What are the economics of well-being?

by sravan ankaraju on February 12, 2012

in Execution

Robert F. Kennedy said on the presidential campaign trail in 1968, “Our gross national product…counts air pollution and cigarette advertising and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl….Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play”.

Per the latest article in HBR, GDP can’t distinguish between economic activities that create increase a nation’s wealth and ones that eat into its natural endowments (cutting redwoods), result in sickness and future cleanup costs (pollution), or merely ameliorate disasters whose costs are never accounted for (ambulances). Measuring the sustainability (environmental or otherwise) of economic growth requires making estimates, of course.

This brings me to measurement that has been around since 1990’s – Human Development Index (HDI), which according to economist, Amartya Sen, better represents capabilities versus commodities (GDP). The HDI is a combination of three indicators – Life expectancy, educational attainment, and income. United States’ HDI is 0.910, which is a rank of 4 out of 187 countries with comparable data. The HDI of OECD as a region increased from 0.749 in 1980 to 0.873 today, placing United States above the regional average.

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  • US is #10 on Legatum Institute’s Prosperity Index

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If US is 0.910 on Human Development Index (HDI), #10 on Legatum Institute’s Prosperity Index, #10 on Heritage Foundation’s Index of Economic Freedom, and 7.1 (very clean is between 9.0-10.0) on Transparency International’s Corruption Perception Index; why is it #31 on Poverty Index? Housing, Income, Jobs, Community, Education, Environment, Governance, Health, Life Satisfaction, Safety, and Work-Life Balance are 11 topics that OECD has identified as essential, in the areas of material living condition and quality of life.

The HDI trends tell an important story both at the national and regional level and highlight the very large gaps in well-being and life chances that continue to divide our interconnected world.

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Statistics are no substitute for judgment

by sravan ankaraju on February 12, 2012

in Execution

The Organization for Economic Co-operation and Development (OECD) publishes statistics from Agriculture to Youth Unemployment for many countries in the world. One indicator that got my attention today while watching Fareed Zakarias’ Global Public Square show on CNN is Poverty, Infant Mortality rate, and implications of Child Poverty on long-term Income distribution. Evan Esar, American Humorist (1899-1995), wrote that Statistics is the only science that enables different experts using the same figures to draw different conclusions. In the case of poverty, the context in which Fareed used the figures is important i.e. whether we can do anything about the Poverty in the United States, and whether a smart kid who is poor can succeed and excel in this world? I know there are lots of stories of poor working hard to succeed but I know those are far and few in between when you look at Poverty objectively.

For me personally, it led me to ask questions like, since resources are never unlimited, where would I make the first $1 investment – Food or education? Why is US #31 on the chart below? And why is US at the bottom 4 along with Chile, Israel, and Mexico? What is the trend, and is it getting better? I think framing right questions within the context helps draw on facts and real-life experience. There is lot of useful data out on the internet to help give businesses and individuals a great start to develop a problem statement, develop a story behind a story, present options, and make a judgment call. And no recommendation (judgment call) is useful until it is acted on through long-term focus on execution of Programs, and keeping the story alive through active campaigns. Statistics are reversible. 

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Making ideas happen

by sravan ankaraju on July 5, 2011

in Execution

It has been a year since I blogged on this site. The essence of this site which is about “Getting off the drawing board” is still relevant though I moved into a new role professionally. The organization of ideas, execution with bias for action, crowd sourcing, building organization capabilities & strong network are important to building Operating Models, and that they are as important as they were a year ago. As I evaluated how to get started with blogging again, I wanted to scale out my concepts & ideas through a blogging/re-blogging platform that provided ease of  use, and quick access to other like-minded bloggers. Towards that end, I am going to slowly move my old content to Tumblr, and keep the same domain name. Thank you for all those who have been following me.

Today’s post is at – http://getoffthedrawingboard.tumblr.com/post/7264364632/making-ideas-happen-to-get-off-the-drawing-board

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Over the last 2 months, I have been having conversations about playbooks, and best practices for many subject areas that are important for day-to-day running of the business. This was the result of running a small crowd sourcing project to generate outside the box thinking for the whitespace opportunities. In my view, the ideas that float to the top based on voting, ranking, and quality of comments is great for problem solving exercise but not the best to gather best practices for running of business. The reason is customer best practices have context and relevancy based on the size of the customer, industry, culture of an organization, and multiple other factors including the person managing the relationship. These cannot be codified. The unpredictability requires informal mechanisms, most of which can be clearly identified and consciously influenced, and that link very closely with other cultural elements.

A good definition of culture per Merriam-Webster’s collegiate dictionary is – “the set of shared attitudes, values, goals, practices that characterizes (human behaviors in) a company or corporation”. This definition puts human behaviors at the center of culture, and human behaviors always involve both rational and emotional dimensions, as well as formal and information components.

According to authors, Jon R. Katzenback & Zia Khan of the book, Leading outside the lines, “the formal is best used for predictable and repeatable work that needs to be done efficiently and with little variance. The predictability and repeatability of the work warrants the effort to develop the infrastructure of the formal organization, which can be documented and constantly improved upon to improve efficiency and remove variation. Conversely, the informal is best applied for issues that arise outside the scope of the formal organization, the surprises that need to be sensed and solved. Increasingly, people who need to do the solving need to be motivated outside the reward system, collaborate across organizational boundaries, and make decisions with little guidance from formal strategies”.

This is my area of passion which is balancing the formal via Management by Objectives (MBO) to drive business forward, with influencing the cultural elements through people engagement and participation. Again, per Jon & Zia – “the ‘best practice’ is a means of improving performance in various functions, departments, and levels of management. To go beyond best practice requires a level of insight, risk taking, and trial-and-error responsiveness that demands understanding and harnessing of the informal. This separates ‘best performance’ from ‘best practice’”.

This is the time of the year, every year, that I spend understanding the formal and informal. I would like to hear from the readers of this blog how you have able to drive change and better results – formal and/or informal.

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