How to find Happiness at work 10-15

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Happiness is in short supply at work these days. Deadlines, staff shortages, productivity pressures and crazy stress push even the most talented and temperate people to want to quit their jobs. But that’s not a realistic option, even for folks in the C-suite. Annie McKee, director of the Penn CLO and Medical Education programs at the University of Pennsylvania where she teaches leadership and emotional intelligence, has a better idea. In her book, How To Be Happy At Work, she outlines three requirements that workers need to feel more fulfilled on the job. McKee spoke about the concepts in her book on the Knowledge@Wharton show on SiriusXM channel 111. (Listen to the podcast at the top of this page.)

 The following is an edited transcript of the conversation.

Knowledge@Wharton: How many people do you think are not happy at work?

Annie McKee: I don’t think we even have to guess. Gallup has been studying people for years, and upwards of two-thirds of us are either neutral, which means we don’t care, or we’re actively disengaged. Disengagement and happiness go hand in hand, so an awful lot of people are not happy at work. Unhappy people don’t perform as well as they could. When we’re negative, cynical, pessimistic, we simply don’t give our all, and our brains don’t work that well just when we need people’s brains to be working beautifully.

Knowledge@Wharton: Has this problem ramped up in the last two decades or so? As much as digital is phenomenal for us, a lot of people feel under pressure because of what digital does to accelerate change.

McKee: The world is changing at a rapid pace, obviously. As much as we love our always-connected world, it can mean that we work all of the time. We’re always one minute away from that next email that’s going to bring tragedy or crisis to our working lives. Some of us never turn it off, and that’s not good for us.

Knowledge@Wharton: Where did your idea for the book come from?

McKee: I’ve worked in organizations all over the world for decades now. I’ve looked at leadership practices, emotional intelligence, culture and all of those things that impact the bottom line and people’s individual effectiveness. I decided to take another look and see what people were trying to tell us. All of these studies that we did around the world were practical studies. People were telling us, “I want to be happy, I want to be fulfilled, I want to love my job, I’m not as happy or as fulfilled as I could be, and here is what I need.” And then they went on to tell us what they need.

Knowledge@Wharton: Are executives aware of their employees’ problems? Are they also aware that they may susceptible to this?

“Unhappy people don’t perform as well as they could.”

McKee: It doesn’t matter where you sit in the organization, you are susceptible to disengagement and unhappiness even at the very top. We think if you’re making all of that money and you’ve got all of that power and that great job, it’s going to be perfect. The best leaders in our organizations, at the very top and all the way down to the shop floor, understand that people matter, feelings matter, and it’s job number one to create a climate where people feel good about what they’re doing where they’re happy, engaged and ready to share their talents.

Knowledge@Wharton: What are the key ingredients to finding that happiness?

McKee: From my work, I’ve discovered three things. Number one, people feel that they need to have impact on something that is important to them, whether it’s people or a cause or the bottom line. They need to feel that their work is purposeful, and it’s tied to values that they care about.
Number two, we need to feel optimistic that our work is tied to a personal vision of the future. The organization’s vision isn’t enough. As good as it may be, we have to know that what we’re doing ties to a personal vision of our future.

Number three, we need friends at work. We’ve learned over the course of our lives you shouldn’t be friends with people at work, that it’s dangerous somehow, that it will cloud your judgment. I don’t agree. I think we need to feel that we are with our tribe in the workplace, that we belong, that we’re with people that we respect and who respect us in return. We need warmth, we need caring, and we need to feel supported.

Knowledge@Wharton: I would think most people looking for a job, whether they are coming out of college or shifting careers mid-life, are looking for that area that would make them happy. When you have that expectation of being in the right sector to begin with, you hope that you have the happiness to go along with it.

McKee: We do hope that we get into the right organization and there’s a good fit between our values and the organization’s values. We really try hard. But we get in there and the pressures of everyday life, and the crises and the stress can really tamp down our enthusiasm and our happiness.

Also, a lot of us are susceptible to what I call happiness traps. We end up doing what we think we should do. We take that job with that fancy consulting firm or that wonderful organization not because we love it and not because it’s a fit, but because we think we should. Frankly, some of us have ambition that goes into overdrive. Ambition is a great thing, until it’s not.

Knowledge@Wharton: Is that part of the reason why we see more people who have been with a company for 20 years, 25 years and suddenly pivot? They may be going to work for a nonprofit. You see these stories popping up, especially with people in the C-suite.

McKee: You do see that. You see senior leaders all of a sudden saying, “Enough is enough, I [want to do] something different.” But I really want to be clear, you don’t always have to run away. In fact, you want to run towards something. If you feel you’re not happy in the workplace, quitting your job is probably not the first answer, and some of us can’t. What we need to do is figure out what we need, what we want, how to have impact, what will make us feel hopeful about our future, what kind of people we want to work with and for, and then go find that either in our organization or elsewhere.

Happiness starts inside each of us. It’s tempting to blame that toxic boss or that horrible organizational culture, and those things may be true. But if you want to be happy at work, you first have to look inside and ask what is it that you want? What will make you feel fulfilled? Which happiness traps have you fallen prey to? And get yourself out.

Knowledge@Wharton: What are the happiness traps?

McKee: There’s what I call the “should” trap. We do what we think we should do. We show up to work acting like someone we’re not. That is soul-destroying, and it’s fairly common. [There’s also] the “ambition” trap. When our ambition drives us from goal to goal and we don’t even stop to celebrate the accomplishment of those goals, something is wrong.

Some of us feel helpless, stuck. The “helplessness” trap may be the most serious of all. It’s really hard to get out of because we don’t feel we have any power. My message is we have a lot more power and control over not only our attitude but what we do and how we approach our work on a daily basis and in the long term than maybe we think we do.

“Ambition is a great thing, until it’s not.”

Knowledge@Wharton: Earlier in your life, you found yourself fitting into these patterns as well.
McKee: I did. Early in my life I wasn’t teaching in a wonderful institution like Penn. I didn’t even have what you would call a professional career. I had jobs like waiting tables and cleaning houses and taking care of elderly people. I was making ends meet. And it wasn’t easy.

I had two choices, I could either say to myself this is miserable and I hate it, or I could look for something that was fulfilling in what I did. I tried to do that. I did find aspects of my job, whether it was cleaning houses and feeling like I was doing a good job or finding a mentor in some of these workplaces, that really made it worthwhile to me.

Knowledge@Wharton: Do you have to be 100% happy all of the time? I think if you can find areas of happiness, it can make your job or your life so much easier to go through.
McKee: Happiness isn’t just about feeling good every moment of the day, and it’s not just about pleasure. That’s hedonism, and we’re not seeking that. Frankly, a little bit of stress is a good thing. It pushes us to be innovative and to do things differently and to push harder. So, it’s not about just feeling good. But we do need a foundation of purpose, hope and friendships. We do need to know that what we do matters at work, that we are doing something that is tied to our future, and that the people we work with are great.

