The hidden trait of a leader is to dodge stupidity

Inversion Thinking is avoiding being stupid

On the court, Djokovic continues to pull off magical feats. Last season, every single grand slam tournament seemed to yield a new all-time record, from clinching the record number of weeks at No 1 to the astounding feat of securing every grand slam tournament and Masters 1000 event at least twice. He is the men’s player of the last 10 years by a mile.

Yet his breathless ability on the court is paired with his frequent tendency to self-sabotage. It is often said about the best players that their greatest opponents are themselves but Djokovic takes it to new levels.

He chases history and a record-setting 21 grand slam titles, yet he is so taken by alternative science that he was willing to complicate his chances by arriving unvaccinated at one of the world’s strictest borders. It is hubris and it is the single-minded self-belief that drives his tennis but that also so often leads him astray. 

‘It is hubris’, wrote The Guardian. 

Hubris- a great or foolish amount of pride or confidence. 

In today’s habits for thinking, we are not discussing whether Djokovic’s act is full of hubris but will focus on what Charlie Munger popularised – Inversion Thinking

“Invert, always invert: Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead. Tell me where I’m going to die, that is, so I don’t go there.”

Charlie Munger

To see where one could die and avoid that route is not a simple decision, definitely not one exercised by Djokovic and his team in this case. The shade of hubris as written in several ‘Djokovic-refused-entry‘ articles makes us notice the absence of inversion thinking practice by his team and decision-makers. 

Inversion Thinking is not turning the goal backward and trying to see how to achieve the goal. Inversion Thinking is always thinking about how to fail, thinking meticulously, step by step, in interconnected and independent ways. If First Principles Thinking is about reaching the building blocks of the problem by deconstructing, Inversion Thinking is playing the part of how building blocks will fail to assemble to make a secure castle. 

Thinking about how to fail seems easy. You just need to remove a big chunk of the building block and you know it will fail. Like, you may think not having a marketing head is going to make the business fail. The marketing head is a chunky building block. However meticulous inversion thinking is looking at various aspects of the marketing team, not just the team leader, as the strength of the entire team, getting the right partners, getting the positioning right, building the right consumer context and connection, etc. If any of these small building blocks fail, the business will face a setback. This is meticulous inversion thinking, thinking in detail on how could one fail. 

How does Inversion Thinking help: 

Not all decisions that are made are reversible decisions. We make some decisions that are irreversible and have a large impact. This is applicable in both personal and professional life. These decisions, the ones that are irreversible and impactful, need clear, noise-free thinking. 

Secondly, the process of inversion thinking also helps one identify the right metrics for measurement. Like in the case of marketing one would keep an eye on measuring consumer connect. In case if the measurement is away from the desired results one would know which aspect of marketing needs rework and corrections to be back on the track of achieving goals. 

How to practice Inversion Thinking: 

Avoiding being stupid is the way to practice Inversion Thinking. How does one avoid being stupid? By learning stupidity from others. It is funny and true at the same time. Why funny? Funny because when you see someone take a stupid step, you laugh- how could he be so stupid? The day Djokovic news came out, the internet was flooded with memes on him.  His name turned as a trend “Novax Djocovid”. Seeing stupidity is funny. Seeing stupidity is learning too. 

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

Djokovic meme

It is true that stupidity teaches you a lesson in bad judgment. Collecting bad judgments from any other area, unrelated to your scope of work is still collecting lessons in bad judgments. These lessons work with our own set of mental models and help us in our future decision-making, helping us from stupidity. 

Not everyone has the stature of Novak Djokovic and not everyone needs to find this visa issue as a stupid decision. There are many people who are against taking a vaccine. But what everyone can learn from this is a leadership lesson. When you are on the top, assisted by a team of invisible people, you are alone. Your decisions are seen as only your decisions, and not as your team decisions. You may be right in your mind but as being a person on the top, you are presented as an object in the context of reality. 

The Economist writes– Yet although as a tennis player Mr Djokovic’s vaccine hesitancy is exceptional, as a Serb it is not. Despite there being little shortage of vaccines in Serbia, where he is from, just 45% of adults have been double-jabbed. Meanwhile, the country has been battered by the disease. According to The Economist‘s tracker, Serbia suffered the second-highest number of excess deaths in the world per head of population. With as much clout off the court as on it, Mr Djokovic’s public hesitation to take a life-saving vaccine may well be costing the lives of his countrymen

Your audience is not just people from your field, but the audience is from across different sectors. In fact, when you play at a large, global scale, it is not a different set of audiences but it is a singular audience and your context may not hold true for the singular audience. 

This brings to context collapse, where your single decision that should only impact you, your decision to not vaccinate, becomes a decision in the public domain. A decision declaration, at the time of the rising Omicron wave, in a country that is not your own, and when the world is nudging everyone else to vaccinate, is a decision most unwelcomed. When the world wants to stay safer by vaccinating, you stand on the other end and the media finds a target to shoot at. It is a leadership lesson to understand how a personal decision can be caught in a context collapse and come in the way of a professional goal. 

It is a failure of Djokovic’s team to not foresee a sudden change in travel policies when almost all countries are changing travel rules frequently depending on the shape of the pandemic curve. It is also a failure of his team to take leadership for granted and not invert the thinking to test the decisions.

Sports personalities are living lessons. They align their mind, body, and goal in the most effective manner. Naomi Osaka redefines quitting and our thinking, Novak Djokovic accepts his mistake of hitting a line judge are some instances I have written about learnings from judgments of sportspeople. 

The Australian court on Monday decided to release him from detention and restore a visa it had canceled because Djokovic has not been vaccinated for Covid-19. While there is a win on Djokovic’s side, this is an event they could have avoided on their path to the next grand slam title. As an admirer of tennis and his game, it is very discomforting to share his and his team’s lack of inversion thinking as a case of bad judgment as a note in your habits for thinking. 

Inversion Thinking is avoiding being stupid. To avoid being stupid, collecting bad judgments as a lesson is a thinking skill. Collecting bad judgments can be from any sector, any field, even from Novak Djokovic. 

The GOOD More- selection for the mind

Draft No. 4, a book by John McPhee stood out for me across my readings last year. I must admit I didn’t know who John McPhee was till I went for a deep work retreat1 in the summer of 2020. A deep work retreat for me is typically a couple of days, maybe two nights and two and a half days, away from family, friends, and familiarity, staying in a place to spend time reading, reading and more reading. The deal is to go in without an agenda and dig deeper into what you find interesting while reading. Take note of every idea that flashes in the mind and come out at the predecided time. So discovering Draft No. 4 and McPhee this retreat was a delight and it stayed like that for the year. John McPhee, a Pulitzer prize winner is considered a pioneer of creative nonfiction, the subject he taught at Princeton University. Draft No 4 is a book on the process of nonfiction writing.  ‘Writing is a selection’ is a line from this genius work that stayed with me. In fact, ‘writing is a selection’ is the sentence I had read somewhere before making my commitment to read the book. The chapter, Omission, while explaining the concept of selection of words and details in the writing process gives examples of selection from other areas too. Like the book says- sculptors address the deletion of material in their own analogous way. Michelangelo: “the more the marble wastes, the more the statue grows.”

‘The dignity of movement of an iceberg is due to only one-eighth of it being above water.” Ernest Hemingway, the short story writer, called this concept the theory of Omission in writing where the writer omits things that he knows and the reader will have a feeling of all those things as strongly as if the writer had stated them. The deeper meaning of a story should not be evident on the surface, but should shine through implicitly. 

Writing is a selection. Just to start a piece of writing you have to choose one word and only one from more than a million in the language. 

John McPhee

In this first edition of 2022, when we are tempted to make a new year resolution or a commitment to keep at least one thought in our minds, I want to bring your attention to the concept of selection. But there is an irony. While in today’s habits for thinking we talk about selection and omission, it is our heart that is always seeking more, there is never enough.

