Personal, Thoughts

When you cannot longer recall how many times you’ve been to India

When you do not longer wonder by hearing the expression of “doing the needful”, when you realise that there are other ways of thinking, and by being different they are not better or worse (an easy temptation that leads to failure) but just different, when you see the order in the chaos and walking in a Mumbai slum doesn’t make you cringe anymore, when you are being told that you may have Norwegian accent (yes, me), when you use the words yaar and walla as basic words, when you learn to walk under the rain (and I mean really walk under the Monsoon with a smile), when you repeat the verbs twice and ask no at the end of the sentence, when you get used to see very simple people smiling, when they do not longer chase you for money, when you realise that being in a crowd is a different way of being alive, that’s when you start loving this country.

Because India can and should be loved. There’s a layer of dirt, a crust of inefficiency, true, but there’s more than that, much more. There’s this will to move ahead, this aim to be, this sturdy yet huge democracy, this terrible mother mistreating her children yet, somehow, still loving them.

India changes you. And does so from within. Makes you better. New connections in your brain. Not linear ones, true, but since when humanity has traveled a linear path? Never. India is as organic as a human body, as imperfect as any of us. Yet it thrives as any of us can thrive. It’s a unique opportunity of developing a diverse society without resourcing to authoritarianism. A path that many others we’ve left behind may follow.

Once you’ve been here, really here, I mean, you’re never the same. A part of you never leaves India, and a part of India comes with you.

Economy, Personal, Politics, Thoughts

From Germany to Spain by train (the Eyjafjallajökull volcano and a “laisser-passer”)

Yes, I was one of those people stranded around Europe thanks to a cloud of ashes that no one could see but make brighter reds at sunset. My journey was a 42-hour journey through Europe’s interconnected railway connections, but also an eye-opener on the frailty of globalisation and a living proof that the railway systems of the European countries are not effectively interconnected.

Belgium is a good example. Ongoing works on a track to Liege. No way to get there on time, but with a 15-minute delay. A train loaded with people that are connecting to the Thalis, a high-speed train taking people directly to Paris and Brussels. Two trains leaving at almost the same time we arrive. They hold one for a few minutes and, to the travellers’ consternation, let the other one go. A whole journey ruined because of a three-minute coordination error. Lots of wasted space on the leaving train, lots of upset passengers that need relocation on the station. Belgian management at its worst. Fortunately a compassionate soul understands the disaster they have caused and change my first class tickets to Spain for some piece of paper: a “laisser-passer” (let him pass, a safe-conduct). With it I can sneak into any train, no seat assured, but if there is a seat, I can take it. That was the key to my escape.

A journey away, in Brussels, the Belgian capital, lots of people queuing at the counters. People sitting and standing everywhere. No trains to leave. We manage to sneak into one. Half of the places were free!

Then in Paris. Train workers on strike for the 14th day. No way to get info in Paris Nord. In Paris Lyon we are stopped by some first-attention workers selected, I guess, by their ability to mutter some words in English. Totally unhelpful, there are no spaces in trains for the next three days. Everyone should go home. The poor bastard even doubts that my reservations are authentic and asks me for proof. Amazing.

Next stop at Paris Austerlitz. Instead of flocks of British citizens trying to get their chance as in the last station, this time it’s crowds of Spaniards there trying to get home. No places till Saturday. I manage to talk to a nice guy from the company which tells me something that I’ve already heard a couple of times before: “hold on to that laisser-passer, that’s the best thing anyone can have out there” and then shares some secret with me “there’s going to be some special train service taking people southwards to Toulouse tonight at 21:56 at Paris-Bercy station”.

That was another key moment. The secret train. One of those trains that France has put up in order to help travellers through France.

Paris Bercy. That station does not even appear on the maps. (Just check it, amazing! It’s not Bercy metro station which is in the centre of Bercy, a huge borough) I had to go back to my source and ask for some references. Not even the taxi driver knew where Paris Bercy was. Fortunately and thanks to my confident I knew it was just after crossing the Bercy bridge over the Seine. Once there, there were some sign.

The station is used to transport cars by train. It’s an auto-train station. They have added some passenger wagons to a huge line of car-transporting wagons.

Ten people controlling the entrance, god forbid that some crowd would jump onto the train to get home. I’m sure they would only select the travellers really deserving it, the desperate ones, the children. After all that’s what was in the news: France doing all they can to help expatriates get back home.