Knowledge@Wharton: You mentioned taking the time to recognize your accomplishments, but there are companies that want you to push on to the next project. They don’t give you the opportunity to slow down even for an hour to enjoy it.

McKee: Most of our organizations are really hard-driving, especially publicly traded organizations. I’m not even sure they’re that different than other institutions these days. The pressure is on everywhere, and the reality is we do move from project to project, goal to goal. What choices can we make in the middle of that culture? We don’t have to be victims of our organizational culture, and we don’t have to be victims of that bad boss you might have or maybe you’ve had in the past. We can make choices about what we do with our time, our energy and our emotional stance.

Knowledge@Wharton: Going back to the friends component in the workplace, does it matter where those friends come from within the structure of the company? A lot of people say you have to be careful if you want to try to be friends with the boss.

McKee: It doesn’t matter where your friends are, but it does matter whether or not you have your eyes open and recognize what people are thinking about how you are behaving and who you are friends with. You’ve got to be aware of your organization’s culture and the rules of the road.
If you’re violating some of those rules — for example, going up the hierarchy and building friendships with people who are a couple levels above you or maybe in another division — you need to understand what the implications of that are. And you need to be maybe a little bit careful.

Knowledge@Wharton: How does the middle manager deal with this?

McKee: Middle managers get it from all sides. They are pulled in every direction, and it is probably the hardest job in any organization. They, more than anybody, need to hear this message. Life is too short to be unhappy at work. Middle managers have a tremendous impact on the people who work for them, and recognizing that you more than anybody are the creator and the curator of the culture in the organization is an important place to start.

Knowledge@Wharton: Sometimes managers forget about the life people have outside of work.
McKee: We’re here at the Wharton School, and we’ve been studying management now for over 100 years. Some of the early approaches to managing organizations are really destructive, and one of the aspects of that early research has been the attitude that people don’t matter and that private lives ought to be left at the door of the office. It’s impossible to leave our private lives at the door of the office. It doesn’t mean that we talk about it all of the time, but we bring our experiences with us and we bring our feelings with us. Managers need to recognize that.

It’s also hard to find what is commonly called work-life balance. By the way, I don’t like that phrase. I think it’s a myth. I don’t think there is any magic formula that says if we get it just right we’re going to be happy at work and happy at home. It’s more about understanding that the lines are blurred between work and home now, and we need to learn how to manage our choices and our attention.

Knowledge@Wharton: What about those who work remotely and can feel very isolated and disconnected?

McKee: I understand the isolation and feeling kind of left out. The reality is that it takes a lot more effort to build relationships when we work remotely. We need to take time. When we’re working remotely, we get on the phone, we do the work that needs to be done, we talk about the project, and we get off the phone. That leaves us feeling kind of empty. We need to take that extra five minutes to have a chat, have a laugh, feel like we are in a relationship with somebody. It takes effort and self-management because the temptation is to just do the work. You talk about the gig economy, right? We’re all sort of working in a portfolio manner these days. We take on this bit of work and that bit of work, and much of it is virtual.

“Life is too short to be unhappy at work.”

I think we need to figure this out because the bottom line is that we have not changed as human beings. We still need to feel like we belong, we need to feel that we’re cared for, and we need to be able to care for others in return. If we’re working far away, we’ve got to take extra time and make a concerted effort to build those relationships in a different kind of way than if we’re in person.
I’m a big proponent of working from home or working remotely. I think it’s really helpful to individuals and companies. People who are able to work at home feel trusted, and when you feel trusted you are more committed to your organization. A lot of people report being able to get more done away from the office because you don’t have the interruptions. The downside is that you have to find a way to keep the relationships fresh and alive because that’s as important as getting that project done.

Knowledge@Wharton: Companies seem to be more aware of employee happiness than they used to be, which is a good thing. Do you think we’re going to continue down that path?

McKee: Companies are more aware, so are enlightened CEOs and enlightened leaders. I think we will continue down the path for the following reasons. It’s not just nice-to-have, and it’s not just about feeling good. We’ve got solid research coming out of positive psychology, neuroscience and management that tells us that feelings matter. When we feel good, we’re smarter. And we need smart employees now. We need people who are committed, who are engaged. The research is pretty clear. Happiness before success. If we want our employees to be at their best, we need to care about their emotional well-being as well as their physical well-being.

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What Insights lie at the intersection of Neuroscience and Marketing 07-02

Research into the interplay between the discipline of neuroscience — which studies the brain and the nervous system — and marketing could help to explain how people make decisions, how they react to stimuli and what triggers might amplify or diminish the impulses that drive social interactions or even innovation in a business setting. Such research also raises ethical questions on how those insights might be used, and how to prevent them from getting into the wrong hands.

Those are the opportunities and challenges for the Wharton Neuroscience Initiative, which was launched in September 2016, according to Michael Platt, its director. Platt, a neuroscientist, is also a Penn Integrates Knowledge professor with appointments at the University of Pennsylvania’s Perelman School of Medicine, the department of psychology in the School of Arts and Sciences, and the marketing department at Wharton. Creating the neuroscience initiative “at the intersection of medicine and business … is a provocative idea,” said Platt. But he is convinced that “it sends a clear signal to business schools, universities and people in industry that neuroscience is here, and the future of business is in neuroscience.”

Technological developments in the space also make it an opportune time for such an initiative, according to Elizabeth (Zab) Johnson, who is managing director and senior fellow of the Wharton Neuroscience Initiative. She pointed to the “huge boom” in wearable neurotech, and the proliferation of devices such as heartbeat monitoring watches, sleep monitoring gadgets and brainwave headbands. “[Students] need to know how to tell hype from what’s practical,” she said. “We need them to be savvy about that.” Platt and Johnson were previously colleagues at Duke University’s Institute for Brain Sciences.

Platt and Johnson discussed the intersection of neuroscience and business on the Marketing Matters show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.)


How We Tick, Why We Tick

Businesses and marketers need to get up to speed on the use of neuroscience in advertising and marketing, according to Catharine Hays, executive director of the Wharton Future of Advertising program, who co-hosts the Marketing Matters show. “The essence of the initiative is grounded in helping people, understanding how we tick, why we tick, and then using that information to make sure that we tick well,” she said. It helps that Penn has a large neuroscience community, she noted.
Platt expanded on Hays’s comments and said, “Knowing something more about how we tick as individuals and how we tick together sometimes and sometimes we don’t could impact the way we do business and educate the next generation of students….”

According to Platt, the “tremendous strides” in neuroscience over the last couple of decades will help people with brain disorders like Alzheimer’s disease. Those same advances in neuroscience will also help businesses and individuals “reach their maximum potential to create value for society,” he added.

The Wharton Neuroscience Initiative this year started an Introduction to Brain Science for Business course. It essentially uses business as a vehicle to teach students neuroscience, and also a means to convey some of the emerging areas for applications, said Platt. Some of those are in the area of marketing, to test the effectiveness of advertising such as engaging people and predicting sales, he explained. The idea is to broaden the domain of neuroscience beyond attention or decision-making to social neuroscience or studies of creativity, he added.