Many years ago amongst a group of friends, we decided to share our new year resolution with each other. Many new year resolutions had happened before and after but this stayed in my mind for years, not for any other reason but trying to find an easy explanation for others to understand. The resolution was to adopt simplicity. Holidaying in a fancy resort, playing and partying with friends, planning the year ahead full of travels didn’t help me in explaining my meaning of simplicity. I tried saying simplicity doesn’t mean austerity but it didn’t work. As the weeks and months and years progressed, my framework of simplicity became clearer to me.  As the weeks and months and years progressed, I also became conscious of the fact that we chase abundance in day-to-day life, both materialistic and non-materialistic gains. More money, more success, better car, bigger house… it doesn’t end. The word enough is always in the backseat of the car, maybe even locked in the boot but not in the sight. That is the human design and that is also the human drive. This inherent human behaviour of ‘seeking more’ reflects in real life like in the book, Joyful, the author Ingrid Fetell Lee describes ‘abundance’ as an aesthetic that creates joy. ‘More’ reflects in the Veblen effect in economics where it means that the more the price goes up for a luxury product, the more demand comes in.

The ‘seeking’ behavior is explained by science.  

Neuroscience confirms that to be truly happy, you will always need something more, writes Quartz. Neuroscientist Jaak Panksepp argues that of seven core instincts in the human brain (anger, fear, panic-grief, maternal care, pleasure/lust, play, and seeking), seeking is the most important. Huffpost reiterates in an article– “The minute you wake up, the SEEKING system is in gear: where is the coffee, where is my cell phone, what is going on, and where can I find it.” Quartz reaffirms., ‘Whether we’re striving for a new job, more meaningful relationships, or personal enlightenment, we need to actively want something more in order to live well. In fact, neuroscience shows that the act of seeking itself, rather than the goals we realize, is key to satisfaction.’

Yeh Dil Maange More! is an advertising slogan coined for Pepsi at JWT by Anuja Chauhan in 1998. It combines Hindi and English, literally meaning This Heart Desires More, which later became a popular slogan.

Bringing the two together – Selection and More

If it is always about seeking a little more than being satisfied with what one has, then let us accept and acknowledge our inherent behavior of seeking more, but accept it with a little difference, select the one that is a ‘good more’ over the one that is the not-so-good more. Making choices is a thinking selection and thinking, though done both consciously and subconsciously, also reflects the voices that we keep in our head. A new year resolution is just that one voice. Like the theory of omission keeps a lot of knowledge omitted out of the text and retains and showcase only like the tip of the iceberg, in this article the urge is to choose carefully and select which ‘more’ we want to chase and how that more will shape our thoughts and actions. My simplicity resolution practice comes from choosing the good more. 

Seeking more money no matter how rich one gets is a good more.

Seeking more money no matter how rich one gets is a good more when the hows and whys of seeking are right. Seeking more money turns bad when one leaves the moral ground.  Ms Chanda Kochhar, the illustrious woman banker lost her reputation and years of hard work while seeking the not-so-good more money through other channels. There was no harm in seeking more, but it was not a ‘good’ more. 

With seeking more, there is always a not-so-good more too. Keeping ‘The Good More’ as a voice in the head can be a selection framework for peace, health, happiness that comes from growth, success, money… 

The good more can define the control lines. 

Like instead of saying I will quit youtube to control my distraction, I will focus more on the quality of accounts that I follow. I can choose the good more

The good more is in tracking happy moments.

The good more is in tracking happy moments vs tracking the number of parties. Pandemic-related controls are tough to accept and cause worrying impacts on social well-being. If you have missed or have fear of missing out the social circle, channelising the focus on the good more may help. 

The good more is keeping more positive words in the vocabulary.

Showing somebody or something down doesn’t necessarily mean that one gets elevated. Elevation comes from practicing empathy and respect. Just one actionable way of adopting ‘the good more’ is to omit the negative, foul words and focus on using more positive words2.  

The good more is more focus on the process vs focus on the goal.

It can get dizzying to keep any eye on the goal only. Ask Neerja Chopra or Abhinav Bindra or The Hockey Team or Mirabai Chanu or P V Sindhu or any person in the competitive sport and they will tell you that all their energies go towards the process. Every single effort is to get better than their earlier state in order to reach the goal. The good more is more focus on the process vs focus on the goal.

The good more is just a selection in the choice making. If ye dil mange more, make it the good more. 

The Good More

1Deep work retreat- an article on the grand gesture

2The right word is a powerful thinking tool

3Measuring the right metrics

Elon Musk and First Principles Thinking 

Some words enter our lives with authority and stay there as if there is only one meaning, one context. Now just look at the word, “Elon Musk.” It is a name I know, but it is also a personality that resonates with different meanings in different people’s heads. Take the case of him asking his Twitter followers whether he should sell his stock in Tesla?  Now, who does that? 

He may have done his tax calculation earlier yet he went on to Twitter to ask if he should sell stocks. Millions of people voted. Not everyone understands wealth gain tax, the policies, the stock market, its functioning yet the voting must be done. 

You could have one or many word associations for Elon Musk. Weirdo, Bold, Maverick, Genius, Wealthy… it need not be just one. But what comes to my mind is that he is a practitioner of The First Principles Thinking. He not only practices it, but he also brought The First Principles Thinking into the limelight years ago. In today’s habits for thinking, let me bring your attention to the concept. 

During a one on one interview with TED Curator, Chris Anderson, Musk reveals this missing link which he attributes to his genius-level creativity and success. It’s called reasoning from “First Principles.”

Musk: Well, I do think there’s a good framework for thinking. It is physics. You know, the sort of First Principles reasoning. Generally, I think there are — what I mean by that is, boil things down to their fundamental truths and reason up from there, as opposed to reasoning by analogy. Through most of our life, we get through life by reasoning by analogy, which essentially means copying what other people do with slight variations.

It is not that Musk coined it. The thinking style is an old framework of a mental model. Aristotle, writing on First Principles, said:

In every systematic inquiry (methodos) where there are first principles, or causes, or elements, knowledge and science result from acquiring knowledge of these; for we think we know something just in case we acquire knowledge of the primary causes, the primary first Principles, all the way to the elements.

Later he connected the idea to knowledge, defining the first Principles as “the first basis from which a thing is known.”

First Principles Thinking is a way to break down a problem into smaller bits and question every assumption associated with it. Once you do the exercise and remove the assumptions, what remains is the bare essentials. Now, these essentials can be looked at in a new light and will give birth to innovative thinking. 

Elon Musk illustrates it through an example:

Somebody could say, “Battery packs are really expensive and that’s just the way they will always be… Historically, it has cost $600 per kilowatt-hour. It’s not going to be much better than that in the future.”

With First Principles, you say, “What are the material constituents of the batteries? What is the market value of those material constituents?”It’s got cobalt, nickel, aluminum, carbon, some polymers for separation and a seal can. Break that down on a material basis and say, “If we bought that on the London Metal Exchange what would each of those things cost?”It’s like $80 per kilowatt hour. So clearly you just need to think of clever ways to take those materials and combine them into the shape of a battery cell and you can have batteries that are much, much cheaper than anyone realizes.”

In the case of product-led discussions, it is simple to break down the exercise into smaller parts-  as one can focus on each input unit that goes in the making of that product as illustrated in the battery example. But how do you apply First Principles Thinking in a subjective situation? It is easy to remove one petal after another of the flower to dissect it but how does one unfold layers of a subjective issue like ‘the beauty’ of the flower? 

Let me explain this to you. Three weeks ago we were in a workshop for ‘Show, don’t Tell’ communication at workplaces. ‘Show, don’t Tell’ is a tool used in descriptive writing where the writer is encouraged to illustrate the details through words, encouraging her to show and not just tell. So for example to show ‘he was nervous’ could be shown like- ‘he couldn’t stop biting his nails.’

