Book Review: The Future of Boards by Jay Lorsch

Note: The following review was published in the November 2013 edition of Strategic Finance. Many thanks to the editors at IMA/Strategic Finance for spending time to review and edit it.

The growing complexity of today’s businesses, rapid technological changes, globalization, and increasingly assertive investors have made the role of corporate boards more challenging than ever before. The success of companies today depends highly on the ability of their boards to navigate them successfully through these challenges. The Future of Boards is a collection of eight essays covering the most important challenges faced by today’s corporate boards. Key topics covered include role of boards in strategy formulation and implementation, CEO succession, CEO compensation, group dynamics within the boardroom, independent chairmanship of boards, and the concept of lead director.

With contributions from some of the most eminent thought leaders in the field, both from the industry and the academia, this book is edited by Harvard Business School (HBS) professor Jay Lorsch, a leading authority on corporate boards.

On the topic of board’s role in company’s strategy, Krishna Palepu, HBS Professor and a leading expert in business strategy, opines that strategy formulation and implementation is the responsibility of the company’s management, and the board may not have the necessary expertise and time to get deeply involved. However, the board should not be passively approving the strategy presented by the management. Instead, they should actively review the underlying assumptions and implications, and monitor the implementation. In the essay “Focusing on Strategy to Govern Effectively”, he outlines a basic framework for strategic engagement which can help board members actively engage in discussions related to company’s strategy.

One of the most important and challenging responsibility of the board is CEO succession. In the essay “Managing CEO succession” Joseph Bower, HBS Professor and author of “The CEO Within: Why Inside Outsiders Are the Key to Succession Planning”, mentions that the best way for any board to manage CEO succession is to make sure that they don’t have to make a succession choice. The job of identifying potential successors and mentoring them is best done by the CEO and the management. However, typically CEOs are reluctant to do this. It becomes the job of the board to encourage them to do so. Once a pool of potential successors is identified, the board should regularly interact with them, access their strengths and weaknesses. This will ensure that when the time to make a decision comes, the company has an abundance of well groomed options from within.

Executive compensation remains the most touchy corporate governance issue today. Jay Lorsh and Rajesh Khurana, HBS professor of Leadership development, in “The Pay Problem – Time for a New Paradigm for Executive Compensation”, question the assumptions behind a typical CEO compensation plan and urge board members to align executive pay packages with long term company results. They also highlight the fact that incentives have a motivational effect only if they reward outcomes over which the executives have control. They propose a compensation plan which includes both monetary and non-monetary rewards and encourages collaborative behavior within the executive team.

Multiple topics related to board leadership structure – who should chair the board: CEO or an independent director, should there be a lead director, and the group dynamics amongst the board members, its impact and whys to manage it – are covered in the remaining essays.

The Future of Boards is not only an outstanding assessment of the challenges currently being faced by boards, but also a provocative and insightful analysis of these challenges as well as a blueprint of how boards should work to overcome these challenges. Highly recommended for CEOs, CXOs, board members, and anyone interested in corporate governance and working of boards.

Book Review: A Tale for the Time Being by Ruth Ozeki

“Am I crazy?” she asked. “I feel like I am sometimes.”

“Maybe,” he said, rubbing her forehead. “But don’t worry about it. You need to be a little bit crazy. Crazy is the price you pay for having an imagination. It’s your superpower. Tapping into the dream. It’s a good thing not a bad thing.” – Excerpt from A Tale for the Time Being by Ruth Ozeki

‘A Tale for the Time being’ has an innovative and non-linear structure. Nao, a Japanese teenage girl, has recently relocated from California to Tokyo after her software engineer father lost his job. Nao has decided to commit suicide and as a last meaningful activity, she decides to write a journal telling the story of her great grand mother Jiko, a Zen Buddhist Nun. However, this journal is as much about her and her family as about grandma Jiko. In fact, this journal seems to be an escape route for Nao, her way to deal with her problems – extreme bullying in school, family’s financial problems, and her father’s acute depression and resulting suicidal tendencies (the idea that suicide is a legitimate means of solving one’s problem is a recurring occurrence in this novel. This is probably due to the fact that Japanese Culture is much more tolerant towards suicide.)

