December 10, 2012

Good Work Culture but a Bad Work Place

Many organizations claim to have "good work culture". And in this context "good work culture" represents one or more of the following  elements:
  • Top management propagates open door policy and is seemingly accessible to others without taking prior appointment from the executive secretary
  • Top management or the CEO has an email id like write2ceo@abc.com or mail2mgmt@abc.com to which employees can freely send suggestions and concerns
  • Team members are encouraged to walk to their manager, without any prior appointment, to discuss their concerns
  • Teams go out on outings, picnics, lunches, team building etc. which are assumed to strengthen relations of managers to team members and team members to team members in an informal setting
  • There are events like annual day, annual night, sports day, open house, family day, annual meet, annual picnic, etc. where employees can interact with top management in an informal environment
  • Top management conducts monthly open houses, all hands meeting, town hall meeting, etc. where organizational updates are shared with the rank and the file
  • The organization has a set of core values (six to eight generally) and a code of conduct (consisting of eight to twelve points generally) which all employees are expected to imbibe and practice
  • The organization claims to provide career growth opportunities through lateral movement, promotions, cross training, new assignments, etc.
  • The organization claims to have employee friendly policies like work from home, family bereavement leave, flexible working hours, self service portals. etc.
Unfortunately, in many organizations the above elements become a means to camouflage the intrinsic structural weaknesses in the organizational strategy, structure and culture. Such organizations with apparently "good work culture"could be a "bad work place". And in this context "bad work place" represents one or more of the following  elements:
  • Top management is seemingly accessible but the all powerful executive secretary cannot be bypassed. Not only that the top management gives an impression of all talk and rarely walk.
  • Top management or the CEO email ids are not attended to many times and when attended to end up sounding over-sincere but in the end justifying why the suggestions and concerns cannot be taken up
  • Team members are encouraged to walk to their manager but the managers are mostly busy in first getting their concerns addressed in the hustle and bustle of organizational dynamics
  • Teams go out on outings, picnics, lunches, team building etc. where team members enjoy the day off, have a nice lunch and indulge in a lot of irrelevant, trivial talk
  • There are events like annual day, annual night, sports day, open house, family day, annual meet, annual picnic, etc. where employees do interact with top management but must always keep the guards on
  • Top management conducts monthly open houses, all hands meeting, town hall meeting, etc. where organizational updates are shared but in a very ritualistic manner
  • The organization's core values and code of conduct are enforced amongst employees through a corporate mandate but actions of top management are at times exempt from those
  • The organization effects lateral movement through management force (manager may disagree but is forced to take a member in the team) and promotions are tenure-based rather than role-based
  • The organization claims to have employee friendly policies but the approvals and oversight on such policies are such that employees avoid using them

Unpleasant Workplace Situations

Happiness in life depends upon what happens to one in the home, at the workplace and elsewhere. One key point to be noted is that the control and influence one generally has on the home matters is reasonably high, on the workplace matters is moderate to less and elsewhere is very less.

It is an important characteristic of the modern society that one's identity and social status has a lot to do with one's standing in the workplace. For example, the Prime Minister of a country is a Prime Minister every second of his or her term and hence enjoys all the privileges that comes with the workplace position, both material and social. Similarly, an IT Support professional has a certain social status because of his being an IT Support professional. Friends may refer to the IT Support professional as "he is the network guy" or "he fixes IT systems".

The control and influence one has on the workplace matters and the fact that one's identity and social status has a lot to do with one's standing in the workplace implies that happiness in life depends a lot upon what happens to one at the workplace.

Unpleasant situations happen at every workplace and to almost everyone in their careers not once but many many times. Here are some unpleasant situations one experiences in the workplace, especially in the corporate setup:
  • One is not at all copied on an important email
  • One is not copied on an important email and receives it as a forward from someone else
  • One is not copied on an important email and receives it as a forward from someone else who might be in the reporting chain of the recipient but adds only as much value as a post-redirect does
  • One is the head of a function for all practical purposes in actual practice but is not invited to inter-functional meetings as someone else is the function head on the papers
  • One as the function head "in actual practice" holds all accountability for failures but has to share the successes with the "on the papers' function head
  • One is not invited to an important meeting and the "on the papers' function head represents the "in actual practice" function head
  • One as the head of a support function is given clear indication by the marketing head that"sales and marketing" is all that matters as they bring money (revenues, clients)
  • One is not proactively informed by a team member regarding the progress of an assigned task unless asked about the same
  • One gets to know from a team member only at the last moment that a certain critical task will be delayed
  • One is not informed by a team member about him or her being on leave 
  • One has a team member who doesn't communicate the stakeholders who might be waiting upon him or her regarding possible delay in completion of certain tasks leading to avoidable escalations

December 4, 2012

This Way… or Another (A Poem)

Which path shall one head for?
Should one head this way… or another?

