What is Finance?
Finance is about management of money and assets and provision of funds to meet requirements and needs. It is important to know finance to be able to procure and manage money.

What is innovation?
Innovation is about improvisiong around constraints that are produced by both strategy and finance. It is important to be able to think new solutions because that is where the money is.

What is marketing?
Marketing is about creating perception of the stuff and communicating the value.

The one really good thing that I realised is that there is a subtle difference between a disagreement and a feedback for a job. Often confused, and as a result both of them are handled badly.

What is feedback?

It can be positive or negative. Positive feedback lifts morale. Negative feedback is given to lift (improve) performance. Job could be related to your subordinates, peers and managers.

Both the feedbacks need to be timely (regular/instantly), based on specific instances (not attitudes and personal), and aim to add value to the person (concrete).

Negative feedback is a about a job done wrong and its poor handling leads to conflict. It has 2 basic components: a) you have facts that show that a job is not getting done properly b) you add value to the person by giving out steps for improvement and prepare a plan for follow up.

What is conflict?

It arises from disagreement over a proposed plan or activity. The important point is that you do not have the facts about the job going bad. You only perceive it to go bad. It is the perception that differs. However, you do need to have an alternate plan to propose that meets both ends.

Handling them

Handling negative feedback has four important skills

if receiver is unmotivated – contraction

if receiver is uncommitted – set personal goal in conjuction with corporate goals and consequences of not meeting the corporate as well as personal goals

if receiver disagrees – about the facts provide evidence.

– about the problem show consequences of non-action

if receiver gets emotional, shocked or cries – give permission, give space, empathise, sort it out but do not stop.

The art is how to not to sound complaining.

I am still not clear about how to handle the conflicts.

A contradictory report says that China is increasingly file number of patents.

The first thinker to be profiled in the series is C.K. Prahalad, the author of the famous concept of market at the ‘Bottom of the Pyramid’.

He is renowned for coming up with break through ideas that helped management develop ‘next practices’ and change the perspective on management thinking. He was voted as the most influential business thinker in 2009 by The Times. He gave a couple of interviews on his thought process to the management journal s+b which was published recently. The article sheds light on how C.K. Prahalad was able to develop the concept and ideas.

New ideas are conceptual breakthroughs which can be derived from close observation.

the most powerful ideas did not come out of multiple examples. They came out of single-industry studies and single case studies. Big impactful ideas are conceptual breakthroughs, not descriptions of common patterns.

Conceptual break throughs are found by looking for outliers and weak signals

To me, the problems of greatest interest are things that you cannot explain with the current prevailing theory.Every one of my research projects started the same way: recognizing that the established theory did not explain a certain phenomenon. We had to stay constantly focused on weak signals. Each weak signal was a contradictory phenomenon that was not happening across the board. You could very easily say, “Dismiss it, this is an outlier, so we don’t have to worry about it.” But the outliers and weak signals were the places to find a different way to think about the problem

The first step is to identify the problem and frame it appropriately without worrying about the methodology.

“In developing all of these ideas, I learned not to start with the methodology, but with the problem. A lot of times, research tends to start with the methodology. I prefer to start with a problem that’s of interest and apply whatever methodology is appropriate…..

Finding evidence to observe pattern and derive logic

..when we started looking around, we suddenly found some examples….

Demonstrating the existence of pattern

So we looked at the logic…You have to create a story out of what doesn’t exist yet… and therefore you have to make it conceptually strong. The data is only an illustration.And you use stories or companies’ work as examples and illustrations of the concept, not as proof of good practice.

Disciplined precise thinking is required to put it across in a logical fashion.. like a flow chart

With every book or major article I write, I start by looking for a logical structure. It must be as simple as Euclid: The shortest distance between two points is a straight line. Once you have this logical framework, everything else, all the examples, are just illustrations….
I can take any of my books and give you a flowchart in one page on the substance of the book…

Go read the full article here.

All real world issues have a number of these dimensions. The mind scrapes the surface and moves ahead jumping from one aspect to another. What one gets a lot of time is an illusion of understanding. A belief that this is how it might be. How easy would it be to learn new things if it could go into a structure already existing in the mind. However, learning everything in life is not possible.

I think one the good thing is that a lot of the stuff is basic such as maths and language. Much of the other stuff builds on it. Its a progressive structure. The more solid your foundations are – the higher (wider) and faster (deeper) you can construct.

Is competition the answer? How do you bring in competition within the government and what are the downsides?

Simplistic and Naive I believe…

He is giving a lecture to prove that Economics unlike Physics involves uncertainity (because of human emotions), hence, the tools of Physics – Mathematics – do not provide a accurate results while making decisions about markets as it involves human decisions. He says that the quant in Economics cannot be berated for the economic crisis – rather its limitations should be understood. Similarly, other fields of study can be categorised on the scale of uncertainity, where, Mathematics and Physics forms one end of the spectrum where we are certain and Philosophy and Religion on the other end where we are uncertain about meaning of life etc.

The overarching message is that the limitations of using certain tools should be realised. And in such cases a mental checklist of various other parameters apart from mathematics must be used. A very important point explained simply.

At that time, the intellectuals and leaders got together and outlined the vision for Denmark and set it on road to progress and prosperity. One of the key decisions that was made at that time,, and which is still being followed, was to impart education in a manner so as to enable people to – learn to learn – rather than learning facts. The idea was simple and profound at the same time. Till the time one knows ‘how to learn’, new things and the vast ocean of knowledge is accessible to him. Otherwise the person is stuck and has nowhere to go. I do not see such a thing being taught in India and was clueless about what are the essentials. I went back home juggling the idea in my head and eventually on Google. I found this nice link on Clara.net for helping students to learn in school and believe that it could help students a long way.

However, an extension of learning to learn in college is to apply the learning in real life. This can be put in simplified terms to be equivalent to learning to think and making decisions. One of the ways is termed model based thinking – promoted by Charlie Munger. Charlie Munger is partner of Warren Buffet in Berkshire Hathaway. He uses mental models to evaluate the value in potential investments. He advocates that there are a handful of models that enable clear thinking while making decisions and one should make a mental checklist of these mental models. These models are derived from various spheres of education such as Physics, Psychology, Economics, Biology and Accounting. Go read a speech of his at this link

Further, I believe that another important aspect to learning and thinking is to ask questions if you think you know the answer. It really helps a lot.