Ten interesting things we read this week

Some of the most fascinating topics covered this week are: Lifestyle ('Managing' and 'Measuring' your life; Young golfer needs a good read to succeed), Business (Vontobel's Matt Benkendorf on managing equities; Built leather bag business with just 25k and a cobbler), Leadership (Leadership qualities from a failed expedition) and Travel (Is Ladakh being loved to death?)

Published: Mar 21, 2020 09:28:15 AM IST
Updated: Mar 20, 2020 01:46:57 PM IST

reading covid19Image: Shutterstock

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: Lifestyle (‘Managing’ and ‘Measuring’ your life; Young golfer needs a good read to succeed), Business (Vontobel’s Matt Benkendorf on managing equities; Built leather bag business with just 25k and a cobbler), Leadership (Leadership qualities from a failed expedition) and Travel (Is Ladakh being loved to death?).

Here are the ten most interesting pieces that we read this week, ended March 20, 2019-

1) Managing Oneself by Peter R Drucker [Source: signallake.com
In order to be successful in your personal and professional life, you need to know how to manage yourself. And in this paper, Peter Drucker, management consultant, educator, and author, throws light on how to manage yourself to be successful. 1) Know your strength: The only way to discover your strengths is through feedback analysis. Whenever you make a key decision or take a key action, write down what you expect will happen. Nine or 12 months later, compare the actual results with your expectations. Also, one should waste as little effort as possible on improving areas of low competence.

2) How do you perform?: Am I a reader or a listener? and How do I learn? are the first questions to ask. But they are by no means the only ones. To manage yourself effectively, you also have to ask. Do I work well with people or am I a loner? And if you do work well with people, you then must ask. In what relationship? Some people work best as subordinates. 3) Your values matter: To be able to manage yourself, you finally have to ask. What are my values? This is not a question of ethics. To work in an organization whose value system is unacceptable or incompatible with one's own condemns a person both to frustration and to non-performance. To be effective in an organization, a person's values must be compatible with the organization's values. They do not need to be the same, but they must be close enough to coexist.

4) Where do you belong?: Mathematicians, musicians, and cooks are usually mathematicians, musicians, and cooks by the time they are four or five years old. Physicians usually decide on their careers in their teens, if not earlier. Knowing where one belongs can transform an ordinary person -hardworking and competent but otherwise mediocre-into an outstanding performer. 5) What should you contribute?: To answer it, one must address three distinct elements: What does the situation require? Given your strengths, your way of performing, and values, how can you make the greatest contribution to what needs to be done? And finally, what results have to be achieved to make a difference?

2) The Butterfly Effect: Everything you need to know about this powerful mental model [Source: Farnam Street]
The Butterfly effect is known all over, but can a tiny detail result in something big? This piece talks about its origin and how it affects the world, business, market, etc. Although the concept of the butterfly effect has long been debated, the identification of it as a distinct effect is credited to Edward Lorenz (1917–2008). Lorenz was a meteorologist and mathematician who successfully combined the two disciplines to create chaos theory. During the 1950s, Lorenz searched for a means of predicting the weather, as he found linear models to be ineffective. In speeches and interviews, he explained that a butterfly has the potential to create tiny changes which, while not creating a typhoon, could alter its trajectory.

But how does this affect business? Marketplaces are, in essence, chaotic systems that are influenced by tiny changes. This makes it difficult to predict the future, as the successes and failures of businesses can appear random. Periods of economic growth and decline sprout from nowhere. This is the result of the exponential impact of subtle stimuli—the economic equivalent of the butterfly effect.

In The Butterfly Effect in Competitive Markets, Dr. Rajagopal writes that most global firms are penetrating bottom-of-the-pyramid market segments by introducing small changes in technology, value perceptions, [and] marketing-mix strategies, and driving production on an unimagined scale of magnitude to derive a major effect on markets. Well-managed companies drive small changes in their business strategies by nipping the pulse of consumers. Most firms use such effect by making a small change in their strategy in reference to produce, price, place, promotion,… posture (developing corporate image), and proliferation…to gain higher market share and profit in a short span.