Travelling across the pacific ocean, this journal reaches Ruth, a Canadian author of Japanese accent who lives with her husband and a pet cat (named Schrodinger) in a remote island. Recovering from the recent death of her mother due to Alzheimer’s, Ruth is struggling with writers’ block. Alternating between a chapter written by Nao and Ruth’s reaction to it, the story moves back and forth between the past and the present, Canada and Japan, Ruth and Nao – until it all converges.

I would categorize Nao as one of the most nuanced teenage characters ever written. From being bubbly and humorous, she will suddenly shift gears to something visceral and brutal. Like being hit suddenly by a hammer when you are laughing out loud. Ruth’s character on the other hand could have been better itched out. Other characters like Oliver, Ruth’s husband, Nao’s father and mother, etc. are deliberately underdeveloped, probably to keep the focus on Ruth and Nao and present their world as seen by them.

A Tale for the Time Being is an offbeat novel. It will require patience, careful attention and some amount of thinking and introspection to fully understand and appreciate this beautiful book.

Ruth is a Canadian/American novelist/filmmaker and her earlier works include the critically acclaimed “All over the Creation”. ‘A Tale for the Time Being’ is one of the six books shortlisted for the Man Booker Prize 2013.

Bonus Material: Ruth talking about the book

Bonus Material: Trailer of the book

Book Review: River of Smoke by Amitav Ghosh

“Democracy is a wonderful thing, Mr Burnham,’ he said wistfully. ‘It is a marvellous tamasha that keeps the common people busy so that men like ourselves can take care of all matters of importance. I hope one day India will also be able to enjoy these advantages – and China too, of course.” – Excerpt from River of Smoke by Amitav Ghosh.

River of Smoke is the second book of the Ibis trilogy. Like the first book, Sea of Poppies, it is set in early 19th century, against the backdrop of the opium trade between India and China, and explores the lives of various characters involved in the trade.

As against the Sea of Poppies, which was set mostly in India, a large portion of River of Smoke happens in Canton, the port thru which opium was imported to China. Balram Modi, a wealthy Parsi businessman from Bombay is carrying one of the largest consignments of opium ever on the Ship Anahita to Canton. Another ship, Redruth, carrying horticulturist Frederick Penrose and his assistant Paulette, who are in search of rare Chinese plants and flowers, is also heading towards Canton. Things take an unexpected turn when the Chinese emperor bans opium trade, resulting in some interesting social, political, and economic consequences.

There is no doubt that River of Smoke is a difficult book to read. It contains dialogues in multiple dialects – English, Hindi, Gujrati, Bhojpuri, Cantonse, pidgin etc., with little effort from the author to translate everything to English. Many a times, one has to judge the meaning of these dialogues by the context. There are words like pus pus, muchi, allo olo, gradmanzees, etc. One has to interpret the meaning of these words. Although making reading difficult and demanding, it give a unique flavor of authenticity to the narrative. And in spite of being laborious to read, it is by no means boring or dull.

The characters, some continued from ‘Sea of Poppies’ and some new, are engaging and there are interesting ways in which their stories crisscross each other. The author has presented early 19th century Canton beautifully. The depth of research which has gone in writing this book is commendable.

The book (and the trilogy) covers one of the most interesting and historically significant part of British-Indo-chinese history (the events leading to the Opium War). It is most certainly a captivating read of those who are interested in this slice of history.

I have read the first two books of this trilogy and I have no qualms declaring it one of the most epic and grand literary exercise undertaken by any Indian author. Eagerly waiting for the third installment.

PS: I received a complimentary copy of this book, in order to review it, from MySmartPrice Books. Know more about them here

Book Review: The Lowland by Jhumpa Lahiri

The Lowland By Jhumpa Lahiri

“Isolation offered its own form of companionship: the reliable silence of her rooms, the steadfast tranquility of the evenings. The promise that she would find things where she put them, that there would be no interruption, no surprise. It greeted her at the end of each day and lay still with her at night.” – Excerpt from The Lowland by Jhumpa Lahiri

The Lowland is the second novel by the famed Indian American author Jhumpa Lahiri. Her earlier works include Pulitzer Prize-winning short story collection Interpreter of Maladies and novel The Namesake (which was adapted to a motion picture directed by Mira Nair). The Lowland has been shortlisted for the Man Booker Prize 2013.

