Wk6, Day I @HBS: The art of communicating, the wish to listen
On the last day of the previous module (yes, i did not ever get to write the learnings for that one), we were discussing about the importance of communication. We got to establish, what is communication.
Communication is not about transmitting, it is about receiving.
This is further, compounded by difficulty in a natural world, where people really do not want to hear what you are saying (well mostly). People are wanting to hear, what they want to hear.
Let me elaborate a bit.
At the beginning of our fourth module.
What HBS said: "Week 6 is going to be hectic and intense",
What we heard them saying "Like we scared you for the previous weeks, which you evidently got through, the next weeks are going to be slightly more challenging, you can go to watch game, lobsters, wine, dine and have fun."
What they actually wanted to say "Effective first hour of monday, you would be slaved into four lectures in a day. We will bombard you with exponentially more papers per case study. And just when you thought, picture could not get any bigger than the Minister of planning for a country to teach you, we will get the Former president to come and speak to you guys, and you better 'act' that you know 'something' !!"
Get the feeling, yes that one...
Masses, and their wish to listen
Its no different than the US current account deficit. That seems to say, loud and clear that (from a US point of view), we are eating more than what we are producing. That it is prudent to build some resilience into the system through savings, investing in 'export led strategy'. But then, that is what is being transmitted, I wonder if this is being received. (See S - I = X - M below)
Sub-prime crisis was the very same thing.
At a retail level all consumers wanted to hear was the good story about the house price escalation and the profits and returns. Banks wanted quick acquisition of business. Appraisers wanted to paid well, regulators had everything going as they had done for the last 30 years, and the Government was happy with the new growth story.
It is as if, everyone wanted to hear what they wanted to hear and simply ignored the underlying messages that were actually quite evident. And USA is not unique in this position, pick up any crisis that any country has seen, you would find barometric indicators showing the picture in all its clarity, only to get convoluted in what end users want to hear.
The art of communication makes the greatest leaders
When you meet with the President, he seems to appears to be more of a seasoned, business person. When you listen to him, his statesmanship is evident, loud and clear. His visions are crisp and his grasp of in-country, global and inter-country issues are spot on. (And who do you think, you are Alok ??) Well, I am merely presenting my view point.
Anyways - a passionate man, he presented some statistics that really open your eyes. You receive the message in such sharp contrast. In his short presentation, he has made a lasting impression - of not only the strong steps his country has taken under his leadership, but also the charisma that he draws to himself. Here are some position-altering stats from his speech.
1. For a foreigner, time to start a new business in Mexico now reduced to 9 days (as against 58 earlier)
2. If New Orleans was a country, it would be world's second highest homicide rate 62 (per 100,000 people). Detroit, Baltimore, Washington, Newark, Houston, Chicago - all of these will have higher homicide violence as compared to Mexico !! India comes way down at 3.4 (with cities like Delhi, Mumbai hovering at around 2-4)
3. Immigration from Mexico to USA, has remained at zero for the last three years.
My point, is these information data points existed all over, but for the President to come into a classroom of (atleast prospective) business leaders of the world and make a position statement for his country. To communicate in less than 40 minutes, how the picture in his country is that of a resurgent Mexic - Effectively, accurately and most importantly - a lasting impression. Now that is truly a remarkable person.
What did I learn today?
1. Answer to yesterday's equation
Y = C + I + E + (X-M)
GDP (Y) = C (Consumption) + I (investment) + E (Govt Spending) + (X (exports) - M (Imports) )
2. I also learnt
[Faint hearted folks may please skip this section]
- Y - C - E = I + (X - M) (Just realigning equation)
- Y - T - C + T - E = I + (X - M) (where T = taxes)
- (Y-T-C) + (T - E) = I + (X-M)
- Pvt Savings + Govt Savings = I + (X-M) (That is what earning - tax - consumption means)
- Savings - I = X - M
[Calling all of you back here]
So a net exporter country has savings greater than investments
A net importer country has savings less than investments.
3. Media typically does not know much about business. They are in business of reporting not understanding.
Alok
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