and the US, have acquired legal protection even though the species as a whole is not endangered. After a battle in the American courts these whales have been defined by their culture, and the culture is deemed endangered.
- The idea of rights for whales echoes Australian philosopher Peter Singer’s proposal that human rights be extended to the great apes – chimpanzees, bonobos, gorillas and orangutans.
“Moby Dick seeks thee not. It is thou, thou, that madly seekest him!”
– Moby Dick
Despite all the valiant efforts by “Save the Whales”, International Whaling Commission (IWC) & Whale and Dolphin Conservation Society (WDCS), thanks to pirate whaling, 15 species have become vulnerable, endangered or critically endangered.
Managing and breeding them in captivity may soon come within the purview of HR managers. Whether whales and dolphins will have the benefit of access to the likes of International Human Rights Commission or a separate set of laws and enforcement mechanism need to be codified?
Technology running ahead of legislation – Dilemma 2:
As they become smarter and more widespread, autonomous machines will end up making life or death decisions, thereby assuming moral authority. Moreover, as the human operators go out of the loop , such robotic machines will be presented with ethical dilemmas. Regulating the development and use of autonomous robots will require an elaborate framework, in the following three areas:
- Laws are needed to determine whether the designer, the programmer, the manufacturer or the operator is at fault if an autonomous machine has an accident.
- Where ethical systems are embedded into robots, the judgements made by them need to be ones that seem right to most people. Studies from how people respond to ethical dilemmas need to be reigned in.
- More collaboration is called for between engineers, ethicists, lawyers and policy makers. Ethicists are likely to gain a greater understanding of their field by trying to teach ethics to machines, and engineers need to reassure society that they are not taking any ethical shortcuts.
“Baby you can drive my car”
– The Beatles
Driverless cars are very likely to be safer than ordinary vehicles, as auto-pilots have made planes safer. Sebastian Thrun, a pioneer in the field, estimates driverless cars could save 1 million lives a year.
In conclusion:
Despite the diversities of the two dilemmas, there are interesting dissimilarly similar underlyings. In the first, we are discovering higher forms of hitherto unknown levels of intelligence. With this growing realisation, we need to take a call whether we are gracious and generous enough to bestow the moral authority rightfully due to them – the wonderful habitants of the blue seas? In the second, we are inventing higher abilities to perform intelligent acts. Are we ready to abdicate increasing moral authority before we weigh the risks entailed?
Inspired by:
http://www.economist.com/node/21548150?fsrc=scn/tw/te/ar/whalesarepeopletoo
Onboard the German airline, during my passage from Mumbai to Seattle, I got to read the inflight magazine editorial. Happy to post it here.
Written by none other than the airline Chief Executive, it tends to lend greater credibility to their committment to diversity practice.
Thankfully it does not just begin and end with employment practices. Christoph Franz, Chairman and CEO, Deutsche Lufthansa AG talks about
the diversity of more than 100 million passengers they transport around the world each year.
Increasingly, more and more enlightened managements need to heighten their sensitivity in this department and the entire spectrum of stake-holders!
V Raghunathan has been a prolific author, banker, columnist and corporate executive.An accomplished chess player, a gifted cartoonist, perhaps the largest collector of ancient locks and padlocks in India and much more. Anyone who wishes to get better insights into his seminal thinking and his versatility ought to visit www.vraghunathan.com.
I saw him recently post the launch of his latest book “Ganesha on the Dashboard”. Raghu brilliantly portrays how educated, smart and tech – savvy, Indians can be surprisingly unscientific in their daily lives. Take the way we go about buying a new car, he says, and goes on to elaborate. We identify an auspicious date and time, then proceed to break a coconut, plonk a plastic deity of Ganesha on the dashboard, and zoom off at a great speed, refusing to wear our seatbelts. Like we refuse to wear a helmet while driving two-wheelers. I was tempted to add – just the way we refuse to protect our boards without caring to protect them by availing a Directors & Officers’ insurance. More on that when we deal with issues in corporate governance.
Here are some very candid and perceptive responses by Raghu to my explorations into Delivery not Distribution:
Q: As an eminent Behavioural Finance expert do you see a disconnect between the distribution and delivery approach in financial services?
A. Yes there is. This disconnect is the same as the one arising from treating financial services as products. For instance, while we call mutual funds or insurance as financial services, the fact is the industry willy nilly markets them as products. Even an insurance-linked savings “product” is sold for its superior returns, as is a Mutual Fund, for example. We often see claims to being No.1 Fund of the Year based on returns and rarely based on service. Terms like financial products, financial agents, financial engineering, or even financial technology continue to create a product myth around what is essentially a service. Once the industry comes to terms with the fact that it is predominantly a service sector (never mind that the sector is in fact called Financial Services) and not a product sector, the misunderstanding between service delivery versus the product distribution will be automatically resolved.