“The brain is trying to figure out ambiguity, and is trying to find solutions for what we see and what we perceive.” –Elizabeth (Zab) Johnson

Takeaways for Businesses

Research being conducted by Platt and Johnson could find numerous applications in the world of business. Johnson’s research includes studies in vision and color vision. For example, she would examine why different people identify the same color differently, such as some seeing blue as black or white as gold. She pointed to applications, for example, in the cosmetics industry. “We spend a lot of time looking at whether or not we can make ourselves more attractive” by adding different colors, she said.

Johnson saw big opportunities for research into those varying perceptions of color. “People had very emotional responses when they realized that what their friends saw was different from what they saw, even though it is same [color],” she said. The neuro-scientific explanation for people seeing colors differently is still being probed, she added.

“Inherently … what you perceive is all in your head, which as neuroscientists we always knew,” Johnson said. “We also know that the brain is trying to figure out ambiguity, and is trying to find solutions for what we see and what we perceive.” She has also begun to research how colors on people’s faces change depending on their emotional state “and the signals that we might be getting but we don’t think about,” such as when people blush.

Hays noted that 80% of the decisions or choices people make are based in their subconscious. “[In] bringing them to the fore and making them explicit, the business applications are mind boggling,” she said.

Platt said his research includes trying to understand at “a very deep level” aspects of interpersonal interactions. That begins with how people perceive each other to “higher-order processes” such as how that might prompt people to be kind or deceptive, he explained.

“We are working out the circuitry [and] trying to understand how we might turn up the volume on some of those signals and turn down the volume on some others,” Platt said. “So, could you do various kinds of nudges to promote more social behavior, to make us more attentive to each other, or [to become] better able to read social cues and be better listeners?”

“Could you do various kinds of nudges to promote more social behavior, to make us more attentive to each other, or [to become] better able to read social cues and be better listeners?” –Michael Platt

A Measured, Cautious Approach

Penn research is focused on using those insights to test new therapies to treat people with disorders, including both medicines and non-invasive brain stimulation, Platt explained. “We need to do research to figure out how to do it right, and how to do it safely.” Some of those therapies are being put into practice at the Children’s Hospital of Philadelphia, he added.

Platt’s research extends to studying decision-making and how people weigh trade-offs between continuing to exploit something they know well versus taking risks to explore new ways of doing things. “That is where the spark of innovation comes from,” he added. As that research advances, it will also try to uncover the mechanisms of that process, measure it on individuals unobtrusively through a wearable device or “stimulate that circuitry on people whose job it is to be innovative.” The research work will also extend to innovating on devices at an ideas lab to improve quality and make them cheaper so they can be used more in everyday lives.

Platt acknowledged that such research raises “important ethical questions,” but clarified that they are not specific to neuroscience in a business context. He said that among other resources to grapple with those issues, he wants to tap into the deep expertise in bioethics at Penn. Johnson called for continuing debate on these issues to come up with the right applications.

Reproduced from Knowledge@Wharton

How Anticipating Future Variety Curbs Consumer Boredom 06-29

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If your favorite chocolate brownie ice cream were on sale, then surely buying a few containers to stock in your freezer would makes sense, right? Surprisingly, the answer may be no, according to recent research from Wharton marketing professor Barbara Kahn, who also serves as director of the school’s Jay H. Baker Retailing Center. In a paper titled “Anticipation of Future Variety Reduces Satiation from Current Experiences,” Kahn and her co-authors — Julio Sevilla from the University of Georgia and Jiao Zhang from the University of Oregon — debunk the notion that consumers respond positively to an endless supply of the exact same product.

Through controlled lab experiments, Kahn and her team found that when consumers are offered more variety for future consumption, their perception of present satisfaction changes. The paper was published in the Journal of Marketing Research. Kahn spoke with Knowledge@Wharton about what the research means for marketers. 

An edited transcript of the conversation follows.

Knowledge@Wharton:  Could you give us a summary of your research?

Barbara Kahn: What the research shows is that if you anticipate consuming a variety of things in the future, you will satiate slowly on what you’re consuming now.

Knowledge@Wharton: This sort of sounds like the reason why we all overeat at the buffet.

Kahn: Except overeating is consumption, and this is about eating the same thing over time, how fast you get bored with it or how fast you satiate with it. The reason it’s interesting to marketers is, of course, that marketers want you to consume as much as possible of their product. But the problem is when you consume a lot over time, you get bored, or satiate. This is not just for food; it could be for music or for anything else that you consume over time. Is there a way to reduce the boredom so that you’ll enjoy what you’re consuming for a longer period of time?

What we found was that some of that boredom and satiation is cognitive. It’s not all physical. If we can encourage you to think about something in the future that’s related to what you’re consuming now, and that will offer more variety, then you’ll satiate more slowly.

In an article you wrote for the American Marketing Association on this research, you introduced the example of yogurt, which I think helps to clarify this. Could you explain that example?

Kahn: Say you’re eating vanilla yogurt every single day for lunch for a week, two weeks, three weeks. You could imagine over time that you’d get bored with vanilla yogurt. What can we do to make you less bored?

Knowledge@Wharton: If you went to Costco or BJs or some warehouse and bought a whole pallet of yogurt, and it was all different flavors or some flavor different from vanilla, and you knew in the future you would consume that, it would make you satiate more slowly with the vanilla yogurt you’re eating over time today. That’s the idea.

Knowledge@Wharton: What are the implications for retailers like Costco, for example?
Kahn: It’s that selling a variety of things has a benefit over and above what you might think. Just having the variety in the refrigerator will make the enjoyment of a single flavor more pleasurable.
Knowledge@Wharton: What is the biggest surprise that came out of this research?

Kahn: We’ve always known a lot about anticipation; a lot of past research has shown that you should savor the anticipation of something good. There’s an advantage in planning for a vacation or a wedding or something that’s really fun. You might actually enjoy the anticipation of the event more than the event itself. That’s something that’s been shown before.

But what’s different about this research is that we show that anticipating variety in the future affects your current consumption. That’s somewhat surprising because you wouldn’t think that just thinking about something in the future could affect how you’re enjoying something today.

Knowledge@Wharton: One of the other interesting examples you brought up in your AMA article was the idea that maybe it’s not always best to keep a surprise gift a secret from a significant other. Could you explain that?

“You wouldn’t think that just thinking about something in the future could affect how you’re enjoying something today.”

Kahn: The point is that if people can anticipate something that’s going to happen in the future, not only do you savor the excitement of the future, but it also can affect your current consumption, so that’s a little counter-intuitive.

Knowledge@Wharton: If someone’s going to give you a surprise vacation, for example, knowing about it earlier helps you to anticipate and actually enjoy something else in the present, correct?