3) Death, taxes, and three other inevitable things [Source: Collaborative Fund]  
This piece talks about a few inevitable things that no one can change. Talent will cluster around tiny groups of people: Equal talent does not get equal recognition because customers, employers, and fans like associating with known winners. And being known as a winner is not the same thing as being talented. Because: 1) winning opens doors, so perceived talent creates greater opportunities for actual talent. The best athletes get the best coaches; the best investors get the most patient capital; and 2) perception of winning makes it easier for people to check the boxes necessary to value your worth.

Boom-bust cycle will never go away: Bold leaders will rise to the top, with the brashest rising fastest. Employees and investors gravitate toward bold, and boldness creates the fastest growth in the shortest time. But boldness rarely knows how to tone it down, because it’s so foreign to the personality that brought success. So the kind of person who rises to the top keeps pushing until they’re forced to stop, which is often when they go over a cliff and can’t come back. Booms and busts will never go away because people capable of causing a boom rise to the top and keep rising until they cause a bust.
Some social problems will never be solved: Every solution to a social trend is, at best, like the flu vaccine. It can be effective in a given period of time. But it has to be constantly updated, because the virus it’s protecting against evolves and adapts. Few problem-solvers want to admit that. It’s neither easy or intuitive to let go of a good idea whose time has passed. So we’ll always be debating problems and chasing new answers, despite our desire to think we’ve found a solution. As certain as death and taxes.

4) Managing equities with Vontobel’s Matt Benkendorf [Source: ritholtz.com]
Matt Benkendorf, CIO of Vontobel Quality Growth which runs about $35 billion in equities, in this conversation talks about how different people approach investing. Vontobel has a very unique approach, a single team puts money to work in all those areas. A lot of firms do not operate that way. They have amassed quite an outstanding track record beating comparable firms and their benchmark for quite a long number of years. Mr. Benkendorf says that he always was interested in business. And as a kid, he found stock market interesting. 

Talking about his process of selecting stocks, he says that one of the greatest advantages in investing is typically behavior management. For him, investing is like dieting. A lot of people know the keys to living typically longer, healthier, happier life, right? What you should eat, what you shouldn’t eat, how you should exercise, and those elements, the key is discipline. And investing he thinks is very similar to that, it comes down to discipline, the roadmap is fairly clear and it’s been well out by Warren Buffett years ago. 

Further, he talks about high conviction, education, investment industry, mentors, etc. On reading, he says that he like reading non-fiction and history a lot. Some of the books he likes are biography of FDR from Jean Smith, Chernow Hamilton biography, and A World Lit Only by Fire. Besides reading, he also likes to go skiing in the mountains.

5) 6 ways to measure your life [Source: HBR]
Harvard Business School’s graduating class asked HBS professor Clay Christensen to address them. But not on how to apply his principles and thinking to their post-HBS careers. The students wanted to know how to apply them to their personal lives. So here’s a set of guidelines that he shared with the students which have helped him find meaning in his own life. 1) Create a strategy for your life: It’s quite startling that a significant fraction of the 900 students that HBS draws each year from the world’s best have given little thought to the purpose of their lives. Having a clear purpose in life is essential. Mr. Christensen spent one hour every day thinking about his purpose in life, till he figured it out. Without a purpose, life can be hollow. 
 
2) Allocate your resources: Your decisions about allocating your personal time, energy, and talent ultimately shape your life’s strategy. Still, people spend most of their time and energy behind things that won’t make a difference in their lives. 3) Create a culture: If you want your kids to have strong self-esteem and confidence that they can solve hard problems, those qualities won’t magically materialize in high school. You have to design them into your family’s culture—and you have to think about this very early on. Like employees, children build self-esteem by doing things that are hard and learning what works.