Q. To what extent should distribution, predominantly borrowed from the FMCG industry, be reigned in within the confines of financial services?
A. My short answer to your question is this: Yes, there is a crying need to reign in the tendency to distribute, nay push down the throat of the innocent investors, suspect products, when what the investors need really is deliver of high quality service.
But let me also give you the long answer. The tendency to productise services is so strong in the Financial Services industry that even Insurance Sector, with respect to which there should ideally be far less confusion as to whether it is a product or a service, is increasingly trying to posture itself as a financial product. One would think for example, that insurance is essentially a risk-mitigating service for a fee. The service is to protect folks from financial ruin in case an event of small probability carrying huge loss were to happen. And for this service, folks pay a fee, or a premium. This service becomes all the more delicate because often the culmination of the service is linked to some sort of tragedy, calamity or some other unsavoury event. But unfortunately, this is also a service, where if the disastrous event did not happen, the insured views the premium paid as a “dead loss”! One gets a feeling as if one paid the premium for nothing! After all what did you get in return for the premium? It is not easy for the mind to come to terms with the fact that you should pay good money for nothing to happen!
It can be argued that it is this human nature which leads insurance companies to “productise” their services, and spike an insurance deal with some savings component, so that this “dead loss” concern is mitigated to some extent. Of course, from here it is just one more step to another product with even a lower insurance component and a higher savings component and create ULIP-type products, and from there just another jump, even for someone from a respectable stable, like HDFC Standard Life, to offer what they call as Savings Assurance Policy (SAP), with zero insurance element and 100% “savings” element which is in fact worse than an FD in a bank in every aspect, and does not even protect your principal. With this, the productising is complete – complete with adulteration! For instance, if the above-referred Savings Assurance Policy were to be viewed as an edible product, it would be the equivalent of pure white lime solution being marketed as milk! The problem is, once the productising a service becomes a competitive thing and more people and companies doing it, and then some start contaminating some of the products, and then others start contaminating even more products and so forth, everything becomes par for the course. Now it is all about distribution of those contaminated products. There is no service to deliver. And it goes without saying that while financial service is all about integrity and commitment, productising them gives rise to the exact opposite – namely Greed.
Why do investors fall prey to such products? Nobel Laureate and famed behavioural economist Daniel Kahneman calls this the substitution heuristics. For example, he talks of two questions that were asked of from young participants from the student population. The questions were asked in the following:
How happy are you these days?
How many dates did you have last month?
Do you think those who had more dates reported being happier than those who had fewer dates? The answer was no. The correlation between the response to the above questions was nearly zero. Clearly, dating was nowhere in their minds when they were asked about their happiness.
Now another set of students from the same campus were asked the same questions in reverse order, namely:
How many dates did you have last month?
How happy are you these days?
Surprisingly, this time the correlation between the responses of the two answers were extremely high! What happened? Apparently, dating was not the centre of the students’ lives (as evidenced from the response in the first case). But when they were asked about their romantic life, those who had had many dates were reminded of the happy times of their recent lives, while those who had had no dates had no such happy association, and were in fact reminded of their loneliness. Thus this emotion of remembering happy times or being sad, reflected in the responses for the second question this time!
Now why I quote this example is that when people see a product coming from HDFC Standard Life, they are reminded of the tremendous brand that HDFC has created for itself. Since the association with HDFC is positive, no one thinks of questioning their offering – Savings Assurance Policy – seriously. Had the same product been offered by a lesser brand or an unknown brand, it is a safe bet that there would have been few takers. But that means every time a bad product is associated with a top brand, there is some brand erosion. And this erosion is slowly but steadily multiplied by the number of innocent victims whose savings were directed into such a product by sharp salesmen.
But what is interesting is, even when the industry apes the product segment, it is most reluctant to recall bad products sold by it, like good automobile companies do worldwide. For example, with respect to Savings Assurance Plan, I had personally written twice to the Chairman, Mr. Deepak Parikh, to recall this faulty product, and received no response. And if this happens with the best of the names in the industry, one wants to be wary of virtually everyone else!
Q. Some of the recent woes emanating from the Wall Street did have origins from the ways of distribution with total disregard to the well-being of governance, share-holder and the end customer interests?
A. Of course. When the service of home loans and student loans to the riskiest of borrowers was productised as sub-prime mortgages et al masquerading as investment products, we had this contaminated product being widely distributed replacing the service delivery of the good old banking. And the shareholders, and the tax-payers worldwide ended up paying the price.