The Lowland is the story of brothers Subhash and Udayan. Born just 15 months apart, but having a dramatically different personalities – Subhash is pragmatic and realistic whereas Udayan idealistic and romantically besotted with the ideals of communism. Udayan gets drawn to the violent Naxalite movement whereas Subhash moves to the US for further studies. The story takes an unexpected turn when Uadyan is killed by the police for involvement in anti-government activities and Subhash marries his pregnant widow Gauri and takes her to the US. But it is difficult to escape the consequences of what Udayan had done, and which will define the lives of Subhash, Gauri, and their daughter Bela.

Similar to her earlier works, the characters here are burdened by sense of remorse which results in their emotional isolation. The highlight of the book is the emphatic portrayal of these characters, particularly of Gauri and Udayan. Some of Gauri’s actions seem to be cold-hearted and, at times, even cruel. However, Jhumpa never makes an overt attempt to justify these actions, gradually revealing information from the back stories and leaving it to the readers to make any judgement.

Similarly for Udayan, he seems like irresponsible and unemotional to his family, putting them into unnecessary danger and hardship. From a rational point of view, it is difficult to understand and reconcile with his behavior. Yet, not much space is spent explaining his point of view.

The complex relationship between Bela and Subhash is captured beautifully and forms some of the most emotionally satisfying parts of the book.

Overall, The Lowland is a beautifully written book. Highly recommended.

Bonus Material: Jhumpa talking about the book

Trying to Understand India – Three Books You Must Read

The Discovery of India by Jawaharlal Nehru

There is no better book to understand the history of India. Right from the Indus valley civilization through the various phases of its history, it is truly a journey to discover India. Written by Jahawarlal Nehru, the first Prime Minister of India, when he was imprisoned during India’s freedom struggle, this book was an effort by the leader to understand and chronicle the rich past of his country.

Notable Quotes

“India has known the innocence and insouciance of childhood, the passion and abandon of youth, and the ripe wisdom of maturity that comes from long experience of pain and pleasure; and over and over again she has renewed her childhood and youth and age”

Midnight’s Children by Salman Rushdie

Nothing captures post Independence India like Salman Rushdie’s seminal work – Midnight’s Children, which is probably the best book ever written about India.

Notable Quotes

“‎No people whose word for ‘yesterday’ is the same as their word for ‘tomorrow’ can be said to have a firm grip on the time.”

“India, the new myth–a collective fiction in which anything was possible, a fable rivalled only by the two other mighty fantasies: money and God.”

The White Tiger by Aravind Adiga

The White Tiger is to post globalization India, what Midnight’s Children is to post colonial India. Aravind has such a fine understanding of the pulse of this new India, it almost make me jealous.

Notable Quotes:

“Go to Old Delhi,and look at the way they keep chickens there in the market. Hundred of pale hens and brightly colored roosters, stuffed tightly into wire-mesh cages. They see the organs of their brothers lying around them.They know they are next, yet they cannot rebel. They do not try to get out of the coop. The very same thing is done with humans in this country.”

“The trustworthiness of servants is the basis of the entire Indian economy.”

“Do you know about Hanuman, sir? He was the faithful servant of the god Rama, and we worship him in our temples because he is a shining example of how to serve your masters with absolute fidelity, love, and devotion.

These are the kinds of gods they have foisted on us Mr. Jiabao. Understand, now, how hard it is for a man to win his freedom in India.”

Enjoy Reading!!

Book Review: Smart Tribes by Christine Comaford

Note: This review was published in the July 2013 edition of Strategic Finance. Many thanks to the editors at IMA/Strategic Finance for spending time to review and edit it.

What are the biggest challenges faced by rapidly growing companies? Ask the CEO of any such company and chances are that establishing a growth-oriented culture, where employees are self-motivated, loyal, can perform to their fullest potential, and are passionate about the company’s shared goals, would be at or near the top of the list.

