How can we make better and effective decisions ?

More often than not in our daily lives we move from one decision to the next and we have to make at least one to two very important decisions at least on a weekly basis. Do we take these decisions with full knowledge or do we allow our biases to colour our decisions ? Do we care whether our decisions affect others negatively and if so do we reconsider such decisions ? A good decision should least negatively affect others. Herbert Simon and Henry Mintzberg are some of the classical theorists who have studied this field in depth.

The picture on the right gives the famous seven steps involved in making a high quality decision. Credit to umass.edu for the pic. 

The seven major steps involved in any major and effective decision making are given below.

• Identify the decision
• Gather information
• Identify alternatives
• Weight the evidence
• Choose among alternatives
• Take action and
• Review the decision.
  

While going through a recent HBR document of April '21 (click here) on the myths that mar effective decision making by Cheryl Strauss Einhorn, I came across very similar thinking. Cheryll in the article mentions of the 1 myths that block effective decision making in our lives. 

The most important among them I found were three in number, 

• the feeling that one is very busy and do not have much time
• one knows enough to help take a good decision and 
• one needs to take the decision alone and not to disturb other stakeholders.

I found that these three biases that mar my decision making at all times is very often wrong. Every decision can wait for some more time before one  takes a final decision. Most of the time we have to take decisions that are based on partial information, we rarely get full info. Our experience and spatial intelligence to understand the situation with its emotions more often help us to take a good decision.

The author of the HBR article also mentions of taking some calculated pauses before any major decision to recollect the importance of it. Called Cheetah Pauses, these small time breakss help us to recollect the situation once again, evaluate the environment and data necessary to take the decision. The small time break puts things in perspective and gives one the confidence to take a good decision. 

Bounded Rationality compels us to take decisions when we are in complex circumstances, hard pressed for time with incomplete information . Refer to the HBR artcile , A brief history of decision making, by Buchanan and Andrew O'Connel, Jan 06 (click here).

It is also a good point to crosscheck at the decision making point how the decision is going to affect oneself in the long term and whether it gels with his or her long term plans.  

Eric Colson in HBR June '19 article, What AI driven decision-making looks like, (click here) brings in Artificial Intelligence that can aid humans to help make right decisions. As different from models that were based completely on human ingenuity to models that used Big Data to analyse data to a summarised form to help make decision making and finally to the modern day situation where Artificial Intelligence analyses Big Data to help make total machine based decisions without human intervention. If human intervention is needed, decision making models are available that subject the AI information output to human analysis to arrive at the final decision.

George..

How Pfizer got the vaccine out in 10 months ....

This article highlights the challenges faced by one of the Covid 19 vaccine developers of the world Pfizer. We know that Pfizer, the New York based global pharma MNC giant employing 79,000 people across 125  countries has been successful in coming up with a vaccine against the Covid 19 virus. Pfizer had revenues in 2020 of $42 billion. 

The Covid 19 vaccine BNT162b2 developed by Pfizer with German BioNTech has shown efficacy of 91.3% measured from six days to 3 months after the second dose. (click here) This article outlines some of the challenges faced by vaccine developers, and more so, when time is scarce and the mortality is increasing daily.

We know vaccines  take anywhere up to 8-10 years to develop. How did Pfizer manage this in about 10 months without much of complications, delays or bureaucratic interference ? How did they manage the testing phases trials 1, 2, 3 and 4 effortlessly and successfully ? The Pfizer CEO Albert Bourla happened to write in HBR of May 2021 (click here) in very clear and simple language how he managed to get the vaccine development done in a short span of about 8 months, when all the odds were against it. He stresses on the patient first mentality.

Leadership mattered very much. Pfizer working alone being successful was a distant reality. Pfizer had the concerns of mankind in mind, in this case, more than any immediate returns or patents. This prompted Pfizer to pump in almost $3 billion for this project. Since it was hard pressed for time and talent doing it alone, it joined hands with BioNTech of Germany, who had the expertise of doing synthetic vaccines using messenger RNA (mRNA) technology.