Q. Are there any learnings for our industry from such way-ward behaviour?
A. As I said earlier, productising financial services underlies why Greed dominates the financial sector. Service has a noble ring to it. If the industry sold itself based on the services it offers, its mind-set would be ‘cleaner’. But the moment it starts selling ‘products’, the mind-set is that of simple trading and all that is fair in love, war and trading becomes fair for financial services sector too, and Greed takes over. Our major learning in this regard could fall under different baskets.
Regulatory:
Whether it is Mutual Funds or Insurance, their service aspect alone should be regulated by their respective regulators. Ideally they should be prevented from productising themselves, especially in areas that is not their domain. For example, insurance industry has no business offering savings products. Such products should be regulated only by those charged with the oversight of savings, namely SEBI.
But what is more important, regulators must have proper data base and have the wherewithal to ensure that faulty products do not get through their goal post. For instance, it is difficult to imagine a responsible insurance regulator letting a product like Savings Assurance Plan enter the market.
Perhaps it is time the regulators also took a relook at the Groups whose insurance companies market their products in tandem with their Mutual Fund Counterparts within the Group and hard-sell them through their Group’s network of bank branches via their branch managers – typically entirely innocent of investment knowledge – to the unsuspecting customers at the bank.
Management:
Managements should learn to pitch themselves more at the service end than the product end. For example, a Mutual Fund should resist the temptation to advertise itself based on its returns. By definition, a Mutual Fund is a service in which a small investment can reap the benefit of diversification; a service that collects all the dividends from the various investments and pools them for the investors; a service that brings some benefits of research into equities; a service that meets the risk-return profile of the investor and advises him to invest wisely and so forth. It would be so much more in keeping with good corporate governance to advertise themselves based on the ‘delivery’ of these services.
Q. How should the customer interface architecture of financial service industry be fundamentally different from the rest of businesses?
A. In a way I answered this when I said the financial services players should stick to their respective domains. For example, I am dead against a branch manager selling savings products to the bank customers. Combining the network of Insurance, Investment and Banking is fraught with major risks, as management oversight in such cases is often blinded by greed. I have personal knowledge of school teachers, 65 year old house wives and retired clerks who have been made to withdraw their PF funds and invest in this or that silly product ‘recommended by the branch managers’, who have a target to meet in this regard! I have seen innocent customers whose risk profile test in a branch clearly stated that not more than 13% of the investment should be invested in equity, had 60% of her savings invested into equities by the Manager in mutual funds, which lost nearly 30% of its value within a year when the investor had stated clearly that she wanted her funds within 18 months for building a house! In my mind, Banks should stick to banking and not peddle mutual funds. Mutual funds should stick to the service of pooling resources and sell only through identified brokers. Insurance companies should stick to the business of insurance and nothing more. Problems crop up only when these parties start crossing each other’s territories and set off land mines wittingly or unwittingly.
Q. Any other thoughts in this regard?
A. Only this. Behavioural economics repeatedly shows that greed a rather dominant sentiment in investment. Regulators worldwide would do well to keep this in mind.
Widely acclaimed as the Master of Value Investing, Parag Parikh (Chairman, Parag Parikh Financial Advisory Services Limited) emerges from his mid-day meditation session, apologetic that he slightly overshot his appointment as he fell into a slumber. He truly personifies equanimity which he talks and walks.
Parag Parikh (www.ppfas.com) has been evangelizing the concept of behavioral finance, appealing investors to remain focused on long-term goals rather than fall prey to instant gratification – staying on the rational track rather than swaying towards the emotional, and surely keeping away from the herd mentality.
While behavioral finance is now a considerably developed science as far as investments are concerned, who but the high priest of rational behavior could be better equipped to unravel some of the diverse currents (and under-currents) that insurers ought to proactively understand and tap?
Praveen Gupta: In behavioral finance do you see a distinct gender divide?
Parag Parikh: Behavior depends on various factors. It is a function of conditioning and circumstances. Given certain circumstances, each one behaves differently. Let us remember that males were predominantly hunters and women homemakers. A hunter has to take bold decisions and would be weak at his own peril. That does not mean either cannot be the other type.
Let us also remember the “Mind versus Heart” and the “Left brain versus Right brain” debate; your circumstances and conditioning would determine whether you are intuitive or calculative.
Interestingly, if you look at today’s trends, women have started dominating and also making investment decisions. Today’s girls are much smarter than boys. We are actually creating divisions.
PG: In terms of segment/s of our society, do you see any patterns in say how senior citizens exercise choice vis-à-vis those in their prime. Likewise, is there any regional bias in terms of risk taking or risk aversion?