On the journey towards the destination
Everyone encounters this question
Which path shall one head for?
Should one head this way or… another?

Thoughts of home as you reach the unknown earth
Bring the familiar feeling in the heart,
That the known clouds though left behind
Are just hiding somewhere for you to find

Memories lingering in your mind-scape
Search for old things in the new landscape
To make you feel at home
As you find many new things are actually known

You are on your way to a new territory
Leaving behind a life full of merry
Determined to find another home
In a land far away from your own

Waiting to start another journey
And ask yourself the same question again
Which path shall you head for?
Should you head this way… or the other?

The Beckoning Beacon (A Poem)

The beacon on the horizon faraway
Ignites feelings of runaway

Reaching there seems tough
With the weather seemingly so violent and rough

Holding tightly to hope
Mustering all inner strength to cope

The unbroken spirit is still alive
To see the days with eyes wide

It is going to be bright soon
If not sun let it be just the moon

Light though dull and dark
Will surely be enough to make the mark

Carrying the longing in the heart
Waiting for just one sight of earth

The days seem to be slow
Like rain turning into snow

The beacon from the distance is beckoning
Seems to say, “it’s you I am challenging!”

Will you arrive at the destination
Doesn’t appear to be anyway a question

Would you be able to arrive with your spirit unbroken
Is really the only million-dollar question

The beacon seems to challenge again
Prove that you are a real man!

Make a wish, offer a pray
Though the weather is all dark and gray

You will make it to the destination with unbroken spirit
Arriving with heart full of spirit

Holler at the beacon with all might
I will be there, yes that’s right!

So here I come
The beckoning beacon

December 1, 2012

Buying a New Car

Buying a new car is a good exercise to test one's decision making skills. Especially these days when the choices are really too many. If one is in India like me one has multiple models (Ford Fiesta Classic, SX4, Santro Xing, etc.) with multiple versions (LXI, VXI, ZXI, etc.) from dozens of car manufacturers (Maruti Suzuki, Ford, Hyundai, etc.) to choose from. And then due to the increase in prices of petrol in the recent months CNG and diesel cars have suddenly become very popular amongst car buyers.

Suggested Steps for Buying a New Car

So how should one go about buying a car? I am going to narrate my experience and opinion on a suggested approach to decide and buy a car.

It must be remembered that no decision is best and the selected decision should be optimal in a given situation. And most importantly an optimal decision at a given point in time may not remain so afterwards.

So here's a step-wise approach to buy a car. These steps need not be followed in a perfect linear fashion and not only that some of them may need to be iterated more than once.

Step 1 - Check Affordability and Requirements
  • Determine, as the first thing, the affordability which depends on one's financial position. Do consider both the one time purchase cost and the recurring cost for fuel, service, repairs, etc.
  • Determine the requirements based on factors like one's typical monthly running, ratio of highway versus city driving, social standing, lifestyle, ego drive, etc.
  • Decide based on the above whether one would want to buy a petrol, a diesel or a CNG powered car and also whether one would want to buy a hatchback or a sedan or an SUV. In the end however budget is everything and might constrain one's choice to only a hatchback or the low-end version of an entry segment sedan.
  • Decide, in case one already has a car, whether one would want to exchange the old car for a brand new car or buy another one (this has direct impact on the budget).
I had an old hatchback car which I wanted to exchange for a new sedan. After having driven the hatchback for 7 years I wanted to move up so as to say. Also financially I was in a position to afford a sedan. In addition I wanted to buy a car with good ground clearance (a must for the potholed and poorly maintained roads). Based on my driving requirements I realized a petrol powered car would suit me fine.

