The Money Worshipers

money worshiper

The Global Index of Religion and Atheism Report 2012 results indicate that just 59 percent of world population was religious last year. Even India, the land of prayers and spirituality is showing a declining trend in belief in God. In 2005, 87% Indians believed in religion. While in 2012, 81% Indians declared themselves religious.

In Indian society,  the focus has shifted on earning money in the last decade. Money has become the new God.

The belief is that money makes one happy, though psychological studies show it is an open question. Some studies show that money does contribute to happiness; some show that beyond a point, money doesn’t add anything to happiness quotient. On the other hand, the law of diminishing returns applies to money as well. Nassim Taleb analysed that after a certain point, the pleasure in earning more money is less than the fear of losing it.

I don’t have the answer to whether money makes a person happier. Yes, it does provide a whole lot of comforts. But beyond that, there are others aspects of life that contribute to happiness. So the question is why we see more people willing to compromise their morals for the sake of money. One hears often this explanation from a person who is compromising morals for money – “You know the world has changed. What to do?” Basically, they are saying – “I have changed and I want to blame my greed on the society rather than take individual responsibility”. We want to avoid analyzing our thoughts and motives deeply, because we will get very unpleasant answers about ourselves.

A joke really sums up these thoughts – A man bought a new Mercedes and parked it in front his house for neighbors to see. While he was getting out of the car, a truck drove close by, and disjointed the door of the car. The man called the police, who came immediately. The man said – “This truck driver damaged my car,  see my car door”. The police officer said – “Sir, do you realize that your arm is also detached”. The man replied – “Oh shit, my Rolex is damaged”. It might sound far-fetched that a person doesn’t realize physical damage to self, but most of us do ignore the internal damage pursuit of money causes us.

Quite a few of our prayers to God revolve around money. God, get me this deal (subconsciously – I will earn a lot of money). God, give me a good spouse (subconsciously – a rich spouse so that I can live in luxury). We are not above bribing God too. We promise to do x,y, z if we get what we want. However, if we face difficult times our faith disappears. We are unhappy and miserable. We don’t think that God may have gifted us the sword to cut our greed. We ourselves can remove the chains tying us to the greed.

Rabindranath Tagore in Gitanjali displays his profound understanding of the same. The English translation of the incredible verse is below:

He whom I enclose with my name is weeping in this dungeon. I am ever busy building this wall all around; and as this wall goes up into the sky day by day I lose sight of my true being in its dark shadow.

 I take pride in this great wall, and I plaster it with dust and sand lest a least hole should be left in this name; and for all the care I take I lose sight of my true being.

 I came out alone on my way to my tryst. But who is this that follows me in the silent dark? I move aside to avoid his presence but I escape him not.

 He makes the dust rise from the earth with his swagger; he adds his loud voice to every word that I utter. He is my own little self, my lord, he knows no shame; but I am ashamed to come to thy door in his company.

 ‘Prisoner, tell me, who was it that bound you?’

 ‘It was my master,’ said the prisoner. ‘I thought I could outdo everybody in the world in wealth and power, and I amassed in my own treasure-house the money due to my king.

 When sleep overcame me I lay upon the bed that was for my lord, and on waking up I found I was a prisoner in my own treasure-house.’

 ‘Prisoner, tell me, who was it that wrought this unbreakable chain?”

 ‘It was I,’ said the prisoner, ‘who forged this chain very carefully. I thought my invincible power would hold the world captive leaving me in a freedom undisturbed.

 Thus night and day I worked at the chain with huge fires and cruel hard strokes. When at last the work was done and the links were complete and unbreakable, I found that it held me in its grip’.”

For all our human insight and wisdom, we have tied ourselves in chains. We don’t want to break them, as it will require a lot of strength, so we continue to complain about them. We forget, a rose blooms on a stem of thorns.

Closing thoughts

 When we think about happy times, most of us have some memories of childhood. It was the age of innocence where we couldn’t even count money. All that mattered was the love of our family and the mischief we could get into with our friends. We walk such a long distance in our adult life to pursue things, than be blissful internally. It is out of fashion to discuss it, as the cynics will call us utter fools out of touch with reality. So let me open the question to you.

References:

  1. Global Index of Religion and Atheism Report: Number of Atheists Increased on Global Level
  2. Gitanjai – by Rabindranath Tagore 

 

Guiding Principles of Nelson Mandela

Wishing Mr. Mandela A Very Happy 95th Birthday.

nelson young Mr Mandela inspired South Africans to fight against apartheid and the world population to strive for equality. He led a life of meaning and broke all the chains that imprisoned him and his community. To free his people, he walked over landmines, made prison his political playground and sacrificed his personal life. In his own words –

It was this desire for the freedom of my people to live their lives with dignity and self-respect that animated my life, that transformed a frightened young man into a bold one, that drove a law-abiding attorney to become a criminal, that turned a family-loving husband into a man without a home, that forced a life-loving man to live like a monk. I am no more virtuous or self-sacrificing than the next man, but I found that I could not even enjoy the poor and limited freedoms I was allowed when I knew my people were not free.”

His life message is clear –  Life is not about whether one lived on bed of roses. It is about how one plucked all the thorns that were hurting and cleared the road ahead for others.

There are very few leaders of his calibre in the world. His autobiography – Long Road to Freedom – draws the essence of the man and his guiding principles.