Show, don’t tell is one of the fifteen habits in the course SHIFT. This mental framework not only empowers users with effective communication tools but also hones thinking skills by focussing on detailing. 

In the workshop, we had an exhausted participant who was not able to adopt Show, don’t tell in his work. His writing reflected a lot of telling and less of showing. In peer correction, he received the feedback- ‘go deeper’. It has no meaning unless applied logically. This is how we used First Principles Thinking in a subjective field like thinking to write. We helped him break down the framework of the ‘show don’t tell writing assignment’ into smaller pieces by identifying the essentials that were needed in the writing piece. Firstly, the structure of the writing and secondly the content for the description. The structure can be detailed further – like two or three paragraphs, closing statement, etc. The content needs to be broken further into smaller details like the adjectives and the verbs. Can we now elaborate on each of these adjectives and verbs and see if we get closer to the objective?  The participant who had started at a sub-zero level of writing skills ended up being a confident communicator. To work on his problem, he disassociated himself from the statement – ‘not a good communicator’ to ‘the problem at hand in a structured manner ’ and through The First Principles reasoning, was able to improve.

In creative thinking and innovation, a subjective process, reasoning by First Principles helps open up more areas to look up for ideas and innovation. 

The mental model, First Principles Thinking, is an effective strategy to induce creative thinking in solving problems. To bring this framework into practice, one has to look at two steps. 

Step 1: Breakdown the challenge into smaller chunks 
Step 2: Check if each chunk can be further broken down
Step3: Address each chunk with a fresh approach

Elon Musk’s style of challenging assumptions exhibits a First Principles Thinking approach. You may have your descriptive phrase for him but what you cannot deny is his ability to think in a unique manner, courtesy First Principles Thinking. 

Surviving Availability Bias in Our Decisions

The man behind the counter placed a pair of glasses on my nose and suddenly split his leg wide open, like baby giraffes do. Baby giraffes, whose neck is not long enough to reach parts of a tree, gather food from the ground. But instead of bending the knee, they split wide open their front legs so that the neck can reach the ground. Grown up giraffes also do a split to drink water. It was a Sunday morning and I was in an eyewear store to get a new pair of glasses. The salesman, a tall man, much taller than my five feet six inches, was taking measurements on my selected frame. That moment, when he split his legs to bring his eye level to mine, it reminded me of the giraffe. The man was measuring the centre of my progressive lens. Now to understand the centre, one must understand the way progressive lens are made. Progressive lens are the lens that helps you see clear sight both for far objects and near objects like. But a lens comprises physics. It can’t be merged into one. So there are bifocal lens which have a clear line demarcating the lens for far vision from the lens for near vision and then there are progressive, the seamless lens where you do not see a line dividing a far vision, a near vision. Both merge in the centre for intermediate vision. Intermediate vision is where you look straight, not down, not far into an object, at a closer distance like a computer screen. The centre point is significant because it depends on the shape of your frame, how the frame sits on your nose and the centre of your vision. It is the ultimate personalisation in a progressive glass that is a necessity. It is measured by both machines and opticians to arrive at an accuracy level.  At the store, I had gone through machine measurement and here I was, in front of the tall, gentle-like-giraffe salesman, in a split position to come down to my eye level. He had made a mark on my glass with a blue marker pen. 

Progressive lens

This was my second trip to the store, an old chain of eyewear. Nearly six years ago I was here to get my first pair of progressive glasses.The between years, from the first one to this one, took me to a new age, online-offline integrated eyewear retail that had mushroomed all around in the city and screens. They had made the second one for me and were quick to replace my frame and lens when pandemic restricted services. It was all easy-peasy, until a prolonged neck stiffness took me to physiotherapy sessions and I circled back to this eye-wear store to treat my neck. My neck and shoulder have been ruined due to hours of being on the computer and due to the error made in my progressive glass where the centre was not in the centre. It was meant to look at the computer screen straight, while I had been lifting my neck to get clear vision from the bottom of the lens. 

That Sunday morning, I had shared this challenge with the optician at the store. They had just taken my eye measurement through a machine. The good part of the machine is that it makes you less judgemental about yourself. Have you ever sat on an ophthalmologist’s chair where he tries minutely differing lenses and you get confused which one is the clearest. So in a way it was good that the guys used a machine to measure pupil’s centre, eye movements etc through a machine. But it was not enough, as here I was, against a counter, looking straight wearing trial lenses and he, on the other side, in a split position, marking on my lens. He took three measurements. Two differed so he used a blue and red pen to mark it. To verify, he called another colleague- a man of a similar height of mine, to see which one was accurate. The man announced a color. But they were still not satisfied. So they called another gentleman, in a uniform which clearly designated him as a senior of all other salesmen in a crisp white shirt with a tie, while others were people wearing blue. This man had to stand on his toes, in a tippy toe way to be at my level. One color mark on my lens was pronounced the winner. From a giraffe split to a straight standing man to a ballerina tip toe, I had men measuring my lens and it’s centre or the fitting height. 

Here I was, a customer amongst two-three trained salesmen, perfecting their skill on the progressive lens and reminding me of how my biases failed me. 

In today’s Habits for Thinking let me bring the focus to availability heuristic. In simple words, a heuristic is a shortcut in decision making.  

What is the availability heuristic?

The availability heuristic describes our tendency to use information that comes to mind quickly and easily when making decisions about the future.

Availability heuristic has been extended to machine heuristic. In a study, people who trusted machines were significantly more likely to hand over their credit card numbers to a computerized travel agent than a human travel agent. A bias that that machines are more trustworthy and secure than people—or the machine heuristic—may be behind the effect, said S. Shyam Sundar, James P. Jimirro Professor of Media Effects, co-director of the Media Effects Research Laboratory and affiliate of Penn State’s Institute for CyberScience (ICS). “This tendency to trust the machine agent more than the human agent was much stronger for people who were high on the belief in the machine heuristic,” said Sundar.

This is what happened to me where my lack of knowledge regarding progressive lenses coupled with machine heuristic, read trust in technology, led me to ignorance about wrong fitted glasses. 

Excerpt from my previous article on : 
What is Availability bias: All of us have the tendency to use information that comes to mind quickly and easily when making decisions about the future. Our memory is stronger of things that have vivid narration. This availability of our thoughts impacts our decision making.Studies have shown that victims and near victims spend on insurance purchases and protective action after disasters. Another example is you tend to handover a new project to a team member who has a clean recent record and not to an equally competent member who committed a small error recently. This is something similar to recency bias in investing where one tends to take investment decisions based on recent memorable events.

Availability heuristic in the case of trusting that a new age eyewear company is following all the processes is a natural phenomena. For example,  Amazon has made us believe that delivery and return is the easiest thing in e-commerce. So when a delivery is delayed or a return is cumbersome from another e-commerce business, we tend to get upset because our availability bias makes it tough to accept the delayed delivery. 

The first step is to understand the existence of availability bias as mentioned above. The second step is to think methodically about it.

1. Ask for Facts to avoid availability bias:

Availability bias means the mind retrieves the information that is easiest to recall. The mind anchors the latest memory. The last event, like a failure of a recent project, can stay in memory and may make you ignore the entire year’s performance of a person.  In such a case, an effort to take a look at the entire year’s report about the performance needs to be anchored around. 

A habit of presenting your mind with long term facts helps in clearing the bias. 

2. Practice Inversion Thinking to deal with availability bias:

Incase of high impact and irreversible decisions, practice inversion thinking while making decisions. For example, making an investment decision is sometimes colored by availability bias. One example can be the entire team thinking on similar lines. Inversion helps in questioning areas that could have been missed. (Read more about inversion thinking here)

Three men at the eyewear store took turns to remind me that my availability bias, the recall of online and technology trust, didn’t let me question my ill-fitted lens. It is a natural human behaviour.  It happens with us many times. We think the coach we have for the team is the best and knows the job, because he has been a star coach for so many others. We think that this stock has to be bought during the IPO because it is all over the newspapers. We think of what is available for us to think. 