Kahn: Right. You know you’re going to have a lot of varied activities — you’re going to go skiing and mountain climbing or whatever you’re going to do in the future — so maybe you won’t be as bored with what you’re doing right now.

Knowledge@Wharton: There are all sorts of implications for this. What are you going to look at next?

Kahn: It’s interesting to think about how consuming variety can affect things besides the actual utility you have for the variety. One of the projects I’m working on with a doctoral student at Drexel University is how consuming variety can make you feel less guilty or more fulfilled when you’re in a self-regulatory mode — like when you’re trying to like control your weight or eat more healthily. Sometimes, using variety as a cue for doing more of a good thing or less of a bad thing can alleviate guilt. That’s kind of an interesting thing — that variety in and of itself can affect these other kinds of feelings or emotions.

Reproduced from  KNOWLEDGE@WHARTON

Has the ‘Dream Run’ for Indian IT Ended? 04-15

After years of sitting on piles of cash, Indian information technology (IT) services firms are suddenly dispensing some of it to their shareholders by way of buybacks. In mid-February, Tata Consultancy Services (TCS), India’s largest IT services firm, which has a cash pile of around Rs.40,000 crore ($6 billion), announced that it would buy back equity shares worth up to Rs.16,000 crore ($2.4 billion).

This is TCS’ first buyback scheme since it went public 13 years ago and also the biggest share repurchase program in the country. (A few weeks before TCS’ announcement, Nasdaq-listed Cognizant Technology Solutions, which has the bulk of its workforce in India, declared a dividend payout and a share buyback of $3.4 billion.) In March, HCL Technologies said it would buy back Rs.3,500 crore ($340 million) of shares. Others like Wipro and Tech Mahindra are expected to follow suit. On April 13, announcing its results for the fourth quarter of fiscal 2017, Infosys said that up to Rs. 13,000 crore ($2 billion) is expected to be paid out to shareholders during 2018 in dividends, share buybacks or both. In addition, the company expects to pay out up to 70% of free cash flow next year in the same combination. Currently, Infosys pays out up to 50% of post-tax profits in dividends.

The buybacks are a move to boost share price and soothe investor sentiments. They are also designed to make them less attractive to predators. After years of giving high returns, the industry has been delivering below expectations; most Indian IT services firms have been performing below the Sensex, the benchmark stock index. Recent developments like U.S. President Donald Trump’s election and the ensuing controversy surrounding outsourcing and H1-B visas, and technology disruptions caused by digital transformation and automation are in fact threatening the very fundamentals of the $108 billion IT-BPO exports industry.

That industry put India on the world map because of its high-quality, low-cost tech talent and a successfully executed offshore-global delivery model. (Indian IT firms use the H-1B temporary work visas in large numbers to fly their engineers to client sites in the U.S., which is their largest market accounting for over 60% of exports.) There are also pressures from other quarters, such as Brexit and the consequent delays in decision making; slowdowns in the banking and financial services sector, and reduced discretionary IT spending.

The projections of industry body Nasscom (National Association of Software and Services Companies) mirrors the growing uncertainly. In sharp contrast to the heady growth of over 30% of previous years and in line with dipping growth in recent times, at the beginning of fiscal year (FY) April 2016-March 2017, Nasscom had forecast a growth of 10% to 12% (in constant currency terms). In November last year, it lowered the outlook to 8% to 10%. In February, for the first time in 25 years, Nasscom deferred giving the annual revenue outlook for fiscal 2018 by a quarter.

Other projections, too, are bleak. A few weeks ago, Goldman Sachs said that the revenues of the top five Indian IT services firms are likely to grow at a compound annual growth rate (CAGR) of 8% as compared to 11% during the FY 2011 to FY 2016 period. The U.S.–based Deep Dive/Everest Group IT services forecaster expects a 6.3% growth for the top five IT companies for calendar year 2017. For the industry as a whole (excluding multinational captive centers), the growth in 2017 is projected to be a mere 5.3%.

“For several years now, experts have been predicting that the dream run of the Indian IT services industry will soon be over. By all indications, that time has actually dawned now,” says Rishikesha T. Krishnan, director of the Indian Institute of Management Indore.

But this is not the first time that the industry is looking down a long dark tunnel. The Asian Crisis of 1997, the dot-com bubble burst of 2001 and the economic crisis of 2008 were all trying times. Each time, the industry managed to bounce back. So what is different this time around?

Lacking Strategic Relevance

Ravi Aron, professor of information systems at the Johns Hopkins Carey Business School, says Indian companies are struggling with a problem of strategic relevance. “The current protectionist regime in the U.S. and the anti-trade mood will result in legislations that may cause some temporary but not very large setbacks. The real problem for India IT services companies is that they occupy positions of very low strategic relevance with their clients.”

“For several years now, experts have been predicting that the dream run of the Indian IT services industry will soon be over. By all indications, that time has actually dawned now.” –Rishikesha Krishnan

Aron points out that several emerging technologies are changing how companies compete, the way they engage with customers and even the nature of work inside the firm. Big Data and analytics, artificial intelligence and robotics are all top of the mind not just for CTOs in corporations but also for all CXOs. “When we [business school faculty] talk to senior executives, they do not ask us to explain the difference between supervised and unsupervised learning in machine learning. Instead, they ask specific questions about how will machine learning have an impact on predicting customer response to products in retail financial services? Or, how can data mining be used to identify opportunities in new product development by analyzing and classifying patterns from transaction data?”

But Indian IT companies are operating on a different model altogether. They expect the clients to tell them what they want from these emergent paradigms and offer to find out a cost effective way of doing it. “They are not ready to deal with the ‘what aspects of business can I transform with technology’ question, which is of high strategic relevance,” says Aron.

Saikat Chaudhuri, executive director of Wharton’s Mack Institute for Innovation Management, adds: “Essentially, Indian IT firms have been stuck in the middle; they are not low-end providers anymore with low costs, neither have they been able to propel themselves to become high-end providers performing core work and high-margin services. At the same time, on the technology side, automation threatens to render obsolete much of the labor arbitrage work on the lower end; while political changes such as protectionism compound the problem.”

Keeping pace with technology and the changing requirements of clients is the most difficult challenge that the Indian IT industry is facing today, says D.D. Mishra, research director at IT research and advisory firm Gartner. Pointing out that the current situation is “very unique and we are possibly going through the most interesting phase of evolution in terms of IT services,” Mishra lists his key concerns: “We see that creative destruction has become a norm for many businesses. Re-skilling people is a big challenge, especially when you have a large workforce. The short supply of skilled labor will be one big inhibitor. Endpoints of the Internet of Things will grow at a CAGR of 32.9% from 2015 through 2020, reaching an installed base of 20.4 billion units. This will drive a lot changes in the business models and business opportunities which need to be tapped. And though tactical innovation is the strength of Indians, in my view, the cultural aspect around innovation is the most difficult change organizations will struggle with.”