1)    Privileges by bloodline – I maintain that nurture, rather than nature, is the primary mould of personality

As a child Mr. Mandela was neither the most intelligent or talented in his school. He was average in studies, sports and arts. As a young man he initially didn’t understand the magnitude of racial discrimination and wished just to have a job to support his family. Though he belonged to an esteemed South African family, he realized that wasn’t sufficient. As he said –

“No one knew or even cared that I was a descendant of the illustrious Ngubengcuka. The boarding master received me without a blowing of trumpets and my fellow students did not bow and scrape before me. At Clarkebury, plenty of the boys had distinguished lineages, and I was no longer unique. This was an important lesson, for I suspect I was a bit stuck up in those days. I quickly realized that I had to make my way on the basis of my ability, not my heritage. Most of my classmates could outrun me on the playing field and outthink me in the classroom, and I had a good deal of catching up to do.”

His commitment to the political cause grew over time. He learnt the ropes from his mentors and colleagues. He became a great leader after many trial and errors, failed miserably repeatedly and continued on the journey. His choices made him a great leader. Leaders grow and mature. They are  not born.

2)     Leadership – A leader is like a shepherd. He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind

Mr Mandela learnt that leader has to be like a shepherd when he attended his regent’s gatherings as a child. He realized that in the  tribal hearings, after explaining the nature of the meeting, the chief listened to everyone and didn’t utter a word.  Some speakers vocally disagreed with him and criticized him, but still their views were valued. Consensus approach was followed and the minority concerns weren’t overlooked in favour of the majority.

He said – “A minority was not to be crushed by majority.” He displayed these principles throughout his leadership. During the freedom struggle he formed alliances with the communists and Indians. On obtaining freedom, he assured the fights that he didn’t want them to take to the sea. They would retain their place and rights in South Africa. They had nothing to be scared of. South Africa was for all people who lived there -white and black.

3)     Dealing with the enemy – Even as a boy, I defeated my opponents without dishonoring them.

Nelson Mandela maintained the dignity of his opponents even while they humiliated him at every turn. He learnt the lesson in childhood when he attempted to ride a donkey in front of his friends. The donkey threw him off, he became the butt of the jokes of his friends and lost face. When he regained his freedom after 27 years of captivity, he didn’t hate the white people, he hated the system which dehumanized people. His deep understanding of human nature is narrated below:

“Freedom is indivisible; the chains on any one of my people were the chains on all of them, the chains on all of my people were the chains on me. It was during those long and lonely years that my hunger for the freedom of my own people became a hunger for the freedom of all people, white and black. I knew as well as I knew anything that the oppressor must be liberated just as surely as the oppressed. A man who takes away another man’s freedom is a prisoner of hatred, he is locked behind the bars of prejudice and narrow-mindedness. I am not truly free if I am taking away someone else’s freedom, just as surely as I am not free when my freedom is taken from me. The oppressed and the oppressor alike are robbed of their humanity.”

4)    Impact of inequality – It was not lack of ability that limited my people, but lack of opportunity.

Around the world, inequalities in income have resulted in the poor and underprivileged struggling for food, clothing, shelter and an education. The blacks were denied fundamental human rights that even took away the option to dream of a glorious life.  His poignant words describe the plight of the people:

“They will cough their lungs out deep in the bowels of the white man’s mines, destroying their health, never seeing the sun, so that the white man can live a life of unequaled prosperity. Among these young men are chiefs who will never rule because we have no power to govern ourselves; soldiers who will never fight for we have no weapons to fight with; scholars who will never teach because we have no place for them to study. The abilities, the intelligence, the promise of these young men will be squandered in their attempt to eke out a living doing the simplest, most mindless chores for the white man.”

Unfortunately, nearly 25% of the world population still is in dire straits because money measures the success of a man. A skyscraper built in a man’s name makes him feel on the top of the world when he just needs to lie on the grass at night and see the stars shining brightly in the sky.

5)      Moral Dilemmas — I thought what I was doing was morally right, I was still uncertain as to whether it was the correct.

A unique attribute of Mr. Mandela’s personality is that he often questioned himself whether he was taking the right decision. He saw both sides of the coin and realized that sometimes there were no easy answers.

One such instance was in his college life. He was on night watch to see that other students followed the rules. However, he saw another student who had similar responsibilities misusing his privileges. He then thought –  Quis custodiet ipsos custodes?” (Who will guard the guardians themselves?). He wondered whether it was right to report the other students when the one in authority was misusing his?  In another situation he was putting his life on the line and he questioned himself –

“Was I sabotaging my academic career over an abstract moral principle that mattered very little? I found it difficult to swallow the idea that I would sacrifice what I regarded as my obligation to the students for my own selfish interests. I had taken a stand, and I did not want to appear to be a fraud in the eyes of my fellow students. At the same time, I did not want to throw away my career at Fort Hare.”

 6)     Love and family – I do not mean to suggest that the freedom struggle is of a higher moral order than taking care of one’s family. It is not; they are merely different.

Another aspect that he continually questioned was whether he was right in sacrificing his family obligations for the freedom of South African people.

“I wondered — not for the first time — whether one was ever justified in neglecting the welfare of one’s own family in order to fight for the welfare of others. Can there be anything more important than looking after one’s aging mother? Is politics merely a pretext for shirking one’s responsibilities, an excuse for not being able to provide in the way one wanted?”

 Mr. Mandela gave up the joy of living at his home with his wife and children. He never saw his children grow up. He became the father of the nation without being able to enjoy the simple pleasure of being a father to his children.

