PoS Dec 2019 | Year-end round-up of Perspectives on Strategy
As this tumultous year draws to a close, here is a consolidated edition of my Perspectives on Strategy during 2019.
They cover an eclectic range of topics: sales strategies, CEO incentives, preparing for the long term, risk under uncertainty and high stakes, commentary on flawed government policies, and Game Theory influenced politicking. You can catch up if you missed any of the issues.
I wish you a happy and bright New Year.
Will Venkat’s Plan Work?
Venkataraman Aravind is the Head of Sales of a mid-sized firm. He is battling a problem: his sales executives do not submit daily report of activities regularly.
Venkat has tried persuasion, and occasionally mild punishment. They have not had lasting impact. Executives see daily reports as an avoidable chore. So Venkat planned an incentive scheme. More.
Venkat’s Plan Part 2: The Game Theory Trap
The overwhelming majority felt Venkat’s incentive scheme would fail. Should sales people be paid an incentive to do their jobs?
But when studied through the Lens of Game Theory the incentive scheme throws up interesting possibilities. This game is not between sales executives and Venkat. It is among the executives themselves, each competing with the other to win as much money as they can. More.
Taking The Long View
On a chance visit to the Swaminarayan Temple in Kolkata (erstwhile Calcutta, India) recently I heard an interesting anecdote on the importance of taking the long view, a really long view.
It is an impressive edifice but what was most remarkable was the story associated with its construction. It offers rich lessons for managers and business leaders. More.
Just How Risky Is Risk?
How accurately do we measure the real risk in risks we take in our personal and professional lives? Often we do not do it well enough. In May 2019 I completed a 6-day, 66 kilometre trek to Bali Pass in the Himalayas.
I had failed to assess the danger and risk when I signed up for the trek. I wonder how often we, as corporate leaders, make erroneous judgement of risk. More.
Stop Bribing Your Managers
There is hardly a company today that does not have an incentive program for managers. For CEOs and senior managers bonuses are hefty. Large bonuses are especially pernicious.
In spite of overwhelming evidence that monetary rewards do not work, the practice continues unabated. More.
New Traffic Rules: High Penalties Just Do Not Work
Effective September 1, 2019, the new traffic rules in India imposed large fines (4 to 5 times higher than earlier) for violations.
Unfortunately, the new rules are not likely to bring about any significant change in the long run. Because larger fines do not work. Good intentions do not make a policy effective. Science does. More.
Brinkmanship in Maharashtra: A Game Theory Perspective
When Maharashtra Assembly election results were declared on October 24, 2019 it was a foregone conclusion that BJP would form the government with their ally Shiv Sena. With 161 seats between them they had clear majority in the 288-member House.
That it was not be is an interesting application of Game Theory in political strategy. More.