Some of the most fascinating topics covered this week are: Management (Why companies are so bad at hiring), Education (Is MBA degree in crisis?), Big Data (Big brands rekindle growth), Environment (Smoking Amazon is bad for planet's health?), Psychology (Lessons for us from Einstein's loneliness), Business (Solving company problems using desi networks) and Recession (Next one will destroy the millennials)
At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, ranging from zeitgeist to futuristic, and encapsulate them in our weekly ‘Ten Interesting Things’ product. Some of the most fascinating topics covered this week are: Management (Why companies are so bad at hiring), Education (Is MBA degree in crisis?), Big Data (Big brands rekindle growth), Environment (Smoking Amazon is bad for planet’s health?), Psychology (Lessons for us from Einstein’s loneliness), Business (Solving company problems using desi networks) and Recession (Next one will destroy the millennials).
Here are the ten most interesting pieces that we read this week, ended September 06, 2019.
1) Why companies are so bad at hiring [Source: Economist] Employees are the pillars of any company. Hiring good employees is essential for each and every company. But, do the companies monitor the effectiveness of hiring? Only a third of American companies check whether their recruitment process produces good employees. That is one of the striking revelations in a recent survey of hiring by Peter Cappelli, professor of management at the Wharton School in Philadelphia. Mr. Cappelli points out that there are some simple things employers could do: check how long newly hired workers stay at the company, or ask a supervisor whether they regret the hiring decision.
Companies often seem to be channelling Groucho Marx in their approach to applicants: they won’t hire someone who is actively looking for work. Employers seem to operate on the principle that there must be something wrong with someone who is unhappy with their current job. Instead they aim to lure “passive” candidates who have shown no sign of wanting to move. Inevitably, this is time-consuming. It can also come back to bite companies, as rival firms compete to lure away each other’s staff. The best interview strategy is to ask all applicants the same set of predetermined questions. That way answers can be fairly compared. Managers, though, tend to improvise, looking for workers who will be a “cultural fit”, with questions like “what would you do if stranded on a desert island?”
Unsurprisingly, this technique is subject to the biases of the interviewers, who then tend to recruit people most like themselves. So how can companies improve? Mr. Cappelli suggests that firms post all job openings internally, check how many positions are filled from within, and make a greater effort to see how outside hires perform. Improving productivity is generally agreed to be the best way to achieve faster economic growth and higher living standards. Recent productivity improvements have been sluggish. Hiring the right people would be an important way to shift the trend.
2) Big brands turn to big data to rekindle growth [Source: Financial Times] With the ever-changing technology and new consumer products, start-ups are springing up to provide better, in-depth insight to consumer goods companies. One such company is Black Swan, a London-based start-up that hoovers up data from social media, online forums, product review websites as well as other sources and then analyses it to see what consumers want. Black Swan has signed up 16 big consumer goods companies as clients in the past six months alone, including PepsiCo, Danone and McDonald’s, putting it on track to double revenue this year to reach £30m. It is growing quickly because it offers something the leading consumer goods companies, whose revenue growth has slowed to a trickle in recent years, desperately need: an understanding of what fickle shoppers will buy in the future, as well as insights into how to best pitch products to them.
The makers of well-known foods, drinks and household brands have faced generally slower growth since 2012, which has made it clear that the big companies can no longer dictate consumer tastes as easily as they did in the past. Worse, they are often caught off guard by trends such as veganism or high-protein “Paleo” diets and then have to scramble to respond when new brands start to take market share. That’s when start-ups like Black Swan come to their rescue.
Black Swan is using newer methods including online polls that can be done in a few days instead of taking the usual four-six weeks. One such provider, Zappi, has signed up dozens of consumer companies to its self-service platform. It allows marketers to set up their own studies and quickly test ideas with panels of people selected by age, income, or location. Other start-ups, such as London-based Streetbees, allow companies to conduct one-on-one video interviews via smartphone that can be arranged at a moment’s notice with consumers anywhere from Moscow to Oregon. It is still too early to tell whether the adoption of digital tools to predict consumer trends and improve marketing will really be enough to help spur faster growth in the sector.
