Here we go... Kicking Off 2013

Welcome back one and all!!

It has been a long summer break and our blog has been silent for almost 3 months now. No more!

We look to start this year with vigor and are excited to take a new journey together. At this year's club fair we had a record 60 new members sign up. They filled out a survey telling us their interests and aspirations.

However, at EMDC we hope to surpass their aspirations. I hope this year is beyond the ordinary and expected. Here's to more to come.

But before jumping into everything, I must pause to introduce the newest member of our club. I want to introduce you to GEORGE BALL, the sharing monkey. George loves to share. He shares his thoughts, ideas and skills and hopes that we do the same. Why did George join our group? Its because George is going to help us full-fill our vision for the coming year.

George is going to help us build a dialogue; a dialogue that is deeply needed across a broad swath of stake holders at Darden (See Exhibit 1.).

Exhibit 1: George Ball building a dialogue across a range of stakeholders

So why is this dialogue important? Well it goes back to the purpose of EMDC.

EMDC cares about developing markets. These are markets that don't exist and should, or markets that are under-developed. These are the markets for food, water, security, finance, roads and even cellphones. Missing markets are relevant to everybody. Below are just a few examples.

The Career Folk
- Consultants will have to help their clients work in societies with no roads, building businesses in a places with no infrastructure.
-  General managers will have to higher and develop talent when their local education system is limiting skilled labor.
- Financiers and investors will have to operate in a geography with non-existent capital markets and lack of legal frameworks.
- Marketers will need to understand the world's largest growing demographic and the range of challenges they face.

The Industry Folk
- Each of these represents a broken market.
- Education is either too costly or too inefficient. Skilled labor is hard to find in developing economies and as a result incomes stagnate
- Healthcare is not available in many rural economies, and even cities have over-extended healthcare systems
- Energy is an enabler of development, but oil-gas also are the root causes of many developmental challenges.

The Global Folk
 - The issue extends across the globe and hence we need a global perspective
 - These are conversations about what it means to be a civilization. Everyone must be at the table

The Thinkers and Doers
 - Ultimately there are no clear answers. We need bright minds and willing hands.
 - From academics to firms, each is part of the solution.

So ultimately, what is the missing ingredient?

The dialogue.

That is EMDC's purpose. We hope you will join us this year as we hope to build on our past foundations. Our goal is very simple. Let's start thinking. Let's start doing.

Best Wishes,

CJ - President 2013-2014

Crossing the Real Development Gap

The institutional benchmark for poverty seems to be $2 a day. Every infomercial asking you to donate, sponsor or advocate for alleviating poverty will at some point mention the $2/day mark. If I'm honest, after a while the number loses meaning. I become cynical.

Does this measure cost of living? What basket of goods can these populations afford? Has this number been exchange rate adjusted? Does the number include welfare services? Is this earned income or state handout?

More importantly, would increasing this number really help? If so, how much? How far up Maslow's pyramid does one need to travel to be considered developed and will increasing incomes get them there? 

My point here is that I think his measure falls woefully short of describing poverty. It's a good touchpoint, but a  hard measure to empathize over. I say this because this was the message that hit home last week. I've been looking at development statistics for some time now, and yet I was caught by surprise last weekend by a very poignant implication of poverty.

A Real Gap

A friend of mine was hosting a guest from Uganda. The two had worked together developing clean water projects in rural villages and this was the guest's first visit to the US. While staying in Houston, my friend decided to take his guest to the various museums in the city.

The guest was blown away, fascinated by what he saw. He couldn't believe that the Earth was many millennia old and that once reptilian giants roamed the land. He had never heard of T-rex or that life on earth was once far different than today. At the NASA space center, he saw man's footsteps on the moon. He had spent a lifetime looking up at our celestial partner and never once conceived that a person had actual set foot on it.

It is a measure of his awe, that in witnessing it, we ourselves were in awe and shared in his wonder. If providing clean water was a chance to share a drink, this was a chance to share a dream. But why was this moment so special?