To drink, giraffes first have to splay their forelegs and/or bend their knees, and only then can they lower their necks to reach the surface of the water. To protect the giraffe’s brain from sudden changes in blood pressure when it lowers its head to drink, it has valves to stop the back-flow of blood and elastic-walled vessels that dilate and constrict to manage flow. These are survival of the fittest adaptations. 

We humans need to have thinking adaptations too to survive. Availability bias is a mental model that needs to be worked upon consciously, through processes, to survive decisions.

Survival GIraffe

SHIFT, the online-offline course, next Cohort is starting 16th August. See the introductory video here. Reach out through this form for details/queries:

The Flywheel Of Growth: Three Essential Tenets

“Dig in and pull only when you hear go,” shouted my friend, a father of two little boys. Before I could repeat for the children standing closer to me, at the far end from where my friend was, I could hear him shout three, two, one and… A few of us were helping some little kids play a tug of war between two neighbouring housing societies. As the kids lined up, we realised the kids from our apartment were little children in their fives and sevens, definitely looked tinier than the kids on the other side, who were more like ten year olds. A fun game, but there is no one who doesn’t want to win. Realising this difference between the two sides, my friend and some of us who were standing on the sides, jumped closer to our gang of little kids, screaming instructions, lining up height wise and just getting them more organised. As some more kids ran and joined the tug of war on both sides, suddenly the attention shifted to this area and we noticed the imbalance. I remember the friend shouting three, two, one and I joined him in … GO. 

Our little gang, as instructed, pulled at one go. And yeah, despite being tinier than the other lot, they were able to pull the opposite team down on the grass. We won. No one expected it. Everything happened at a fast pace, the coming together of kids on both sides, cheering and running parents and the referee standing in the centre blowing the whistle to begin. Ecstatic was the word for the winning team’s reaction. Magic was the word that the losing team thought of when they saw a younger team pulling them down. Collaborative effort is what my friend smiled as his timely strategy worked. He had noticed that kids on both sides of the rope were not organised, it took him a loud voice to get them together and act. 

Business life is also a tug of war, not with another competitor but with the market forces itself. It is not about winning just one tug of war, but it is about continuously winning many tug of wars. In this week’s Habits for Thinking, I want to bring your attention to a concept highlighted by Jim Collins, author, Good to Great  – called the Flywheel effect. 

Here is an excerpt: 

Pushing with great effort, you get the flywheel to inch forward, moving almost imperceptible at first. You keep pushing and after two or three hours of persistent effort, you get the flywheel to complete one entire turn. 

You keep pushing and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation. You keep pushing in a consistent direction. Three turns… four…five… six… the flywheel builds up speed, seven … eight… keep pushing… nine… ten… it builds momentum… eleven… twelve…. Moving faster with each turn…. Twenty… thirty… fifty…. A hundred. Then at some point- breakthrough!  The momentum of the thing kicks in your favour, hurling the flywheel forward, turn after turn,,, whoosh!… its own heavy weight working for you. You are pushing no harder than during the first rotation, but the flywheel goes faster and faster. Each turn of the flywheel builds upon work done earlier, compounding your investment of effort. 

What was the one thing that caused things to go so fast? You wouldn’t be able to answer. Flywheel momentum is not an act of one big innovation, it is a combined effort of many small activities. 

For example, free shipping by Amazon is considered to have greased the flywheel for Amazon. “People who want something in 2 days are going to pay for it, but everyone who wants free shipping will get their stuff in 5 days,” says Jason Child, who describes the 2001 shipping fees debate as fundamental for the Amazon Prime program and Amazon’s explosive growth. The team was debating whether free shipping would cannibalize their revenue from shipping. The decision to offer free shipping to Amazon Prime customers was a journey from a debate to trials to a success story today. 

Not every idea is successful. Amazon too had launched and withdrawn other ideas. For example, placing a button on the fridge of the household for monthly repeat orders. These were called Amazon Dash buttons. It was rolled out only in a few markets. Designed as a stick-on button to be placed on the fridge or any convenient location, the button made it easier for customers to quickly reorder frequently used household items like paper towels, detergents, soaps etc.  The idea was to make it effortless for frequently ordering items. It didn’t roll out in many markets and after a few years of being in the market, Amazon pulled it out of the market a couple of years ago. 

Free shipping is not just one push in the giant flywheel of Amazon. There are several other activities too. Like getting to put the customer order in a package under a certain time limit in the inventory team. Or, to work on the ease of returns and refund. Every step that solves a customer problem was not taken as one giant step but  was seen as a small push in that area. The only common thread across all teams is focussed towards the goal: customer satisfaction. 

Several initiatives by Amazon have kept the Amazon flywheel in momentum. 

Flywheel is not one giant push. It is a matter of gaining momentum through multiple initiatives. Keeping the flywheel in motion is about keeping the business in good shape. The Flywheel of growth is fueled not by several push initiatives but is also strengthened by three tenets: 

1. Discipline fuels the flywheel: 

The discipline of remaining aligned to the mission. The discipline of keeping the momentum going. The important part of the flywheel growth is it doesn’t stop turning.It takes a disciplined approach to keep the pace of the flywheel. Success often makes businesses complacent. The discipline of turning customer knowledge into action, reading market pulse and maintaining the rigor does not allow any complacency to set in. 

2.Innovation adds to the flywheel momentum:

Flywheels do not move overnight. As a startup, a new innovation in product or service, customer engagement gets the flywheel moving. But as the startup moves and the flywheel gains momentum, the culture of innovation starts working on creating the next push for the flywheel. In established companies too the innovation culture has to keep the flywheel moving in the new digital world. A discipline of prototyping, testing, redesigning or embracing failure for that product or service makes the culture of innovation.

For example: UPS, the global shipping and logistics firm, took an innovative step. Realising the growth of small medium enterprises and e-commerce, UPS launched a new technology company called Ware2Go aimed at connecting small- and medium-sized businesses with warehouses to help streamline online orders. “This is really a technology and platform company – more than a services business – with merchants on one side, looking for order fulfillment capabilities, warehouses looking to fill space appropriately. We wanted to build that using the best of both worlds,” said Nick Basford, vice president of global retail and e-commerce strategy for UPS. Ware2Go is one innovation push to UPS flywheel. 

But it doesn’t stop there. Recently, Ware2Go has added another offering – NetworkVu that analyzes merchant sales and transit data using machine learning with the aim of recommending ideal warehouse placements to small and medium enterprises. This is to maximize delivery speeds within ground networks and control costs.

Ware2go is a new business offering. It is further aided by recommendations for warehouse placements. Each of these add momentum to UPS flywheel business.  

3.People keep the flywheel in motion

The culture of flywheel is dependent on people- not just leadership but also on the middle management. To get teams aligned, especially the middle management aligned towards innovation is not an easy task as this set of people are focussed on regular work delivery. Also, flywheel can stop if the momentum drops due to leadership change, management change. If the business holds a strong culture of innovation and keeps the team aligned to the main purpose, businesses  get built further on with that culture. 

Discipline, Innovation and People are three essential tenets for keeping flywheel in motion. Getting complacent in any one area will initially slow the speed and later will bring it to a halt. It is almost like being in the tug of war and getting all three, the discipline, the culture of innovation and people digging in and pulling together with the sound Go. 

6 impacts of anchoring bias on mind and money

One hour. No, just 5 minutes. Please dad, 40 minutes. No, max 15 minutes more. This is a regular small stake negotiation between the father and the child at home for extra television time. The negotiation begins only when the agreed time is over. Which means, ideally there should not have been any negotiation. Ideally it should have been zero extra minutes but the child ends up winning most of the time, because the negotiation always starts with a large number. This number anchors father’s mind and his quick reactions.  