A vaccine is just weakened forms of the virus (or whatever pathogen it is dealing). In this case the vaccines are prepared synthetically by mRNA technology using the pathogen's genetic code, and it helps speed up the process. No vaccine developed through the mRNA technology had ever been approved till then in the world. The efforts that started around March '20, found BioNTech joining by April. 

Normally the trials would first start with animals and then four sets of human trials on limited than large samples. The tests are also done on placebos to check the efficacy of the virus. It is very difficult to get the required permissions and sanctions from the regulatory agencies, more so with US Federal Drugs Administration. Being an emergency and the okay from US FDA and German regulatory authorities coming fast, the tests on large animals and phase 1 on about 20-100 human samples were done simultaneously. The main objective of this vaccine development was to come up with a new vaccine after finishing the mandated trials in as short a time as possible.

Similarly Pfizer request to the authorities to combine third stage trials (on hundreds of human samples usually spread over 1-3 years) and stage 4 trials (usually done on thousands of human samples over 1-4 years) was accepted by the above authorities and this gave added impetus to Pfizer to race towards completion of the vaccine. It was gradually discovered that to be effective against the virus, the treatment would require two doses of the vaccine spaced three weeks apart.

By end July '20 Pfizer was confident of two vaccine formulations that was ready to go to stage 3 and stage 4. Simultaneously the manufacturing supply chain for the vaccine production in US and Germany proceeded with great haste developing cold supply chains and storage boxes with remotely monitored temperature gauge and GPS monitors. In the meantime Pfizer CEO Albert Bourla (and author of the HBR paper) acting with the CEO of Johnson and Johnson, managed to interact with other pharma CEOs in the race to develop the Covid vaccine to get global acceptance to adhere to rigorous scientific processes and safety standards to develop the vaccine. Everyone agreed that speed was critical but not at the expense of scientific rigour.

By September the manufacturing team was ready with the production line for vaccines. By November as the phase 3 and phase 4 trials were proceeding, only 94 of the 43,500 people who were administered the doses had fallen sick (<0.2%). These 94 people were also from the placebo group, who were administered a placebo instead of the Covid vaccine. 

With the efficacy of the vaccine established, by December 8, 2020, UK started using the vaccine on its citizens and by Dec 14, 2020 US too after approval from FDA. In 2021, Pfizer is planning to produce 2 billion does of the vaccine. In the history of humanity it is for the first time than an anti viral vaccine, instead of the usual development time span of 8-10 years, is getting developed in a span of eight months. Pfizer took a calculated risk of setting up the production lines for its vaccine even months before it was fully accepted by the regulatory authorities. If the tests were not satisfactory, the production facilities would have to be discarded, resulting in great losses for Pfizer. But nothing like that happened.

The lessons learned by Pfizer from this accelerated vaccine development with global collaboration has been multiple.

• Team effort between Pfizer, BioNTech and their supply chain partners
  
• Purpose first, mission was important, not profits. By keeping the societal good as the priority, the objective was very clear and focused.
  
• Moon shot challenges with the right purpose are always galvanising and more often than not, tend to hit it big, always keep aims high ..
  
• encourage out of the box thinking for the team members, do something different from what people have been doing over the years
• Isolating the scientists from financial concerns and excessive bureaucracy to help them to concentrate on the work and develop the vaccine at an accelerated pace
  
• embrace cooperation at the beginning itself. Though the contracts and deals were finalised only in Dec '20, confidential info between Pfizer and BioNTech was shared as early as March '20.
  

As of Feb March '21, seven vaccines have been rolled out across the world.(click here)  Each of the company would also have a similar story to tell the world of their initial vaccine development challenges and how they overcame it. 

Though in the Indian scenario, the Indian companies can produce up to 160 million (16 crore) doses a month, the restrictions on export of certain vaccine components by US companies is stalling the production and this is affecting the deaths in India.  (click here). It will also pass and we will meet our targets soon.

George..

The invaluable experience in Goan open iron ore mines ..

Barges with iron ore moving on the Mandovi to Vasco

I come from the South Indian state of Kerala and finished my engineering education at a great old competent Govt engineering college at Trivandrum in Kerala in 1986. 

Even though my first job was with the Kochi Port Trust, which offered lot of rich experiences and knowledge to begin with, which became very handy in my logistics and supply chain classes, the real break came when I moved to Arkonam in Tamil Nadu,  joining MRF tyres in 1987 Jan. 