I would posit her that the moment revealed the real gap in human development. It is not just a gap of income, but also a gap of EMPATHY. 

I'm not suggesting that the critical need for the poor is knowledge of dinosaurs, but rather that one tragedy of global poverty is the alienation. We can and must meet the immediate needs of the famine and drought-stricken, and emergency aid can be helpful here. But unless we are able to envision a true sharing of cultures and experiences, I believe we will struggle to endure the hard task ahead of us. Fighting poverty means fighting ignorance, fighting corruption, fighting disease and fighting doubt. 

Doing so will require the best efforts of all mankind.

The Mandate

In 1962, President Kennedy spoke at Rice University and shared his vision of America's space program. In a soaring speech that resonates to this day, he shared:

"There is no strife, no prejudice, no national conflict in outer space as yet. Its hazards are hostile to us all. Its conquest deserves the best of all mankind, and its opportunity for peaceful cooperation many never come again. 

But why, some say, the moon? Why choose this as our goal? And they may well ask why climb the highest mountain? Why, 35 years ago, fly the Atlantic? Why does Rice play Texas?

We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win."

I hope these words resonate with you as they have with me. Fighting global poverty and oppression may be the hardest thing we every do, but if we can bridge the chasm to the stars, then let us believe that we can and shall succeed in this endeavor as well.

What makes you happy? ... And is Darden providing it?

MBA50.com ran a study polling MBA students to understand if and how an MBA made them happier. If you're an MBA student then the results are not that surprising. We can all relate with most of the sentiment suggested in the data.  However, the research opens up a more intriguing line of questions. We all know what makes us happy, which is why the graphic bellow isn't really that stunning. But...

Is this really what your MBA experience is providing?

If so, how can these programs do MORE and BETTER?

Here I will deep dive into the Darden experience because truth-be-told I'm not qualified to opine on anything else. If you think differently then tell me about it in comments. Also, these are one person's opinions and do not represent anything but that. If you think differently, say so.

What does Darden do well?

Personal Development: Darden pursues this in spades. The faculty and curriculum are designed around holistic thinking and a program that will stretch you both academically and personally. There is a reason that the program has a set course list for the first year; it's to guide you into a broad and integrated view of business and society. 

Career Progression: The amount of preparation and resources offered to candidates is amazing. If you're planning to apply for consulting or banking then you get tailor training and amazing access to companies and recruiters. For some the MBA will be a seamless trajectory to a higher level; for others a shot in the arm that skyrockets them somewhere new.

Learning from Classmates: If you're applying to Darden, know that this is core to the program. You learn from your peers at every stage of the process and in every facet of the program. Whether getting interview prep, class content or extracurricular engagement, it's all student led.

What does Darden need to do better?

Pleasure of Learning: Perhaps this is a function of the fire-hose of information we encounter at the start of the year, but Darden sometimes isn't the most fun learning experience. StratSim is a major high-point, but after a while the academic experience starts to fall flat.

Engaging speakers seem to be fewer and farther apart as the year progresses, and those that come often don't get the audience they deserve. I'm trying to think constructively but the best I can suggest is that we need to look at both demand and supply.

It's on us as club leaders to push the envelope in creating meaningful learning experiences and not just filling our calendars. It's on us as community members to truly take pleasure in learning and seek and demand a better learning experience. I know we're tired and we want a break, but I hope that a few years on we don't look back wistfully and think about the learning experience we could have missed.

Experience a new Culture: Darden is an incredibly diverse place in the sheer number of nationalities that attend our classes. I believe this is an easy area for us to grow and do more. We can do more in engaging each other's cultural and national heritage. The Food Festival is a great event but should not be the climax of the Darden diversity experience.

In 2013 let us push for a deeper understanding of where we are coming from and where we are going. I'm excited for this year's push for launching a Global Conference and I hope the student body makes the most of it. I don't know which conversations we need to have as a community, but until we start talking, we'll never know.

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I hope this is taken in the right spirit, as in not criticism but exhortation. I'm excited for another year to explore, innovate, think and create. However, it misses something if we don't do it together.

