Book Review | HBR Guide to – Finance Basics for Managers

I am not so good in finance even after doing my MBA (which was in HR). It’s definitely not the easiest subject to understand however is the most important one. I will skip mentioning the arguments for its importance in our day to day life, be it investments or handling your current role at work. The bottom line is, we need to know, understand & use this domain. Fact – the term ‘bottom-line’ is itself taken from finance, a ‘part’ of P&L statement!

I accidently stumbled across this book in my college’s library in the ‘Philosophy’ section, strangely. I have always been an avid reader of HBR, so much that I find 60% of HBR articles pure & unadulterated BS. So, my initial reaction to this book was a feeling similar to puking. But my horrible experience with other books on such subject, and the small size of this one, made me pick it up.

As a person who is not interested in finance, I can tell you, this book is awesome! I don’t think there is any other text out there which has simplified the basics and important concepts of the subject as beautifully and elegantly as this one. The book has a 10-question quiz at the beginning, to keep a track of your knowledge before and after. My score: before 3/10, after 9/10.

The book takes you smoothly through all three types of financial statements (balance sheet, income statement and cash flow statement), explaining what comes where and why. With examples, which are very simple to understand and calculate. It explains various financial ratios like ROI, Working capital and many more which we regularly hear during our day to day dealings. It makes you understand that why a profitable business can go bust if cash flow is screwed. The clarity and simplicity is amazing.

This is a book which can ignite your deep interest in the subject, no matter how low your current level of knowledge may be. This book can act as your foundation for financial knowledge (of some sorts). I am done with this and have started reading another & little more detailed book on ‘Business Finance’.

Employee Engagement at Workplace

Don’t worry, I am not going to ‘define’ it and I will not try to state its ‘importance’ and many ‘could-be’ possible impacts on ‘employee satisfaction & business results’. There is far too much literature out there which tries to explain that, so we will leave that to those ‘experts’, who apparently neither play any real on-the-floor role in such events nor in their planning & design. Let’s talk about: those who do; what to do; how to do and other execution matters.

A disclaimer: No matter what we say or hear/read about employee engagement in HBR, HR conclaves, meetings and discussions, in current Indian context, in the majority of organizations, it is largely ‘entertainment’ than ‘engagement’, which is not that bad at this stage. We do need to fill in some metrics where we are asked how any engagement activity results in some direct or indirect business results. Good intentions, irrelevant context. The HR function needs to be at some minimum maturity level (e.g. CMMI 2 or 3) before getting and analyzing metrics makes sense. And often that’s not the case, but it’s like an elephant in the room, no one wants to see it.

Moving focus to the actual employees, we don’t need to run a survey to know that too few ‘engagement’ activities are being done in a quarter/year. Because survey’s purpose is to uncover something which is not apparent. Employees are dying to have some fun activities, they are more than happy if something decent is conducted. They are not specifically looking for some ‘learning points’ from such activities, and they won’t refuse to participate in an activity if it has no apparent ‘teaching’. But we as HRs are unable to deliver even that. They form their fun committees amongst themselves and try conducting something. And we don’t even attend those, but conveniently use those activities and metrics in our quarterly reports and broadcast emails with event photographs.

There is a discord between the leadership team and execution team as to what shall be done and why. Leadership though talks big stuff about engagement, but generally cares only about metrics, and any tangible business results or outcomes from the activity are added benefits. Floor HRs cares about giving employees a different experience, something out of routine and something which they can’t do by themselves within their authority. So, to satisfy everyone, floor HRs basically need to get creative with the activities & its metrics.

Common activities like rangoli competition, drawing competition, tambola etc. are found in every organization. Though they are thoroughly enjoyed by many employees, such activities are suitable for school children and not working professionals. We also observe the employee’s childlike expressions and behaviors during such activities. It only serves the purpose of a break from the routine. Any HR trying to justify the benefits of such activities by terms like ‘team-bonding’, ‘creativity’ etc. is just trying to fill his/her metrics for the activity.

let’s get more creative with the activities and its metrics. We may try and do one or two actual ‘serious engagement’ activity in the quarter to satisfy leadership’s lust for metrics (and our annual appraisal objectives) however, more and more ‘light engagement’ activities shall also be done with equally creative metrics. We are better than organizing rangoli on the floor. I am trying to create some of these light engagement activities which are relevant in the Indian context and can be copy-pasted by anyone HR in his/her employee span. Click here to check out these activities.

Book Review | All life is problem solving – Karl Popper

The author takes a different approach towards understanding, accepting and using criticism among many other related themes in his book. Using occasional mathematical language, he beautifully showcases how when you are proven wrong in any context, it’s not actually you who is wrong, but it is your hypothesis (the starting point of your statement/argument made on the basis of limited knowledge available at that point of time). You are not your hypothesis!

You add to your knowledge from the result of the hypothesis. A hypothesis once formed can be either proven right or wrong, that doesn’t validate or invalidate you as a whole. He remembers the Greek saying, ‘Only Gods have Certain knowledge (undisputable), men have only opinions’.

Below are some extracts from the book to grab your interest.

“Let your hypothesis die for you, you don't.”

“Science emerged through the invention of critical discussion.”