Typically, such companies are characterized by rapidly shifting internal and external priorities, frequently changing business models, unclear directives and accountability structures, and/or the lack of alignment within the leadership team. As a natural response to such situations, employees fall into a “fight/flight/freeze mode.” In her book, Smart Tribes: How Teams become Brilliant Together, Christine Comaford refers to this as the “critter state.” People in the critter state are driven by fear, individual safety, and survival rather than collective success. Instead of focusing on real issues that impede growth, they’re emotionally disengaged, don’t collaborate, and spend time and resources on solving problems that either don’t exist or aren’t important. When management decision-making and behavior is driven by the critter state, it’s nearly impossible for companies to move up to the next level of growth.

In Smart Tribes, Comaford, an applied neuroscience expert and a New York Times best-selling author, presents a recipe to move employees out of the critter state. When in the critter state, decision-making is driven by the most primitive part of the brain, which is a stimulus response system focused on survival. Instead, employees need to be in the “smart state,” where decision-making is driven by the pre-frontal cortex, a more evolved part of the brain that enables us to plan, innovate, solve complex problems, and think abstract thoughts. Employees in the smart state are focused, accountable, collaborative, loyal, and imbued with a passion to solve problems. With their creativity, innovation, and passion unleashed, they not only outsmart the competition but do it consistently, again and again.

Employing well-researched neuroscience and behavioral science techniques, Comaford proposes a very structured approach to move from the critter state to the smart state. She recommends the following five accelerators that can help the transition:

Focus: Be aware of what is important and delegate, defer, or ditch everything else.
Clarity: Be aware of why you do what you do.
Accountability: Make accountability a part of the company’s DNA by having clear expectations, owner’s agreement, and well-defined rewards and consequences.
Influence: Be able to understand, empower, and motivate people.
Sustained results: Have energy to enjoy your work and avoid burnout.

Interspersed with numerous real life cases and examples, Smart Tribes is a very well-written book. Comaford follows a “do it yourself approach,” using assessment questions, resources, and actions plans at the end of each section, making it a very engaging and interactive read. Another highlight is that it’s backed by rigorous scientific research, making it very credible and trustworthy.

The issues Comaford raises in the book are extremely critical for success in the contemporary business environment. Smart Tribes is a great read for anyone managing a team in a fast-paced and dynamic environment.

Book Review – The Blind Man’s Garden by Nadeem Aslam

“History is the third parent.” – Opening line of The Blind Man’s Garden by Nadeem Aslam

I read this line. I re-read this line. I took a pause and inhaled. I read it again. This is one of the most powerful opening lines in recent times. And then I realized, this isn’t going to be an ordinary book. It is a piece of art, the kind of book which remains with you forever. It cannot be treated like an ordinary book. It has to be given the respect and reverence a masterpiece deserves. You have to read it slowly and attentively, savoring each and every sentence, some times re-reading portions to admire the elegant, poetic and beautiful writing.

The Blind Man’s Garden is story of ordinary people caught up in extraordinary events – the aftermath of 9/11, USA’s attack on Afghanistan, the resultant rise of taliban and religious fundamentalism in Pakistan. Rohan is a religious Pakistani from Heer, a small town in Pakistan. He used to run a school, which has now been taken over by the fundamentalists. His doctor son Jeo, along with his close friend Mikal, sets off to Afghanistan to help the wounded civilians. However, they get entangled in the war there, Jeo get killed and Mikal captured by the tribal lords and handed over to the US military. Mikal and Naheed, Jeo’s wife, were in love before Naheed’s marriage to Jeo. There are multiple sub-plots, each character has its own story, however, Mikal’s journey back to his love Naheed forms the main plot.

It is a beautifully written book with very well itched out, realistic characters. The way the inner conflicts and turmoil of the characters is brought out by Nadeem is commendable.

The dialogues are deep and meaningful, sometimes you have to pause your reading to fully absorb them.

Highly recommended!!

Bonus Material: Nadeem Aslam taking about the book