We need a model for the future with AI

There are 2 realities that we must acknowledge so that we can start visualizing an economic model for the future:

(1) The model that applies currently to 99% or more of the humanity in how they can avail stuff to survive, sustain and enjoy their lives is to work and earn money - the medium of exchange. The remaining 1% or less will continue to control access to resources. They'll compete as well as collaborate at various levels to keep themselves in that position for as long as they can.

(2) AI, coupled with robotics, can and will do a lot of the work out there, much better than we ever did, increasingly with time. New kinds of work might emerge - but it's hard to visualize what and how much.

The world is both euphoric about AI and scared about its repercussions at the same time. The real threat from AI is not that it'll blow up the world. It's about the mechanism through which humans can continue to avail earth's resources to an extent that looks like progress. If the world can come together and solve this problem it can totally change the pace of human evolution for good in multiple ways:

(1) We can devote our minds to unprecedented waves of creative, scientific, intellectual and spiritual endeavors that can unlock possibilities and human potential in ways that we can't imagine today.

(2) AI can be developed faster and in more unhinged manner without setting artificial barriers in areas where it has value to offer.

This vision is a bit too utopian, as the ones shaping things would like to be the biggest beneficiaries as well, at the cost of the rest.

Working in GCC's - does it require a different mindset than in IT Services Companies?

As Global Capability Centers (GCC) are increasingly becoming popular in India, their rising demand for mid-level management personnel is drawing a lot of senior technical leaders and managers from Indian IT services companies towards them. While the companies that have had their back-offices in India have always known how to operate here, a lot of first-timers struggle to figure it out, and end up offshoring mundane low-risk low-impact jobs.

Over the past couple of decades, Indian IT companies have gradually spun internally into whirlpools of their own making. First, a large aged workforce accumulated in all of them, sitting in cabins, passionately claiming to lead with ruthless eye on efficiency, while at the same time denying their own redundancy in the scheme of things, besides their contribution to a crazy overhead which the industry didn't need during it's glorious years.

Second, most Indian pure play IT service providers failed to move up in the IT value chain. Our stories couldn't move beyond resolving tickets more efficiently through automation, process optimization and shift-left-right-center-whatever. Some industry-flavor helps. We must of course sprinkle some AI these days. We can also implement. But it's largely about resources - that's people.

We learnt how to tell stories - art of story-telling they call it - showcasing past experience, painting scenarios, promising outcomes that would excite customers - we excelled at fluff! But we still don't know how to make and sell stuff that a lot customers would want to buy. Ironically, though, we are good at building the same stuff for western tech giants if they hire us.

In spite of having the largest tech talent in the world, we lacked sufficient depth to have done much by ourselves in AI or any of the recent tech innovations. Even as users of AI, as of social media, our outcomes are mediocre. I agree that we do lack the level of capital rich countries can afford to pump, but it's not always that.

At the core, at least in the IT industry, we have developed a strong service-provider mindset. It's this same mind-set which is probably creeping into GCC's. Most project managers and technical leaders in the new GCC's in India see their colleagues from US or UK or elsewhere as clients without calling them so. This mindset is not healthy for the success of any GCC, as it should not just end up being an offshoring arrangement, but must emerge as a strategic and genuinely value-adding center for a company, where value is beyond cost reduction and tapping of skilled resources.

Offshoring some of IT without outsourcing it has become a compelling option for a lot of large companies in the west, especially as Indian IT firms have become huge and expensive masses of inefficiency. But for GCC's to integrate into parent companies as strategic centers of excellence, their leaders must come out of service-provider mindset ingrained into them from their IT services experience and become assertive partners. (Also, the parent companies need to treat them as their own, and equals, which is another topic worth exploring.)

At the same time, the next generation entering the tech sector must unlearn the 'customer is always right' lessons and ingrain creativity and problem-solving skills to truly build what solves customer problems.

I must admit my experience is limited, samples are small and I may have made too broad and sweeping generalizations some of which may only be partially true. I would like others to share and help us get better perspective of what's up, what's down, what's to be, and how.