3) Why everything they say about the Amazon, including that it's the 'Lungs Of The World,' is wrong [Source: Forbes] Global warming has recently been the topic of discussion these days, with the Amazon rain forest being the main focus. Celebrities, environmentalists, and political leaders blame Brazilian president, Jair Bolsonaro, for destroying the world’s largest rainforest, the Amazon, which they say is the “lungs of the world.” But, are they correct in blaming? Most of the photos that these celebrities shared were of different geographies, not Brazil’s Amazon rain forest. The photo Ronaldo shared was taken in southern Brazil, far from the Amazon, in 2013. The photo that DiCaprio and Macron shared is over 20 years old. The photo Madonna and Smith shared is over 30. Some celebrities shared photos from Montana, India, and Sweden.
CNN and New York Times repeated the claim that the Amazon is the “lungs” of the world. But, one of the world’s leading Amazon forest experts, Dan Nepstad, said that it’s bullshit, “There’s no science behind that. The Amazon produces a lot of oxygen but it uses the same amount of oxygen through respiration so it’s a wash.” While the number of fires in 2019 is indeed 80% higher than in 2018, it’s just 7% higher than the average over the last 10 years ago, Nepstad said. Amazon forest fires are hidden by the tree canopy and only increase during drought years. “We don’t know if there are any more forest fires this year than in past years, which tells me there probably isn’t,” Nepstad said. “I’ve been working on studying those fires for 25 years and our [on-the-ground] networks are tracking this.”
Against the picture painted of an Amazon forest on the verge of disappearing, a full 80% remains standing. Half of the Amazon is protected against deforestation under federal law. Today, 18 – 20% of the Amazon forest remains at risk of being deforested. “I don’t like the international narrative right now because it’s polarizing and divisive,” said Nepstad. “Bolsonaro has said some ridiculous things and none of them are excusable but there’s also a big consensus against accidental fire and we have to tap into that.” Despite climate change, deforestation, and widespread and misleading coverage of the situation, Nepstad hasn’t given up hope. The Amazon emergency should lead the conservation community to repair its relationship with farmers and seek more pragmatic solutions, he said.
4) The curse of genius [Source: Economist] This longish article throws light on the grim or the lesser-known side of being a genius. Tom is a genius and loves solving sums instead of going out and playing with other kids at breaks. One day his parents took him to Milton Keynes to have his intelligence assessed by an organisation called Potential Plus, formerly the National Association for Gifted Children. The results were astonishing to the parents; Tom’s intelligence put him in the top 0.1% in Britain.
But children like Tom are different. He was brought up in an underprivileged part of south London: 97% of pupils at his first school didn’t speak English as a first language. When it comes to numbers – or his other passions such as Latin and astrophysics – Tom’s parents have little idea what he’s talking about. His genius is not of their engineering. Society prizes intelligence. Geniuses are viewed with awe and assumed to be guaranteed prosperity and success. Yet there is a dark side to intelligence. Like many gifted children, Tom’s childhood has often been unhappy. Aged five, he talked about wanting to end his life! There are such cases in this piece that the author discusses in detail.
So how can you educate such kids to strike a balance? The challenges are complex and often competing. On the one hand they are able to master material sooner and more rapidly than their peers. On the other, because the social skills of many such children are poorly developed, it can be extremely difficult for them to be a child in the traditional sense, to fit in and to learn many of the non-verbal, non-testable skills that social activity teaches you in preparation for being an adult. Even Albert Einstein, one of the most emblematic examples of genius, wrote in 1952: “It is strange to be known so universally and yet be so lonely.”
5) It’s Official: The M.B.A. degree is in crisis [Source: Forbes] Is getting an MBA useful in today’s world? While the MBA students are landing very good jobs, for the second consecutive year, even the highest ranked business schools in the US are beginning to report significant declines in MBA applications and the worse is yet to come, with many M.B.A. programs experiencing double-digit declines. Last year, the top ten business schools combined saw a drop of about 3,400 M.B.A. applicants, a 5.9% falloff to 53,907 candidates versus 57,311 a year earlier. The University of Michigan Ross School of Business experienced the worst drop, an 8.5% decline from 3,485 to 3,188 apps. Harvard fell 4.5%, UC-Berkeley Haas 7.5%, Wharton 6.7%, Stanford 4.6%, and Booth 8.2%.
