Winners Curse

The other day I spotted ( On TV - sipping a cold Bud) a rather relived Vijay Mallya watching Yuvraj Singh pulverize the hapless Delhi Daredevils bowlers in their first game of the IPL at Sharjah. Yuvi had been bought by Mallya for the Royal Challengers Bangalore at a staggering INR 14 Crores and many felt that Mallya had lost it and overpaid for an ageing, overweight yesteryear hero at the IPL auction. Warren Buffet, for many years the richest man in the world and quintessential super investor offers us some sage advise - "Stay away from auctions", he says, simply because in the ensuing excitement we tend to over call, spend too much and regret our decision later. The 'Winners Curse' has caused grief to many. The person who wins a bid at a stupendous price eventually is left looking foolish when he/she realizes that they have overpaid. Mallya faced fair flak for his spending on Yuvraj Singh. How does one mitigate the winner's curse? Buffet offers excellent advise - he says, " Decide on your maximum bid, reduce it by 20 % and do not over step that mark". Simply walk away from an auction if your price is not met and congratulate yourself that you were not left holding the can at the end of it all, because that winning smirk on your face can melt away pretty quickly when the mallet pounds or the penny drops. As for Mallya, what with his King Fisher Airlines and the ensuing brouhaha I hope the deal on Yuvi pans out well and RCB is not shortchanged. For you and me, tread warily when you choose to head to an auction, because the Winners Curse is real and ruthless!

The Goal Keeper's story!

I'm not a great follower of football and was even less a player as I was growing up. The reasons are pretty obvious, at 5'6" and slightly built you don't stand much of a chance tackling burly boys whose sole intention is to crack a rib or two of yours.Well, this short blog is not about my football days but more about decision making.Surprise, surprise! One of my memories of watching a football world cup was the great Frenchman Michel Platini winding up for a penalty kick.It was June 21, 1986, on a blisteringly hot day at Guadalajara, Mexico France played Brazil. Platini takes the kick and the ball aimlessly floats over the cross piece as the goal keeper dives away to the right. The French supporters groan in dismay and hold their heads in disbelief even as the goal keeper looks around to see where the ball is. The point here is the action of the goal keeper. Research has shown that during a penalty shoot, one of three things are likely to happen - the ball is shot to the right corner of the goal, the left corner of the goal or goes straight, unless of course like Platini did the ball is kicked out of the goal. However it is generally seen that the goal keeper dives either to the right or the left while there is a good 33% chance that if he just sits tight the ball might head straight to him. Why then does a goal keeper dive all over the palce? Psychologists say that it is human nature to look busy. Looking busy and failing is more acceptable than failing while appearing to be doing nothing. Hence from our football analogy, while it makes good sense for the goal keeper to sit tight and wait, he dives to either side simply because he does not want to be seen to be doing nothing, even at the cost of conceding a goal. Managerial decision making is unfortunately similar and many managers think that incessant action looks better than calibrated and calculated decision making.Senior managers need to impress upon their subordinates that action without progress is a waste of resources and does not pay in the long run!

What Narendra Modi needs to know?

As the great Indian masses wind themselves up for yet another general elections, most people feel that the BJP’s Narendra Modi will be India’s next Prime Minister. Modi will take over from a beleaguered though likeable Dr.Manmohan Singh. India has this habit of selecting the strangest men to lead her, from Deve Gowda to Manmohan Singh and now probably Modi. Narendra Modi hails from India’s western state of Gujarat, known for its great entrepreneurial skills and not necessarily its leadership though both Gandhi and Jinnah hail from Gujarat. Narendra Modi has been the darling of the masses, in times of great economic uncertainty simply because he promises the average Indian a better deal in life over the next five years. The country is at the end of its rather long tether with the dithering and over cautious approach that typifies the incumbent Congress leadership. Narendra Modi comes with a track record of vision and transformation where he has put Gujarat on a road of economic prosperity and this has struck a resounding chord with the rest of India. His oratory skills are brilliant and his followers look up to him as a definite game changer in what I repeat are difficult economic time for an aspiring Indian. In short Modi is telling us that this, again, is India’s moment in the sun and that the Congress is wasting time in seizing the moment. However is there disquiet? A few days ago I asked a Muslim acquaintance on his thoughts of Modi being our next Prime Minister, considering the fact that most Muslim’s either fear or loath or have both feelings for the man after his alleged supervision of brutal riots in his own state under his watch. While this has been negated by successive courts in India, the Muslim’s or Modi’s opponents are not buying the story. There was long pause as my acquaintance mulled over his answer, saying hesitatingly that he does not mind Modi, if he was inclusive…….. So will Modi if elected lead a divided India? If we are able to resurrect Sigmund Freud and should Freud have had a shot at psychoanalyzing Modi, Freud would have told us that Modi is a narcissist as a personality type and a leader lead by personal vanity. Now before you shudder and recoil, let me remind you that some of the greatest leaders of this century have all been Narcissist’s. Good examples are Napoleon, Winston Churchill, Charles De Gaulle, Steve Jobs, Larry Ellison and Bill Gates. You might have guessed right, all these men were/are great visionaries who thrived in the most turbulent time and came up trumps. Narcissistic leaders are strangely some of the most successful ones, but then why are they disliked? This personality type can be ruthless, exploitative and vain glorious while being men of great vision, action, risk takers and wonderful orators who can have people eating out of their hands. Narcissists need side-kicks who can temper their own sense of infallibility with some caution and sanity. The side – kick needs to also figure out how he/she is going to survive the rather tricky role of giving advice to a narcissist. Freud pointed out that Narcissists, are emotionally isolated and highly distrustful. Perceived threats can trigger rage. Achievements can feed feelings of grandiosity. Consider how an executive at Oracle described his narcissistic CEO Larry Ellison: “The difference between God and Larry is that God does not believe he is Larry.” Having said that do we need Modi? As a country I think we do, with Modi down playing his Hindutva side and being more inclusive, less autocratic and surrounding himself with sane advice with a strong dose of genuine empathy for the minorities. To paraphrase George Bernard Shaw, some people see things as they are and ask why; narcissists see things that never were and ask why not. India needs a person who can lead her into a future that is free of poverty and hunger and I think a narcissist is best suited to the job!