Networking – Getting it Right!

Metcalf’s Law (http://en.wikipedia.org/wiki/Metcalf) fascinates me. It states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n²).

• Metcalf’s Law (http://en.wikipedia.org/wiki/Metcalf) fascinates me. It states that the value of a telecommunications network is proportional to the square of the number of connected users of the system (n²). Attributed to Robert Metcalfe in regard to Ethernet, (geek speak for a common form of computer network) Metcalfe’s law characterizes many of the network effects of communication technologies and networks such as the Internet, social networking, and the World Wide Web. Boy, are these networks powerful!!!!!
  
• The concept, expectation and impact of networking have changed dramatically as the world and the means for networking have evolved. From an individual engagement involving two people that serves mutual needs – the networking scope has scaled to involve communities seeking similar goals and aspirations. These ubiquitous networks deliver different levels of efficiency and are being used to extract varied levels of value. The evolution of supportive, easy to use technology has played a big role here!
  
• I do not associate Networking with financial gains alone. I have seen friends closely associated with the church, healthcare and other humanitarian pursuits where networking (or Support Groups) get people with similar psychological and physical challenges together to bond, share and support each other. These are incredible efforts and underline the selflessness of the people who organize these groups and invest their time to help others.
  
• With Networking becoming a core skill in every individual’s profit and non-profit go to market model, differentiation in how you network is crucial. So here are 10 tips that I have picked up from my time at work – I am not the Oracle from the mountains, these are lessons that I have either triumphed or suffered for…
  

1. Understand who you are? Analyze your strengths and weaknesses – no one is perfect! Then place your best foot forward judging the circumstances of the engagement.
2. Treat people with respect and grace in every instance irrespective of the level of your familiarity. An unassuming exterior often sheaths very capable personalities within
3. Assume a longer term goal from the relationship – do not focus on instant gratifications. Just like you would be forming an opinion about the individual you are dealing with so would the other. Let the engagement evolve rather than force it..
4. Keep every relationship ‘alive’ even after the immediate objective is served. Many a great opportunity of a larger mutual leverage is lost because the people involved took a short term perspective of the relation
5. Make an impact on people when you meet them, especially for the first time at gatherings – they should remember you even after you have moved on! Appropriate compliments, graciousness, eye contact, intelligent questions or observations and great listening skills will be your check list., ‘Charisma’ by the way is often overrated!
6. Make a conscious effort to make people comfortable in your presence – refer to the checklist above. Watch out for a shifting gaze, a nervous laugh or extended silence from the other person as tell tale signs of discomfort!
7. Be a fabulous listener – there is a reason why you have two ears and one mouth (boy, do most of us struggle!). A superior listener gathers far more from a conversation than someone with an over eagerness to speak. Besides, good listening skills add balance to an engagement and provides an even keel for a conversation
8. Absorb the other person’s point of view and ask intelligent questions during your interaction, be it in person or electronic (emails, social networking sites etc)
9. Refer people you know to other people you know – if you promote others, they will promote you. Keep compatibility and common interest in mind though while facilitating these introductions
10. Come out of each engagement making the other person feeling generally optimistic, more self aware and possibly knowledgeable than before they met you
    
    I look forward to all of you building valuable, fulfilling, engaging and incredibly rewarding networks in every sphere of your lives..

First Among Equals: Effort or Attainment

I have mentioned this in one of my previous posts … I do not cease to be impressed by the kids these days. They are intuitive, articulate and down right smart!

. My 12 year daughter and I are out on our scouting/hiking trail over the weekend, the Singapore sun was beating down on us but fortunately the breeze was holding – so it was okay! Before she could get into one of her teen tantrums on ‘how the weather sucks’, I decided to engage her in conversation. She loves a spirited chat and I reckoned it was the best way to keep her mind off the heat!

. “What is more important, effort or attainment?”, she blurted out. She went on to say that her projects in school were being graded on those two parameters. I chided her on what she thought was more important and she said, “effort definitely. If the effort is in place, attainment will follow.” What better way to set expectations with the term results due just round the corner!

. I reasoned with her but did finally agree that in a learning environment, I would rate ‘effort’ higher than the immediate ‘attainment’ at least in the very short term. Very often institutions of learning are too focused on grades rather than the actual learning process. This makes the whole process very mechanical and sadly exposes students to developing that behavior I absolutely dread in the workplace – “doing without understanding why they are doing what they are doing”! (See my other post on this topic). Consequently, I also agree that with the right level of effort, intellect and disciplined application, attainment is bound to eventually show up.

. In my career, I have faced similar dilemma while judging employee productivity, performance and development. I have seen many ways in which performance is mapped and measured. While the usual ratings – Top, Strong, Solid, Needs Development & Manage Out or derivatives of these are quite common, I have in instances used a broader framework in judging employees within these categories i.e. the ‘What’ and the ‘How’.