“A rationalist is simply someone for whom it is more important to learn than to be proved right, someone who is willing to learn from others, critical discussion. He doesn't think that he or anyone else is in possession of the truth, but he does think that, in sphere of ideas, only critical discussion can help us separate wheat from chaff.”

“Critical discussion can give us the necessary maturity to see an idea from more and more sides and to make a correct judgement of it."

“Perhaps I am wrong and you are right; anyway, we can both hope that after our discussion we will both see things more clearly than before, just so long as we remember that our drawing closer to the truth is more important than the question of who is right.”

HR Interview at campus - What Really Happens

We all have given many job interviews, will give many more. Experience we take from our first interview is perhaps the most memorable one for most people. And then it keeps withering, as per the law of diminishing marginal utility. It keeps getting more and more technical, HR rounds start becoming a formality and salary negotiation rounds, except for very senior profiles where detailed personality profiling is required. Let’s look at the background processes which usually plays for majority of campus interviews, things in ‘as-is’ perspective and not ‘should-be’, from an HR view.

In many ways, interviews of freshers and campus hires are done more rigorously than for laterals (those coming with some credible work experience). This is kind of a paradox. Freshers are clean slate, what’s the use of looking for any unseen hidden traits? Plus, they are trained by their institutes and teachers to have good quality answers to common interview questions. Apparently, they are so called “self-aware” at the age of 21 that they know all their strengths and weaknesses, although they have been unproductive throughout. And a 32-year-old experienced guy when asked what are his weaknesses, he has to introspect!

So, in spite of the uselessness of the interviews for fresher, we still do it. Rigorously. And we may never admit it, but we enjoy it. Sure, we give well sounding business reasons why it is vital to get the right talent at the trainee level, but power corrupts, especially those who want it. Written tests are conducted (dumps available on freshersworld.com). Then group discussions are done. I have no idea why, literally. Only logical and valid reason which justifies a GD round is an easy way of eliminating candidates from the crowd, so that the hiring process can be completed in a single day. It results in a hilariously large number of type-2 errors, which the hiring team doesn’t know. I mean they don’t know what a type-2 error is, let alone its implication.

So we are left with some candidates, pending HR and technical interviews. This is where the fun begins. It’s very hard you know, to control your laughter when candidates gives silly answers. But we conveniently forget to laugh at our own contextually silly questions. We tick some boxes in an evaluation form, which itself has never been evaluated for its relevance in decades if not centuries. We try to throw in some Shakuntala Devies. How it is relevant God only knows. Working in any organization in any capacity, is not similar to solving a puzzle, not even close. Now we try to convince ourselves and others by telling that it helps judge the critical thinking or on-the-feet thinking, but arguing with that is a lost-cause as we know how true that is, especially in a complex organization setting.

Technical interview is of far more merit, but often useless because of many reasons. We know that they don’t know anything. Still, we try to justify our selections by asking some standard questions and in turn get standard replies and appreciate ourselves that we have made a decent selection. Students rarely will be trained in company on the technologies they have studied in their college (if their college had teachers). They will rarely get work / project in the technologies they were trained by the company. So if we see this broken chain of college-training-work, interview’s assessment loses its credibility within next 6 months of joining, which is a shame.

If a quick analysis is made of past year’s new hires performance at work, the results would suggest a 50-50 ratio of success and failure (perhaps more so on the failure side). Add to that the infant attrition. In all probability it might suggest that, given all things constant in the campus hiring drive (no. of selections, visited campus, etc.) if the selections were done entirely randomly (without any sort of tests/interviews), the results after a year will be almost same (or perhaps even better) as to that of a usual controlled hiring drive. Perhaps all organizations should do this controlled experiment and check the results, to test the time and money spent on hiring team is actually resulting in results substantially different to that of an entirely random selection process.

HR Function - Lets cut the crap shall we

HR Transformation. HR becoming a partner to the business. Next generation HR. Strategic HR. Ditching the bell-curve in performance management.

Most modern literature on the HR function is incomplete without such heavy weight terms. Go to any HR symposium or conclave, it will be raining there with such terms. In the beginning it all sounds cool and interesting, the people or ‘leaders’ speaking and writing seems expert in their fields and domains. But then all the hype withers away when you see the actual realities of the function in various organizations, the very same people failing consistently in what they preach.

Nassim Nicholas Taleb has coined a term IYI short for ‘Intellectual yet Idiot’ especially in reference to economists and journalists, however perhaps it is even more so applicable to the HR people. The actual business of HR is Business, however we do everything other than that. The function that is supposed to provide credible training and learning programs to the whole organization is itself populated with untrained idiots, or worse, trained idiots. The relatively new role of ‘HR Business Partner’ which was originally suggested by Dave Ulrich has been misinterpreted and misrepresented to such an extent that it has basically reduced to a generalist operations role.

You will be surprised to know how many HR professionals, even at senior levels have never heard about Dave Ulrich, let alone having read his work. We are supposed to design the induction programs for the entire organization, but there never exists any sort of induction for the people who will give this induction. People hide their incompetence and inefficiency with twisted scientific-istic words and jargon, which even the listener know that its BS. HR is perhaps one of the most incompetent and inefficient function in the entire organization and that's why it is always busy justifying why it is so important and relevant.