Step 2 - Check Budget Availability
  • Figure out the initial budget. A range has to be good to go like 6 to 8 lacs or 15 to 20 lacs. 
  • Fine-tune the initial budget based on how much one is willing to spend, down payment amount and loan requirements. 
  • Search on the Internet to find out if any schemes or discounts that are being offered during that period.
  • Do consider the approximate exchange cost (in case one is wishing to sell the old car and buy a new one) as well to arrive at the maximum amount one can stretch the budget to. 
    • One can use the niche websites on cars and automobiles that provide information on approximate exchange cost based on the year of manufacturing of your old car, kilometers driven, condition, accidents and insurance claims history, etc. 
    • For getting the URLs of these websites Google for something like "Buy Car India" or "India Car" or anything that you think appropriate.
I did not want to take loan. I also did not want to pay more than a certain amount in cash (x1). Based on research I could gather information on schemes/discounts on offer (x2) and the fair exchange value of  my old car (let's call it x3). So I could come up with my initial budget, B = x1 - x2.+ x3

Step 3 - Check Car Options
  • Do research into the cars that will fit the affordability and budget parameters.
    • You can use the niche websites to search for cars in the range you have selected.
  • Keep in mind that the cost shown in most websites is the 'ex-showroom price' and the 'on road cost' will be typically 8% to 12% higher. This is for the RTO registration, insurance, dealer handling charges, extended warranty, etc.
Based on searching some of the niche websites I zeroed down upon sedans whose 'on road cost' was within B. I narrowed down to diesel versions of three cars - C1, C2 and C3.
  
Step 4 - Visit Car Showrooms
  • Visit the car showrooms in person and discuss with the salespersons there. In the visits gather information on 'on road cost' and its detailed break-up for the car models one is interested in. Again one can use the Internet to search for addresses of car showrooms near to you.
  • Take a test drive to get a feel of driving the car of choice. Do ask all any questions that come to your mind while doing te test drive. Typical questions are "how to open the bonnet?", "how to use the wipers?", "how to adjust the seats?", etc.
  • Do inquire about any scheme that may be going on like cash discounts, free accessories, free fuel coupons, etc. Other than ex-showroom price and RTO registration cost everything else can be negotiated.
  • Find out whether there is any exchange and/or loyalty bonus being offered. If you are considering buying another car from the manufacturer of your old car loyalty bonus may be offered. And in case you want to sell your old car for a brand new car exchange bonus may be offered. For availing exchange bonus you need not go with the manufacturer of your old car.
I visited many car showrooms and other than the discussions and information gathering made sure to take the test drive.

Step 5 - Bite the Bullet - Decide which Car to Buy
  • Consider various factors like affordability, requirements, etc. and arrive at a decision
  • Do consult any friends or family memebers
  • Visit the showrooms for next round of discussion and negotiation. Do ask for a better deal or some discounts, etc.
  • Agree on the payment amount and other terms and conditions like number of days for car delivery
  • Make the token payment and book the car.
I made the final decision based on affordability, requirements, etc.and discussion with some acquaintances, friends and family. For me family's concurrence and affordability was very very important.

Step 6 -  Arrange the Finances and Make the Payment
  • Arrange the payment amount
  • Make the payment to the car dealer
  • Get a commitment from the dealer on the expected delivery date
I arranged the finances and made the payment to the dealer leaving a small part which I decided to pay on the date of the delivery. I also negotiated for an early delivery of the car and also that I would leave my old car with the dealer when I come to take delivery of the new car.

Step 7 -  Drive Home the New Car
  • Visit the car dealer on the date of delivery
  • Make sure the documents related to registration, warranty, insurance, etc. are in order. In case one is exchanging the old car for the new one, the sale documents for the old car also need to be checked.
  • Inspect the car and then sign all papers carefully
  • Thanks the car dealer
  • Drive your car out of the showroom!
I went on the day of the delivery to the showroom with my family in my old car. And after completing the formalities drove out in the new car.

And while on the road in your new car, very importantly, don't forget to carry the necessary car documents and follow the traffic rules. Enjoy and let other also enjoy safe driving.