. The ‘What’ actually alludes to the ‘Attainment’ while the ‘How’ alludes to the ‘Effort’ that my daughter was talking about. Usually the Top and the Manage Out categories are ‘absolute categories’ while the other three intermediate categories have a ‘What’ and ‘How’ flavor i.e. we rate the individual’s performance with an emphasis on ‘What’ results he achieved and ‘How’ the result was achieved.

. In a typical workplace, What and How are both crucial but considering the fact that the primary goal of the business is to generate shareholder value – the What (Attainment) shows up as the first among equals!

. Before we get too ahead of ourselves, the How (Effort or the right kind of Effort) is not far behind! Results at any cost where the How defies the prevailing strictures and governance is definitely a no-no with definite longer term ramifications. We are all seeing plenty of these instances in the midst of the current financial crisis!!!

. So we rounded off the conversation unanimously agreeing that school might be a better place for learning and experimentation where ‘Effort’ deserves a slight advantage. Workplace on the other hand is far more exacting, demanding and impatient. Experimentation is fine and even encouraged in some places but needs to be maturely managed so that it is not at the expense of ‘Attainment’ of overall expected financial or operational results!

. As she flirted with another topic I just wanted to have a last word on the school before my daughter could forcibly move me on – ‘Just ensure that your grades show up good! ‘Effort’ wins when you are in a class session, but ‘Attainment’ sure comes tops on exam day – I am learning fast on how to set my expectations clear with this smart kid walking beside me – she gave me a quizzed look, but I bet she knows what I meant. Never too late!

Step by Step: How the Financial System’s Coffin was Nailed!

In my conversations with people these days many quiz themselves on how a financial crisis of this dimension was conceived in the first place …. So here’s my attempt to piece the disaster together. I am not an economist by training, but will nonetheless try and build a layman’s model of what led to this doomsday!
. In my conversations with people these days many quiz themselves on how a financial crisis of this dimension was conceived in the first place …. So here’s my attempt to piece the disaster together. I am not an economist by training, but will nonetheless try and build a layman’s model of what led to this doomsday!

. Like any terminal illness, all this did not happen in a day, a week, month or even a year. Years of neglect, greed & improper governance were the root of the crisis. Lets take a peek…

. The financial world at the turn of the twenty first century created radically different trends with Asia generating massive surplus riding on the macroeconomic waves in China & India. The US on the other hand faced current account deficits despite being preceded by a Clinton era where the President actually turned around a deficit laden economy and balanced the budget before his term was over

. Despite the dodgy financial fundamentals in the US, the Bush government’s foreign policy was built around massive spending – a significant portion of which was linked to defense expenditure incurred in Afghanistan & Iraq

. Instead of Americans paying this bill, foreign borrowings (presumably the surplus from China) funded the spend while taxes were cut and interest rates were kept low at home– a surplus of cheap money was built for general consumption, falling into the hands of people, many of who did not know how to use it wisely!

. Stock, securities and real estate flourished and equity that was generated through asset appreciation related gains were reinvested in more of the same instruments and used for other forms of consumption, may of them needless (also called conspicuous consumption)

. The evolution of the ‘Free Market Economy’ in the US also radically changed innocuous financial instruments which I believe was built during the Clinton era to increase home ownership and labeled Collaterized Debt Obligations (CDO) into vicious financial tornadoes which coupled with sub prime mortgages extensive financial leverage practices and risk tolerance by established financial instruments broke the proverbial camel’s back in many places!!

. In parallel the excessive import related deficit of the current administration quickly eroded all the budget surplus benefits that the Clinton administration drove – the US dollar faced downward pressure and suddenly creditors both domestic and foreign had better options to route their funds

. Federal reserve had no choice whatsoever but to raise interest rates (despite a slowing economy) as the dollar fell and commodity prices rose driving an inflationary climate progressively

. As Interest rates rose, some of the sub prime mortgagees began to realize that the interest rate rise had suddenly turned their mortgage payments unaffordable. The snowball began small but grew rapidly and soon led to situations where lenders started revaluing the risk which in turn led to de-leveraging of assets!

. Large scale divesture of risky assets followed in increasingly illiquid markets while at the same time radical fall in asset valuations dramatically impacted balance sheets of very prominent establishments. The establishments had no choice but to raise capital till the money market ran dry as paranoia ran high amongst investors!!!

. Thus is the story so far as banks stop trusting each other and inter bank lending virtually stops – interest rate cuts do not help as the cash level in bank vaults continue to stay low (as the banks stop lending to each other) affecting both the individual and the corporation alike!