Destiny brought me to Goa MRF plant, and to Goa government engineering college for my PG studies and finally to the Goan iron ore mines. Most of us feel, working in the mines is not a great job, just a blue collar job. Most of the people want to work in white collar jobs, IT, consulting etc that does not get your hands dirty.

After moving from MRF tyres Goa, after doing my PG course, I worked in Velingkar iron ore mines in Ponda Tisk, Goa for almost six months. I am thankful to my senior colleague and Goa Engineering college ME alumnus CS Dhaveji, for giving me the opportunity to work in the iron ore mines of Velingkar. 

Iron ore mines of a large MNC in Goa

Mines duties are very tough. One has to use our brain and brawn daily. During rains, the mines are shut down. The task of ensuring high mining efficiency, high truck loading, ensuring proper availability of mining equipment and transportation trucks, proper maintenance crew, proper loading and transportation management in the mines, availability of fuel, refreshments and lunch to field personnel, these are all quite challenging to the field personnel. 

When I worked in the mines, during summer from Jan to June '89, though it was a stop gap arrangement for me before joining Goa Govt Engg college as a lecturer,  the experience was rich.  Got to know in real time many of the aspects of mining, environmental clearances needed and the maintenance problems in heavy earth moving machinery. 

Now when I engage classes in Alliance University Bangalore, thirty years later, on Environmental sustainability and challenges brought about by mining around the world, I can relate directly with the issue and how it affects adversely the community.  If not great comments, I can give learned weighed opinions to the students in the class.

When I take these aspects in the strategy cases, I can explain in real time the challenges and give real time examples that make the class all the more interesting.

Were it not for all these experiences and challenges, I would only have been half as effective in the class. I can imagine how difficult it is for faculty members without industry exposure to engage classes to prepare students for a rich professional life. 

Now I realise all the eight jobs I have been through in my career so far, have helped me become an experienced and factually rich individual with lot of material for conveying to the young generation. 

         Everything happens in our life for a purpose

George. (pic courtesy Economic Times (mines pic) and Businessline (barge pic)

Crisis Management in critical situations ...

 At some point in life we come across some crisis and on a daily basis we come across smaller crises. But take the case of an airline pilot, the amount of pressure he has to endure in the event of an accident is unimaginable. Such people in charge of critical equipments need special training.

The Indian billionnaire Yusuf Ali this morning while flying across Kochi, Kerala, had to do an  emergency landing at swampy land near Panangad in Kochi. Yusuf Ali and his wife were the only passengers besides the pilot. When the Augusta Westland A109 helicopter developed problems atop a populated part of Kochi, the timely intervention and application of mind by the pilot helped it to land which saved the life of Yusuf Ali and his wife. Pic courtesy newsminute.com. Inset Yusuf Ali.

I was reading through a Harvard Business Review article on what constitutes effective crisis management actions. Referring to the article by Hagen, Lei and Shahal, HBR Dec 2019, titled "What aircraft crews know about managing high pressure situations (click here), presence of mind and good communication skills are the most necessary. 

What the crew does in the first 20 seconds following a crisis developing  situation is of utmost importance in deciding the fate of the passengers, crew and the plane. In the case of large planes with hundreds of passengers and twenty to thirty crew members along with the large quantity of fuel onboard, this time is even more critical last it develops into a grave situation. 

The above article has done a good study of such crisis situations and ,mentions that communication between the crew members is of vital importance. In the case of this morning Yusuf Ali's small plane it is not clear whether there was a co-pilot to assist and with whom the pilot could have communicated to get some feedback and info on what to do during the golden 20 second interval. Even if alone, he has done an excellent job.

In military situations, the crisis is still more critical. It is to help pilots take decisions peacefully with a calm mind that airforce pilots even during peaceful times are deployed on reconaissnce missions and practice flights. 

The communication of the captain asking his deputy or co-pilot his opinion and feedback, more often than not helps the captain take a very balanced decision than a quick and less thought out decision. The open communication between the pilot and the co-pilot will give confidence to the other crew members too to give their feedback to the pilot to help steer clear the crisis.