Anchoring bias is the impact on human behaviour after receiving the initial piece of information. Like in this case, the child says one hour and father’s thoughts get anchored around one hour. Instead of negotiating from zero to fifteen minutes, he actually negotiates from sixty minutes and brings it down to fifteen minutes. Obviously, this behaviour also covers father’s indulgence for the child. 

Anchoring is a concept explained by Amos Tversky and Daniel Kahneman in the book Thinking, Fast and Slow. In today’s Habits for Thinking, I am bringing your attention to how anchoring impacts our decision making. Viewing the screen for an extra few minutes is not a high stake decision but there are other decisions that have an anchoring effect and we need to be mindful about it. 

Here are six features and impact of the anchoring bias in our decision making.

Table of content:

  1. Anchoring as priming effect
  2. The anchoring index
  3. Anchoring is a marketing strength 
  4. Anchoring is used in policy making
  5. Anchoring is for focussing mind 
  6. Anchoring in wealth and investing

1. Anchoring as priming effect:

A textured premium paper box in navy blue with lettering in gold and a brown cardboard box with black lettering are identical in shape and size. Both of these boxes are shown to consumers and they are asked to estimate the price of face cream inside it. Unmistakably, consumers vote for the blue box with a higher price than the brown box. The packaging of the box is the anchor here that gives an initial piece of information to people. The packaging suggests that one in blue is more likely to be premium than the other one, even if the facecream is exactly the same inside the box.

This priming effect applies in our lives on a daily basis. Picking up a product from the shelf on the basis of packaging is just one of these decisions. The priming effect of anchoring also applies to first impression. This is the reason we dress up appropriately for an interview, which makes the first impression. 

2. The anchoring index:

“Powerful anchoring effects are found in decisions that people make about money, such as when they choose how much to contribute for a cause.” Quoted from the book, Thinking Fast and Slow. Research has shown during a donation drive, when the anchoring amount or the suggested amount was only Rs 1000, donations averaged around Rs. 500 but when the anchoring amount was made an extravagant Rs10,000 as suggested amount to be donated,  willingness to pay rose up to Rs. 5000 or more. 

Anchoring Daniel Kahneman

Kahneman writes, “a key finding of anchoring research is that anchors that are obviously random can be just as effective as potentially informative anchors.” Even a simple roll of dice with a number on it, can have an impact on the decision unrelated to the dice. The point to remember is that anchors do not have effects on people because they are informative. People just get carried away by the number. 

3. Anchoring is a marketing strength 

Discount on MRP of products work on the basis of anchoring. You like a jacket, you get it on a discounted price and you feel happy about the savings you have made from the anchor which is the original price of that jacket. In another instance of shopping, you end up buying an item because it shows ‘only one piece left’ in the ecommerce site. You click to buy even if the item is not an immediate need. This is priming of the anchor ‘one piece left’ which makes you take the quick decision. 

4. Anchoring is used in policy making

Traffic fine for drunk driving in Mumbai was Rs 2000 and for speeding Rs 400. In 2019, with the new policy change , drunk driving fine was made ‘Rs10,000 and/or 6 months prison’(or Rs.15,000 and/or 2 years jail for repetitive violation) plus for speeding it ranged between Rs 1000-4000 + licence seizure in certain conditions. In 2019, when the policy was redesigned the fines were not only increased for these two offences, but also for other offences like overloading of a vehicle, obstructing the path of an emergency vehicle etc. 

According to a report, approximately 2348 road accidents were reported in Mumbai between January-October in 2019. A dip of about 18% had been noticed in road accidents in comparison with 2018 (January-October) when the total number stood at 2619. The decline in the numbers of road mishaps can be partially attributed to the Motor Vehicles (Amendment) Act 2019. 

Speeding and drunk driving fines work as anchors for policy making in other areas too. This large fine has an impact on the overall behaviour of drivers thus reducing the accident rate. Anchors are used in policy making to have a large umbrella impact on other aspects of the policy too. 

5. Anchoring is for focussing mind 

In sports psychology, athletes are trained to have winning mindsets. To enter this winning mindset just before a competition, they get into a ritual designed well in advance. This ritual works as an anchor, almost like a switch on button to enter a winning mindset. Like, see this “Micahel Phelps dynamic stretch arm swing on the block. Not only did it tell Michael that he was ready to pounce on the competition, the loud slap on his shoulders of his hands also anchored to every one of his competitors that Michael was ready.”

6. Anchoring regarding money and wealth: 

In our own life, the anchor effect plays a role in many thinking processes. Here is a quote: 

Anchoring to a number is the reason people do not react to their total wealth, but rather to differences of wealth from whatever number they are currently anchored to. This is in major conflict with economic theory, as according to economists, someone with $1 million in the bank would be more satisfied than if he had $500 thousand but this is not necessarily the case. ”

Nassim Nicholas Taleb, Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets

Anchoring bias in trading and investing is a common behaviour. Like anchor effects in other areas, anchoring bias in trading is similar. Suppose a buyer wanted to buy a stock at Rs70, but he didn’t buy it then and now the stock price is Rs110. The buyer feels that the stock will go higher after studying the company’s reports but he is still dilly-dallying to buy the stock at Rs110 as he is facing an anchor of Rs 70. A similar bias plays in while selling stocks. An anchor effect of a higher price makes the person hold the selling decision.  

Money led transactions like selling of an old car, buying of a house, buying and selling of companies in businesses can be influenced by anchoring bias. Negotiations, business dealings are a lot more dependent on anchoring. It becomes important to who begins first. As mentioned earlier, the mind has two systems, one that reacts immediately, and the other that thinks, weighs the details and then reacts. To counter the adverse effects, it is important to train the mind to think the opposite. It helps in avoiding decisions that get influenced by anchoring bias. 

As a conclusion, here is an excerpt from Kahneman: 

You are always aware of the anchor and even pay attention to it, but you do not know how it guides and constrains your thinking, because you cannot imagine how you would have thought if the anchor had been different. However, you should assume that any number that is on the table has had an anchoring effect on you and if the stakes are high you should mobilize your thinking. 

Babies are great negotiators, they get their way. But to avoid anchoring bias, grown ups have to behave in a conscious manner and apply thinking. 

Your food habits can teach you how to think

Facebook lunch was the best, their cheese spread was eclectic during one of the meal times. Google’s spread of a variety of cuisines were mind boggling. Never seen before or after, a large spread like that in a corporate, everyday work setting. There were at least three lunch places, each with a wide range of food in a particular cuisine.  Microsoft felt a little more like a workplace lunch, thankfully. Twitter was a small gathering. Each place left an overwhelming memory of food that still lingers years after our trip to the headquarters of internet giants. I was a part of an IAA delegation that visited and spent a day at some of these corporate headquarters in order to immerse ourselves in the way of their thinking. Digital tourism is the name we gave to this trip. While there are several memories and notes about the experiences gathered across several cities in America, one that tops the charts is the food that we experienced at these places. It was lavish not just as our welcome meal, but as a culture of the workplace. 

Food makes the culture. Culture of a workplace, culture of a community, of a family. Food is a necessity, like air, like water. Yet, most of us have been brought up to leave our own decisions regarding food to someone else. Think about it, we have read about Mark Zuckerberg’s uni color t-shirt choice so as to avoid everyday decision making on what to wear. Ever wondered how he makes food choices, so many decisions to be made in a day? Maybe, like most of us, he is largely dependent on someone else for those decisions.  In most households, the decision lies on the lady of the house. What is served on the table is something that is accepted as a matter of fact. There is nothing wrong with it, except that one has outsourced the most important decision about his mind and body to someone else.   