Closing Thoughts

nelson oldI think all of us wonder how a person can live 27 years in prison, face indignities and humiliations and come out of it with such a remarkable and generous spirit. So I am closing with his inspiring words:

“I never lost hope that this great transformation would occur. Not only because of the great heroes I have already cited, but because of the courage of the ordinary men and women of my country. I always knew that deep down in every human heart, there is mercy and generosity. No one is born hating another person because of the color of his skin, or his background, or his religion. People must learn to hate, and if they can learn to hate, they can be taught to love, for love comes more naturally to the human heart than its opposite. Even in the grimmest times in prison, when my comrades and I were pushed to our limits, I would see a glimmer of humanity in one of the guards, perhaps just for a second, but it was enough to reassure me and keep me going. Man’s goodness is a flame that can be hidden but never extinguished.”

References:

Long Road to Freedom – Autobiography of Nelson Mandela

Malala Yousafzai – The Youngest World Leader

A kid can take on terrorists of the world. This isn’t a joke. Malala Yousafzai, the 16-year-old education activist from Pakistan did just that. Last year Taliban shot her in the head and killed most of her friends. She recovered after a brain surgery and gave a speech at  the United Nations. She can teach  adults about leadership. . She has shown courage under fire. She has become an inspiration for young children and women to fight for equal rights. She is battling adversity non-violently with determination and persistence for the grater good of humanity.  She has become the voice of the young, has put their cause above her safety and life. Now this is a leader worth following. Below is the speech she gave at United Nations.

We need more youngsters to lead the world. Their idealistic thought process, commitment and courage can change the world. Unfortunately, age has only taught us to be so-called practical realist where the focus is on earning money, building a career and looking after our immediate family. We consider ourselves mature when we are able to put our own selfish interests first and foremost at the cost of harming the world. The old cannot change since the thought process and habits are ingrained in them. They have become jaded and cynical as life has dealt them with many wounds. They didn’t have the courage and character to stop being victims.

The young can build a better world for themselves without relying on the older generation. Take the torch in your own hands to  lead the world. Become an inspiration.

Price of a Soul

Soul

At fourteen, I read Ayn Rand’s “The Fountainhead” and fell in love with it. It is one of my favorites and last week I read it again. I still found it mind-blowing. This time, Toohey’s character got me thinking.

In the last few chapters of the book, Ellsworth Toohey speaks about his devious plan to portray mediocre people in the media as supremely talented to gain power over public. He planned to rule the world by ruining the thought process of the public, demolishing the careers of great thinkers, and glorifying stupidity.

His conversation with Peter Keating, who was one of his experimental puppets, reveals the crux of human behavior and our vulnerability for exploitation. He said –

“It is only about discovering the lever. If you learn to rule one single man’s soul, you can get the rest of mankind. It is the soul, Peter, the soul. Not whips or swords or fire or guns. That is why the Caesars, the Attilas, the Napoleons were fools and did not last. We will. The soul, Peter is that which can’t be ruled. It must be broken. Drive a wedge in, get your fingers on it – the man is yours. You won’t need a whip – he will bring it to you and ask to be whipped. Set him in reverse and his own mechanism will do your work for you. Use him against himself.”

Isn’t this what our education system and media done to us?

When was the last time our teachers taught us – “Lie down on the grass and let your tensions drain away. Look at the vast expanse of sea to be at peace.” They teach students – “Own a lot of land and you will be rich. Get a ship to cross the ocean with your merchandise.”

Our education system on the pretext of teaching fundamentals and preparing us for life, teaches us that conformity, obedience and pursuing a career for success are the greatest virtues. How many schools teach children that creative thinking, being different or spending extraordinary time on hobbies just for simple pleasure of life, is something worth pursuing and achieving?

By teenage, the fashion magazines decide the length of hair, size of waist and color of dress that are suitable for the season. If a teenager refuses to follow, others label the poor kid weird.

As we grow older, the competition becomes of the gadgets we have, than our thoughts and principles. The neighbor has an iPod, Mercedes and x, y and z. So I also want the same. Have we every compared ourselves to say “the neighbor has such excellent thoughts for humanity, works diligently for the benefit of humanity and always  walks the high road on principles, hence, I want to be the same.”

If we aren’t thinking in these lines, then I would say Toohey’s words are correct, our education system and media took our souls not the devil. Moreover, if we are questioning how it has happened, then the following quote of Toohey’s captures the problem though said with a different slant.

“Make man feel small. Make him feel guilty. Kill his aspiration and integrity. That’s difficult. The worst among you gropes for an ideal in his own twisted way. Kill integrity by internal corruption. Use it against itself. Direct it of a goal destructive of all integrity.”

The key is – “Kill integrity by internal corruption.” From childhood, we are taught success matters. Success is equal to money plus position. Organization position gives power. That puts you in top bracket of society. This idea of success destroys all integrity within us. For the sake of money or position, we are willing to make compromises one after another. Without it, we feel small and useless. The drive for money makes the man poor in character and principles. At the start of our careers, we willingly hand over a part of our souls for a few dollars. By the time we retire, we are uncertain whether we have a soul left.

Then we lament on lack of ethics and profess horror on breach of ethics by the people we have put on the pulpit. In most of our adult age, when we haven’t had a serious thought on ethics or made an effort to learn ethical behavior, can we really assume it will occur by itself? We want to delude ourselves into thinking we are a good people, living a principled life because not thinking in those terms will destroy our self-image. . We cannot face the fact that 99% of us have conducted some crime or the other sometime in life. We cannot afford to face reality if we want to live.