PP: You know ageing when you age. With age you generally make wiser decisions. A young guy may no doubt be intelligent and brilliant but it is wisdom that comes with age and endures.
Unfortunately, today’s education is not about compassion and collaboration. It is rather about competition and we make our laws on the basis of that.
“Unfortunately, today’s education is not about compassion and collaboration. It is rather about competition and we make our laws on the basis of that”.
We make our yardsticks for measuring people on the basis of competition. We categorize and incentivize them with money. Money does not give happiness but rather greed and discontent. People do not realize there is something called contentment.
Again, there are some myths like Indians are not long-term investors. That is not true. The very fact that they invest in FDs, PPF, Endowment, Post Office and gold proves it otherwise. Why cannot we cater to that need? We should develop a pull market rather than a push one. We need advertisements that have a thought process that appeals to the rationality rather than the emotional stuff we see today. Behavior is long-term but what are you doing about it?
In South India, which has a very high degree of education, people who are hard working and have humility have a predominantly long-term philosophy and live by that. The North possesses more of a trader mentality. Take Muscat and Dubai, for instance. Both are in the Gulf region, yet Indians in Dubai are driven by instant gratification. Generally, the working class is long-term and businessmen are short-term.
PG: Are there any segments which in your experience demonstrate strong EQ despite a not-so-great IQ or whose EQ and IQ are reasonably at par, or for that matter show high divergence?
PP: It is all about how one individual uses self-control – his or her ability to delay instant gratification and wanting more for less.
PG: Have you noticed any shifting patterns among the youngest of the investing lot?
PP: Today’s young have so many aspirations. They know what is possible. Given the societal change, everything is moving from self-sufficiency to higher self-sufficiency and higher indebtedness in the name of consumerism.
When you are down and out, you are always in a rat race and your nature starts changing. Increasing aspirations of spouse and material pressure further make you lose sight of the value system.
PG: Like the HNIs, are the NRIs one homogeneous lot in terms of investing behavior? Are their motivations and aspirations any different from the rest of the lot? Any noticeable distinction in their preference for an asset class?
PP: HNIs are a different lot. If these are lawyers who litigate, they will be very competitive. Likewise, among doctors there may be ethical or non-ethical strains. The patterns are generally individualistic.
“As a bubble starts to build up, everyone joins in and start losing their rationality. The overarching belief then is that things are going to be permanent”.
PG: How does an inside view influence any particular individual’s rationality in a particular group?
PP: This is all about lack of self-control and willpower. Most of individuals going for instant gratification would be the ones say going for fast food or a smoke despite realizing that it is not good for their health.
PG: Does the investing behavior transcend into how each distinct lot banks or fulfils (or does not fulfil) respective insurance needs?
PP: It is all about needs and aspirations. A 70 year old would want to play very safe but a younger person would like to take chances.
PG: Do you notice any discerning shift when it is a group buying versus an individual one?
PP: We always have safety in numbers. If it is a collective action that turns out to be wrong, all are wrong or a general belief that something good will come out of it. It is just about not taking responsibility.
PG: Any thoughts on how a particular segment which does learn from past irrationality and other which never does?
PP: We have a big market and each year a fresh lot comes in. The new crop ends up making same mistakes of the earlier lot, as they are inexperienced.
PG: Does irrational exuberance have anything to do with all of this?
PP: As a bubble starts to build up, everyone joins in and start losing their rationality. The overarching belief then is that things are going to be permanent.
PG: Do you believe there is a consistency in this ‘emotionality’ of decision-making across all financial services?
PP: Wherever there is money, greed and fear dominate. You need to have the courage to be contrarian if you do not want to lose.
PG: Grateful thanks for these wonderful insights, Paragbhai!
Published in AIR, April 2012
Soren Kierkegaard, the famed Danish theologian, remarked “Once you label me, you negate me”. The process of putting ourselves and others into neat little compartments on the basis of any label and then making judgements about everyone on the basis of those labels is nonspiritual and dehumanizing an experience as I can imagine. Yet it is done all the time. Our government asks us to fill out census reports and to neatly compartmentalize ourselves racially. Funding is allotted on the basis of these distinctions, and prejudices are rampant because we tend to identify one another on the basis of what we can see with our eyes, rather than feel with our hearts. We know that we can exchange our inner organs, and borrow each other’s blood, and we know that our thoughts and our souls are colorless, yet we still need to put labels on ourselves on the basis of what is outside.