Fortunately, my “laisser-passer” worked. They seemed to be impressed by it. I know it’s going to end up hung up somewhere at home. We could board the train… and then we left for Tolouse. I was to share my journey with a lot of refugees, sing songs and share experiences, or so I thought.

Well, you can see the reality. Fortunately there were two people to talk to. The rest of the train was empty. I guess they had a tough time deciding which of those refugees deserved going back home. So they decided not to let anyone go. These are the trains, the special trains, meant to be helping people get back home. And that’s how they go: empty.

There were still a lot of things to come. The 14th day of railway workers strike in France cancelled the following trains I hoped to take and I had to make it in a bus to the Spanish border. There I read again about the special resources countries were providing to help those stranded get back home. Astonishing.

Yes, resources were there, somehow. But totally uncoordinated and wasted. Here lies the proof of the case against European efficiency and how politicians and media speak of things they don’t know about. In the meantime, the non-transported travellers mean loses both for them and the companies they work for, for the airlines and for the whole Europe. Another notch down the economic crisis that is dragging us down.

At the end of the day, the Eyjafjallajökull leaves us with lessons on how the globalisation is frail, too frail. Myself, I should be in India now. Instead I’m at home in Barcelona, and happy to be here by the way. Is the air transportation sector so frail to completely collapse under some ashes? Is the railway transportation system so inept that it just wastes more and more resources while failing to respond in an emergency situation? Why are the politicians lying to us so blatantly about the extra efforts they’ve made to help people get back home? How can railway workers just keep on strike in this situation and Mr. Sarkozy simply do nothing about it?

We are less prepared than we think we are. And we must get ready and push towards open skies and build the next generation of air navigation systems the sooner the better. Also it is necessary to overhaul the whole inefficient European rail transport system.

Experiences. We all learn from them. I also try to. And from one reconforting image, the most positive thing the volcano did (as if telling about our shortcomings wasn’t good enough…) the impressive sunset over the Seine in Paris, the one thing that has improved and turned even more reddish with the Eyjafjallajökull’s ashes.

Business, Economics, Economy, Macroeconomy, Personal, Thoughts

Basic macroeconomics again: government savings, private deficits and the Ricardian debt equivalence theorem

If you brush up your basic macroeconomics you will remember this: in an open economy, if national saving is insufficient to finance national spending, an influx of foreign capital will be needed to balance the accounts. That’s the story of the US -or Spain-. Where we invest (spend) more than we save (earn).

In times of high leveraging, where the private sector has grown too indebted, a deleveraging process is mandatory. Whether it takes ten or five years, it doesn’t really matter. It has to happen. It will happen.

But what if it’s the private sector that has gone too indebted? How can the public sector help?

Well, it’s not only that, as I said, the national balance must equal the foreign financial balance. The fact is that the national balance is necessarily made of two balances that add to each other: the public sector balance and the private sector balance.

That means that the fiscal balance plus the private sector balance must be compensated by the external balance. In other words: money goes out of one sector only to enter another, whether outside or inside the country. But it’s a zero-sum game.


If the government is saving, the only way that the private sector can save is by means of exporting, suddenly, a lot more.

Otherwise, more saving by the government, means more private sector deficit thus more leveraging.

Hmmm, sounds ingenious, but makes sense too.

Can we expect all the countries to suddenly double their exports? No way that’s going to happen as exports are also a zero-sum game. What someone exports, someone else is importing. So, what’s the alternative?

Let me say it again in plain words: if the governments reduce their debts is because part of the taxes that are being paid by the private sectors will be committed to paying creditors, that is, they will go out of the cycle. More taxes, less returns in services or infrastructures. Yes, that is, hurting the private sector.

What can a government do to reduce the debt burden? Obviously, inflate prices, which in times close to deflation is no simple task to do. But again reducing the savings of their citizens, whether people or companies.

But it has to be sudden, unexpected. As creditors wouldn’t accept low interest yields if they were expecting inflation. Credibility is important and we don’t want to lose our reputation as a country.

Let’s say that you can only lose your reputation once, just like your virginity. Next time you won’t be able to make this move or to get credit at such low rates.

So, what’s the alternative to increasingly indebting the private sector? Because if you do for a long time, the increasing frailty will become evident, more than evident, obvious.

Let’s increase debt to reduce deficits? Bonds maybe? Some safe heaven for governments?

Maybe they are for governments but, in the end, they must be paid off sometime. The contested Ricardian debt equivalence theorem states that government expenditure on the private sector is equivalent whether it’s financed by taxes or bonds.