What is Development? : The Road Ahead

What implications does complex adaptive thinking have for how we manage development?

In his 40-min lecture posted on the Center for Global Development, Owen Barder makes a new and compelling case about how we should think about development. His talked, titled “What is Development” presents us with key ideas that should shift the way we think about foreign engagement in developing economies.

In Part 4 of this blog series (Part 3: Evolutionary Progress ; Part 2: Progress in a Vacuum ; Part 1: Where we've been) we discuss the imperatives we face given the systemic nature of the development challenge.

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Why have I written this post? We spend billions on development aid, and if the end result of a generation of goodwill is inefficiency and anemic progress, then we risk disillusioning those that follow. The world not only needs us to have a big heart, but also the best of our mind.

How can we be smarter about the change we seek to make? I'm going to skip the justifications (read prior posts for the build-up) and delve into a short list of how our development efforts much change.

1. Resist Engineering
It's tempting to design the ultimate solution. However, evolutionary biology is a story of adaptive change consistently outperforming design. As the challenges get tougher, the simplifying assumptions we must make to comprehend and the model undercuts the value of such an approach.
It takes a level of humility to abandon the illusion of control engineering gives us, but it is a necessary step.

Resisting the lure of over-engineered solutions will also mean that we approach problems with fresh eyes and appreciate the context. What matters in Peru will not matter in Indonesia. Even if the guiding principles hold, the small differences that tip the balance of change can never be fully predicted.

This also means we must find ways to resist the pressure from donors to adopt "best practices" or "industry standards". The history of poorly applied best practice is well worn.



2. Resist Fatalism
It may feel like waiting for evolutionary forces to drive change will leave us watching for the proverbial pot to boil. However, intentional, market driven pressure to iterate fast and effectively can drive dramatic improvement quickly.

It took computers a decade to transition from the office desk to our back pocket, but the pace was driven by companies experimenting and innovating. It wasn't one company that drove that change either (I'm sorry Apple fanboys) but whether Dell changing laptops, or Nokia the cell phone, or Apple the smart phone, or Google the eye-whatever, the progress comes through an optimistic drive for persistent failure and occasional success.




3. Encourage Innovation
Though necessary this can be a hard task to fulfill. Sometimes we need Apple like safeguards to create the right conditions. The argument of pharmaceuticals and the entire patent system is that innovation must be nurtured safely, much like a seedling in a greenhouse.

However, the era of open-source innovation has challenged the notion; arguing the opening the floodgates and creating a collaborative culture will be far more effective. Crowd sourced fundraising have enabled a generation of entrepreneurs to bootstrap their innovations outside the strict confines of corporate R&D.

The method you prefer may reflect as much of your temperament as the circumstances you find yourself in. If the patent system is weak or non-existent, then perhaps open-sharing might be the way to go. Whatever the method, the mandate is clear. Keep placing bets and make sure you stay at the table.



4. Embrace Creative Destruction
Innovation cannot sustain itself without selection. In his follow-up posts he discusses the idea of identifying the right fitness function to enable proper selection. Iteration without a meaningful method for promoting the promising results is meaningless.

Effective selection is the underlying engine for crowd sourced funding. By allowing people to vote with their dollars, the hope is that the best outcomes will bubble up the surface. Similarly, by creating the right marketplace for developmental work we can create an objective lens through which the screen initiatives. The process might seem ruthless and none of us wants to envision our own demise, but progress demands culling and renewal.

5. Act Global
The world is far too large for us to operate in a static and simple framework. Here I relinquish the page to pose a series of ideas:

"If we believe...

that open and accountable institutions are important, we could make a bigger effort to reform international institutions of which we are part. We still participate in processes to appoint leaders of international organizations based on stitch‐ups behind closed doors.

that trade is important, we could do more to open our own markets to trade from developing countries.

that property rights are important, we could do more to enforce the principle that nations, not illegitimate leaders, own their own natural resources, and that anyone who buys oil or minerals from un-elected governments is guilty of handling stolen goods.

that transparency is important, we could start by requiring our own companies to publish the details of the payments they make to developing countries. (the Foreign Corrupt Practices Act is a step in the right direction.

that rule of law is important, we could entrench those rights more firmly in our own systems, and resist the temptation to make exceptions in the name of political expediency
.
that openness and exchange of ideas are important we could do more to welcome the movement of people around the world, instead of making it more and more difficult for people to migrate temporarily or permanently from one country to another."