. The US administration has heeded the internal advisory and has stayed out of any direct involvement way too long – by the time Paulson, Bernanke and his cronies got involved it was too late! The bail-out plan that was prescribed by the Presidential decree was mired with conflicting opinions of why the common tax payer should bear the brunt of a trillion dollar rescue package needed to fix the greed and misdeeds of a section who have amassed massive wealth and are running scot free, still ‘very rich’!

. The financial community internally and externally lost all confidence – investment withdrawals and redemptions followed, causing the breakdown of financial systems worldwide and complete pandemonium!

. While the US government’s corrective policies have had scant impact with even the US arranged meeting of the G7 nations, the European Union’s follow up actions of injecting cash into their banking system and guaranteeing credit facilities have set the bank collaboration going freeing up the financial system and setting the world markets on an upswing!

. Still a long way to go before the tremors subside but any buck in the trend is welcome. Borrowing the lessons of greed (see my other Post), I hope the world will learn and end up being a better place going forward as we painfully navigate through the quagmire that is our own creation!

Greed is Good …. The Parable from Wall Street!

It was in my freshman undergraduate year that I watched Oliver Stone’s ‘Wall Street’ and was thoroughly impressed by the ‘style’ of the ‘Street’ not to mention Michael Douglas’ Gordon Gekko character that personifies the summary and celebration of free market capitalism (“I am not talking about the regular Wall Street stiff, flying first class and being comfortable, I am talking liquid! Rich enough to own your own jet, rich enough not to waste time. 50, a 100 million a year.. a player!)

. The movie closes with Gekko ending up in prison but not before very successfully hammering down ‘Greed’ as a ‘Virtue’ for the continued innovation and evolution of mankind and human spirit! I hear that a sequel might be in the works with Gekko (now a free man!) emerging in today’s financial hotspot … Shanghai, China!

. Lets ponder on Greed though – I want to do this because of the potentially negative label that the word carries stemming from the seven deadly sins! I tend to some what agree with Gordon Gekko’s summation. The manifestation of Greed emerges from the individual’s perspective of the word. Every achievement of any proportion arises out of greed … greed drives desire, leading to focused actions, which leads to results. Greed therefore leads to actual results that benefit an individual, a group, community, nation or mankind depending on the intensity of the action!

. The scale and the benefit that the ‘greed’ led action drives defines the nature of ‘greed’ and is possibly what Gordon Gekko was alluding to when he labelled it as ‘Good’. From Aristotle, Archimedes, Gandhi, Luther King, Edison, Gates, Jobs to even Mr. Buffet, there is an incredible internal motivation to build innovative ‘models’ in tech, human rights, government and finance followed by superior execution that provides ‘ incremental value’ to millions of people over decades – much more than initially perceived

. So what is that ‘internal motivation’ that led these individuals to do what they did? Controversial as it may sound, seems like it was ‘Greed’ (as in ‘an intense desire with a perceivable outcome’) for accomplishing their objective that gave meaning to their lives and defined their destinies. In the process they positively touched generations around the world. This greed (whilst not totally ‘Selfless’) does not seem bitter rather it sounds ‘Good’ to most of us!

. On the other hand as the world today reels under the largest financial catastrophe of our lifetime, I question were ‘Greed’ sits in the equation. The Sub prime mortgages, the collateralized debt obligations and the leveraged positions that are breaking the largest financial institutions were not meant to be what they finally evolved into! So who and what led that evolution … well it is the other form of ‘Greed’ … the stuff that sent Gekko behind bars!

. So how is this form of greed different? Well, it still drives massive benefits but specifically to an individual or a small group of individuals at the expense of a much larger majority! “While Richard Fuld of Lehman was pleading with Secy. Paulson for Federal rescue, Lehman was recommending to its compensation committee four days before bankruptcy filing that three departing execs should receive more than 20 million in “special payments” (Straits Time Singapore, 8 Oct 08). Another example of how this industry squandered on executive compensation at the expense of the hapless shareholders and the tax payer in general who has to contribute to the 700 billion bailout package to save the US economy

. I fervently hope that we will see collaboration between the government, regulators and the industry worldwide to tidy over this mess as quickly as possible with not too severe global impact! (I am the eternal optimist). I am also quite certain that in the aftermath of this debacle more stringent governance measures will be implemented as the pendulum shifts to the other extreme! Massive changes in work processes will be implemented and workflow will get more complicated and long drawn … learning from our mistakes is laudable, all good stuff!

. The ultimate test however will be TIME and the human nature … so we are back to ‘Greed’. Greed will drive humanity again into taking little chances, small shifts from the dictum in the name of innovation and value creation to drive the economy and the industry! Government, regulators and the industry will all be drawn into the party till we are hit by another tidal wave … the cycle will be complete!

. Good or bad, ‘Greed’ will live on and we will have to learn to deal with the Gordon Gekko…..