Closing thoughts  

Ayn Rand aptly put it – “Enshrine mediocrity and the shrines are erased.” By putting money as a standard for measuring success, we have enshrined mediocrity of character. Nobility of character lost its glory when money epitomized the crowned king of success. They why show surprise, anger or disgust when our much hyped heroes breach ethics. Should we punish them or the society for teaching them the wrong definition of success? Can we punish a person for doing a better sales job on selling their soul than the rest of us?

 

References: 

Free download of the book The Fountainhead.  

India’s Failures In Disaster Management

Floods in North India have left over 70,000 people stranded and 550 dead. Loss to property will run in billions. The on-going rescue efforts are yielding results but very slowly.  The uncoordinated recovery response and efforts indicate lack of disaster management capabilities of the state.

India as a country does not have a properly implemented disaster management system. The Comptroller and Auditor General of India recent report – “Performance Audit Report on Disaster Management of India” highlights glaring deficiencies. Below are some of the key observations from the report. It is sufficient to make Indian citizens sleepless at night.

1.      An Introduction

India with its geo-climatic conditions, high density of population, socio-economic disparities,  politics and troubled relationship with neighboring countries, has high risk of natural and man-made disasters. In respect to natural disasters, it is vulnerable to forest fires, floods, droughts, earthquakes, tsunamis and cyclones. Man-made disaster risks are (1)war, bombing, terrorist attacks, and riots, (2) chemical, biological, radiological, and nuclear crises, (3) hijacks, train accidents, airplane crashes and shipwrecks, etc.

Government passed the Disaster Management (DM) Act in 2005. According to the act, National Disaster Management Authority (NDMA) was formed under the Prime Minister and the National Executive Committee (NEC) developed National Policy of Disaster Management, which was approved in 2009.

2.      Failure in Formation of Disaster Recovery Plan

Until mid-2012, the National Executive Committee (NEC) had not prepared India’s National Plan for Disaster Management. Surprisingly, though India has faced a major disaster each year since development of DM Act, NEC has not met after May 2008. The Working Group it formed in 2007 never met after that.

Then the buck was passed to Ministry of Home Affairs (MHA) to prepare a National Response Plan (NRP). It directed National Institute of Disaster Management (NIDM) to prepare the NRP. NIDM submitted a draft plan in April 2012, which was circulated by MHA to other departments.

The other two components of the National Plan for Disaster Management are National Mitigation Plan and National Capacity Building Plan. While the latter is still under preparation, some departments have submitted the mitigation plans.

Things are equally bad at State level. Just 14 states have submitted their State Disaster Management Plan.  The lackadaisical attitude shows government’s complete disregard towards national and human safety.

3.      Performance of National Disaster Management Authority

The CAG report states that – “So far, no major project taken by NDMA has seen completion. It was noticed that NDMA selected projects without proper groundwork, and as a result either the projects were abundant midway or were incomplete after a considerable period of time.”

The projects included earthquake vulnerability risk assessment, micro zonation of major cities, landslide risk assessment, national flood risk mitigation, national school safety program, mobile radiation detection system, national disaster communication system, etc. The natures of the projects indicate their criticality and importance for disaster management. Even the hazard maps for earthquakes, landslides, cyclone, tsunami and floods are incomplete or unavailable. Without these maps, the government is not even in a position to identify the high-risk areas.

The main reasons for delays in disaster management project planning are lack of committed groups, failure in communicating and coordinating with various ministries, shortage of staff and insufficient knowledge and expertise in these fields. Though funds were approved and allocated for various phases, things just haven’t got beyond conceptualization stage.

4.      Mis-utilization of Funds

Government constituted National Disaster Response Fund and State Disaster Response Fund to deal with the disasters. The government approved Rs 33,580.93 crores for State Disaster Response Funds for a period of five years – 2010-2015. The report indicates that Ministry of Home Affairs is not receiving appropriate information from states on utilization of funds. Audit findings reveal that some states have misutilized funds for expenditures that were not sanctioned for disaster management. There was in a few cases significant delay in releasing funds. Additionally, some States didn’t invest the funds thereby incurring huge interest losses. This shows financial indiscipline in states management of funds.

Secondly, a separate National Disaster Mitigation Fund was to be constituted for reconstruction and restoration activities after the disaster. However, this has not been done till date. The States were required to form State Disaster Mitigation Fund and District Disaster Mitigation Fund. Quite a few states haven’t created the funds. Uttarakhand, the state reeling from floods, has just a State Disaster Mitigation Fund.

The situation is so bad, that the National Disaster Response Reserve of Rs 250 crores to buy relief material (blankets, tents, etc.) was not operational until audit time.

5.      Disaster Management Communication

Department of Space commenced a Disaster Management Support programme in March 2003. The main seven projects started between 2003 to 2007 are incomplete till 2012. These are namely – National Disaster Management Informatics System, National Disaster Communication Network, Doppler Weather Radars, Satellite Based Network for Disaster Communication, Disaster Management Synthetic Aperture Radar, Airborne laser Terrain Mapping and Digital camera System and National Disaster for Emergency Management. Presently, if a disaster strikes and regular communication networks go down, there are no contingency methods available for communication to a disaster-hit area.

