Gianpiero Petriglieri, Gig Economy and Resilience

A gig economy is an environment in which organization encourages temporary workers to be part of their talent pool, it gives talented people chance to work on projects of their choice while not compromising with their independence.

This arrangement has its benefits. For organization it helps to have a pool of talent whom they don’t have to take on their payroll and for freelancers it gives freedom to work on projects of their choice with different organisations, as they are not tied down to an organization like regular employee.

Gianpiero Petriglieri is a psychiatrist  who changed his career track to become Associate Professor of Organizational Behavior at INSEAD. Based on his research he feels that freelancers take pride in work they do and value their independence. But they also face anxiety when contract is about to expire, they also have tensions related to lack of safety net that a regular employee enjoys in terms of regular income, daily interaction with teams, monetary and non-monetary benefits etc.

“However, the price of such freedom is a precariousness that seems not to subside over time. Even the most successful, well-established people we interviewed still worry about money and reputation and sometimes feel that their identity is at stake.”

– Gianpiero Petriglieri, Thriving in Gig Economy, HBR

Gianpiero feels that freelancers should focus on four aspects which will help them to over come the anxiety and become resilient.

 “We discovered that the most effective independent workers navigate this tension with common strategies. They cultivate four types of connections — to place, routines, purpose, and people — that help them endure the emotional ups and downs of their work and gain energy and inspiration from their freedom.”

– Gianpiero Petriglieri, Thriving in Gig Economy, HBR

These four aspects are routines, places, people and purpose. They help freelancers to avoid feeling of anxiety  and loneliness.

They should stick to routines, even when routine is not strenuous. This helps in imparting discipline and protects them from external distractions.

‘It must be nice having a job where you can work at home.’

Gianpiero feels that freelancers work best in surroundings that sharpen their concentration. This can differ from person to person, for some it can be cramped place for others it can be public place.

Freelancers should cultivate very close connections with an inner circle of confidants. These were people who know them well enough to soothe their emotional tension and restore their self-confidence when it flags.

Finally, investing their work with a broader purpose was key to not getting bogged down in the day-to-day struggles of their working lives. It tied them to something greater than themselves.

Advertisements

Martin Lindstrom, Big Data, Small Data

Martin Lindstrom is Danish author and expert in area of branding.

Organisations today use big data to understand customer preferences, buying patterns etc. This data is used to design products and services.

Martin feels that going solely by big data in designing products is not a reliable method. He is author of book called Small Data.

As against big data and analytics, he believes in meeting small group of people, personally visiting their homes and observing them. These methods of anthropological research helps him in gaining insights that big data does not offer.

“Every big data study Lego commissioned drew the exact same conclusions: future generations would lose interest in Lego. Legos would go the way of jackstraws, stickball, blindman’s bluff. So-called Digital Natives – men and women born after 1980, who’d come of age in the Information Era – lacked the time, and the patience, for Legos, and would quickly run out of ideas and storylines to build around.”

-Martin Lindstorm

He gives example of Lego. Big data predicted that millennials would not be interested in spending considerable time on small bricks and complicated structures. So to increase their sales they decided to make game less complicated and have larger bricks so that they can finish game quickly.

To their surprise after making changes their sales went down further. At this stage they hired Martin Lindstrom.

Martin decided to ignore findings of big data. He decided to meet a 11 year old German boy. While interviewing him Martin noticed that in addition to Lego bricks, the boy also liked skateboarding. He was proud of his worn out Adidas shoes, the shoes signaled to world that he was a skateboard champ.

“The entire look of the sneakers, and the impression they conveyed to the world, was perfect: it signalled to him, to his friends and to the rest of the world that he was one of the best skateboarders in the city.”

-Martin Lindstorm

This interview gave Martin insights he was looking for. He told Lego that they should stick to their original product of smaller bricks and complicated structures. People buy Lego to show world that they are capable to completing complicated game. They take pride in it. Easy and fast game does not allow them to boast.

Based on this insight Lego decided to make their products even more complicated, resulting in high increase in sales.

 “The company not only re-engineered its bricks back to their normal size, it began adding even more, and smaller, bricks inside their boxes. The bricks in turn became more detailed, the instruction manuals more exacting, the construction challenges more labor-intensive. For users, it seemed, Lego was all about the summons, the provocation, the mastery, the craftsmanship and, not least, the hard-won experience – a conclusion that complex predictive analytics, despite their remarkable ability to parse “average” scores, had missed.”