Even in business and our daily lives, whenever a crisis erupts, the best strategy is to take advice and support from colleagues. After weighing the feedback, the decision has to be taken which in most likelihood will be correct than when deciding alone. Open communication with people at all hierarchies at all times is an important trait we should develop in good times and bad.

George.

How to reduce wastes in our daily lives ?

While engaging a class with my BBA sem 6 students on Green Buildings and Sustainability, the students were given a passage for reading and wanted them to initiate some discussions to help in active learning.

The students were given a task to identify the wastes that happen in the hostels on a daily basis and how to reduce these wastes. Was surprised at the quantity of suggestions from them on identifying wastes and then suggesting ways and means to control these wastes. 

Wastes, in the university campus, were classified by the students as 

• electricity wastage
• paper wastage
• plastics wastage
• water wastage
• food wastage
• fuel wastage
• e-wastes

While a discussion was initiated with them on how to control wastes, it was surprising to find the many ideas, creative, that came from their side. 

They came with interesting suggestions on how to reduce the different wastes

1. Electricity wastage - 

•     less elevator use
•     less filament bulb usage, more LED bulb usage
  
•     switch off hostel power from 9 am to 1 pm daily as some fans and lights are burning all the time

2. Paper wastage

•     use e-billing instead of paper bills in all campus dtores
•     circulate pdfs than booklets to students
•     recycle used notebooks of previous semesters for future semesters
•     use ERP system for registering leave system from hostels 
•     use emailing for all communication between faculty and students

3. Plastics wastage

•     segregate non-biodegradable wastes ie. plastics and biodegradable wastes, mostly paper
•     collect and sort plastics and paper separately
  
•     use paper packages to collect items from stationery shop
•     What gets measured, gets managed - try to measure quantum of non biodegradable plastic generated inside campus monthly and consciously try to progressively reduce plastic waste generation at source in hostels

4.  Water wastage 

•     recycle waste water and use for gardening (daily 4.5 lakh litre waste water treatment plant in operation in Anekal campus)
•     do extensive rainwater harvesting and prevent usage of ground water for upto 2 months every year (being done in Anekal campus)

5. Food wastage

•     encourage students to have multiple helpings than one large helping
•     counsel students against wasting food
•     Strict monitoring of food wastage at plate disposal area
•     take preventive measures like denying mess food for any intentional wastage

6. Fuel wastage

•     encourage students to walk short distances or use public transport outside campus than use motor bike or four wheelers

7. Electronic wastes (e-wastes)

•     exchange or recycle old mobile phones while buying new ones
•     recycle old phones with family members
•     future proof purchase of egadgets by buying latest tech products
•     donate to old age homes / orphanages old egadgets / good dress etc

The brilliant students have done a great job in identifying wastes and coming up with very practical solutions at eliminating them. It is a very gratifying exercise.

George.

The different business models in a technologically disrupted world

While going through The book "The Future is faster than you think" by Peter Diamandis and Steven Kotler, (click here) a mention is made of the seven business models which is based on how disruptive exponential technologies is going to influence our future. 

The first business model is the crowd economy model which is based on the crowd sourcing model. The success of Airbnb or Oyo or Uber is linking the people or the crowd who have excess of a resource, in this case hotel rooms, or cars, to people who need that resource.

The second business model is the free / service model. The service is offered free to the public and in turn the data of the usage patterns is monetised by the service provider. In the case of Free and Open Source Software, the maintenance and upkeep of the free and Open Source software systems is the business model.  Facebook belong to the former model, Redhat belongs to the latter model.

The third business model is the Augmented Reality (AR) / Virtual Reality (VR) Multiple worlds model which transports us to multiple online and offline, different worlds for the duration of the experience. The warehouse management system at Amazon with millions of items is based on the east storage and retrieval of materials on racks enabled by AR at Amazon.

Decentralised autonomous model is the fourth model where the control is out of human hands and resting with AI in a decentralised mode totally leaving humans free to do more creative activities. 

Converting normal devices into smart devices, feature phones to smart ones, ordinary wi-fi speakers to smart speakers etc fall in this category of the fifth smartness business model. Convergence of technologies is crucial here.