— Wayne Dyer in the Chapter on Langston Hughes, WISDOM OF THE AGES
Diversity Training Doesn’t Work*: Contrarian views from Peter Bregman, strategic advisor to CEOs and leadership teams. This piece, in an HBR blog dated March 12th, has already drawn 100+ comments.
- Centers around a media company – Bedia
- Diversity training does not extinguish prejudice; it promotes it
- What people could and could not say seemed to hurt
- Rather than changing attitudes of prejudice and bias, categorizing people reinforces both
- People are not prejudiced against real people; they are prejudiced against categories
- We need to see people as people
- Stop training people to be more accepting of diversity; train them to do their work with a diverse set of individuals, not categories of people
- Move beyond similarity and diversity toward individuality
- The antidote to the ineffectiveness of diversity training is the opposite of diversity training. If you want diversity, think about an individual, another, then another
- So how did Bedia get it right? They decided to put all managers through communication training. People learned to listen and speak with each other, no matter the difference; this is the key to creating a vibrant and inclusive environment
So is this really a case against diversity training? Or is it perhaps the next step forward?
*Original blog by Peter Bregman: http://blogs.hbr.org/bregman/2012/03/diversity-training-doesnt-work.html?awid=8988621802016686590-3271
Distribution and delivery are virtually used as synonyms, in our industry. As a matter of fact, distribution dominates in terms of usage and application. Does it represent some form of diversity or diversion? Sorry for this digression!
Delivery equals indispensability
The quiet agent or the insurance man who could get almost anything done – would even pay your premiums when the policy became due and for some reason you were likely to miss out renewing your cover. He would be out there ahead of your beck and call, God forbid, if you had a claim trigger under any of your policies. He could also get all your other avenues like tax-saving addressed, at your door-step. A seamless intermediation, an epitome of delivery rather than distribution. Far diverse in offerings rather than a mere transactional one-off relationship. Maturing with time like a good quality wine. In other words, near indispensable part of your financial risk management value chain. And what made it difficult to dispense was the value proposition – ‘always there for you’.
For anyone today who tends to take the virtual anytime communication for granted, forever – the age and woes of landline phones would be far and wide out of bounds of their imagination. Particularly in places where it was a luxury and not commodity. All the gaps and snags were taken care of by this one man institution. It was certainly not terminated by advances either in telephony or internet.
Distribution is not equal to delivery
Distribution is but a small part of delivery and more fixated with the Point of Sale (POS). We trade in the business of trouble. The woes of our trade commence only after a sale. POS is only the first major milestone. Thereafter come the several test cases – sometimes unique to each individual every time – thereby very special Moments of Truth (MOT). It is actually going beyond realm of sale into the world of individual experience that makes our business uniquely diverse.
Yes, it has its own downsides because we then impose Standard Operating Procedures (SOP) which do not allow the individual customer to be treated as special. Our call centres – whether onshore, off-shore or outsourced – further complicate it in their ‘diverse’ ways. Generally, cultural in nuances.
Sighting the POS – MOT gulf
Having sold you a policy or any financial product for that matter, the focus of a financial services entity is on the next kill (sale). The ‘back office’ is faceless, notoriously prone to staffing churn, diverse in unacceptable ways and the customer is a king or queen of no consequence. A deviously divergent diversity of today. The customer is confused and anxious, because distribution only drives sales. It wants to sell what it wants to sell. Neither what the end user desires or deserves, nor a solution. This can never lead to a true fulfillment.
Distribution is about sales hence short-term. It is full of discontinuity thereby makes it harder to retain a customer. We all know it is more expensive to acquire a new customer than retaining one. It makes the entire arithmetic unsustainable.
Delivery on the other hand is service driven. It is about managing and sustaining the continuum of relationship. Thereby comes in bottom line value. Unfortunately and increasingly the insurance business is configured as a sales organization. The behavior and personality mutate into something inherently contradictory. Not just that, some of them also tend to pose as role models for the bottom of the pyramid entities who owe their existence to pure service. In emerging economies this is embedding a bad DNA into the evolutionary cycle of the financial services architecture.
In conclusion
The insurance business need to really think hard and deep as to where must it head. It cannot afford to be naïve in interchanging distribution for delivery. Having done so, it calls for a course correction. It must not allow itself to be conditioned as a sales industry. The POS mind-set needs to be reconfigured as MOT. Both are diverse in their own ways. Let us not forget that having chosen the current way; we have already invited upon ourselves the risk of unintended consequence. Before this risk becomes perilous enough to threaten our raison d’être let us bring back the indispensability of service that we all seem to be missing in the world of financial super-markets or the one-stop shops. Let us not digress from our kind of desirable diverse ways.
Published in AIR, January 2012
The Diversity Blog 