-Martin Lindstorm

Francesca Gino, Pirates and Mughals

“When I think of rebels, I think of people who break rules to explore new ideas and create positive change…These are people who are doing good in the world.”

-Francesca Gino

History of piracy shows that pirates were most democratic when it came to electing leader or sharing loot. They voted or voted out captains. One of the reasons was most of the pirates worked as sailors in navy and hated the rigid hierarchical system of navy. They were sort of rebels who left navy to work for themselves. It was organization of rebels.

In August 1695  a British pirate Henry Every attacked ships belonging to Indians who were returning from Hajj. Before attacking Indian ships Every met other pirates and they elected Every to be their leaders. Earlier there was mutiny on ship Charles II, this resulted in Every getting elected as leader of rebels and captain of Charles II which he renamed as Fancy.

This democratic system helped pirates to group together and elect leaders quickly.

Every first attacked ship called Fateh Muhammad which was owned by rich trader Abdul Gaffur from Surat, the loot was distributed among pirates, next he attacked Mughal ship Ganj-i-Sawai. The Mughal ship was full of treasure and was carrying pilgrims from Hajj, one of them was relative of Mughal emperor Aurangzeb ( there is no clarity on relationship). Ganj-i-Sawai’s captain was Muhammad Ibrahim. After fierce battle Every was able to defeat Ibrahim, he looted the ship, killed men and raped women pilgrims.  Though Mughals were larger in number they were used to hierarchy, without orders they used to panic and get confused hence were not match to Every’s army of pirates.

“It is certain the Pyrates, which these People affirm were all English, did do very barbarously by the People of the Ganj-i-sawai and Abdul Gofor’s Ship, to make them confess where their Money was, and there happened to be a great Umbraws Wife (as Wee hear) related to the King, returning from her Pilgrimage to Mecha, in her old age. She they abused very much, and forced severall other Women, which Caused one person of Quality, his Wife and Nurse, to kill themselves to prevent the Husbands seing them (and their being) ravished.”

– Sir John Gayer, President, East India Company

Francesca Gino is professor of business management at Harvard Business School, in her book Rebel Talent, she says that while rebels are treated as outcastes by society, rebels also change world for the better with their unconventional outlooks. Instead of clinging to what is safe and familiar, and falling back on routines and tradition, rebels defy the status quo. They are masters of innovation and reinvention, and they have a lot to teach us.

“Rebels embrace the unfamiliar rather than being threatened by it. Many of us choose to stay in the same jobs and careers, working on the same sorts of tasks for years and years. Thinking that stability is the key to happiness at work, we fall back on our comfortable routines.”

-Francesca Gino

She gives example of Italian Chef Massimo Bottura who keep breaking all the rules of Italian cuisine, yet keeps winning awards.

She classified rebels based on their ability to resist external pressures like conform or stick to stereotypes and internal pressures like staying in comfort zone. Those who resist external and internal pressures are classified as pirates.

Executive Compensation, Bell Curve, Power Law and Clawback Policy

There are  two interesting concepts from statistics that are used in executive compensation- Power Law and Bell Curve.

While most are familiar with normal distribution which is bell shaped curve,  Power Law states that a relative change in one quantity results in a proportional relative change in another ex. let us take example of square. If side of square is 10 cm its area will be 100 sq cm, now if we double the length of side ( 20 cm), then its area will not double but quadruple ( 400 sq cm), similarly if we triple length of side, area will go up nine times and so on…

Earlier the CXO’s had simple compensation structure, large part of their compensation was fixed consisting of Basic salary, reimbursements and allowances and retirals, there was a small component of variable pay which was liked to some parameters like revenue or profit made by company.

Later Jack Welch popularized concept of Bell curve. Now CXO’s pay hikes were linked to his/her position in bell curve and variable component started increasing.

Next came Power Law as it was felt that bell curve was too lenient. Now the organisations differentiated between superstars and rest. Superstars were given big hike while rest ( 80-90% of staff) got nominal hike. While some CEOs got huge pay hike, the variable component went up further, now he/she was responsible for revenue, profits, share price etc. His/her compensation included stock options i.e. he/she makes money if share price goes up in long term.