6.      National Disaster Response Force (NDRF)

Ten Central Armed Police Forces battalions were formed of 1149 posts each. 27% of the posts were vacant in May 2012. The NDRF personnel don’t have sufficient training, facilities, equipment, and residential accommodation. With these constraints, it is difficult to imagine that they can effectively manage disasters.

Till recently, they didn’t even have deployment guidelines. In a few instances, they were deployed during elections. In one instance, they reached the disaster site without food, water, or tents for themselves. The local authorities had to give the same.

Up to June 2012, just seven states have constituted State Disaster Response Force. Even the local Regional Response Centres are ill equipped.

The impact can be seen at the local fire services level also. As per the Thirteenth Finance Commission, deficiencies in fire services are alarming. 97.54% of the country doesn’t have fire stations, 96.28% doesn’t have fire-fighting personnel, and 80.04% doesn’t have fire fighting and rescue vehicles. Shortage of trained manpower, vehicles, and equipment plague the existing fire service centers.

Locally, the states do have not mobile hospitals and trained trauma management doctors. There are no real medical facilities available for Chemical, Biological, Radiological and Nuclear disasters at national level. This is seriously a pathetic state of affairs. Government bodies are showing no concern for human life.

Closing Thoughts

After reading the report, I realized that Indians have just one option at present – pray to God that disaster doesn’t strike in their region. The governments at national, state and district levels have shown a negligent attitude towards disaster management. This is a classic case – funds are available but nothing has been done to implement the plan. Indian citizens can check with the local politicians and government bodies to assess the level of preparedness for disaster management. If required, local bodies can be formed in different constituencies and societies to act as disaster management task force. As it is a question of citizen safety, public activism will help in developing adequate disaster management capabilities.

References:

CAG Report – Performance Audit Report on Disaster Management of India

 

Strategy For Funding Risk Management Departments

Organizations want risk managers to focus on reducing costs of doing business, especially the regulatory costs. However, when risk managers ask for resources and budgets for running the department, they have to compromise. Lack of budget is generally the main cause for not implementing enterprise risk management, doing strategic risk management, building a risk management culture and providing consulting.

Generally, the budgeting process starts in the last quarter of the year. When the budget committee is approving other revenue earning departments budgets, risk management department heads present a cost budget. This does not go down well with the budget approval committee. They cut ten to thirty per cent of the budget despite risk managers giving valid justifications.

After budget approval, risk managers spend the year trying to squeeze in as much as they can. Sometimes it results in limited coverage and high stress levels for risk managers. With the increasing focus on risk management, the heads of risk management departments need to form a strategy to obtain the required funding. Look at the tips below to navigate the tricky budget approval process.

1. Start at beginning of current year

Start preparing for next year at the beginning of the current year. Identify the long-term and short-term projects. Commence influencing the key stakeholders of the long-term projects from the first quarter of the current year. If risk managers are the last one to submit their budget, they are unlikely to get heard.

2. Analyse the reasons for past failures

Assess the reasons for non-approval of the budget in previous years. Was it because the management thinks risk management is unimportant, is concerned about costs or it harms the interests of the key political players in the organization. After determining the reason, formulate strategies to change the mind-set for next year’s project approval.

3. Build relationships with key political players

Chances are that risk managers focus on the budget committee members for approval. Instead, identify the key power holders within the organization. Identify their relationships with the budget committee members. Before influencing the budget committee members, build relationships with key power holders. Get their support for the risk management function by understanding their drivers and motives.

4. Participate in business strategy formation

Involve yourself with the business strategy group. Identify various risks of the changes in business strategy and recommend the mitigation costs for the same. Attempt to incorporate the risk management budget in the strategy implementation costs. Align risk management budget with corporate goals and strategy.

5. Calculate the Return on Investment (ROI) for various projects.

Robert Biskup wrote an excellent article on Corporate Compliance Insights – “Making the Bottom Line Case for Compliance: The ROI of a Robust Compliance Department”. The nine points give superb ways of calculating ROI. Use the methods to negotiate with the business teams as the department can give a clear demonstration of cost savings or profit earnings. Do ROI calculations for previous years’ projects to demonstrate the value that risk management departments brought to the table.

6. Make business teams bear the cost of the project

For the projects, identify the stakeholders in the business teams. Categorize the projects as critical, necessary and optional from risk management perspective. Sometimes, risk managers spend time doing optional projects at the expense of critical projects, as they cannot refuse powerful business heads. In such cases, present the advantages of getting the assignment done. If possible, check whether business team will merge the cost of desirable projects in its budget next year rather than have it in risk management budget.

7. Build flexibility in budgets

The budgets go haywire when unexpected risks arise or regulations change. Suddenly risk management departments are in fire fighting mode and regular work is ignored. That is bad for business, since other critical risks remain un-monitored. Hence, estimate different cost budgets with probability of various risks and disasters occurring. Present these as contingency budgets to the management and take advance approval for the same. Risk mitigation efforts are delayed when risk managers take approval after a disaster has occurred. Revise the budgets quarterly as the business budget changes.

Closing thoughts

 Generally, risk managers have a financial background so they are outstanding at preparing the budgets. However, problem occurs when they do not have the negotiation skills and political strategy in place. Last quarter efforts do not work because everyone is on the same bandwagon. Gain a head start by starting in the first quarter itself. Be the first one to get the required approvals, so that the function gets what it wants.