4) Avoid the “Marginal Costs” Mistake: If you give in to “just this once,” based on a marginal cost analysis, you’ll regret where you end up. You’ve got to define for yourself what you stand for and draw the line in a safe place. 5) Remember the importance of humility: If you have a humble eagerness to learn something from everybody, your learning opportunities will be unlimited. 6) Choose the right yardstick: Don’t worry about the level of individual prominence you have achieved; worry about the individuals you have helped become better people. Think about the metric by which your life will be judged, and make a resolution to live every day so that in the end, your life will be judged a success.

6) A young golfer needs a good read to succeed [Source:pgatour.com]
All know the benefits of reading. Take the top 10 richest person in the world and you’ll find that majority of them love to read and spend most of their time reading. And it’s the same with a young golfer, Rory Mcllroy. “Books,” Rory McIlroy says. “I have some on my phone and e-books just as references, and you can highlight stuff, but I take it in more when I’m holding the book and get to turn the pages.” This defending champion of THE PLAYERS Championship is himself a reader.

“I spend enough time around a lot of impressive people, and one of the common denominators, always, is they read a lot,” McIlroy says. “Readers are usually successful people and great people to be around. I had read before, but it had always been biographies and fictional stuff. Over the last couple of years, I’ve gotten more into the psychology or self-help or that sort of stuff.” He further says how other renowned golfers like Tiger Woods and Lucas Glover like to read. 

Asked at the Masters last year to name the best book he’d read in the previous 12 months, McIlroy was surprisingly expansive. “The Greatest Salesman in the World, by Og Mandino, that’s one that I sort of refer back to every now and again,” replied McIlroy. “Either of the Ryan Holiday books are pretty good, The Obstacle is the Way or Ego is the Enemy. Just started on Steve Jobs biography by Walter Isaacson, so getting into that. There’s four.” He later mentioned a fifth, “Digital Minimalism” by Cal Newport.
McIlroy, who has deleted several apps from his phone, wonders what all of our screens are doing to us and tries to go low-to-no-tech during tournament weeks, preferring jigsaw puzzles and, yes, books.

7) Israeli Research Center to Announce It Developed Coronavirus Vaccine [Source: haaretz.com]
Covid-19 has created havoc across the world. Most countries are doing their best to contain the virus from spreading. Even if that means a complete or partial lockdown. But, it now seems like a panacea is around the corner. Scientists at Israel’s Institute for Biological Research are expected to announce in the coming days that they have completed development of a vaccine for the new coronavirus Covid-19.
Scientists have recently had a significant breakthrough in understanding the biological mechanism and qualities of the virus, including better diagnostic capability, production of antibodies for those who already have the virus and development of a vaccine.

Before the vaccine can be used for humans, it will have to undergo a series of tests and experiments. The Institute for Biological Research, located in the central Israeli town of Nes Tziona, was established in 1952 as part of the Israel Defense Forces' Science Corps, and later became a civilian organization. It is technically under the supervision of the Prime Minister's Office, but is in close communication with the Defense Ministry.

Prime Minister Benjamin Netanyhu ordered the institute to devote resources to developing a vaccine for COVID-19 on February 1. Normally, a long process of pre-clinical trials on animals would be the next phase, followed by clinical trials. This period allows for a full characterization of side effects and a better understanding of how different populations are affected. Spreading of virus can be contained the vaccine passes the test on humans. Till then we need to take care of ourselves.

8) Real Leaders: Ernest Shackleton Leads a Harrowing Expedition [Source: HBR]
In this talk, HBR Editor in Chief Adi Ignatius and Harvard Business School professor and historian Nancy Koehn analyze an explorer, Ernest Shackleton’s leadership during the struggle to survive. They discover lessons in building a team, learning from bad bosses, and cultivating empathy. 

In 1915, polar explorer Ernest Shackleton’s ship became trapped in ice, north of Antarctica. For the next two years, he kept his crew of 27 men alive on a drifting ice cap, then led them in their escape. How Shackleton did that has become one of the most famous leadership case studies. 