The Micromanager

I was discussing the HBR case - The Micromanager - with 1st year MBA students as part of the course Principles and Practices of Management that I'm teaching. It very vividly presented a strained relationship between a manager - George - the CEO, and his direct report - Shelly - the Marketing Director. George was described as someone who liked to be in control. He always wanted to be aware of what everyone was doing. He was instantly there to rescue when someone was even mildly stuck. He was some kind of a problem-solver that way, didn't matter whether you wanted your problems solved or not. He'd do it for you before you asked for help or even tried to figure it out yourself. He probably didn't trust the abilities of people around him to complete tasks. This made him impatient and wanting to peek at all things work-in-progress. He made sure he pointed out others' mistakes, so that they were aware and were more careful next time. He saw it as doing them a favor.

Being the newly appointed CEO of a struggling company that was planning for an IPO, George had to deliver results fairly quickly. He felt responsible for it, and rightly so. The board wouldn't be kind to him if he didn't show results. They had kicked out the former (founder) CEO and George was brought in with lot of expectations. Clearly, George was under pressure. He needed a strong team behind him. And he needed that team to contribute flawlessly towards the goals laid out for the company.

Shelly was brought in by the board because of exceptional credentials in Marketing in her previous stint. While her past experience was in an industry that was somewhat different (hardware earlier vs software now), the learning curve wasn't expected to be much of a challenge. The company had to project to the market a strong image as it headed towards an IPO.

George was very quick at forming a negative view about Shelly's capabilities after looking at some of the first assignments she delivered. And that's when he started pestering Shelly with his constant remarks, pointing mistakes, accusing her of being careless and inefficient.

George's behavior started affecting Shelly's confidence. She descended into a vicious spiral of underperformance and frustration because of not feeling trusted. She couldn't tap into her own abilities and couldn't deliver the quality that used to be cakewalk for her. The constant pressure hampered her creativity. She felt scared to face George and just wanted to run away from there.

George, on the other hand, thought he was offering constant mentorship and support to Shelly. He hoped it would help her get up to speed sooner and contribute at her full potential - which was much needed for the organization, as marketing had to be top notch without compromise.

Who do you relate with more here?

Anyone who sees this picture and thinks about it for a while would naturally start relating to it. And in my observation, majority would relate with Shelly. Why do you think that happens?

The hierarchical nature of organizations along with the way we climb this professional ladder starting from the very bottom is part of the reason for this kind of association. We are managed from the moment we start working till the time we retire. Even a CEO like George is constantly monitored and subjected to tremendous amount of pressure. In fact, in a more general sense, we are managed by different people all our lives. And being 'told' what to do is never pleasant. Add to that the imposition of control over why, what and how - the means, and the burden of meeting expectations on the outcome - the end - the relationship between a manager and his/her reports is bound to be strained.

On the other hand, 'telling' someone what to do would never hurt so bad, although one may not be qualified to do so, and may even feel wrong about it deep down. The dynamic of the relationship is such that the manager gives and the receiver takes. For someone who is both a manager and a subordinate to different people, it's being the latter which is associated with more discomfort and therefore the empathy from that person would always be directed towards Shelly, the frustrated subordinate.

Modern organizations are designed as top-down pyramidal chains of managers / bosses and their reports / subordinates. The directionality of power, control, communication, expectations, pressure and feedback is predominantly all top-down in practice. One is supposed to adjust to the nature of his/her boss. Make the boss happy. At the same time, it's rare to meet someone without a list, usually long, of grievances concerning their bosses. So much so that being a boss seems synonymous to being insensitive, emotionless and self-centered.

It's important to acknowledge that Bosses / managers are human, and have personalities. Being a micromanager, like George, springs more from personality / behavioral traits than from a cultivated style of management. Micromanagers find it hard to trust team members to eventually deliver. When managers don't trust their reports, it is hard for the latter to feel excited to perform. They don't feel free. It hampers their creativity. They force themselves to be creative as managers want them to be, or at least say so. When creativity is an expectation it would only come out as stereotypical "crazy" for whatever qualifies. We can perhaps call it Generative Intelligence.

A common suggestion to resolve the situation between George and Shelly involves open communication, and George cutting Shelly some slack by trusting her more and interfering less in whatever she does. I find both of them hard to achieve.