Related article: Political Strategy for Risk Management

 

Political Strategy For Risk Management

A recent report published on Harvard Law School blog stated that in 81.2% of manufacturing and 73.6% of the non-financial sector companies have not appointed Chief Risk Officers (CRO). Interestingly, 83.3% of the financial services organizations have appointed a CRO with direct reporting to the CEO. This indicates, that unless mandatory, the risk managers do not have high visibility. Though their role is important in all sectors, they are unable to leverage themselves among the senior management. This issue is not new, and most complain at not getting a seat at the table.

 1.     Develop Political Skills

We need to look this issue from another lens. We need to develop a political strategy for the risk management department. Reason being, technical expertise on a subject takes one up only to the senior middle-management level. At senior management level organization politics dominates decision-making. Hence, risk managers need to develop political skills and astuteness to survive and thrive at that level.

However, the challenge is that though risk management job requires high political skills, very few work at developing them. According to an organizational study, ~ 65-80% employees avoid politics, ~15-25% indulge in negative politics and ~5-10% participate in positive politics.  Risk managers need to develop skills in positive politics to influence senior management.

The positive politics players have win-win, ethical, organization focus, enlightened self-interest, collaborative and best interests of the business mindset. Indulging in negative politics will be harmful as the group has  win-lose, non-ethical, upward focus, self-interest, competitive and personal gain mind-set. Viewing politics as dirty and avoiding it, isn’t an option. Politics prevails in organization DNA and one has to choose how to play it.

 2.     Implement a Political Strategy

Another aspect to look into is that risk managers have to influence the organization to build a risk culture. The concerns of the junior managers differ from those of middle managers and senior managers. Moreover, different business units have clashing interests and priorities. Stumbling from one person to the other and trying to influence them on a random basis will not benefit the organization or the department. Therefore, to influence each sub-group positively, risk management departments need a political strategy.

After developing the political strategy, risk managers need to implement and run with it consistently over time to reap success. It will involve getting supporters, appointing campaign managers, forming coalitions and doing some secret handshakes. Risk managers of course have to walk a fine line of maintaining independence and objectivity while implementing the political strategy.

 Closing Thoughts

Success in organizations depends on how well a person manages their own expectations by understanding the political game. Corporate world is a jungle. One cannot expect that people will make rational and logical decisions in the best interest of the organization. Risk managers will remain on the side lines unless they learn to trapeze the political web. The good news is one can learn political skills.

References:

  1. Risks in the Boardroom – Harvard Law School
  2. Investigations in Organizational Politics

iGate’s Failures in Risk Management

phaneeshiGate fired its CEO Phaneesh Murthy for sexual misconduct after Araceli Roiz; an American employee accused him of sexual harassment. As per media reports she has claimed that the relationship started soon after she joined the organization in 2010 and is pregnant with his child.

Mr Phaneesh Murthy has the dubious honor of facing two similar charges while working as a senior manager in Infosys in 2002. Reka Maximovitch and Jennifer Griffith had both received huge out of court settlements previously. Now he faces the similar charges from Araceli Roiz. Mr Murthy has acknowledged that he had sexual relationships with Ms Roiz. However, it was with her consent. He has alleged he is being defamed and this is an attempt at extortion.

With the limited information available in the media, one cannot comment on the details of the personal relationship.

However, this disaster teaches a few lessons. iGate could have prevented this reputation damage and legal risks if it would have taken a few timely steps.  iGate board and senior managers failed to take due care of the following risks.

1.     Pre-employment Background Screening

Mr Murthy has an excellent academic and professional achievement record. He was credited for taking Infosys turnover from $ 2 million to $ 700 million. However, when he was hired by iGate in 2003 he was in the news for all the wrong reasons. The sexual harassment cases were all over the media.

iGate needed a CEO who could deliver results. My guess is the board looked the other way or considered Mr Murthy’s infidelities small or insignificant. However, if a junior or middle manager had the same reputation, his career would have been over. No organization would have hired him.

Hence, when generally senior managers background screening is more stringent  than junior or middle managers, iGate board took the opposite stance.  It appears that the same yardstick isn’t being applied for background screening or it is being given lip service.

2.     Failure to Monitor & Control CEO Behavioural Risks

iGate board and senior managers chose to ignore the CEO behavior  As per media reports, the relationship was known to the staff. However, it appears no action was taken to guide or coach Mr Murthy.

Read these statements of Mr Murthy from prior interviews at the time of Patni takeover.

The National – “Everyone says that M&As are about ego. I’ve been a salesperson for 10 years. For every 100 doors that you knock on, 98 get shut in your face. That has knocked away most of my ego. I have two teenage boys who whip my butt in every game. They have gone from wanting to be on my team to not wanting to be on the loser’s team. Because of that, I have no ego left.”

Livemint – “Not at all. I am basically a conservative, middle-class south Indian Brahmin. As it is, we don’t like debt, and I am very uncomfortable with a $700 million (around Rs 3,180 crore) debt.”

Ms Araceli Roiz is 31 years old and Mr Phaneesh Murthy is 53 years old. In conservative South-Indian Brahmin families “divorce” is taboo. With two teen aged boys at home, he started an affair, if Mr Roiz version is true, when she was in her late twenties.

From a psychological perspective, it is a classic case of a talented man unable to deal with his own fallibility and mortality. Mr Murthy is a competitive man and the yearly success in his career may have made him feel invincible and powerful.  He is raised on Indian middle class values that look down on promiscuous behavior  He competes with his own children in games. He was heading an Indian IT organization where the average age of employees is 25-26 years. Does it look like he was suffering from mid-life crises?