In today’s Habits for Thinking, I am bringing your attention to something as basic as food and to understand how it is a mental model for thinking and for making right decisions. Let us first understand the theory of First Principles.  

To explain, theory of First Principles, here is an excerpt from an interview with Elon Musk: 

I think people’s thinking process is too bound by convention or analogy to prior experiences. It’s rare that people try to think of something on a first principles basis. They’ll say, “We’ll do that because it’s always been done that way.” Or they’ll not do it because “Well, nobody’s ever done that, so it must not be good. But that’s just a ridiculous way to think. You have to build up the reasoning from the ground up—“from the first principles” is the phrase that’s used in physics. You look at the fundamentals and construct your reasoning from that, and then you see if you have a conclusion that works or doesn’t work, and it may or may not be different from what people have done in the past.

I think it’s important to reason from first principles rather than by analogy. So the normal way we conduct our lives is, we reason by analogy. And it’s … mentally easier to reason by analogy rather than from first principles. First principles is kind of a physics way of looking at the world, and what that really means is, you … boil things down to the most fundamental truths and say, “okay, what are we sure is true?” … and then reason up from there. That takes a lot more mental energy.

Nutritionists are people who understand the first principles of the food. They understand the value of components and what it brings to the body. To a large extent, our mothers and grandmothers who have spent days in the kitchens managing meals with limited seasonal produce have the understanding of first principles. They can toss a meal with equal panache of nutrition and taste even with limited resources as compared to internet-recipes-driven generation. 

First Principles here means understanding the role of food, its nutrients, its pairing,  understanding the needs of the human body at a particular time, at a particular age etc. Over the generations, as the world opened up to travel and cuisines, the knowledge of first principles passed down from one generation to another as a diluted version, mixed with global influences. 

You would wonder, where does this take you in Habits for Thinking? Why and how understanding food becomes a thinking model? A mental model helps us define questions, seek answers and seek solutions. Food has a direct impact on our body and mind. Yet, we take it for granted and depend on others to understand it for us. In today’s habits for thinking, I bring your attention to four areas where you can think about food and that it can have direct impact on our growth. 

“I don’t know what’s the matter with people: they don’t learn by understanding; they learn by some other way—by rote or something. Their knowledge is so fragile!”

—Richard Feynman

1. Understanding one’s own food habits is thinking in First Principles

Have you been taking Vitamin C and Zinc and other multivitamin supplements? Pandemic has brought attention to our nutritional needs. Each body has a unique requirement not just the quantity, but also the variety. This requirement changes with seasons and age. Understanding one’s own food requirement need not come from a third person who serves the food but by owning the responsibility. An athlete, at a competitive level, irrespective of his age, would know his food needs. He has to think and plan for strengthening muscles, building endurance and most importantly recovery. We may not have a similar need, but we still need to understand our rhythmic requirements like when and what to eat, how much to eat. Understanding is a responsibility. 

2. A mental model to exercise control:

Rujuta Diwekar, nutritionist, talks about overeating and portion control.  One of the ideas  she shares to control portions is something that she picked up on her travels: “On a visit to Jordan for a talk, I learnt that there is actually a rule to how many dates and cups of Arabic coffee you can drink at a time. So, of course, you must drink that one cup that your host offers when you arrive, along with one date. But you should allow yourself the second only if you can have the third (date and coffee). Stopping at two or four or even numbers is not allowed. This, I felt, was such a beautiful way of knowing when to stop eating and such a practical way of stopping before getting full.”

Paying attention to overeating trains your mind to exercise control. Something that is important in life to stay away from distractions like doom scrolling on social media.

3. Food language impacts your decisions

In last week’s article we learnt about the importance of the right language. Have you paid attention to the food talk around you? Not just food conversations, words on the menu to describe food influences our perceptions of food. For instance, a research found that people are more likely to choose vegetables as a meal component when described using indulgent (e.g., zesty ginger-turmeric sweet potatoes) language compared to other types of language descriptors, such as healthy (e.g., wholesome sweet potato superfood) (Turnwald et al., 2017) 

Be mindful of the influence that food talk has on you. For example, following intermittent fasting on the basis of what most friends do is the lack of first principles understanding.    

4. Food binds culture. 

It is the warp and weft of our social fabric, whether at home, at work place or with friends. Even in days of physical distancing, food keeps people connected through images, memories and shared experiences. A good food culture can be a pillar of purpose for a group of people fulfilling our social needs. 

If the pandemic will leave us with something good, then it will be a heightened awareness of physical and mental well being of individuals. Consciousness to work out to stay fit is as important as the alertness of nourishing the body with food. It is time that we not only question our own understanding, we also contribute to overall well-being through sharing of knowledge, control on sharing of fad based concepts and build better relationships through food as a binder. 

Paying attention to food is nurturing a growth mindset. It begins with the responsibility of taking mindful decisions and learning as one progresses in the journey. 

The right word is a powerful thinking tool

Kaun bola mujhse naa ho payega? (Who said that I can’t do it?)

Kaun bola, kaun bola? (Who said it? Who said it?)

Apna time aayega! (It’s gonna be my time, soon.)

Uth ja apni raakh se (Rise like a phoenix from the ashes!)

Tu udd ja ab talaash mein (And now start looking for your destiny.)

Parwaaz dekh parwaane ki (As your wings spread)

Aasmaan bhi sar uthayega (The sky will bow to you)

Aayega, apna time aayega (It will; my time will come soon)

Apna time Aayega! 

Our time will come. Bollywood movie, Gully Boy is based on the rise of street rappers from Asia’s largest slum, Dharavi. Coming from a background of insignificance to the light of fame and glory, the story is ripe with grit, determination, passion and obviously struggle. The director  of the movie keeps the audience pumped up with the slogan Apna Time Aayega not through just a song but also through the background score. The experience is so impactful that I remember coming down on the escalator that was thumping with the rhythmic footsteps of almost every one coming out of the movie theatre. Apna Time Aayega, Apna Time Aayega echoed in the ambience. That is the power of words. Years after the release of the movie, the line continues to linger in our lives. Apparently, the original lyrics were sabka time aayega (everyone’s time will come) and the story goes that Javed Akhtar, the renowned lyricist and father of Gully Boy’s film director, Zoya Akhtar, suggested to replace the word Sabka to Apna. Apna means my own and sabka means everyones. Apna, my own, has a magnificent power to connect with the listeners as compared to sabka. 

One word, just a change of word, changes the mind and makes it more adaptable. In todays’ Habits for Thinking, my focus is on the language that we use and how it shapes up our thinking. There is an immense amount of work done on how language and thinking are intertwined. Roger Martin writes in his book ‘Diaminds: Decoding the Mental Habits of Successful Thinkers”: 

Thinking – especially thinking in words and sentences – is a form of internal communication. In thinking, you-in-the-present communicates with you-in-the-future. But though thinking is a private and covert activity, it is influenced by external interactions – in particular, by how you communicate with others. Communicative patterns become mental habits.

Roger Martin

He further guides: 

Our ‘mind design principle’ for new and more successful mental habits is thus a simple one: because thinking is self-talk, talk and thought are linked. To change patterns of thinking, change the patterns of talking.

How we speak makes a difference to how we think. And sometimes, just a replacement of a word makes a sea of difference in the thought process and therefore in the action that follows. 

A constructive word: 

On a podcast, The Knowledge Project, Angela Duckworth, a professor of Psychology at University of Pennsylvania and author of Grit:The Power of Passion and Perseverance, a New York Times bestseller, was asked what she had to say to ‘follow your passion’ as an advice to people.  She said, I would like to change it to ‘develop’ your passion as an advice and not follow your passion. She went on to explain that many young people, at 18-22 years of age, do not know what their interest is and to give advice as ‘follow your passion’ is not a helpful suggestion to give. She suggested replacing the word follow with develop. Develop your passion gives a constructive path. You work on your interest on one day, and second day and third day and over the years you see it developed into a meaningful purpose that can either be a mainstream of your work life or your defining trait. Irrespective, that developed passion becomes a strength. One word- develop instead of follow changes the mission of the statement. 