Communication between bosses and subordinates is inherently constrained by the unequal nature of their relationship. While it is common for a boss to find flaws with a subordinate, the latter can't ever point boss's issues, howsoever damaging they may be to his/her mental well-being and ability to perform well. If he/she ever tries, it would most likely hurt the boss's ego, feel disrespectful to him/her and damage their relationship.

Trust more is not a natural to expect from George. Firstly, he would not be made aware by anybody how he is sabotaging productivity of his own team. If by some rare model of counselling an organization is able to develop that kind of an awareness, can George alter his natural inclinations significantly? I think the chances are slim in the short-term, but a sustained counseling and deliberate effort can generate long-term changes in his behavior.

But companies aren't in business of fixing imperfect humans. They exist to generate outcomes including, and not necessarily limited to, making money.

It's also ironic that most micromanagers are high performers in companies, and often make path-breaking business contributions. Everyone tolerates them coz they are capable of making things happen. They become assets to companies, while being pain in the asses of many who works for them. And invariably, there are also a few who would even enjoy working for them. It's strange how compatibility finds itself.

My view about this case was that people like Shelly end up leaving organizations because such strained relationships are hard to turn around in the near term, especially in an unequal relationship like a manager and his report. In the long-term, however, micromanagers can design more optimized behavioral templates for themselves so that they are able to generate the best outcomes from their teams.

What's your take?

"flow"

When we listen to a song by watching its music video, the video colors our imagination. There is a different magic that we can experience if we can isolate the sensory experience. Close your eyes and listen to the song. Imagine the singer singing it. Imagine yourself singing it. Imagine your own setting. Let your imagination loose. Lose yourself in it. Experience a semblance of "flow".

Take it a step further. Just look within, into yourself, into the depths of your mind. No music. No video. Nothing. It's just you. And everything you've gathered to become who you are. Look deeper, beyond the clutter of all the mental possessions. Beyond the light, beyond the darkness, to a place which no metaphor can explain. That's "flow".

Why they don't make movies that are "love stories" any more?

I was listening to the song “kaho na pyar hai” from the movie “kaho na pyar hai” and it suddenly struck me - love story as a genre in Bollywood is over.

There was a time in India when seeking love meant fighting the world, and of course the family. But now that’s not that big a deal - not totally and not quite everywhere, though. Seeking and finding love, and being accepted for it, is not that far fetched fantasy today.

Look at Hollywood. The love story genre there has been long dead. Romantic comedies as they are called are hardly love stories. I think that’s coz American, in fact most western cultures have embraced marrying for love long back. A few romantic comedies that still get made just celebrate love, and that’s cute, but we don’t want tons of that stuff when it just depicts the reality, and perhaps starts deviating once it starts looking too far from reality in how beautiful it turns out in the end!

Singapore - a truly amazing work of art

I recently had a wonderful vacation in Singapore with my family. I am of course tempted to write about the fabulously planned and developed place Singapore is and managed to become due to the sheer will of its leaders, impeccable governance, focus on efficiency, zero tolerance to corruption and uncompromising discipline instilled through well-intentioned authority. But there's a lot written about it already from myriad perspectives.

One of the things I love doing whenever I visit any city is to take long walks on its roads. While they are aimless and random, they give me an opportunity to observe - the little things - the faces, the expressions, the eyes - the bodies, the postures, the pace - the traffic, the rules, the compliance - the shops, the food, the architecture - the art, the dressing, the style, the life - the mood, the culture, the vibe. These walks help me uncover places in my own way. So, here's a little bit of what I uncovered about Singapore:

• 
  Attention to detail: I noticed this everywhere. The design of roads along with signs like directions, crossings, foot-paths, etc. are well thought out with careful consideration of all means of commute. You'd be amazed to see how well defined walking routes are and how well the route guidance on google maps is even for walking. (I didn't see much scope of cycling in the regular roads, but for that there were dedicated places.) It is like everything has been built according to a template. Every country has such templates, but I was amazed to see the uncompromising adherence to them in Singapore. And it is not just about the roads and signs. It's visible in how all public amenities operate.
  