Okay, there’s a lot of restrictions to that Ricardian debt equivalence, or Ricardo-Barro equivalence proposition. We may not care about our descendants so we may not care to indebt them either. But one thing is clear: a debt is a debt and, along the road, it must be paid. The equivalence says that, somehow, the private sector will get ready to pay that and the ultimate effect will be the same.

The lesson? Damned if you do, damned if you don’t. Maybe getting government deficits under control right now is going to make the economy even worse. Believe me or not, it doesn’t matter. Just do something for me…

Stop seeing the government deficits and debts in isolation. They are part of a bigger system.

At the end of the day, there’s the need for more competitive if countries are to scape the leverage trap. And productivity adjustments come with a high price, be it devaluations where they are still possible (beware your reputation, U.S.) or by means of drastic reduction of labor factor costs… yes… wages (beware Spain).

Okay, that was tough. Sorry. Not the usual me. Lots of theoretical threads I needed to spit out. Oh, is it going to be the first post without a picture?

No way! Here it is. Commonsensical:

b-school, HRM, Project Management

Workers crave for attention (The Hawthorne effect)

It happened long ago, in 1924. Taylorism was in its apogee so it was only reasonable that there were studies going on at the Hawthorne Works. Testing different ways of doing things. Groups of workers, reduced time of work, output rate peaked, more reduced time of work, output rate soared again, total output decreased. Then back to normal, output rate had risen… wait a moment… risen?

What the Hawthorne experiments showed was that giving attention to a group of workers always paid off. According to Mayo, that was because they now considered themselves part of a team instead of isolated workers. According to other sources, even isolated workers raised productivity. They had been singled out, they were special, they were being monitored, they were being listened to.

The Hawthorne effect didn’t get its name till 1955, yet it’s interesting to see how they concluded that upward communication in an organisation raised morale. And with the morale rise came a productivity rise. The service-profit chain at its best, starting with employees, finishing at the bottom line.

They were not that different from us. We still crave for attention. Good managers are the one that, in the midst of the crazy hectic pace of work, can still provide it. It’s so tough to do so. Personally, when I don’t even have time to write this blog, how can I remember to talk to everyone?

Yet that’s vital. Especially in tough times, where employee morale is subject to the ups and downs of collective morale, so troubled. We need to find the time.

In crises, where layoffs are there, what message should we send to the ones that are staying? Unless we listen to them, unless we communicate with them, there will be one clear distinct message for them: that they are next in line. Unless we listen. Now more than ever, maybe we should use the Hawthorne effect to our advantage.

Management, Personal, Thoughts

Personal branding (not a facade but clarity)

Posting again after a too long hiatus. And thinking of branding, personal branding. I overheard a conversation that made me cringe about faking. Personal brands are confusing muddy concepts under suspicion that make us recall the marketisation and productisation of people. Let’s package ourselves with a nice and faux decor so as to facilitate our buy out!

Wrong. Sorry to be so bold. But that’s not it. It’s about credibility, it’s about reputation. And you don’t rebuild those every week with a new rebranding. No one else can do it for you. Maybe help you, but that’s all.

The true personal brands are made of congruence. Congruence with personal values, which are those that must become obvious with our personal brand. You got no values? Start building yourself first. Or simply, look inside. Think, what do you stand for? What are you willing to stand for?

That’s your brand. Make those values visible. You won’t be able to ask them from other people unless you’re constantly showing them off yourself. Reliability? Quality? Decisiveness? Assertiveness? Put them on the table, your table, and others will start following.

And be constant. Trust and reputation take very long to build, but can be shattered in just one second. That’s why your brand must be anchored in your true self, otherwise it will be a lie. And people will realise.

It all goes back to leading with example. The example will become your personal brand, lest you’re not consistent with it. And your personal brand will become an explicit part of you that will be clearer every day. Not only others will perceive it but you’ll feel it grow steadily within you. Not a fad but part of your identity.

Business, Economics, Economy, Macroeconomy, MBA, Microeconomy, Private Equity, Thoughts

Dubai has financing troubles but… is it making a profit?

More than two years ago I was writing about Conspicuous consumption: from Thornstein Veblen to Jumeirah Palm. The reference to Dubai was almost mandatory of course. I’ve been to Dubai and I like the place. We all know that recently it has run into some trouble financing its debt. They are expecting a bailout from the United Arab Emirates which are playing hard to get.

My personal view is that they will get this bailout. Actually, I have little doubt of it. They must be now in the midst of a power struggle about how to manage all that. We have to remember that many western nations rushed to finance banks only to discover that they had forgotten to write down a few conditions in the contract about the remunerations to top managers and suddenly the public opinion cared more about those millions’ destination than for the rest of thousands of millions.