A transformational word: 

If you have been active on Whatsapp groups that share lifestyle articles, you might have received the New York Times piece on naming the current state of mind by Adam Grant. It reads: ‘There’s a Name for the Blah You’re Feeling: It’s Called Languishing. The neglected middle child of mental health can dull your motivation and focus — and it may be the dominant emotion of 2021.’ The author suggests that giving a name to an emotion, like languishing that means a sense of stagnation and emptiness, helps in managing that emotion.  

A couple of weeks later to this article, Whatsapp circulated another New York Times piece almost as an antidote to this one: The Other Side of Languishing Is Flourishing with suggestions on how to come out of this blah state of mind. Some excerpts are here:

A growing body of research shows that there are simple steps you can take to recharge your emotional batteries and spark a sense of fulfillment, purpose and happiness. The psychology community calls this lofty combination of physical, mental and emotional fitness “flourishing.” It is the exact opposite of languishing, that sense of stagnation Adam Grant wrote about recently for The Times. 

Acknowledging small moments is also important for well-being, research shows. Psychologists call it “savoring.” Savoring is about appreciating an event or activity in the moment, sharing tiny victories and noticing the good things around you.”

This  post suggests replacing the word ‘languishing’ with ‘flourishing’ with a middle path of using ‘savouring’. Words shift mindsets, almost like from languishing to savouring where you move from being in the state of emptiness to being in the state of gratitude. 

Words have the power to influence the way we think and act. Actually, our thinking, like stated earlier, is an internal conversation in words with our own self. A word has the power to lower the intensity of a negative thought to an extent that it starts fading into oblivion. And similarly, a word has the power to manifest a dream into reality. One can start small with everyday lexicon, where you soften a negative impact like ‘devastated’ with ‘upset’ or amplify a positive one with ‘ecstatic’ instead of ‘pleased.’ It works. 

“But if thought corrupts language, language can also corrupt thought.”

George Orwell wrote in his novel, 1984

A thought can control words 

This week make a mental note of words that you use in your thoughts and your speech. You can change just one word and make it a constructive statement. You can change just one word and allow growth around you. Every thought has a dark side and bright side of it, diminish the negativity and amplify the brightness with your words. The thought will grow too. 

A couple of decades ago, as I joined my first job in a large media house I realised my language was changing. To fit into a new culture, the easiest thing to do is to pick up the language of your colleagues and workplace. At many urban workplaces, language is not clean, sparkly white and devoid of any abuse. It took me a deliberate effort to remove the newly entered F words and other not so pleasant lingo in my everyday language. A constant thought anchored my effort to change words. It is Mother’s Day tomorrow and I am so grateful to my mother for the gift of the right language. The thought that anchored my efforts to change my language was my mother’s saying to us:

“Apshabd na kaho. Labhon se nikla apshabd hamare vatavaran mein rahta hai aur kahin na kahin hamaare saath juda rah jaata hai.” 

Do not use bad words. Once spoken, it lingers in the air around us and affects us in its own way. 

Moral Intelligence- the remarkable trait for leaders

As a child during one of the summer holidays in our ancestral village, I remember a kid in the neighbourhood was being reprimanded by others for stealing. His mother pleaded innocence and covered up for him. I have no recollection of who that child grew up to be but I remember my father’s words after that incident. He had said, ‘a mother makes a thief.’ Sounded odd at that time but I realised it truly when years later after that incident, I had to talk to my less-than-5 year old to return a candy he had picked up slyly in a store. Recently, I was reminded again of the statement ‘a mother makes a thief’ when I had to take care of the teenager’s act of watching Netflix on her laptop during online school hours. Mothers have a knack of understanding a child’s behaviour and by virtue can either confront or cover up if there is wrongdoing. Mothers become the first moral intelligence police for the child. 

Right and wrong taught as values remain the compass for decisions that define moral intelligence. Moral intelligence was first developed as a concept in 2005 by Doug Lennick and Fred Kiel, Ph.D. They defined moral intelligence as “the mental capacity to determine how universal human principles should be applied to our values, goals, and actions” Michele Borba, Ed.D., in her book Building Moral Intelligence: The Seven Essential Virtues that Teach Kids to Do the Right Thing defined seven essential virtues of moral intelligence as empathy, conscience, self-control, respect, kindness, tolerance, and fairness.

Moral Intelligence is a lesser known leadership trait but is an essential tool for a leader, actually for every person in the room, not just the leader. Watching Netflix during an online school time is not a crime, so are what seems as small trespasses of values in the course of business. Sometimes these small moves climax into a big one and backfire and sometimes a small harmless move comes under the radar of law and order.  It doesn’t matter whether an unethical practice comes under the law scanner or not, it definitely deviates the business and its processes from the path of competency. 

If you would wonder, consider some of these past news headlines:

Rajat Gupta’s Lust for Zeros

Videocon loan case: Srikrishna panel indicts Chanda Kochhar; what we know so far

Rajat Gupta. Chanda Kochhar. Big names. Bigger body of work. Yet, tarnished by what seems like deviation in moral intelligence. Some stories come out in the public domain. Some don’t. Yet, from time to time, leaders miss a step or two in moral intelligence. It leaves a hole not just in their lives but also in the company’s trust and value systems. Sometimes these small, unharmful yet unethical steps might look natural and acceptable in the value system. Like we have seen in the case of Harshad Mehta scam story, where many others were also following similar practices. Moral Intelligence is not rocket science but it is helpful to understand how it is defined by researchers.

Lennick and Kiel say that the construct of moral intelligence consists of integrity, responsibility, forgiveness and compassion:

  • Integrity: integrity are a) acting consistently with principles, values, and beliefs, b) telling the truth, c) standing up for what is right, and d) keeping promise
  • Responsibility: Responsibility’s three competencies are a) taking personal responsibility, b) admitting mistakes and failures, and c) embracing responsibility for serving others (Clarken, 2009).
  • Forgiveness: Forgiveness involves a) letting go of one’s own mistakes and b) letting go of others’ mistakes (Clarken, 2009). 
  • Compassion: compassion is actively caring about others (Clarken, 2009). 

Moral intelligence is separate from emotional intelligence. Emotional intelligence is about understanding and controlling one’s feelings and reactions. I have written about Emotional Intelligence in this article here. In today’s Habits for Thinking, we discuss how carrying the knowledge of moral intelligence impacts leadership style. 

The advantages of building Moral Intelligence: 

1. The compass of decision making

Moral intelligence though spoken less about as a leadership trait, is central to leadership. The beauty of this intelligence is that it can be acquired as a skill by practice. But this is a compass that needs to be the true north. 

2. The roadmap for the purpose:

Bringing the purpose, individual or a business purpose, depends on the moral roadmap. Moral intelligence paves the roadmap for continuing on the mission of purpose. It is the guide for why we do things and how we do things. 

3.The competitive edge: 

How many times have you been told that your team has earned the business because your team’s integrity stood over other competitors? We may be technologically enabled but business relations are based on human relations. The moral intelligence of an effective leader makes way for everyone in the business. The moral intelligence of the leader defines the right processes and functionality at the core of the business.

4. The tool for ethical design: 

We are governed by privacy policies. That is the law. But there is no law to suggest that as a brand when or how many times can you call the customer? In an another example, leaders that are employing Artificial intelligence have to make several ethical decisions. The more we are driven by technology, more we will have to be morally conscious and intelligent to drive technology. 

5. The responsible influencer: 

I sometimes wonder, if Elon Musk would not have tweeted about Gamestop, would less number of  redditors have made losses? I have no scientific way to prove it but there is a possibility that Elon Musk’s tweet would have influenced some more retail investors to jump in the Gamestop saga resulting in both gains and losses for individuals. Moral intelligence is not just for people with large following on social media platforms, it is with anybody who has influence over people around him. 