Sudin Apte, CEO and research director at Offshore Insights, an IT advisory and research firm, says that Indian IT firms could survive the many challenges earlier — whether it was shortage of skills, fluctuating currency, macro-economic factors, growing competition from multinationals and pressure from clients to build skills such as domain expertise, program management and consulting capabilities — because “they had the benefit of the TINA (‘there is no alternative’) factor.”

But that is no longer true. Now, there are several point solutions available which are part of the enterprise resource planning ecosystem. Many business process providers offer specific business processes as well as cross industry processes on demand. Cloud and software-as–a-service (SaaS) companies are changing delivery and payment parameters. “The industry is facing structural changes. All aspects of a solution — what clients are buying, in what format they are buying, how they want to pay, what value they expect, competition — are undergoing change simultaneously. The gaps between what clients are looking for and what the Indian IT firms have to offer is widening. The industry has not faced such issues before,” says Apte.

He points to another disturbing trend: Even as global IT spending is growing, it’s not coming to India. Instead, most of it is going to other companies. “Look at the growth of firms like Salesforce.com, Amazon Web Services (AWS) and Workday. Even cloud divisions of Oracle and Microsoft Dynamics have been doing well and so are numerous firms like Tableau, Marketo, etc. There are around 200 or 250 companies which came from nowhere and are today in the range of $200 million to $1 billion,” says Apte.

“The real problem for Indian IT services companies is that they occupy positions of very low strategic relevance with their clients.” –Ravi Aron

New Skills Are Required

Krishnan believes that Indian IT firms were successful in riding multiple waves like the shift from mainframe to client-server, Y2K, internet and e-commerce, social media and the mobile because “the core skills needed to succeed didn’t change dramatically — essentially good programming skills plus the ability to manage large teams across geographies.” He notes that while the programming languages and platforms did change, the ability of Indian companies to train large numbers of software professionals in new programming languages in short timeframes allowed them to stay ahead.

However, the latest wave embracing big data, machine learning and artificial intelligence requires fundamentally different skills. It’s more research-intensive. “Many existing employees can’t be re-trained for these requirements. And India’s engineering education will be unable to meet these needs, at least not immediately,” says Krishnan. According to a recent McKinsey & Company report, more than half of the 3.9 million people employed in the Indian IT sector will become “irrelevant” in the next three to four years.

Ganesh Natarajan, industry veteran, chairman of Nasscom Foundation and founder and chairman of 5F World, a platform for skills, startups and social ventures in India, describes the current scenario as “a perfect storm” created by three forces. The first is digital transformation of clients with applications and infrastructure moving to the cloud and clients asking for new services like mobility, analytics and cyber security which cannot be delivered using the traditional dual shore model. The second is automation of knowledge work, which is seeing traditional manpower intensive offshore services like applications management, infrastructure support and testing becoming automated and reducing or, in some cases, eliminating the need for manpower. Third are the forces of protectionism that is leading to tightening of visas and making cross-border movement of people extremely arduous.

“Each of three forces can have severe ramifications for the Indian IT services industry. Digital transformation can take away as much as 20% of existing services volumes, automation can eliminate 30% of manpower and protectionism can reduce revenue opportunities and profitability by at least 10%,” says Natarajan.

Transform or Perish

Clearly, the rules have changed for Indian IT firms. The big question is: Can they in fact get back into the game?

Only if they differentiate themselves, says Kartik Hosanagar, Wharton professor of operations, information and decisions. He suggests two strategies. One, become a partner that can guide CEOs with strategic initiatives like digital transformation. This will require them to be part of the “what to do” and “why do it” conversations and not just “how to do it.” Two, specialize and build deep expertise in certain areas. For example, CMOs are increasingly spending on IT including custom IT implementations. Another such area is Big Data and analytics. “Organizing into divisions or perhaps into sub-brands, each with deep expertise, is the way to go,” he says.

According to a recent McKinsey & Company report, more than half of the 3.9 million people employed in the Indian IT sector will become “irrelevant” in the next three to four years.

Chaudhuri suggests that while Indian IT firms have been making investments over the past five years in emerging technologies, they now need to scale up those efforts and do so quickly. “They need to increase the investments in those areas drastically, and hire top talent from established Western firms and startups alike. At the same time, they also need to leverage acquisitions of small firms and/or build alliances to rapidly increase access to those capabilities and be part of an ecosystem.”

Indian firms need to be innovative, agile and flexible, says Gartner’s Mishra. “Thinking out of the box will differentiate the winners. They must be able to predict the changes faster and adapt themselves to leverage it much ahead of others.”

For Natarajan, the most important imperative is to re-skill employees for the new digital challenges at a rapid place. “The winners will be those who use technology to enable just-in-time and on-the-job learning and are able to equip their workforce with skills needed to pivot their own careers as well as the organization.”

Apte offers an additional prescription. Since Indian IT companies have grown mainly in the era of client-pushed business growth, their corporate functions such as strategy, planning, market research and strategic marketing are not very strong. “They need to ramp-up on all these fronts. They need to invest much more on sales and marketing, grow their selling sophistication and competitive positioning. They also need to embrace a truly global delivery model where 40% of resources are placed in on-shore, near shore and other alternate geographies,” says Apte.

Looking Beyond H1-B

While the possible tightening of the H-1B visas in the U.S. is giving most Indian IT firms the jitters, Aron suggests that they can in fact turn this temporary adversity to long-term advantage if they can acquire some additional capabilities. He explains: “First they need to invest in the ability to translate business needs into software features – these are professionals that can talk to users (business managers) and translate their needs into a set of software features and then create a system of codification that can transfer this to the offshore production location.” In a study based on multiple years of data on offshore information services, which Aron conducted with former Wharton doctoral student Ying Liu, they showed that such codification capability improved both the output and quality of work and lessened the need for onshore managers.

The blended rate that Indian IT firms offer their clients usually combines a mix of offshore and onshore wages at 70:30 or 80:20 ratios. By developing this capability, Aron says, the onshore presence can be reduced to 2% to 3% of total project capacity. “By deepening this capability, Indian IT majors can actually make this a long-term competitive advantage and wean themselves away from the need for large numbers of H-1Bs.”

Indian IT firms could survive the many challenges earlier … “because they had the benefit of the TINA (‘there is no alternative’) factor.” –Sudin Apte

Another way to reduce dependence on H-1B visas is to focus more seriously for business from ASEAN, Middle East and Africa and other emerging markets. Currently, the bulk of their overseas client revenues come from the U.S. and Europe. “In ASEAN, the Middle East and Africa, a wave of automation is beginning to take place. IT spending in many of these countries is set to increase by 8% to 22% according to some industry reports. Many of these countries do not have local firms with the ability to strategize and provide consulting services and sell them on top of an ‘IT stack’ – a set of technology solutions that will make the strategies work. The time is right for Indian IT majors to take on these markets,” says Aron.

