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It all started with lending money to Subprime borrowers or at least as the world knows how it began.  Next in line was Credit crisis, as a result of freeze on lending. Banks, financial institutions and businesses across the world have lost tons of money causing the economic tectonic plates to re-adjust, drifting the financial world as we know as far back as 90’s, wiping out close to $5 trillion market value.
The technology boom of the late 90’s followed by the financial prosperity over the last decade had created numerous jobs raising the per capita and thereby standard of living of every individual. Are jobs an exaggerated response to what we thought the marketplace was? Are jobs another bubble waiting to burst? The answer only time can tell.

Investor Dilemma:

Market collapse has raised awareness on the financial model and prevailing regulations. Diverse viewpoints of each analyst is often confusing;  I’ve heard one say that in a un-regulatory environment, everything could go wrong and others say that in a tightly regulated markets, nothing functions as expected. Now, how can you stay in between the two conditions and expect nothing to go wrong. Isn’t that confusing (inevitable)? Excessive greed coupled with that mystification marked the genesis of various investment vehicles such as Mortgage backed securities, Collateralized debt obligation (CDO), Credit default swaps (CDS) etc. These asset-backed securities, typically big buyers of subprime mortgage backed securities, are sliced, diced and sold to institutional investors. As subprime delinquencies soared in the year 2007, major rating agencies such as Moody’s and Fitch have downgraded some of their AAA rated CDOs to Junk; as a result their market value slumped. Insurance companies like AIG, Security Capital that guaranteed interest and principal payments in the event of default have lost their market capitalization as they began writing off the billions in their quarterly filings. Risk transferred from one institution to another without much accountability has brought down the entire market.

The crash seems to have heard every nook and corner of the world including a small and peaceful seaport town of Narvik in Norway, where the municipalities and civilians have lost millions in such complex derivate instruments.

Who has the courage to invest or spend in a market that has lost more than a decade of positive performance? During the time of enormous economic distress, Investors need confidence that most institutions that they invest in are sustainable and viable long term. Jamie Dimon, CEO of JPMorgan Chase had delivered a terrific speech at US chamber, which was meant to restore confidence in the market. When asked about Executive compensation, he aptly said that Government, Treasury or Federal reserve  should not intervene or guide them to run their businesses and that institutions cannot retain talented resources if the government were to lay out stringent policies on executive compensation. I am in full accord with Jamie Dimon and other CEOs that restricting compensations would in fact prove to be deterrent for businesses on the long run because compensation and bonuses if paid for better performance over an extended period of time, are basic incentives to actuate individuals to strike better deals. Do we not have better things to do at this point than to talk about compensation?

Fundamentals fell off the cliff?

When I first started investing, I spent a great deal of time and effort in understanding what market indicators are- behavior of Stocks vs. Oil, Dollar vs. Oil, Commodities vs. Stocks, quarterly earnings, ramifications of dividend cut etc. Well, I now know what they are however they are no longer fundamentals in the current circumstances.

Considering the numbers are bloated over the years I ask myself, is this the true market value? If so, will the market ever see the heydays of the years 2007-2008?

Far-reaching changes in attitudes and family structures have been redefining the workforce for more than two decades – yet the workplace has remained much the same. During this time, many companies have learned that personalizing the customer experience is good for business. In Mass Career Customization, the authors argue convincingly to extend this popular and profitable concept to the workplace. As the working population shrinks, maintaining industry advantage will depend largely on keeping employees engaged and connected. Mass Career Customization provides a framework for organisational adaptability that will do just that.

Cathy Benko is the chief talent officer responsible for driving the Deloitte U.S. Firms strategy to attract, develop and advance a highly skilled and increasingly diverse workforce. She is also leading a pioneering approach to employee engagement and career/life integration called Mass Career Customization, a signature initiative of the Deloitte U.S. Firms Talent agenda.

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Also check out the other blog post pointing to some potentially troublesome future for the OLPC program.

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This weekend I got the chance to catch up with his follow-up work, “Social Intelligence – The new science of Human Relationships”. Daniel describes Social Intelligence as the interpersonal part of Emotional Intelligence. He argues that human beings are “wired to connect” with brains of other individuals. Our brain is “Social”, meaning that our interactions with others, verbal or visual, have a far-reaching biological impact, sending out cascades of hormones that regulate everything from our hearts to our immune systems, making good relationships act like vitamins–and bad relationships like poisons. Daniel points out those emotions are “contagious” – we can “catch” other people’s emotions the way we catch a cold. The “Social Brain” has something called “Mirror Neurons”, which sense both the move another person is about to make and their feelings, and instantaneously prepares us to imitate that movement and feel with them. This is extremely important when you consider implications on the business world, when negotiating with the opposite party, and especially in Leadership. Followers are naturally attuned to mirror the emotions of the leaders.