While there are a precious few exceptions, the early reports on 2018-2019 applications are bleak. Some other highly prominent business schools are reporting lesser declines but the trend of young professionals showing less interest in an MBA is certain. The University of Pennsylvania’s Wharton School just announced that applicants for its fall 2019 intake numbered 5,905, down 5.4% from 2018 and 11.8% from the school’s all-time high of 6,692 in 2017. “The M.B.A. market is in dire straits right now,” concedes Andrew Ainslie, dean of the University of Rochester’s Simon School of Business. “The joke among deans is that ‘flat is the new up.’
Deans attribute the decline to a confluence of factors that include a strong U.S. economy, which is keeping more people in their jobs, as well as uncertainly over work visas by international students who also have been scared off of coming to the U.S. due to anti-immigration rhetoric. It’s not all bad news, of course. “The positive side of the news is that this is causing us to do some really interesting new product development,” adds Ainslie. “The online market is really maturing and there are some excellent offerings out there. Master’s programs in business are slowly moving from a product solely for international students to domestic students. We are seeing the demise of the M.B.A. but we are still getting a lot of students in different degree programs.”
6) Nine things that make you unlikable [Source: Forbes] Did you know that you could control your likability? In a study conducted at UCLA, subjects rated over 500 descriptions of people based on their perceived significance to likability. Here are the key behaviors that hold people back when it comes to likability: 1) Humble-bragging: We all know those people who like to brag about themselves behind the mask of self-deprecation. While many people think that self-deprecation masks their bragging, everyone sees right through it. This makes the bragging all the more frustrating, because it isn’t just bragging; it’s also an attempt to deceive.
2) Being too serious: People gravitate toward those who are passionate. Likable people balance their passion for their work with their ability to have fun. 3) Not asking enough questions: The biggest mistake people make in conversation is being so focused on what they’re going to say next or how what the other person is saying is going to affect them that they fail to hear what’s being said. 4) Emotional hijackings: An emotional hijacking demonstrates low emotional intelligence. As soon as you show that level of instability, people will question whether or not you’re trustworthy and capable of keeping it together when it counts. 5) Whipping out your phone: Nothing turns someone off to you like a mid-conversation text message or even a quick glance at your phone. When you commit to a conversation, focus all of your energy on the conversation.
6) Name-dropping: It’s great to know important and interesting people, but using every conversation as an opportunity to name-drop is pretentious and silly. 7) Gossiping: People make themselves look terrible when they get carried away with gossiping. Wallowing in talk of other people’s misdeeds or misfortunes may end up hurting their feelings if the gossip ever finds its way to them, but gossiping is guaranteed to make you look negative and spiteful every time. 8) Having a closed mind: If you want to be likable, you must be open-minded, which makes you approachable and interesting to others. No one wants to have a conversation with someone who has already formed an opinion and is unwilling to listen. 9) Sharing too much, too early: Getting to know people requires a healthy amount of sharing, and sharing too much about yourself right off the bat comes across wrong. Be careful to avoid sharing personal problems and confessions too quickly.
7) Universal pattern explains why materials conduct [Source: Quanta Magazine] Why do the electrons act the way they do? Over the last 50 years, mathematicians and physicists have begun to grasp that this blizzard of movement settles into elegant statistical patterns. Electron movement takes one statistical shape in a conductor and a different statistical shape in an insulator. In a paper posted online, Paul Bourgade of New York University, Horng-Tzer Yau of Harvard University, and Jun Yin of the University of California, Los Angeles, prove the existence of a mathematical signature called “universality” that certifies that a material conducts electricity.
The paper is the latest validation of a grand vision for quantum physics set forward in the 1960s by the famed physicist Eugene Wigner. Wigner understood that quantum interactions are too complicated to be described exactly, but he hoped the essence of those interactions would emerge in broad statistical strokes. Universality describes many different kinds of things: the frequency and size of avalanches, the timing of buses in decentralized transit systems, and even the spacing of cells in the retina of a chicken. It pertains, in general, to complex, correlated systems.
When materials conduct, it’s precisely because their electrons are interacting in an orderly correlated way — moving together as if in lockstep, carrying the electrical current along. This new paper gets almost all the way there. The three authors work with models in which particles interact with more particles than just their immediate neighbors, but not with all the particles in the system. The matrices describing such interactions are called random-band matrices. The authors proved that eigenvalues in certain random-band matrices — those where the band is a certain minimum width — still follow the distribution Wigner observed in mean-field matrices. This means that even when you restrict electrons to interacting only with other particles in their neighborhood, the entire physical system still maintains the same type of average statistical behavior — the distribution of its eigenvalues — that Wigner found in his more stripped-down framework.