November 9, 2012

Presidents are Better Actors than the Actors

It is hard to imagine that the presidents, prime ministers and heads of states across the world are as genuine as they sound when one listens to their passionate speeches. One fact is true - most of them are great orators and public speakers. How much they really believe in what they so passionately and energetically talk about is anybody's guess though.

In a certain sense one can compare presidents, prime ministers and heads of states to actors. It is known that actors have separate reel lives and real lives. It appears so do the presidents et al. They have a public persona and a private persona where at times the disconnect may be so large as to cause a normal person (and it can be argued that presidents et al are probably not normal) to either go mad or never look settled.

Actors put on the mask temporarily while giving a shot whereas presidents et al have to keep the mask on for longer periods. Otherwise how can one explain presidents et al to talk so genuinely about poverty in a conference but not be bothered at the sight of poor people while on the way to the conference inside a super luxury car. Apparently presidents et are better actors than the actors themselves and know how to manage ambiguity in real life and display of genuineness with a finesse.

The other side of the picture is that if one really and genuinely feels for the poor, downtrodden and marginalized sections of  the society one would jump into concrete action and not bother about becoming president, prime minister and heads of state where one needs to be a great actor and great public speaker.

In fact if if one really and genuinely feels for the poor, downtrodden and marginalized sections of  the society then one won't be able to become president, prime minister and heads of state. Presidents et al leverage their extra-ordinary communication faculties to create a sense of hope and genuineness amongst the masses and may take some actions but are not probably as genuine as they sound.

November 8, 2012

Keeping One's Emotions at Check in the Workplace

For surviving the ups and downs at the workplace, keeping one's emotions at check is an essential skill. Many a times people loose control over their feelings and take actions for which they keep on blaming themselves for a long, long time. One might even be very unfortunate in certain situations where some of the actions could cause immense, irreparable damage to one's career.

Some situations which can cause one to blow the lid off are described below. However, these are also the situations where one should keep one's emotions in check. Life is not what happens in the workplace but also a lot that happens outside it. Forgetting this fact can lead one to think and act short term and hence cause self-damage.
  • One's manager's manager plants a member in one's team. This could be due to the fact that the "plant" is known or has an earlier relation with one's manager's manager or one's manager's manager is neither really a professional nor a believer of the concepts of meritocracy and competency. Sometimes it would difficult to comprehend the reason and rhyme for the desperation to get the "plant" inserted into a team since in most cases there is generally no rhyme or reason. In such cases one needs to be smart to manage the "plant" by one's manager's manager.
  • One's reporting manager is placed using artificial structure. This could be due to the fact that one's manager is a trusted solider of one's manager's manager. In such cases trust and relation wins hands down over talent, competency, etc. In such cases one's reporting manager has no technical expertise but still is the manager because of poor organizational design. One should probably move on to another organization as there is a glass ceiling that would come in the way of one's growth should one decide to stay in that organization.
  • One's manager's manager has a very hands-off approach to management. He or she doesn't review the execution with the kind of seriousness and rigor as would be an effective approach to manage the business operations. In such situations one should present the data and information in a smart manner so as not to ruffle the feathers of one's manager's manager.

Being a Manager of People is Tough

I think managers of people need to be good students of human psychology. Here are some reasons and situations which make being a manager of people tough.
  • When an exiting employee who was a poor performer when being invited for farewell lunch declines it and needs the manager to have a personal talk to covert the no to yes
  • When an exiting employee who did not cooperate in transition when being invited for farewell lunch declines it and needs the manager to have a personal talk to covert the no to yes
  • When a team member, who has already taken many leaves, when told to cancel leave due to a some business crisis reacts in a negative fashion
  • When a team member, who may not have been performing that great, when denied a promotion becomes  negative leading to deterioration in performance
  • When a team member takes leaves without informing the manager
  • When a team member who would leave at 2pm if he or she has to catch a train in the evening but is not willing in case he or she has to stay back for a critical activity that needs to be completed that day
  • When a team member doesn't respond to emails from the manager on time or responds only on being asked by the manager

Exiting an Organization Gracefully

Exiting an organization gracefully without burning the bridges is not only important for an employee's career but also the desired and expected professional behavior as well as a sign of maturity of the exiting employee. However, there are many instances of employees not respecting the golden rule that bridges should never be burnt while exiting.

