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Q And A: ‘Technology Can Never Replace Judgement’

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How is this book different from the other books on leadership?
Prasad: When I quit Apple, I was researching on how to design tools that will help enhance human intelligence. In the process, I found that we could come up with a lot of 'smart' solutions to achieve this objective — that is, technology-based solutions that augment human intelligence.

We interviewed many experts and discovered that there are tools that can serve this purpose and the technology to attain this goal can be engineered. There can be a number of tech-based solutions to our problems but that does not necessarily mean that we use any solution without weighing its benefits against the disadvantages.

My good friend, a scientist, has a peculiar habit of avoiding any kind of modern devices, such as microwave ovens, etc., while cooking. When I asked him the reason for it, he simply stated that though such tools have been created for the convenience of mankind, they do not always have a good effect on the mankind. When I persisted, asking for evidence that supported his argument, he responded stating that sometimes it serves us well to follow our belief systems than blindly follow evidence. This incident got me thinking about information-based decision-making -- using analytics, reason, logic, etc., to explain and understand situations and using these tools to guide people through such situations.

When we take decisions such as getting married, buying a house, or picking up food items, there is a tendency of not going through with it in a rational and logical manner. Intuition, faith, values and other such elements end up governing our decisions. Such elements cannot be translated into information-based analysis. Though these are not altogether unimportant, such things, if applied in an appropriate manner, leads to wisdom. So the two things in contention are learning that leads to wisdom and learning that leads to information.

We have observed that many CEOs take decisions based on the experience they have gathered in the field. We realised that in decision-making, one path is about being smart - intellectual, intelligent, analytical and information-based decision-making. And the other is based on experience and wisdom. Though the analytical approach seems more appealing and logical, sometimes, when it comes to making crucial decisions such as building a great organisation, a wise approach is equally important and necessary. We interacted with over a 100 top executives directly and about 40,000 executives through training programmes and felt that there is a need to differentiate as to what is smart and what is considered as wise decision making.

Many people feel that experience and wisdom is simply an aesthetic way of looking at a situation and is not of much help when it comes to business related decision-making. And despite having a so called analytical and business-like approach to decision-making, issues like ethical lapses still plague us. The problem arises when we apply logic and reason in areas where wise decision-making would serve the purpose better. Therefore, we decided to approach and explain this matter with examples and case studies.

We are now in the era of Big Data where correlations and analytics play a big role in business decisions. But your take is contrary to this direction...
Navi: Technology and human intelligence should go hand-in-hand with decision making. Technology, especially collaborative tools, is the best way to test your ideas. But it can never replace human judgement. With Big Data, you have a tsunami of information coming in, but making sense out of this information is purely based on human capability. If you can combine Big Data with human intuition, it can bring in great results. It should be a balancing act. Technology and human intelligence are not mutually exclusive or contradictory.

Prasad: Data collation can happen through tools. Big Data can give you trends, patterns and information that you can use to take decisions. These tools can replace human judgement. Technology-aided analysis is good, but we have to teach people to unlearn their inherent biases and deal with issues in a more logical fashion. Our technology is 21st century technology, but our decision-making skills are still like that of a person stuck in the 18thcentury. Of late, certain businesses globally have seen several ethical errors - for example, Rajat Gupta, the Barclays scandal, Satyam in India and many more. But not many seem to be learning from these mistakes.

Research shows that human beings take 30-40 years to learn from their own experience. We focus on our successes and that reinforces our suppositions. Only failures can teach us anything substantial. But our ego-entanglement with success prevents us from learning. So we don't learn from our mistakes till it's too late. But we noticed that people usually learn from other peoples mistakes. Here, we often judge people on the basis of outcome and choose the examples we find suitable to learn from.

Inherently, human beings are not tuned to learn from experience. Because experiences are behaviour and learning comes from the cognitive part; they don't match. We can rationalise other people's behaviour and actions. If you look at successful entrepreneurs or businessmen, they will always say, I can do better than anybody else in the world.

That is the schism we have. I am different. I won't make the mistakes they have made. They are from another industry, or they don't belong to my category and calibre, so I am never going to repeat the same mistake. As soon as you begin to look at it as if you are better, different or are not going to make the same mistakes, you start isolating yourself from learning from others' failures. Instead of being judgemental and criticising other people's decisions, if one can have empathy and compassion, then that would make a strong difference.