Of course, the challenge for Indian IT firms is that they need to make all these above suggested changes even while continuing to deliver the services that bring them the revenues at present. Some of them have already started making their moves. TCS, for instance, has been on a massive re-skilling exercise and has trained more than half of its 380,000 employees on digital platforms. Tech Mahindra is looking at its DAVID (digital, automation, verticalization, innovation and disruption) offering to keep pace with the evolving needs of its clients. It is also looking to collaborate and crowd-source instead of trying to build everything in-house and is working with more than 15 startups.

At Infosys, CEO Vishal Sikka is passionate about his ‘zero-distance’ strategy. In a recent interview with Knowledge@Wharton, Sikka said: “The idea is that we don’t just do what we are told, but in every single project, no matter what it is, no matter how mundane, no matter what area it is in, you do something innovative. You find some problem and you solve that problem, you go beyond the charter of the project and do something innovative to delight the client, and do something that they did not expect. Something bigger than what you were thinking about.”

The direction is right. Now it remains to be seen if Indian IT reaches the destination.


Reproduced from Knowledge@Wharton

  

The Democratization of Machine Learning: What It Means for Tech Innovation 04-15

The world of high-tech innovation can change the destiny of industries seemingly overnight. Now we are on the cusp of a new grand leap thanks to the democratization of machine learning, a form of artificial intelligence that enables computers to learn without being explicitly programmed. This process of democratization is already underway.

                                     Image credit : Shyam's Imagination Library

Last month, at the CloudNext conference in San Francisco, Google announced its acquisition of Kaggle, an online community for data scientists and machine-learning competitions. Although the move may seem far removed from Google’s core businesses, it speaks to the skyrocketing industry interest in machine learning (ML). Kaggle not only gives Google access to a talented community of data scientists, but also one of the largest repositories of datasets that will help train the next generation of machine-learning algorithms.

As ML algorithms solve bigger and more complex problems, such as language translation and image understanding, training them can require massive amounts of pre-labeled data. To increase access to such data, Google had previously released a labeled dataset created from more than 7 million YouTube videos as part of their YouTube-8M challenge on Kaggle. The acquisition of Kaggle is an interesting next step.

1. Highly scalable computing platforms
2. Even if specialized processors were available, not every company has the capital and skills needed to manage a large-scale computing platform needed to run advanced machine learning on a routine basis. This is where public cloud services such as Amazon Web Services (AWS), Google Cloud Platform, Microsoft Azure and others come in. These services offer developers a scalable infrastructure optimized for ML on rent and at a fraction of the cost of setting up on their own.
3. Open-source, deep-learning software frameworks

A major issue in the wide-scale adoption of machine learning is that there are many different software frameworks out there. Big companies are open sourcing their core ML frameworks and trying to push for some standardization. Just as the cost of developing mobile apps fell dramatically as iOS and Android emerged as the two dominant ecosystems, so too will machine learning become more accessible as tools and platforms standardize around a few frameworks. Some of the notable open source frameworks include Google’s TensorFlow, Amazon’s MXNet and Facebook’s Torch.

4. Developer-friendly tools

The final step to democratization of machine learning will be the development of simple drag-and-drop frameworks accessible to those without doctorate degrees or deep data science training. Microsoft Azure ML Studio offers access to many sophisticated ML models through a simple graphical UI. Amazon and Google have rolled out similar software on their cloud platforms as well.

5. Marketplaces for ML algorithms and datasets

Not only do we have an on-demand infrastructure needed to build and run ML algorithms, we even have marketplaces for the algorithms themselves. Need an algorithm for face recognition in images or to add color to black and white photographs? Marketplaces like Algorithmia let you download the algorithm of choice. Further, websites like Kaggle provide the massive datasets one needs to further train these algorithms.

“The final step to democratization of machine learning will be the development of simple drag-and-drop frameworks accessible.”

All of these changes mean that the world of machine learning is no longer restricted to university labs and corporate research centers that have access to massive training data and computing infrastructure.

What are the implications?

Back in the mid- and late-1990s, web development was done by specialists and was accessible only to firms with ample resources. Now, with simple tools like WordPress, Medium and Shopify, any lay person can have a presence on the web. The democratization of machine learning will have a similar impact of lowering entry barriers for individuals and startups.

Further, the emerging ecosystem, consisting of marketplaces for data, algorithms and computing infrastructure, will also make it easier for developers to pick up ML skills. The net result will be lower costs to train and hire talent. We think that the above two factors will be particularly powerful in vertical (industry-specific) use cases such as weather forecasting, healthcare/disease diagnostics, drug discovery and financial risk assessment that have been traditionally cost prohibitive.

Just like cloud computing ushered in the current explosion in startups, the ongoing build-out of machine learning platforms will likely power the next generation of consumer and business tools. The PC platform gave us access to productivity applications like Word and Excel and eventually to web applications like search and social networking. The mobile platform gave us messaging applications and location-based services. The ongoing democratization of ML will likely give us an amazing array of intelligent software and devices powering our world.

Highly scalable computing platforms

Even if specialized processors were available, not every company has the capital and skills needed to manage a large-scale computing platform needed to run advanced machine learning on a routine basis. This is where public cloud services such as Amazon Web Services (AWS), Google Cloud Platform, Microsoft Azure and others come in. These services offer developers a scalable infrastructure optimized for ML on rent and at a fraction of the cost of setting up on their own.
Open-source, deep-learning software frameworks

A major issue in the wide-scale adoption of machine learning is that there are many different software frameworks out there. Big companies are open sourcing their core ML frameworks and trying to push for some standardization. Just as the cost of developing mobile apps fell dramatically as iOS and Android emerged as the two dominant ecosystems, so too will machine learning become more accessible as tools and platforms standardize around a few frameworks. Some of the notable open source frameworks include Google’s TensorFlow, Amazon’s MXNet and Facebook’s Torch.
Developer-friendly tools.

The final step to democratization of machine learning will be the development of simple drag-and-drop frameworks accessible to those without doctorate degrees or deep data science training. Microsoft Azure ML Studio offers access to many sophisticated ML models through a simple graphical UI. Amazon and Google have rolled out similar software on their cloud platforms as well.
Marketplaces for ML algorithms and datasets.

Not only do we have an on-demand infrastructure needed to build and run ML algorithms, we even have marketplaces for the algorithms themselves. Need an algorithm for face recognition in images or to add color to black and white photographs? Marketplaces like Algorithmia let you download the algorithm of choice. Further, websites like Kaggle provide the massive datasets one needs to further train these algorithms.

“The final step to democratization of machine learning will be the development of simple drag-and-drop frameworks accessible.”

All of these changes mean that the world of machine learning is no longer restricted to university labs and corporate research centers that have access to massive training data and computing infrastructure.
What are the implications?

Back in the mid- and late-1990s, web development was done by specialists and was accessible only to firms with ample resources. Now, with simple tools like WordPress, Medium and Shopify, any lay person can have a presence on the web. The democratization of machine learning will have a similar impact of lowering entry barriers for individuals and startups.