• Truly secular: The peaceful co-existence of people with different religious faiths and races is truly admirable. I am sure the framework for such co-existence and the minimum acceptable code of conduct must have been laid out by the government. Singapore had its share of racial conflicts soon after it came into being, but the founding fathers meticulously and definitively set the agenda and path of the nation towards rapid development and prosperity, adopting English as the official language and made sure everyone was aligned.
• Some serious undercurrents: It was difficult to figure out whether there was any bitterness deep down while different religious and racial communities coexisted. And how did the locals feel about the tourists? Once while I was walking past a group of people waiting for a bus, one elderly man's mobile phone slipped off his hand and fell down because my hand inadvertently brushed on his phone. I immediately said sorry and pretended to bend to pick up the phone. The man was quick to pick it up himself, but he looked into my eyes and said "fuck you".
• Cleanliness: This seemed ingrained in the way of life. People, including tourists, were careful. Public places were clean, no litter. Even little India was unlike India coz Indians behave better outside, as we know.
• Maximum Government: Government seems to be present everywhere, but probably in good ways (though I can't tell for sure). There's lot of regulation, yet extreme levels of efficiency. Sounds counterintuitive, but they somehow make it happen.
• 
  Incentives to drive behavior: We met a colleague of my wife's who showed us a smart watch that she was wearing, which monitored her fitness routines. She told us that people were incentivized to maintain fitness levels through various rewarding mechanisms. The Netflix documentary on blue zones did highlight the incentives younger Singaporeans are offered to stay closer to their parents. 
• Maximum technology & automation: We are often made to fear automation as the enemy of jobs and job creation. Singapore (and also China form what I've been hearing) made me realize that it's not how it works. By letting things be more manual or sub-tech, we compromise on efficiencies while creating disguised unemployment, which doesn't raise standard of living.
• Extreme addiction to mobile phones: We all are addicted to our screens to various degrees, but in Singapore it's much higher than in India.
  
• 
  Little India is more like Little Chennai: India is vast and diverse, so it's difficult that any place becomes a true replica or representative of India. Little India felt more like Chennai, in fact just some part of Chennai perhaps. There was of course a lot of Tamil spoken and written everywhere.
  The place gives Indian old-city vibes, just with better roads and traffic even in the lanes.
• There is a Little everything there: Just walk around Little India into the lanes and you'll see blocks with different kinds of graffiti portraying different cultures around the world. I could feel that spirit everywhere in Singapore.

• Focused on natural preservation, Climate-aware, but high on energy consumption: The importance of preserving the natural beauty and ecology was communicated through various means - the amazing detail with which Gardens by the Bay was built, Zoo with animals from all over the world with artificially cultivated zones mimicking their natural habitats, the messaging on Palawan Beach, the all-out focus on public transportation and other amenities, and so on. However, what struck me was the high level of energy consumption - it was rampant in everything from excessive air conditioning (most of which was necessary because of the hot weather), to everything for tourists to watch and enjoy - like water shows, lights, rides, and so on.

Singapore has been carefully and beautifully designed to promote business, tourism and economy. And everything is held together with focus that doesn't digress more than necessary into conflicts arising from cultural, religious, ethnic and racial differences. Singapore is expensive, yet also encourages making money. All in all, a pretty complete city / country.

Cost it well and cost it right

IT services, especially maintenance and support, has always been driven majorly by cost considerations, besides, of course, the desired quality of service to support the business. The latter is an important aspect to take into account as IT became the "enabler of business rather than a support function" (... it's amazing to recall that this was even a debate a couple of decades ago and there were case studies written to establish the case for IT and its importance).

Price is just an extension of cost - it is predicting the cost that's the challenge. I was part of the global costing cell of Suzlon, where we were responsible for product costing and project costing. Building up the product cost involved adding up the following:

1. Gathering the cost of each component in the bill of materials (BoM) with inputs from SCM team's negotiated prices from vendors
2. Cost of manufacturing including labor and equipment
3. Logistics costs to ship the product to where it needs to billed at, the so-called Incoterms.
4. Overheads of all sorts

Projects could be (i) bounded - e.g., installation and commissioning of turbines, or (ii) ongoing - e.g., maintenance of turbines.