- Owen Barder

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In Part 1, we discussed the complexity of development and how each successive theory of progress has added more layers or agents that are necessary for development to happen. The economy is a highly complex inter-dependent system and it has proved difficult to find the right levers to spur growth.

In Part 2, our case example highlighted the networked nature of systems. A simple toaster making company requires a large ecosystem of products and services in order to function, yet once these are in place, growth is exponential. 

In Part 3, our review of the innovative way Unilever increased soap powder efficiency a hundredfold illustrates how an evolutionary approach to problem solving allows us to overcome incredibly complex challenges.

What is Development?: Evolutionary Progress

Evolutionary problem solving is a power agent for addressing complex challenges:

In his 40-min lecture posted on the Center for Global Development, Owen Barder makes a new and compelling case about how we should think about development. His talked, titled “What is Development” presents us with 2 key ideas that should shift the way we think about foreign engagement in developing economies.

In Part 3 of this blog series (Part 2: Progress in a Vacuum ; Part 1: Where we've been) we look at a case example that demonstrates the power of evolutionary problem solving. In our final post next week we'll tie together these insights into the implications it has for developmental policy.

In Part 1, we discussed the complexity of development and how each successive theory of progress has added more layers or agents that are necessary for development to happen. The economy is a highly complex inter-dependent system and it has proved difficult to find the right levers to spur growth.

In Part 2, our case example highlighted the networked nature of systems. A simple toaster making company requires a large ecosystem of products and services in order to function, yet once these are in place, growth is exponential. 

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The Original Soap Powder Nozzle

The process for making soap powder is fairly simple. It requires mixing several chemicals and forcing the mixture through a spray nozzle. The force of the nozzle makes soap power crystallize and fall to the floor. You then sweep up the powder and sell it at a huge profit.

The critical component is the nozzle. At Unilever, a roomful of scientists had puzzled on how to design a better nozzle. The challenge was that the fluid dynamics were non-linear resulting in a horribly complicated model. Numerous physicists and engineers were unable to make any kind of progress on the redesign.

Steve Jones, a young evolutionary biologist assigned to the team decided to try a different approach. Taking the existing nozzle he made ten copies which were random variants of the original. After testing these he selected the best, and then made another ten random variations of this new nozzle. After 45 such generations of testing a new nozzle emerged that look somewhat like a chess piece. It would have been impossible to envision at the beginning.

The new Nozzle after 45 generations of testing

The new nozzle worked. If it had increased efficiency by 20%, Unilever would have been ecstatic. The nozzle wasn't 20% better; it was hundreds of times better. The most incredible part was that no one could explain why it worked.

To quote Owen:
" This is a characteristic of adaptive change: It doesn't just bring about small improvements; it often brings about startling, game-changing jumps to new solutions, like the evolution of the eye for example in biology."

This is the central message to development experts. The products that impact are lives are not the result of one person's innovation but hundreds of iterations of trial and error. Thomas Edison might have invented the light-bulb, but the hundreds of iterations since have increased the efficacy of the product thousands fold. 

In order for progress to happen, economies must cycle through a process of trial and error, with firms emerging and failing. The idea is embedded in Schumpeter's theory of creative destruction. 

The last point to make is that adaptive problem solving isn't a choice we an ignore. We are already adapting. With each generation of humans we have new preferences, choices and world-views that impact our society. With each generation of new businesses we find new products and services that fundamentally shift the human experience (think about the transition from the printing press to the internet). Hence, attempting to manufacture progress in a static world-view can only be explained as profound naivete or short-sighted arrogance. The change we need to make is embracing change.