The board members and other senior managers could have identified the emotional baggage he was carrying around and addressed the issue. The question arises, when the board knew about his weakness and character problem, was he provided any coaching or mentoring? Or did the board take the view, that as long as he is delivering the numbers, everything will be tolerated.

3.     Lack of attention to work culture

The board and management knew that Mr Murthy had a marked reputation in respect to female employees. Secondly, it appears that is relationship with Ms Roiz was an open secret. From his own words, it doesn’t seem that he took sexual harassment or company policies seriously. In the interview, he stated:

“It was a personal relationship. The company policy states that any two employees having a relationship have to inform the superiors. It is a small note in an employee handbook. I did inform the company about the relationship. Though it was a question of timing from my side as I disclosed this only a few weeks ago, only after the relationship was over.”

According to him, “it is a small note” in the company handbook.  He didn’t believe in walking the talk in personal ethics or corporate code of conduct. Hence, the question arises, what attention iGate paid to maintain the corporate culture.

With previous cases of sexual harassment against the CEO and an on-going affair, did iGate management ensure that the sexual harassment policies were implemented in spirit? If a woman, as per Roiz’s claim, was forced into a sexual relationship by the CEO, what effect did it have on other female employees and work culture? Did it not set the stage for the hostile work culture where women would feel insecure to report cases of sexual harassment? Let us say, another female employee was harassed by a male senior manager, what options does she have when she knows that the CEO is doing something similar? How seriously was sexually offensive behavior taken by the management?

 The organizations pay a heavy price in respect to sexually harassing culture. The direct costs are of course legal penalties and cases, however, the indirect costs are absenteeism, disengagement, high turnover and lower productivity. The iGate management appears to have ignored these aspects while hiring Mr Murthy and during his tenure.

4.     Ineffective Crises Management

iGate public relations team issued the statement – “The investigation, which is on-going, has reached the finding that Murthy’s failure to report this relationship violated iGATE’s policy, as well as Murthy’s employment contract. The investigation has not uncovered any violation of iGATE’s harassment policy.”

It gave information on the interim CEO and search for the new CEO, to rest fears of the investors.

This appears more of an attempt to limit legal risks. According to US laws the company is responsible for sexual misconduct by its employees. Subsequent to the above news, the company has not made any statement or explanation on what it did to prevent such incidents.

According to media reports, the Indian employees received an explanation from the senior managers on the incident and were instructed not to talk to people outside and within the organization. An instruction not to communicate with the media or put comments in social media is sound. However, not to communicate with fellow employees sounds like an attempt to silence. Can management stop the discussion outside office hours between the employees?

In such instances, various stakeholder expectations need to be addressed. It is a sensitive issue that gets the attention of public, bloggers, activists, women lobbies etc. Even the employees psychological stress levels increase and they need to be managed. However, from the information available in the media, there isn’t much effort being done to manage the crises.

Closing Thoughts

Sexual harassment cases cause huge reputation damage and legal risks. I am not sure whether after Mr Murthy’s previous cases, iGate got proper insurance coverage for directors and senior manager liabilities. Implementing sexual harassment policies and holding everyone to high standards of conduct is something organizations need to concentrate on. The issue was taken lightly previously, but now women workforce is increasing and so are the cases of harassment. Unless companies wish to have their name tarnished, they need to take the right steps.

References:

  1. Read more: http://www.thenational.ae/business/technology/rise-and-fall-and-rise-again-of-it-star-phaneesh-murthy#ixzz2UBKIGikk
  2. http://www.financialexpress.com/news/phaneesh-murthy-i-will-fight-sexual-harassment-charges-vigorously/1118857/1
  3. http://timesofindia.indiatimes.com/tech/careers/job-trends/Murthy-scandal-iGate-staff-gets-social-media-code/articleshow/20222185.cms

Missing Men of Honor

royal disgrace

The Story of Disgrace

A wave of shame and disgrace washed over Indian Premier League’s (IPL) Rajasthan Royals team. Three players of the team – S Sreesanth, Ajit Chandila and Ankeet Chavan – were identified as part of the spot fixing racket. Eleven bookies were involved. Investigators have found some evidence connecting it to underworld don Dawood Ibrahim.

As per police disclosure Chavan was paid Rs.60 lakhs by the bookies, Sreesanth and Chandila got Rs.40 lakhs each. By the number of matches they have played they would have earned a few crores each. The bookies lured the players by throwing parties and providing female escorts.

It is shocking that players with such international repute and excellent career opportunities would take a criminal route to earn money. One wonders what they were thinking. Were they joyously throwing up their hands in the air and dancing with happiness. Did they think that for a few millions they would be breaking the hearts, trust and expectations of billions of people, starting with their family?

It is reported that Rahul Dravid, the captain of the team suspected something. He made Sreesanth sit a couple of matches and the team managers asked him to leave the team. How painful it must have been for Dravid, a man reputed for gentlemanly conduct.

This isn’t the first time followers hearts have been broken by their idols.  Now the cancer has spread through all facets of life. Indian politicians – Gandhi, Nehru, and Azad – were known for their impeccable behavior  Congress leaders fought for Indian independence. They spent years behind bars to fight for a cause. Now Indian politicians spend time behind bars for corruption and fraud. Instead of feeling shame or humiliation, they get back into public life with renewed vigor to mislead people and make money.  Over 30% of Indian politicians have a criminal track record.