Leaving that aside, Dubai is similar to a long-term investing fund. In the long run you get your returns, not before. To manage it you need to be very cold, and not let the circumstances blind you.

But everything in Dubai is so shiny that it blinds you. That’s good for the brand, of course. So we have this dilemma: building shiny things maybe is not that good for the long run but, what else do you have to sustain your brand that very very shiny things?

No matter what happens now, the shiny brand is not so appetising anymore. And investors will think twice before risking again. I don’t want to compare Dubai to a Ponzi scheme, it is not, but to achieve the desired returns it needs to be able to sustain the investments arrival for a long-term period. Is it going to?

Since I’m not the Delphos’ Oracle I leave the reflection here. A small hint: it’s all about fundamentals. In the long run, an investment will survive and flourish if its a sound business. If we are dependent on a brand that requires too high a burning money rate, probably it won’t.

Having investors is a thing, when you lose them you can resource to forced investors (also called taxpayers) or stakeholders that have other interests (power in exchange for money, for instance) but, having a big enough profit for the expected yield, that’s another thing…

b-school, Management, Thoughts

Take care of the senses and the sounds will take care of themselves (A Lewis Carroll reflection)

A couple of days ago I spoke to someone that was having an executive education experience. He had sort of been immersed in a boot camp, hectic experience, out of his comfort zone, not a minute to rest. He had a lot of fun and he proclaimed he had came back sort of a changed person. Maybe he was.

Or maybe he wasn’t. Haven’t you ever had these kind of hectic touristic days in an European city, visiting everything, not stopping even to catch your breath, coming back in love with the city, sort of ‘I could live there’ thing and then… well, er… an exhausted but energetic Monday at work and, on Wednesday, everything is the same again.

Because experiences alone don’t have the capacity to change you. Experiences hold some potential to change you, yes, but most of the time, they simply don’t.

I choose the Lewis Carroll sentence to head this blog entry because it’s all about making sense of what happens to us. Yet I could have chosen a very different one:

One day Alice came to a fork in the road and saw a Cheshire cat in a tree. Which road do I take? she asked. Where do you want to go? was his response. I don’t know, Alice answered. Then, said the cat, it doesn’t matter.

How do you know you’re there if you don’t have it clear where you’re going to? Don’t fool yourself, you don’t.

Some fortune cookie sapience, this one was a cookie that Mintzberg was given with his dinner: “Get your mind set. Confidence will lead you on”. And another one by Mintzberg in a not so old “Harvard Business Review” article: “what managers desperately need is to stop and think, to step back and reflect thoughtfully on their experiences”. Well, so fortunate I did read this article. What my admired Mr. Mintzberg says here (or said some time ago) is what I’ve been saying all along!

And that’s my advice to my fellow executive education experiencer. If the experience is too hectic, it’s incomplete! If in your MBA you’re having excitement, rush and more excitement… something is wrong!

Don’t get me wrong, there are many things to be gained from such an experience, but insight isn’t one of them. Reflections come from flectere, to bend in Latin. One must bend inwards as opposite to just perceiving what’s around. What matters is the impact of the reflection on our own inner wall. Like Plato’s myth, we are the wall over which the shades are reflecting. And what we can really do is to learn about that wall. And in observing that wall, in a Heisemberg uncertainty fashion, there’s the reshaping of the wall.

Otherwise, indigested experiences will make nice anecdotes, we will have a lot of fun. We will recommend the experience to our friends for sure. But there’s no learning in that. The superficiality hides essential meanings interwoven with the fabric of organisations and people. Shortcuts deprive us of deep thinking, and so many things in executive education is about shortcuts discovered by the incomplete and un-rigourous experience of others.

Another quote from Lewis Carroll: “While the laughter of joy is in full harmony with our deeper life, the laughter of amusement should be kept apart from it. The danger is too great of thus learning to look at solemn things in a spirit of mockery, and to seek in them opportunities for exercising wit.”

So many self-labelled educational and learning experiences are witty combination of words and anecdotal evidence. So many advice we give is totally biased and based on erroneous assumptions and insufficient reasoning. What about if we decided to think more and speak (write, blog, whatever) much less?

Lewis Carroll at the rescue: “Courtesy while you’re thinking what to say. It saves time.”

And also knowing when to stop: “‘Begin at the beginning,’ the King said, very gravely, ‘and go on till you come to the end: then stop.'”. Yes, time to stop.