8) Solving business problems using desi networks [Source: Livemint] To start a business and keep it running successfully takes lots of hard work and dedication. There are many challenges and obstacles that come through in every kind of business. Be it any business, big or small, each and everyone have their share of ups and downs. It’s surviving the downs that make businesses strong. And to do that the promoters or the founders of the company need to be strong emotionally, and also when it comes to managing the company. A good way to keep one motivated and enthusiastic about their business is through Bouncing Board, at least in India.
A Bouncing Board is a closed, informal club of a dozen entrepreneurs from diverse sectors and without competing business interests. So, for instance, a Bouncing Board can only have one industrialist who operates in the real estate sector. Besides monthly meetings, the members get together twice a year for a day-long retreat where they candidly share everything that concerns their business and personal lives—from family feuds to falling revenues. Empathy and complete confidentiality are the currency in which the membership fee is paid.
For entrepreneurs in small industrial clusters such as Erode (about 400km from Chennai) who often do not have the advantages of exposure to a wider spectrum of professionally run businesses in metropolitan cities, ready access to industry platforms or a sizable corps of professional managers, Bouncing boards have become a vital self-help group.
9) The next recession will destroy millennials [Source: citylab.com] Recessions are never good for anyone. Especially for the millennials. For adults between the ages of 22 and 38, after all, the last recession never really ended. Millennials got bodied in the downturn, have struggled in the recovery, and are now left more vulnerable than other, older age cohorts. As they pitch toward middle age, they are failing to make it to the middle class, and are likely to be the first generation in modern economic history to end up worse off than their parents.
Cost pressures have also made it difficult or impossible for millennials to save or invest. The share of Americans under the age of 35 who own stocks has meandered down from 55% in 2001 to 37% in 2018, in part because employers are less likely to offer retirement-savings plans and in part because millennials have nothing left over at the end of the month to put away.
The next recession—this year, next year, whenever it comes—will likely make that millennial disadvantage even worse. Already, millennials have put off saving and buying homes, as well as getting married and having babies, because of their crummy jobs and weighty student loans. A downturn that leads to higher unemployment and lower wages will force millennials to wait even longer to start accumulating wealth, making it far harder for them to accumulate any wealth at all.
10) Army of women earning $4 a day could be behind your next iPhone [Source: Bloomberg] India has been benefitting from the trade war between the US and China. Foxconn’s plant in Sri City employs almost 15,000 workers—about 90% of them women—and assembles phones for various manufacturers, including local best-seller Xiaomi. After the US President asked US companies to pull out of China, citing national security law as justification, many company have started looking for an alternative. “It’s a good business principle not to put all your eggs in a single basket,” says Josh Foulger, who runs Foxconn’s India operations. “We have to find viable and reliable alternatives. Obviously the alternative location has to be competitive. We can’t put a factory in Mexico for manufacturing mobiles. It might have worked 10 years ago, it just won't work today.”
Foxconn currently ships parts in from China, but hopes one day to manufacture displays and printed circuit boards locally. Mr. Foulger says that India has till now manufactured for India only, but soon India will start manufacturing for the world. They have a staunch partner in Prime Minister Narendra Modi who is under pressure to bring down a jobless rate that currently exceeds 6%. His government’s four-year-old “Make in India” policy seeks to turn the country into a manufacturing power by offering incentives to foreign companies to open factories. “The plan is to expand India’s $25 billion phone manufacturing to $400 billion by 2024,” says Pankaj Mahindroo, who heads the Indian Cellular & Electronics Assn. “A substantial portion of it will be for the export market.”
Foxconn was integral to China’s transformation into a manufacturing colossus. Can it do the same with India? “China’s advantage was its massive labor pool that could produce quite cheaply, and they built on that by investing heavily in logistics and transportation,” says Andrew Polk, a founding partner with Trivium China, a Beijing-based research firm. Catching up will require the Indian government and private sector to invest heavily in roads, rails, ports and other infrastructure. “When China did it, global supply chains were fragmented and there wasn’t another China,” Polk says. “India will not only have to get it right but they have to get it right in a way to better China, and trade wars can only help at the margins." China also had the benefit of being able to grow without worrying too much about the environmental impact. With concern about climate change growing, “that’s not going to fly these days,” he says.