Similarly, IT too involves products (software, hardware / infrastructure) and services - sort of equivalent of projects - which could be various types - (i) building an IT system - predominantly making software on bought-out / paid-for infrastructure, (ii) configuring an IT system for use - involves setting up the whole software and infrastructure systems to work as required in conjunction with rest of IT, and (iii) maintaining IT systems

Costing for IT is a bit more complicated than in manufacturing, as everything in IT has tremendous amount of human effort involved and the various ways in which the effort can be delivered.

In case of products, the effort is incurred once and any number of copies of the product can be sold, which makes it less un-predictable as the projected price can be adjusted once the product is ready and the making-cost is incurred.

The real challenge is in costing for services as these predominantly involve human effort whose extent is difficult to estimate upfront. There are popular case-studies of failed ERP implementations which had massive cost over-runs (e.g., Nike). When companies outsource these by entering into contracts with IT service providers, the pricing challenge is passed on to the vendors. While these vendors are supposed to be well-versed with industry best practices and have expertise from multiple successes in the past, the inside stories are full of large-scale cluelessness and seemingly intelligent guesswork within range good enough to win business.

The company that wants to outsource - although it has better information - has similar challenge in fixing up its own budget. However, because of the closer view it has, it's expected to have better idea of what it would take to execute and the price it translates to, although many uncertainties still persist in the minds of its experts as well.

A vendor, on the other hand, consumes all the information that's made available to them and estimates the effort, costs the effort based on their cost base, plays with margins and gets to the price. But that's an over-simplification. Between effort and price, there are numerous aspects and related parameters that determine cost of execution of the project and the subsequent price, and it's not just about people and their effort but everything that goes into delivering the project. Here's an indicative list, which by no way is exhaustive.

As can be easily seen, there are a large number of variables one can play with. It's not necessarily wise to try and be deterministic about each of these, but to be able to decide at the solution stage would allow a vendor to deliver with a plan based on a budget. And to be able to model with such a wide array of variables and underlying options needs (a) a solutioning mechanism that allows architects to think, visualize and decide their solution parameters, and (b) a costing mechanism - a tool - that understands these variables, has an ability to discern and validate, and has the sensitivity and robustness to provide cost implications of each choice made.

I've had good fortune of working with many IT outsourcing service providers. Among those I've worked with, Accenture has deeply impressed me with the robustness in its solutioning processes, costing databases and tools, along with a rigorous review mechanism. It helps Accenture in many ways - (i) it ensures that many more aspects are given fair and careful consideration at solution stages, than just the effort estimation, (ii) it ensures deeper and holistic review where every choice parameter can be questioned, and is hence chosen with care, (iii) ensures greater optimization at many levels, (iv) ensures greater consideration to project deliverability and optimization to ensure the same, (v) helps identify, assess and plan for risks, (vi) helps prevent manipulation of solution parameters to get to lower cost, and (vii) helps drive high level of confidence in being able to execute with success within budgeted cost.

There is of course a measure of rigidity that creeps in when one works with such an elaborate process and tool driven model that everyone strictly adheres to. Companies must also balance this with flexibility to improvise, course-correct or make rational choices when the older assumptions turn out bad.

I must point out that the Indian IT service providers can do a lot better in their solutioning processes, costing models, tools and underlying databases for costing / pricing, and review processes. Greater detail to solutioning followed by better costing mechanism is essential for confident and successful delivery later on. It's unfortunate that most large Indian IT system integrators can be rated very low on these parameters. While it's important to win so as to be able to execute, not being careful with solution and cost will only render the win meaningless and as equivalent to trying to deliver later to a predetermined price that would be too tight, being generally low, and would require fewer people working longer hours, under stress and facing failure.

Not all unknowns can be figured out or accounted for at the outset, but an honest and detailed solutioning process, a robust costing model powered by efficient tools and a thorough review mechanism can together help vendors enter engagements with greater confidence and probability of successful delivery.

To conclude, just a thought - as AI agents replace human effort, perhaps we'll be able to achieve greater precision in spend on IT projects vis-a-vis budgets, in spite of uncertainties as they emerge. Would love to hear your thoughts...