Further, the emerging ecosystem, consisting of marketplaces for data, algorithms and computing infrastructure, will also make it easier for developers to pick up ML skills. The net result will be lower costs to train and hire talent. We think that the above two factors will be particularly powerful in vertical (industry-specific) use cases such as weather forecasting, healthcare/disease diagnostics, drug discovery and financial risk assessment that have been traditionally cost prohibitive.

Just like cloud computing ushered in the current explosion in startups, the ongoing build-out of machine learning platforms will likely power the next generation of consumer and business tools. The PC platform gave us access to productivity applications like Word and Excel and eventually to web applications like search and social networking. The mobile platform gave us messaging applications and location-based services. The ongoing democratization of ML will likely give us an amazing array of intelligent software and devices powering our world.

Market-based access to data and algorithms will lower entry barriers and lead to an explosion in new applications of AI. As recently as 2015, only large companies like Google, Amazon and Apple had access to the massive data and computing resources needed to train and launch sophisticated AI algorithms. Small startups and individuals simply didn’t have access and were effectively blocked out of the market. That changes now. The democratization of ML gives individuals and startups a chance to get their ideas off the ground and prove their concepts before raising the funds needed to scale.
But access to data is only one way in which ML is being democratized. There is an effort underway to standardize and improve access across all layers of the machine learning stack, including specialized chipsets, scalable computing platforms, software frameworks, tools and ML algorithms.

“Just like cloud computing ushered in the current explosion in startups … machine learning platforms will likely power the next generation of consumer and business tools.”

1. Specialized chipsets

Complex machine-learning algorithms require an incredible amount of computing power, both to train models and implement them in real time. Rather than using general-purpose processors that can handle all kinds of tasks, the focus has shifted towards building specialized hardware that is custom built for ML tasks. With Google’s Tensor Processing Unit (TPU) and NVIDIA’s DGX-1, we now have powerful hardware built specifically for machine learning.

Reproduced from Knowledge@Wharton

Creating a Pension to Fit the Needs of the Rural Poor 03-25

Pensions are, in a sense, a necessary by-product of a rich economy. But what will it take to sell the idea to the rural poor? Especially when their income (never particularly substantial) is seasonal, increasing at harvest time and with demand in the cities for construction-related labor. What are the inducements that can convince them to invest for a future forced upon them by the changing social structure?

Olivia S. Mitchell, a Wharton professor of business economics and public policy and executive director of the Pension Research Council, and Anita Mukherjee, a professor at the Wisconsin School of Business at the University of Wisconsin-Madison, set out to answer these questions in a research paper titled, “Assessing the Demand for Micropensions among India’s Poor.” They chose India as the subject country because it is an ideal setting to study the market for micropensions, or pension plans designed for low-income individuals; the country’s new pension system is designed to reach informal sector workers. A micropension product — Swavalamban — has been applicable to all citizens in the unorganized sector who have joined the National Pension Scheme since 2011.

This scheme was funded by grants from the government. It has been replaced with the Atal Pension Yojana, in which all subscribing workers below the age of 40 are eligible for pension of up to Rs. 5,000 ($74) per month after turning 60. In the Atal Pension Yojana, for every contribution made to the pension fund, the central government also co-contributes 50% of the total contribution or Rs. 1,000 per annum, whichever is lower, to each eligible subscriber account, for a period of five years. The minimum age of joining the Atal Pension is 18 and the maximum is 40. The age of exit and the start of the pension is 60.

There was a significant need for a pension system in India. “According to the government of India’s Planning Commission (2014), nearly 30% of the country’s 1.2 billion population lives below the poverty line (BPL),” the researchers write. “At the same time, according to the Population Research Bureau, the share of India’s BPL population age 60 or older is expected to increase from 8% in 2010 to 19% in 2050. Many of these older persons work in the unorganized sector and, as such, lack the identification and proof of employment documents required for accessing basic financial services. Nevertheless, current research estimates that about 80 million of these workers are capable of saving for retirement and the untapped savings are in the order of $2 billion.” 

There are other systemic pressures at work. “In India, as in many developing countries, younger adults are moving from rural to urban areas for economic opportunity,” Mitchell and Mukherjee tell Knowledge@Wharton. “Often this means that parents are left behind in the rural areas and, though they may receive financial support from their children, this revolution in traditional family structure can make older people more vulnerable. As a result, older cohorts today may be more interested in a micropension product than they were in the past.”

“Our research shows that individuals broadly preferred a micropension plan that offers withdrawals starting at age 60, as well as partial withdrawals beforehand, to other variants that had different access features.”

Micropension Options

The experiment was conducted in two of the 71 districts in the central Indian state of Uttar Pradesh — Fatehpur and Siddharthnagar. Overall, the statistics are comparable to those of BPL populations. The average survey respondent was 43 years old, owned land, was illiterate and had minimal schooling. The two most common livelihood activities that the respondents engaged in were farming via cultivation of one’s own land (37%), and agricultural labor supplied to non-owned farms (34%). With respect to educational attainment, more than 60% had never attended school, while 21% had five to 10 years of formal schooling. Insurance access among the respondents was low, at 20% of the total sample population. But 66% held a life insurance policy. Saving penetration was relatively high, with 55% having access to a formal saving account. Respondents who had saved had an average balance of Rs. 3,000 in their accounts. 

The study placed the existing pension plan as the baseline. An appropriate information and educational scheme was unfolded for the respondents. They were then asked two sets of questions.

Group 1 was asked about variants 1B, 1C and 1D, and Group 2 was asked about variants 2B, 2C and 2D. The first variant (A) is the basic micropension product that was then being offered by the Indian government. The other variants included early withdrawal (1B), where the eligibility age was 55 instead of 60; a lower matching rate of 50% instead of 100% (1C); no early withdrawal (1D); delayed withdrawal, where the eligibility age was 65 instead of 60 (2B); a higher matching rate of 150% instead of 100% (2C), and option for full withdrawal at age 60 (2D).

“Our research shows that individuals broadly preferred a micropension plan that offers withdrawals starting at age 60, as well as partial withdrawals beforehand, to other variants that had different access features,” say the authors. “This is similar to the micropension currently on offer in India. One exception to this, not surprisingly, is that our respondents preferred an option that boosted government matches to their plan contributions.”

“Previous studies on the financial lives of the poor have documented that their incomes are irregular and highly seasonal. As a result, requiring them to pay significant sums in just a few payments could significantly reduce demand for the pension product.”

The study results included a few small surprises. Respondents were asked to rank their levels of trust in six institutions on a scale of one to five, with a level of one indicating a complete lack of trust and a level of five representing a very high level of trust. Banks topped the list with a score of 4.49. The government clocked in with 4.22, while non-governmental organizations (NGOs) at 2.55 and village councils (3.34) were regarded as relatively less trustworthy. “We do not know for certain why NGOs were less trusted relative to government entities, but it could be because they had a smaller presence in the areas we studied,” say the authors.