What are the typical characteristics of situations where exits are not graceful. And what are the typical behaviors demonstrated by employees whose exit is not gracefully handled by them. Following are some thoughts on exits that are not graceful.
  • Exiting employee doesn't proactively prepare the transition plan and needs push from the manager to prepare and share it. In certain cases the manager has to lay down the first cut of the transition plan
  • Exiting employee starts pushing activities to other team members and especially those who will take over after their exit in an unusual hurry
  • Exiting employee detaches himself from the concerns of the organization and lowers productivity and contribution level (even though he or she is a part of the organization until the last working day and is being paid the full salary until then)
  • Exiting employee is in a hurry to leave and not willing to serve the full notice period
  • Exiting employee focuses on completing those activities that are of personal benefit to him or her like completing a certification and even though allowed to do so doesn't care about the organization's needs and concerns regarding completing the transition activities
  • Exiting employee is not flexible to adjust if the transition plan is changed to ensure the transition does indeed get completed
  • Exiting employee expects to be given leave (as a matter of right) for festivals and family functions but is not positive if told that the leave days will be adjusted in the notice period by extending it
  • Exiting employee spoils the goodwill created until then by pressurizing other team members to facilitate his or her exit without understanding the tough situation the organization might be in and in fact putting the organization in a tight spot
  • Exiting employee declines the courtesy extended to him of a farewell lunch (despite all of the above) 
What is amazing is that this happens even in cases where the employee has more than 3-5 years of experience and is expected to be mature and professional. Such exiting employees forget some basic points such as the follows.
  • The exiting employee may be forced to serve the full notice period and leave, if any granted, adjusted to the notice period by extending it
  • The relieving may become turbulent for the exiting employe
  • The reference of the exiting employee may be adversely impacted
  • The current manager and team the exiting employee is working may form an opinion about that employee being unprofessional and immature
  • The attitude demonstrated by the exiting employee in such situations may be a strong indicator that the employee will not be able to go higher up in the career

October 3, 2012

What is That One Thing That will Make You Leave Your Current Job?

This is a question that encompasses the essence of all theories and concepts related to employee retention. In general, why do people join an organization and why they leave it are questions that have bothered many of us since our first job. And in particular, why we joined an organization and left it are questions that are worth exploring for us to take appropriate career decisions.

People may have many reasons to feel happy in their current job but might leave for just "that one thing" which may not be working alright. Based on my experiences here are some of the reasons that might be "that one thing" which makes people leave an organization. These are given in no particular order.
  • The job becomes a drag with no recognition, no clear growth path and a sense of frustration with the prevalent organizational structure. This might be the case when one works in a department of the organization which is seen as a necessary evil and there is lack of visible and active management support to those working in that department.
  • The job falls into rough weather and all growth opportunities are suddenly cut off. This might be the case when one works in a company that gets acquired by another organization and those working in a department are literally run down by those working in the same/similar department of the "acquirer".
  • The job doesn't fit with the current, pressing concerns of the organization. This might be the case when one works in a company (especially an SME) that looses lot of business and some of the departments are shunted out and consequently those working in such departments are shown the door. This is an example of a person leaving involuntarily.
  • The job not only doesn't carry the right designation and title but also the next role one can grow into is simply not there. This might be the case when one works in a certain sub-department of a department in a company where the sub-department is set-up to serve the "career agenda" of the person heading the department. He/she builds the sub-department to achieve some- short and medium-term career objectives and doesn't have any need of the sub-department from a long-term perspective
  • The job carries a fancy title but only in papers and the reporting structure is ill-defined. This might be the case when one works in a company where one department head reports into another department head (the one reporting into the other carries equal level of accountability for meeting the departmental objectives but doesn't have adequate authority). In addition there is a glass ceiling created by the top guy to ensure that no one becomes a part of the team of trusted lieutenants he has put around himself.
  • The job carries a title at par with another person in the department but has superior-subordinate relationship with the other person. This might be the case when one works in a company where organization's real growth is stunted but people still grow (by getting tenure-based promotions). Such a growth may not be for real other than the impression it can create when printed on the business card.