They discuss in length about how Mr. Shackleton managed to keep his team motivated, even as their ship sunk and they had to live in tents on ice. Years after this expedition, the BBC went back in the early 30s and interviewed, the radio interviewed all the survivors. And they asked them, “How did you do this?” All of them said, “the boss”, which was their nickname for Mr. Shackleton, “made us believe that we could each do it.”      

9) With Rs 25k and one cobbler, this entrepreneur built a Rs170Cr leather bags brand out of Puducherry [Source: yourstory.com]
You might have read many business success stories. And this one is no different. Dilip Kapur, who holds PhD in international affairs, fell in love with leather while working part-time at a leather factory. After completing his studies and returning to Puducherry, Dilip started making leather bags as a hobby. His time at the factory taught him all he needed to know about making leather bags. Dilip started sourcing leather from Chennai and started making hand-crafted leather bags in Auroville.

When he started Hidesign, all he had was Rs25,000 and a cobbler. Starting small, Dilip’s wakeup call came in the form of a German tourist who visited Puducherry. The tourist, impressed by Dilip’s work, said he wanted 1,400 bags. He started making wallets and computer bags under his brand. By 1988, Hidesign had ventured into garments, with leather jackets and long pants. The UK market couldn’t get enough of Dilip’s leather bags. Hidesign was soon present across 700 stores in London. “In 1990, we set up a factory in Puducherry, but were still not ready to enter the Indian market. It took another nine years to finally open the first few Hidesign stores in India,” he says.

Hidesign now boasts 1,400 employees and clocks Rs170 crore gross annual revenue. It has evolved from a leather goods maker into a lifestyle brand with presence in exclusive stores, airport stores, shop-in-shops, multi-brand outlets, and ecommerce platforms. It claims presence in 102 exclusive brand outlets and 112 large format departmental stores. Mr. Kapur still faces challenges in reinventing himself and the Hidesign brand in order to stay relevant. As customers’ lifestyles keep shifting, he tries to meet their demands and their desire to “look attractive and upmarket.” Hidesign’s focus in the past year has been on airport stores. Going forward, it wants to make inroads into Tier II and Tier III cities as well as expand its reach in international marketplaces.

10) Is Ladakh being loved to death? [Source: Livemint]
Ladakh is on the bucket list of almost every Indian and all bikers. Also, Bollywood has made it more desirable. But, the surging tourism in Ladakh is something to worry about. What used to be a six-month tourism season in Ladakh is today a year-long affair. Many people come here to trek the mountains. According to the All Ladakh Tour Operators Association (Altoa), around 3,150 permits were issued in the 2019 season (the Chadar trek season runs through January and February). The Chadar trek is a microcosm of Ladakh. What was once a region known for its serenity and solitude is today better known for the hordes of tourists who have put severe strain on Leh and other popular spots in the vicinity.
Records from Ladakh Tourism reveal how dependent Ladakh has become on tourism over the years. In 1990, there were just 6,738 visitors (6,342 foreigners; 396 Indians); this rose to 18,055 (11,828 foreigners; 6,227 Indians) by 2000. In 2008, the figure climbed to 74,334 (35,311 foreigners; 39,023 Indians), with Indian tourists outnumbering foreigners for the first time.  Even the air quality around the region has gone downhill. Even the tourists are to be blamed for the mess that they are making.
 
It’s very common to see tourists at inland lakes like Pangong Tso and Tso Moriri in the Changthang region of Ladakh feeding potato chips to marmots, a small burrowing mammal. While this makes for “cute" photographs, the tourists are completely unmindful of the fact that they are interfering with the natural cycles of a wildlife habitat. Climate change too has had its impact on the mountains of Ladakh. Research conducted by scientists A. Chevuturi, A.P. Dimri and professor R.J. Thayyen shows an increase in temperature and a change in precipitation patterns since the mid-1990s. Only if the people of Ladakh and tourists understand the importance of the serene nature they have, our children will get to see the Ladakh that we saw.

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