Navi: Inversely, it's also important not to follow the success formulas of others either. One of the qualities of successful people is that they always look for global best practices. They say what works in the US should be brought to India too. But that might not always deliver value. If you want to create your own benchmark, you have to find your own secret formula. Again, wisdom comes into play here.

Wisdom is all about knowing better than what's already in the market place. So, the key lies in knowing the right balance between following the best practice and establishing a 'next practice'. For instance, if Ratan Tata went looking for data on the global market for very small cars, it would have confused him completely, if not actually invalidated his intuition. So he said, I do not have much data because I am shaping a whole new market. So, there is no reference point to rely upon. So, the best practices is something that delivers value for an organisation because it has been implemented somewhere already; in a well-established market and has become the benchmark. It all points towards having the 'wisdom' in leadership.

Wisdom is like a muscle. And our research will teach you about the tools that you can use to enhance it. It's meant for building, say, six packs of wisdom. This aspect is very important in order to have a successful business. For example, in the US, if you are a venture capital firm with a new idea and applying for funding, the first thing they would ask you is about other players in the same market. If you tell them you are the only one, in all likelihood, they will not fund you. But if you tell them that there are 3-4 players already in the market and that you have a better solution, chances are that you will end up getting the support required.

Is wisdom linked to age? Many of the new, successful companies are run by young people who lack experience. Does that keep them from being wise?
Navi: There is a troublesome pattern emerging out of the tech sector. In Silicon Valley, in fact, there are two different kinds of companies. The first are those that were started some 20 years ago. When their founders launched into the market, they were able to become successful quickly. They were able to successfully ride what we call the tech-cycle wave. And many of them became very successful in that attempt. But even now they think that what worked for them in the past will bring in success in this era as well. That is wrong. They have to understand that the context has changed. They were working in the PC era, and now we are in the internet era. They have to realise that the strategies they applied in the PC era, or how they developed products and branded and marketed them have changed and they have to adapt to the new era. They don't recognise the fact that they have to change the surfboard. It might drown you on the second way. So there is an amazing generational shift happening among the first-wave companies and the second- or third-wave companies such as Google or Facebook. They realise that they cannot rest on the laurels and they have to constantly keep reinventing themselves. As Andrew Grove says, only the paranoids survive. The point is, wisdom has nothing to do with age. In the tech industry, the senior leaders tend to be smarter and the younger generation is much more open and willing to have more open discussions.

Prasad: To extend Navi's example, recently I heard a talk by Sabeer Bhatia (Hotmail). He keeps talking about grabbing "eyeballs", but eyeballs were important even before the dotcom era. Now, nobody talks about it. He feels that it's still important. Till he gets out of "eyeballs", he may not make it big again. The same way, if you talk to people in the Silicon Valley, for those who grew up with IBM or shrink-wrap products like Adobe, have difficulty in coming up with cloud or online products. Companies like Oracle will have difficulty in mobile computing. That means, the younger generation, which has grown up with social networking and so on, does not care much about putting their stuff online, confidentiality or such issues. For them, these just don't matter at all. They are natural crowdsourcers. But an older person like me will raise all kinds of questions over the 'big brother', 'privacy', etc. And the younger generation will say: "Jeez! You're from the ice age!"
Technology has provided an opportunity to grow and create disruptive future if we are being open, receptive and resilient - which are the characteristics of being wise. In essence, don't get stuck at one end of the pendulum.

How do you look at the free software communities and the open source way of leadership and decision-making? Can these lessons be applied in the walled, corporate environment as well?

Navi: Open Source is going to be a disruptive force in leadership. It means you trust the people you have around. It is really about distributed leadership, about trusting people to do the right thing, against the tendency to control everything from bottom up. Interestingly, in India, HCL has this concept of Open Innovation, thanks to Vineet Nayar's concept of Employees First. They have a platform where all employees can contribute ideas, innovation projects, etc. The advantage of an open source model is that it allows you to bring in different perspectives. People talk of open source as a new way of getting ideas. But ideas are just like data. But what makes open source interesting is its ability to have various perspectives. The problem with data is you can say this market is of $8 million and another set of data can value the same market at $10 million. But if you add perspective, you would say, "Wait, this market is dying. Instead of measuring this market, think of new markets!" That's where open source decision-making helps. Having said that, the open source model of decision-making will not work in an organisation whose leaders are not open minded.

Random House has published this book in India
jinoy (dot) bw (at) gmail (dot) com

(This story was published in BW | Businessworld Issue Dated 03-06-2013)