October 1, 2012

If You Want to Reach Safely on Time then Start Early

The philosophy underlying the statement "If You Want to Reach Safely on Time then Start Early" deserves a careful analysis. There is an analogy here to safe driving but the implications are much beyond.

Many people have the habit of driving fast (which might be unsafe at times) and at times rash (which is definitely unsafe at any time) to reach where they want to on time. These people will not consider starting a little early so that they reach safely on time and in good condition. It seems so ironical that despite fully realizing the value of starting early most people do otherwise.

This principle applies to many other parts of our lives. Some of them are explained briefly as under:

Driving

Many people start late and to compensate for the delay drive fast and rash assuming they will indeed be able to cover up the time deficit. They realize that this strategy doesn't work

Investment

Many people start investing late and to compensate for the delay invest heavily assuming they will indeed be able to cover up the wealth deficit. They realize that this strategy doesn't work. Those with finance background would probably know the reason also - compounding.

Examination

Many students start preparing for their examinations late and to compensate for the delay study day and night assuming they will indeed be able to cover up the knowledge deficit. They realize that this strategy doesn't work.

There are many more examples that can be cited to show why it is important that "If You Want to Reach Safely on Time then Start Early".

What is God?

Humans have relied upon science and technology as a means to answer all whys. However, there is always a "why" at the end of the series of whys for which the explanation is quite simple yet profound "that's the way nature works". This can be understood better with the following illustration.

A ball thrown upwards into the sky falls downwards and hits the earth.

Why downwards? The ball is pulled down by the action of gravity. Gravity is a force exerted by two bodies that pulls them closer, in this case earth and the ball.

Why gravity? Gravity is an inherent characteristic which depends on the mass of the two bodies and the distance between them. Why inherent characteristic? Every mass is composed of atoms which are further composed of electrons, protons, neutrons, etc. The atomic and sub-atomic particles influence the inherent characteristic.

Why influence? That's the way nature works.

Why? The last "why" is where science and technology ends and the concept of God begins. It is possible that humans have answer to another level of why but there will always be that "why" which will remain unanswered.

What then is God? Is God something that can be understood and explained? Is God a physical entity? Is God really for real? These questions have probably no definitive answers. It can however be claimed that God is a concept that transcends physical reality.

Most events that happen to us or happen around us are not controlled by us and depend upon luck or providence. God is a sum effect of all such events. God then is a concept that represents a certain power which is beyond our control. It is humbling to know that almost 100%, practically everything, of what happens to us and what happens around us is beyond our control.

Religions have taken God to a lesser level of abstraction but God being a concept that transcends physical reality cannot really be fully understood and explained through the philosophies underlying the various religions. In a certain sense it can be said that God is and should be beyond comprehension.

September 27, 2012

How Top Management Can Confuse and Hence Harm the Organization?

Top management can make or break an organization. The control exercised by top management on the following two things has substantial and significant impact on the future and very existence of the organization - organization's direction and resource provisioning.

Organization's Direction
  • Others need to go in the direction that is in line with the business strategy conceptualized and articulated by the top management
  • Direction could be in various forms:
    • Revenue model and gross margin target
    • Products and service offerings
    • Company policies
    • Organization-wide initiatives
Resource Provisioning
  • Others are granted resources to perform the assigned activities to achieve the organization's objectives that are linked to the stated business strategy
  • Resource could be in various forms:
    • Budget allocation
    • Expense approvals
    • Organization structure and staffing
    • Hardware and software resources
Top Management Can Confuse and Harm

At times the top management can cause substantial and significant harm to the organization by confusing others in respect of direction and resource. Here are some examples of this:
  • The CEO keeps on telling that an initiative needs to be started urgently but will find one reason and then another to keep on delaying it.
  • The CEO announces in a public meeting that "we want the value and will do something in the right way regardless of the time it takes" and then tell the key stakeholders in a private discussion that "come what may the time set needs to be met at any cost"
  •  The CEO talks about open culture in every meeting but doesn't encourage direct and tough questions from the employees
  • The CEO talks about importance of complying to governance mechanisms and company processes in each and every case, always but is fine with selective exemptions at his level
  • The CEO talks about empowerment and meritocracy but defines an organization structure where those reporting into him are his trusted lieutenants
  • The CEO talks about engagement and involvement but has a hands-off approach to managing the company affairs with the help of the trusted lieutenants
  • The CEO talks about progressive culture and HR practices but allows growth in the organization at a level strictly below the trusted lieutenants
How Can Top Management Avoid Confusing Others