Moral Intelligence is not just a responsibility towards a team or a business. It is also a responsibility towards the community, our work communities, our social communities and the members of that community. This Saturday morning marks sixty five nights for Partho Dasgupta* (BARC scam case), under judicial custody. At some point, maybe in months or in years, the judiciary will define whether Patho Dasgupta had a moral intelligence lapse in his career or not. Events around us teach us lessons and make us reflect. As a member of the community, one could reflect on their own moral intelligence to see if they have been able to forgive and yet be compassionate enough to offer help. 

When a community comes together morally, it forgives and extends help. The compass for Moral Intelligence towards a community could be the one like this popular social kindness quote, –

We are all just walking each other home.”

Business leaders need to become mothers as they practice moral intelligence. They must remember, a mother teaches her child by not just preaching but by practicing.

Mothers are best teachers of Moral Intelligence!

*The author is an ex colleague of Partho Dasgupta. She has worked with him from 2005-2009.

3 must-know business growth tenets from the prepaid success

Kaamta Driver. Kaamta New. Kaamta driver 20. Kaamta Jio. Kaamta is my parents’ driver. Last Sunday, he was there at the airport to receive me. Actually, he has been there every time I have gone back home in the last twenty years. New, Jio, driver 20 are the names of his phone numbers saved in my contacts. He has a knack for getting a new number every time I feel I have cracked which one works. It is a routine between us, he gives me a new number, then I ask him – ‘aur, pehle wala?’ (and, the earlier one?) and he has an answer on the lines of ‘Hai, abhi bhai le gaya hai’ or ‘abhi discharge hai.’ (It is there but my brother has taken it or it is discharged). So you can’t delete the old number and you save the new one with a new code name hoping you have cracked it. The last one I saved was driver20, in 2020. It didn’t work. It seems nothing related to 2020 works. 

I had to call my mother to get his number for the pick up. Waiting for the pick up at the airport, I decided I am not going to save his latest number. What is the point, eventually I have to dial my mother to reach him. 

Kaamta is not the only one. There are many who change their phone numbers frequently. The reason could be many. But the most common factor is that these are prepaid numbers. So when I heard Nandan Nilekani in conversation with Haresh Chawla on the topic of All things digital, what stood out for me was Nilekani’s comment on prepaid phone strategy. His comment took me to the success story of prepaid, almost like that of sachet marketing in FMCG, when FMCG brands made inroads in rural markets through the packaging of products in small, affordable, sachet form. 

Following is what Founding Fuel has published as an excerpt from the talk of Nandan Nilekani: 

The India opportunity in the next decade, where India will go from a “prepaid” economy to a “postpaid” economy. This will drive a huge cycle of consumption and growth because credit will boost the system. (The prepaid model was built by the mobile companies in pre-Aadhaar times, when they couldn’t identify the user. It enabled them to reach every corner of the country. As people get to digital payments, build credit histories, they will now be ready for credit.)

Nandan Nilekani talked about the state of Indian economy and opportunities. He brought up the example of prepaid mobile reach in the country and talked about prepaid to illustrate democratisation of credit lending as an idea to drive the growth. Prepaid in the mobile segment is 95% of the market share. 95% is a staggering figure for one particular service in its space to rule the market. Imagine a train commute pass where you have two options – one where you get to use the pass for a month with unlimited rides, like in Chennai metro, and the second one like any prepaid mobile service, where you buy travel points and commute and the second one is so lucrative, like the prepaid mobile service, that it takes a bigger chunk of the two offerings. Similarly, if one looks at other services like education, credit lending, mutual fund investments, and the different offerings in the respective bouquet, there is no particular offer that outshines the rest to the same extent as prepaid mobile. Prepaid mobile is not only about the 95% share that it occupies as the share of services, it is also the only unique service that has reached the nook and corner of the country. And, mostly through offline mode initially. It has not only reached, it continues to be the bedrock of growth in the country. 

In Habits for Thinking, we bring focus on mental models. Mental models are how we understand things. It is our reference point, our understanding arranged in chunks in our mind. Mental models are our thinking tools, they help us form a web of frameworks which helps in decision making and problem solving. We learn mentals models from different fields like economy, from science for example read about entropy here, from sports, from business etc. In today’s Habits for Thinking, here is a mental model inspired by the prepaid mobile market, as a consumer business growth strategy framework. The economy is moving towards a gig economy where a steady flow of income is changing to income in batches with some months to be good months and some to be slow-generating-income months. Understanding consumer behaviour behind the success of prepaid mobile adoption, is a lens to the evolution of current and future services. 

In this model, we look at three tenets that made the adoption of pre-paid mobile cards deep and wide.

The Tenet Of Convenience: 

Convenience is complex. It is not just about the convenience of shopping, but convenience is about the ease of decision making. Is the decision making convenient enough for one to make a purchase? What are the factors that impact decision making? First is the price. To make products affordable, FMCG companies introduced sachet as a packaging variant. Prepaid has gone to another level. They made many sizes of sachet available, meaning you can buy a small amount of mobile time too. Availability, the most visible convenience factor, is most talked about in the field of ecommerce. Let me bring your attention to the availability of prepaid cards ten-twelve years ago. PrePaid cards were not launched through e-commerce but the convenience was added through prepaid sale counters in every corner store in small towns and villages. Selling from the neighbourhood store killed two birds in one. The product was made easily available and the sale through a neighborhood store owner made it trustworthy and for some, available on credit too. The trust that a face to face sale generates is sometimes essential in adoption of a category. People know the neighbourhood store guy and are comfortable buying sim cards through him. Affordability of price, easy availability and trust made the decision making easier.  

The Tenet Of Flexibility: 

You can recharge not just any amount, you can use it for as long as you want. It has no stopper on the calendar like an expiry date. So there is no pressure on your time. This flexibility over time and spend empowers the end user and therefore aids in quick decision making by the end user. Flexibility about time also takes care of the seasonality of spends. During festive seasons, income rises and therefore the power to spend. If we had a health insurance plan that would allow variable amounts to be paid in the bucket as against a fixed amount every month, it would possibly see more adoption of health insurance. In the gig economy, seasonal spending will only grow and so will the need to have flexible programs

The Tenet Of Respectability:  

It doesn’t judge you. It lets you be you. There is no shame in refuelling a Rs. 20 charge. It doesn’t ask why you recharge three times in a week when you could have done once in the week. It does not judge the irregular flow of liquidity. One day one can have Rs100 in cash and the other day just Rs 20. That’s reality. But no one is judging that. 

It often happens during a sales negotiation, that the buyer starts thinking about how the seller is perceiving him. Luxury brands thrive on perception marketing. Many purchase decisions get influenced by what others will think and these ‘other people’ could be friends, colleagues and sometimes even the sales guy. My years of observing consumer behaviour has noticed that a buyer may get conscious of what he is ordering in the restaurant influenced by people around him but he is never conscious of how much or how little he is paying for a prepaid mobile. The credit goes to building a category where there is no perception marketing. 

There is another advantage of prepaid mobile cards’ positioning and price point. It makes everyone equal. The office boy and the office boss both have access to the same. But health insurance is out of bounds for the office boy. Not because he cannot afford it, but because the product doesn’t meet the needs of the office boy.  

Prepaid cards are levellers, it not only makes everyone equal, it does not judge anyone for his/her irregular flow of liquidity.

As we move into a transactional economy, the convenience of decision making, the flexibility of the offering to suit needs and the respectability of the product will define the growth of any business, product or service. Nandan Nilekani brought up the fact that the consumer today has access to digital platforms and has aadhar identity card. The consumer is ready, if we are ready to sell like the prepaid mobile businesses.