Moving from a linear business model of buy-use-dispose to a circular model of buy-use-reuse ensures better utility of product, less exploitation of resources and sustainable living providing us with the sixth business model. Plastics and wastes e-processing models fall in this group

The seventh and last business model is the experience and transformational economy model like when a person enters a Starbucks store, he experiences a different world which transforms him into a different world altogether. The old tea shop experience in Indian villages is something we cherish to enjoy even to this day which is unavailable in the cities. 

Each of these business models offers the facility to explore and provide the best service to customers, in the bargain making enough money too for the business.  We find that all these models are facilitated by technology

Not all business models in the world fall in this category. The other business models depend on being SAFER, BETTER, CHEAPER and FASTER .. Like healthcare and hospitality is based on the safer and better model, E-commerce is based on the cheaper and faster model. Logistics is based on the safer, faster, cheaper model. Click here to read a summary of the essence of the book.

George..

Innovation and setting the right constraints

When we look at innovation, we look at the customers, quantum of work left out, funds available and the time at our disposal. Additionally we also bring in the risk involved in terms of technology availability, appropriate workforce available, etc. into consideration.

More often than not organisations insist on two main aspects, one, the funds at our disposal and then the risk of not completing the task cue to non availability of the above said resources of technology, trained manpower, equipments etc.

Recently while going through an HBR article which tried to look at innovation, they targeted the same point. Why not look at outcome and time left as two major constraints to effect innovation ? Murray and Johnson in their HBR article Innovation starts with defining the right constraints, addresses the same question (click here).

One of the best Project Managers India has ever had is the Metro man E Sridharan, who besides putting India's first metro in Kolkata in place, worked to put Konkan Railway and Delhi Metro in place for the people of the country in record time and to exacting performance requirements. Sridharan had in his younger days done greater deeds like putting the damaged Pamban bridge coonnecting mainland India to Dhanushkodi back in form in just 45 days.

Sridharan actually worked on time constraints, he always had the reverse clock to denote how much more days were left to complete the project and what was the minimum expected outcome in that limited time. If time and outcome constraints were adhered to sincerely, the constraints of funds and risk would naturally be contained. Innovation in Sridharan's case was the timely completion of the project with least accidents, risks and capital investment.

The above article tells us that in new product development or other innovative activities too, the same principles hold.

George..

Making your company more sustainable ..

With the threat of global warming and climate change looming above our heads, we need to think of making our supply chains more sustainable with each passing day.  We hear of organisations following the circular loop. What is this circular loop ? 

Click here to read the HBR article in this regard by Karolin, Fabian and Richard " A step towards making your company more sustainable", HBR Jan '21. 

The 4 different steps to making your organisation more sustainable is to simply follow these four steps in the circular economy.  What do they mean and how can it be implemented ?

The authors suggest four steps, they are as given below.  

1. Close the loop - move from a take-make use-dispose linear value chain to a take-make-use-recover circular value chain. The recycling is possible with full reuse, part reuse or biodegradability.

2. Improve the loop - the circular offering should contribute to solving environmental problems, reduce the use of resources and slow down the flow of resources within the system. Sensors can help monitor the flow of resources within the system.

3. Monetise the loop - focusing on performance based contracting will ensure that the customer only pays for the performance of the product and not for the product as a whole. This relieves the customer with the botheration of having to dispise the product at end of life of product. Companies should try to make the best revenue model for the customer use of the product.

4. Excite the loop - if the customer can be motivated to think of the larger picture of safe disposal or recycling of the product, as the product enters it's end of life it can be reused or put to other high value use which ensures a longer life for the product at the same time higher value to the customer.

What does it mean actually ? The main focus here is to ensure the extended life of the product and delayed disposal, helping the environment in the long run.

MNCs of late have come to face lot of shame globally when some of their supply chain partners resort to unethical and unsustainable supply chain practices forcing the companies to face global contempt and disdain.

Click here to understand steps for a more sustainable supply chain by Veronica and Dennis, HBR, March '20  where the authors mention of cases where MNCs have been held responsible for unsustainable actions by their first and lower level suppliers. MNCs or large corporations usually find it difficult to monitor their lower level suppliers' environmental and social corporate governance standards and get caught in controversies at the global level, like what happened to Nike in Malaysia and Apple in China with Foxconn.