The ways to ensure these are simple and have their basis in what makes a human being a "good human being" and an "effective leader". Here are some such ways:
  • Possessing business acumen and strategic clarity
  • Being ethical and genuine
  • Being competent and well-informed
  • Having compassion and care for others
How Top Management and Others Can Work Together Effectively

It must be remembered that the top management and the others are human beings at the end of the day. And hence they have their strengths to play with and weaknesses to guard. The interaction between top management and others should not be in competing mode but collaborative mode.

Working in an organization should not be seen as a cat and mouse game but the coming together of many minds to create something useful for themselves and for the society. 

Does a Mid-career Full-time 1-year MBA have a Negative Financial RoI?

Everyone experiences mid-career blues in her career. And one way people (who didn't enter the corporate world with an MBA degree) think they overcome these blues is to get an MBA degree.

Mid-career MBA Dilemma

Since we are talking about a business management course here it is worth assessing whether it makes business sense to get a business degree. What is the likely RoI (return on investment) of an MBA? Does a mid-career full-time 1-year MBA have a negative financial RoI?

Case of Mrs. X - Should She Do an MBA or Not

Let's consider a certain Mrs. X entered the corporate world when she was 25 year old and plans to retire when she turns 55 (hence the career would span for 30 years). After working for 10 years Mrs. X decides to do a 1-year full-time MBA. The big question would be: Does a mid-career full-time 1-year MBA have a negative financial RoI?

Let's assume a few things:
  • Mrs. X will work for 20 years post-MBA
  • The cost of MBA is Rs. 2600000 (26 lacs)
    • It is also assumed that Mrs. X has this readily available in cash and will not be needing an education loan. If an education loan in considered the financial RoI is negatively impacted
  • If the MBA Cost is kept in a bank FD (Fixed Deposit) it can earn post-tax returns at 6% interest rate compounded annually
    • It is also assumed that this money lies in the FD throughout and earns interest on compounded basis year after year
  • The current salary of Mrs. X is Rs. 2400000 (24 lacs)
  • Mrs. X expects to earn 8% salary hike every year
    • It is also assumed the %hike will remain same before and after MBA. The reason is that an MBA can't change the inherent competencies and performance level of an individual. An MBA can help get a one-time major salary hike but the future hikes will depend on the person (and an MBA program can't change a person at a fundamental level).
  •  Mrs. X expects to get a one time 50% hike
Given the above scenario what is the likely answer to the question: Does a mid-career full-time 1-year MBA have a negative financial RoI? One might think it can't be a "yes" but an insightful analysis reveals that it is actually yes. See the table below for the details of calculations.



And here's the chart showing the trend of Money W/O MBA, Money W/ MBA and Net INCOME. It clearly shows the returns over a 20 year period is always negative and in fact, keeps getting worse year on year.


So does a mid-career full-time 1-year MBA have a negative financial RoI? The answer is yes. The financial RoI of doing a mid-career full-time 1 year MBA is actually negative. Thus going by purely financial RoI perspective Mrs. X should not do an MBA.

Reasons Other than RoI for Doing or Not Doing an MBA

Though Mrs. X realizes that the financial RoI of doing a mid-career full-time 1 year MBA is actually negative there are still many other reasons she can go ahead with the MBA. Here are some reasons why MBA may have RoI in other aspects (non-financial in nature):
  • Get break into an area one always wanted to work but couldn't. An MBA degree can open certain doors that were closed before
  • Feel good about oneself by virtue of the esteem value generated in flaunting the MBA degree. An MBA degree is a great label to have on one's resume, any day
In the process of the benefits that might accrue to one certain things might get lost. Here are some of those:
  • Technical or functional competency before MBA may count for little or nothing. Also the grass always looks greener on the other side. One might get an MBA and realize that she was comfortable and enjoyed a role with more technical content as compared to a role with more managerial content
  • One would always have the disadvantage over someone who entered the corporate world with an MBA degree. An MBA degree with 10 years experience after that is not equivalent to an MBA degree with 10 years experience before that

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