These results are informative about whether microfinance institutions or local governments are likely to be successful intermediaries in the micropension product. Since the government was viewed as a trusted entity, having government support for micropensions may have helped boost adoption and contributions, the researchers note.

The faith put in banks is understandable. “For some time, there has been a growing awareness of the benefits of secure banking, even in remote areas of India,” say the authors. “Moreover, technological improvements using audio cues and fingerprinting have helped expand banking to those who cannot read or write. The Jan Dhan Yojana plan was an important vehicle used to include many rural Indian families in the formal banking system. The Indian government’s demonetization policy has also spurred an interest in enhancing poor peoples’ access to banking, as it created cash constraints throughout the economy.”

Pointing out that India’s recent effort to eliminate larger banknotes was intended to crack down on the “shadow” economy,” the authors add: “It has prompted even poor and rural communities to take up mobile payment services. One example is Paytm, a phone-based system for transferring payments from a bank account to cover people’s everyday liquidity needs.”

Growing the Appeal

The paper has some advice for governments or other entities that are developing micropension products. The researchers write that an effective retirement savings device for the poor must take into account cash-flow needs, income seasonality, competing spending priorities and alternative investment options. They note that respondents to the study were among the poorest in their communities and relied heavily on income from agriculture.

“Previous studies on the financial lives of the poor have documented that their incomes are irregular and highly seasonal. As a result, requiring them to pay significant sums in just a few payments could significantly reduce demand for the pension product,” the researchers write. “For this reason, offering frequent opportunities for such individuals to contribute can be critical to the scheme’s success.”

“To grow [the appeal of micropensions], the focus should be on proper investments (inflation is currently around 10%) and policyholder retention.”

The ability to contribute frequently to an agent who makes door-to-door visits could also help explain why people were interested in micropensions even when making fixed deposits at an Indian bank would offer them high annual returns. “Our initial hypothesis in designing this survey experiment was that some respondents would exhibit a preference between early or late eligibility for withdrawal, and that we would be able to identify the heterogeneity driving these decisions,” the researchers write. “Instead, we found that with the exception of the high match variant, respondents were less willing to adopt or contribute to the alternatives to the baseline micropension product.”

Regarding the faith in the government, the authors elaborate: “In our study setting of rural Uttar Pradesh, one of India’s poorest states, individuals receive many benefits from the government such as ration cards for discounted groceries and free health care. We believe that this repeated and positive interaction with the government has engendered the high level of trust we found.” In addition, the country’s largest life insurance company, the Life Insurance Corporation of India, is also state-owned and enjoys a high level of trust. The authors note that the low levels of education and financial literacy found in the communities they studied highlight the need to provide a financial literacy program in conjunction with the micropension. 

“We believe that the move toward digitized finance can facilitate automatic contributions to enhance the appeal of the micropension product in India,” the authors say. “Yet for a micropension plan to work for India’s poor, it must allow policyholders to contribute according to the seasonal incomes they earn while encouraging savings sufficient to provide meaningful support in old age.”

The paper finds that the Indian government’s current micropension product is appealing to the audience it is meant to reach, Mitchell and Mukherjee say. “To grow that appeal, the focus should be on proper investments (inflation is currently around 10%) and policyholder retention,” they add. “The Gates Foundation is also pushing innovations in digital finance [in India] and elsewhere in the developing world, as a means to help the poor do more to save, invest, borrow and mitigate financial risks.”


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Want to Get Ahead? Work on Your Improv Skills 06-08

Want to Get Ahead? Work on Your Improv Skills

MIC LISTEN TO THE PODCAST:

Kelly Leonard and Tom Yorton of The Second City talk about their new book.

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Authors@Wharton series.Kelly Leonard and Tom Yorton of The Second City comedy theater argue that improvisational comedy and business have more in common than one might first think. In their new book, Yes, And: How Improvisation Reverses ‘No, But’ Thinking and Improves Creativity and Collaboration, they share their insights on innovation and team-building.

Laura Huang: This book had me laughing, cringing and taking notes — all at the same time. There are so many useful tidbits in here and also some really humorous anecdotes. Can you tell us about your motivations for writing Yes, And?

Kelly Leonard: Fifteen years ago, if you had said Second City was going to put its name on a business book, we would have been like, “You’re insane.” But when Tom started with the company, which was about 16 years ago, he brought with him a fresh light to the way Second City was working with clients, and he really expanded upon the business. The collaboration here was interesting because I’ve been at Second City for 26 years. It’s really stage-meets-business because Tom has a business career and I’m a theater guy. Second City is a 56-year-old theater. But what we really are is an innovation laboratory. Over about 56 years, we have had groups of people working together to create something out of nothing. We are a content creator, and we never stop. They keep doing it in these groups, and we’re very, very successful at it.

At a certain point, you go, “That’s got to be translatable.” Look at all the famous people who have leapt from the stages to the screen. I’d like to think it’s my great eye for talent. But it’s not. Because I wasn’t there when Alan Arkin started. I was there when Tina Fey started. But there’s this long tradition of building talent out of these groups to have success. When we started taking it into businesses, and having more and more success, we turned to each other — this was two, three years ago — and said, “God, we’re idiots if we don’t write this book.”

Tom Yorton: Absolutely. For me, business is an act of improvisation.  Twitter For all the planning, all the controls, all the governance, and all the things we try to do to keep the variables down, business doesn’t cooperate. The world is a gray place. This improv toolkit that we talk about is really important. It has never been more important than it is now. That was all part of the motivation for writing the book.

Huang: What I was really struck by was the way you were able to put this framework around teaching soft skills. Can you talk a little bit about these soft skills?

Yorton: I don’t think, in any part of my education, anyone ever taught me to listen. Listening is kind of important, it turns out. In fact, it’s vital…. When you improvise, you do practice it. You have to. So, there are specific listening exercises we offer in the book that people can take home with them. But you’ve got to put it into practice. Everyone understands the need to go to a gym to work out your muscles. But where do you go to work out your social skills? Improvisation is yoga for your social skills. It puts you in a mindful, present place, where you’re concentrating with eye contact with the person in front of you. You’re not thinking about before, or about after. When you’re operating “Yes, And,” which is the title of our book, you’re not saying no. You are in agreement and affirming, and you’re building something with someone else. The way you feel after you do that, especially after a three-hour improv class, is the best. If we can bring that best self into our workplace, everything gets better.

Leonard: We talk about the soft skills that separate the stars from the also-ran in business. It’s how to listen, how to read a room, how to work collaboratively on teams, how to respond to failure and how to be nimble and agile and adaptive when the unexpected happens. Those are really foreign skills to many people. You could have all the quantitative skills, and you could have all the strategy skills, and all that other stuff. They are important skills to have — make no mistake –but unless you can work well with an ensemble, create something out of nothing, and respond to the unexpected, you’re only gonna go so far in business.

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