But what if CEO takes money but does not give required results or what if he/she used unfair means to hike profits/share price. The organisations now have put Clawback Clause in their contract with CEO.

A clawback is an action whereby an organisation takes back money that has already been disbursed, possibly with an added penalty ex. case where employee has earned bonus based on fraud or accounting errors. The organization can take back bonuses that have already been paid out.

CEO’s job and compensation is now getting more and more complex.

James Carse, Simon Sinek and Game Theory

A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play.”

― James P. Carse, Finite and Infinite Games: A Vision of Life as Play and Possibility

James Carse is professor of history and literature of religion at New York University. He has written a book “ Finite and Infinite Games”.

In game theory, there are two types of games: single or repeated games.

In repeated games, players take multiple turns- may be finite or infinite in their duration.

Game with finite number of moves has a  terminating point, this motivates players to move towards a non-cooperative strategy towards the end of the game, as each pursues the maximum final payoff.

In game with infinite moves there is incentive for players to move towards cooperation.

James has come with concept of Finite and Infinite games. According to him finite games are the familiar contests of everyday life ex. Cricket match between India and Pakistan; they are played in order to be won, which is when they end.

But infinite games are more mysterious. Their object is not winning, but ensuring the continuation of play. The rules may change, the boundaries may change, even the participants may change—as long as the game is never allowed to come to an end ex. Conflict between India and Pakistan over Kashmir. Kashmir conflict is an infinite game.

“Only that which can change can continue: this is the principle by which infinite players live.”

― James P. Carse, Finite and Infinite Games

Simon Sinek is an American author. He was fascinated by concept of finite and infinite games. He uses this concept to explain issues like conflict between Apple and Microsoft, defeat of Soviet Army in Afghanistan and defeat of US Army in Vietnam.

According to Simon, games like basketball and chess are finite as they have firm rules and clear endpoints. But he calls business as infinite game because ultimately no such thing as “winning” because there’s always a new set of challenges.

He feels that in contest between finite mindset and infinite mindset player, it is infinite player who usually wins as those who thrive in the long run are those who play by infinite rules. They do things that enable them to out-maneuver, out-innovate, and outlast their competitors.

He calls Microsoft as finite mindset player, as they have single objective in mind, to defeat Apple. But Apple on other hand is not concerned about competition at all, they are focused on how to  make better products. He feels that in war between finite mindset Microsoft and infinite mindset Apple, Apple will win.

“Just as Alexander wept upon learning he had no more enemies to conquer, finite players come to rue their victories unless they see them quickly challenged by new danger. A war fought to end all wars, in the strategy of finite play, only breeds universal warfare.”

― James P. Carse, Finite and Infinite Games: A Vision of Life as Play and Possibility

He takes examples from history like war between Soviet Army and Afghan rebels. Soviet Army had single objective of defeating rebels as soon as possible, but Afghan rebels were ready to fight for long duration and in process exhausted Soviet Army in long Soviet Afghan War. Same happen with US Army in Vietnam War. US Army won lot of battles and killed may enemy troops but finally had to give up as Vietnamese were ready to endure hardship for a long time.

Finite players play to beat people around them, infinite players play to be better than themselves, to wake up every morning and say-“How can we make our company a better version of itself today than it was yesterday”

-Simon Sinek

According to Sinek infinite players in any field can exhaust their competitors, stay ahead for the long run, and create strong organizations, built to weather nearly any storm. Great leaders instinctively play the infinite game.

 

 

 

 

 

 

Succession Planning and Dead King

“My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds, too.”

 – Jack Welch

In South America, the Chankas of Peru ruled over a large empire. One king, Uscovilca  was responsible for expansion of empire. When Uscovilca died he body was preserved  in form of mummy and his mummy used to be carried by Chankas in war with others. The Chankas fought under a dead king.

Finally Incas under Pachacuti defeated Chankas and got rid of mummy.

In many organisations, succession planning fails because the person to be replaced refuses to vacate his position. When he is forced to retire on age of superannuation, he comes back as consultant and convinces board that new person cannot manage without his knowledge or expertise. The company now has  employees who have recently taken over, but in turn are guided by retired consultants, who are like the dead king of Chankas.

Succession planning has worked well in very few organisations like Unilever and GE. While in many organisations it is “Long live the dead king”.