The new breed, who have joined the infamous bandwagon are senior managers of Indian corporates. After Satyam and 2G telecom scam, their names appear frequently for being interrogated by CBI and spending time in jails.

Valuing Honor in Our Lives

So where has honor disappeared? Previously, the mark of distinction for a man was when people referred to him as – “he is an honorable man”.  Having a dishonorable reputation was disastrous socially and professionally. Now, honorable men among leaders can be counted on figure tips.

As a world civilization, we need honor back in our bloodstream. Without it, humanity will reach new levels of depravity. We require men and women to work dedicatedly to get it back for the sake of next generation, though it is a challenging task.

The cynics will say it is a pipe dream and point out various flaws. The idealists look at the times gone by and wish the same could somehow come back. The practical breed has learnt to work like an automaton to earn a living and look at nothing else.

So where do we get our heroes who will change the world for us?  The heroes have to pay a price. Lincoln, Gandhi and King – were all assassinated because they dared to bring about change. From the first step to the end of their journey they made personal sacrifices. They repeatedly saw failures, their hearts sank with despair and somehow they gathered their strength to walk on thorns again.

In the present world, who would wish to trade the high life, luxuries and comforts for a life full of dynamite?

But unless we do so, we are bestowing the next generation a dangerous life.

So our choice is between our generation and the next. Do we want to look that far ahead?

Closing Thoughts  

When we talk about change, our hackles rise. Even when it is obvious that we should change, we don’t want to. That is a human failing which 100% of us have. Our best excuse is that we can’t change the world, who would listen to us, how can all the people change? But if we study change, we just need 10% of the people to believe in our cause. That is, we need to influence just 1 in 10 people in our life. That doesn’t sound very difficult; all of us are capable of doing it. So why not give it a shot, and bring honor back in our lives. I leave you with words of Dorothy L. Sayers from Gaudy Night:

“If it ever occurs to people to value the honor of the mind equally with the honor of the body, we shall get a social revolution of a quite unparalleled sort.”

References:

IPL match fixing 

Risk Managers – Tone Down That Report!

This week three renowned figures – Angelina Jolie, Larry Page and Christine Quinn – disclosed their medical problems to the world. They discussed battle with breast cancer, paralysis of vocal cords, and struggles with bulimia and alcoholism. Jolie, a woman famous for her beauty bared her mastectomy details. They talked about fear of death and handicap, and frailty of human character. They risked high-profile careers by being candid. One word describes their actions – Courage.

However, the corporate world wants to hide behind lies and window dress their weaknesses. The corporate leaders sometimes threaten risk managers and auditors to tone down their reports. The messengers of bad news get shot. Risk managers face bullying, retaliation and threat to their jobs for showing courage to speak the truth. If they refuse to bow down to pressure, the business teams label them as politically dumb or difficult to deal with. Question is – should risk managers tone down their reports to please the business teams?

I want to discuss a couple of scenarios here and you decide the course of action.

Scenario 1- Don’t report correct facts to avoid giving bad news

Let us say, you are a CXO of an organization. You have a heart problem and visit a doctor who is a good friend of yours.

The doctor realizes your heart condition is bad. You require a heart surgery for four bypasses. The doctor doesn’t want to deliver the bad news to you, because he doesn’t wish to hurt your feelings.

The doctor tells you  – “You just have too much stress. You need a vacation to relax and have some fun.” He prescribes you some vitamins and discharges you.

You follow your doctor’s advice, take a vacation. You swim and jog for a couple of days and have a heart attack. You arrive at the hospital with a survival chance of 5%.

Did the doctor do the right thing by not telling you the truth?

Scenario 2 : Don’t report correctly to protect a friend

A civil engineer responsible for doing quality and inspection checks of a bridge notices that sub-standard quality of material is used. There is a high risk of bridge collapsing. However, he issues a clean report to his seniors because the engineer-in-charge of the bridge is a friend of his.

An organisation’s senior managers drive daily across the bridge to reach their office. One day all of them are on the bridge and it collapses. All die.

Would the families of the senior managers be happy with the quality control engineer’s for not disclosing the risks?

My guess is most of the corporate readers would have answered no. You would have preferred the truth when it is a question of your own life being at risk.

Corporate Scenario

So why don’t corporate citizens hesitate when they put other people’s life at risk. See the Bangladesh factory fire, Japan’s nuclear disaster or US banks home foreclosure and mortgage mess. Employees, customers and public lives or life savings were put at risk.

Wouldn’t a few honest risk management reports helped in fixing the problem in time to prevent the disasters?

The corporate world maintains double standards on reporting risks. They want full disclosure of the risks to them but not to others. Before setting these expectations, corporate citizens should answer these questions:

1) Isn’t it a risk manager’s job to identify the health problems of the organization, prescribe a cure, suggest amputation where required and nurse the organization back to health?

2) Is it right to compromise professional ethics and code of conduct to keep a few people happy?

3) Aren’t risk managers responsible for calculating the direct and indirect cost to others for non-disclosure of risks?

4) Shouldn’t risk managers hold their ground and stick to their independent advise as you will benefit from it in the long-run?

Closing Thoughts

Moral courage is one of the most difficult qualities to acquire. Larry Page, as CEO of Google fulfilled his responsibility to the investors by publicly disclosing his medical problems. Now the investors can make an informed decision. One has to admire Page for taking such a difficult call. It takes guts. Disclosing personal weakness makes one feel vulnerable, exposed and fallible. He has shown the path for corporate leaders to follow.