There are different approaches in which the sustainability standards can be enforced. They are 

1. Direct - the MNCs themselves exercising control over the first level and lower level suppliers infrequently to enforce standards. This is rarely complete and can result in omissions more frequently leading to poor monitoring and enforcment

2. Indirect - first level suppliers monitor their suppliers (second tier to the MNC) and second tier suppliers monitor their suppliers (third tier to the MNC). This is successful to a limited extent but involves extensive education to the suppliers of what constitutes best environmental sustainability practices for the said MNCs.

3. Collective  - MNCs collaborate with their competitors and major suppliers to develop healthy industry standards that are good for everyone and works for the betterment and growth of the industry

4. Global - collaborating with international organisations like UN and NGOs that share their goals. An example is United Nations Global Compact, an international effort to promote CSR. Carbon Disclosure Project's Supply Chain Program is a group where suppliers by being transparent disclose details about their Carbon footprint and MNCs select the suppliers accordingly. This helps them to get investments liberally to help reduce their Carbon footprint. Better engagement and cascading impact of the efforts are seen to be very encouraging across the field on all the suppliers. 

The collective effort has helped the industry as a whole by imparting better education and training to all the suppliers to reduce their adverse impact on the environment and ensure fair labour practices and better environmental sustainability compliance.

George..

An interesting strategy building session at Alliance School of Business ..

It was interesting to have an interesting 4 hour interaction of Area Chairs with Prof. Dr. B V Krishnamurthy, the Advisor to the Pro Chancellor of Alliance University in Bangalore on the first of April 2021.

We are taking up the step after a Bench marking session, an Operations Strategy exercise where our University was bench marked to some of the world's best and we fixed the targets to reach these standards in the next five to ten years. It was great to see an Operations strategy exercise yo compare our Institution with the best in the country being deployed in our University. ( Please click here for the HBR paper How to measure yourself against the best, Tucker et al, Jan '87 mentions Xerox's experience initially with Bench marking and how it grew to be global in quality eventually)

We brainstormed over 4 hours on Thursday from 10.30 AM to 4.30 PM to find how to proceed to beat the competition and remain among the top in the NIRF survey where we were ranked among the only three schools in the top 50 Bschools from Karnataka along with IIM Bangalore and TAPMI, Manipal. Other business schools were far behind and we hope in the near future they will offer us credible challenge and competition to the top position.  

One of the most important points was to start mentorship yet again, but this time instead of the faculty deciding the mentees, the mentees will decide which faculty member will be their mentees for the next one or two years, till the student passes out of the University. A real challenge to the faculty as they will be put to test in the eyes of the students. Students would naturally like to align with those faculty whom they feel will help them with real industry knowledge for them to perform and shine in the industrial world.

As was done in some of the top ranked Bschools of the world, the bottom 5% is forcibly detained or asked to repeat the course. For Institutions with high academic performance and GMAT entry scores, where one of the faculty's son happens to be studying, the last 5% of the class is asked to repeat the course. For example in IESE Barcelona for a course on Economics, the author's son scored 90 %, the class average was 92% and the 5 percentile score stopped at around 76% and they have been asked to reappear in the subjects in the following semester. ie. 95 percentage of students in the class scored above 76%. The class average of 92% was indicative of the high academic standards in the class. The Economist #1 ranked Bschool of 2021 could not be anywhere else .. Can we employ similar standards in ASB ?

Some of the other interesting points that were discussed included 

1. Taking concrete steps to improve peer learning was an interesting point discussed. 

2. Incorporating SWAYAM MOOCS from Govt of India was also discussed to help improve the quality of instruction delivery.

3. It was also proposed for faculty to prepare a detailed subject outline for each subject which was being taught. 

4. Tackling steps to improving the strike rate of student placement from from the 5-7 lakh band to 7-11 lakh band was also discussed. 

As per Prof. Krishnamurthy, when the faculty expresses real passion for teaching and students know that the faculty really cares, it is the success of the faculty member. 

We hope to discuss some more points in the coming days.

George