Hmmmm… does this make it all the more important for leaders to manage emotions? Sometimes I think of a true leader as a symphony conductor – aware and being one with the surroundings, attuned to each and every musician in his group, expert in communication both verbally, by movements of the hand, gestures, facial expressions… all in order to create a state of the art experience for the audience – the final product. Agree/Disagree?

The book points to experiments, like a British study of health care workers who had supervisors on alternate days, once they dreaded and one they liked. One the days the dreadful boss worked, their average blood pressure jumped 13 points for the systolic and 6 for diastolic. Wow. I guess now those law suites we hear of… where employees claim heath issues from workplace harassement, may hold some truth. 

Too often, when leaders deliver a message, the content takes the first seat and the “HOW” is ignored. Daniel points out to a study where when a manager delivered a piece of bad news (disappointment that an employer had failed to reach performance goals) with a warm demeanor, people neverthless rated the interaction positively. When good news (pleasure that the goals had been met) was delivered with sullen expression, the interaction paradoxically left people feeling bad. This points to the fact that leader’s emotional tone has a surprising power over the organization.

Interestingly, Daniel points out that today’s technological advances which have given birth to the concept of “global communities” and “online virtual worlds” might have a sinister down-side. He discusses the concept of social corrosion resulting from “technocreep”:

“… There are unknowns in the ways humans around the words are connecting – and disconnecting –as technology offers more varieties of nominal communication in actual isolation. These trends signal the slow vanishing of opportunities for people to connect. This inexplorable technocreep is so insidious that no one has yet calculated its social and emotional costs.”

“The one-person shell created by headphones intensifies social insulation. Even when the wearer has a one-on-one face-to-face encounter, the sealed ears offer a ready excuse to treat the people as an object, something to navigate around rather than someone to acknowledge, or, at the very least, notice.”

Daniel argues, “to the extent that technology absorbs people in a virtual reality, it deadens them to those who are actually nearby. The resulting social autism adds to the ongoing list of unintended consequences of the continuing invasion of technology into our daily lives”

Daniel makes a powerful point… which I hate to admit, I have noticed myself. Looking back, I can see how I switched from the good old paperback edition of books to MP3 versions. The convenience and ease is just undeniably one of those things that attracted me to audio books in the first place. Plugin that iPod and take it wherever you go… the long drive, the gym, the walk from the parking lot to work… however, I realize that I DID get in a “bubble” when listening to those books… sometimes so much so that a 10 hour cross-state drive seemed like something I looked forward to!! Yeah – that’s sick for sure. And lemme not forget my huge twitter list who I believe NEED to know everything and anything I do. And my virtual social network, on those gazillion websites out there, where I HAVE to drop in to “show some luv”. Have you paused and wondered if a comment on “My Wall” is really something that “connects” me to my ”virtual” peep sitting in Russia? Do we really understand Social Networking?

“In 1970s two-thirds of Americans belonged to organizational with regular meetings that they attended. That number has dropped to about one-third by the 1990s… New organizations keep people at a distance. Membership comes via e-mails or mass-mailings, and the main activity boils down to sending money, not getting together.”

I agree with Daniel that this new “communication culture” is still too new. There are unknowns in the ways humans around the world are connecting – and man disconnecting – as technology offers more varieties. Are we losing that “personal touch”? Am still looking for that “right answer” – What do you think?

The book has a vast multitude of stories and references to research materials which makes it a very interesting read. Usually I take at least a week to finish off a book, mostly reading an hour or so in the night… but this one got me reading all through thanksgiving

Check out the “introductory” video by Daniel Goleman below… and also 2 related posts – Daniel points out the connection between Social Intelligence and Leadership, and the inspiring Ted presentation on Compassion and Empathy.

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In this video, he talks about how to have real relationships in your professional life; how to warm a cold call; finding time to build relationships; opening yourself to others’ generosity, and many other cool ideas, that will help you eliminate artificial boundaries between personal and professional relationships.

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About Daniel Goleman:
Daniel Goleman is an internationally known psychologist who lectures frequently to professional groups, business audiences, and on college campuses. Working as a science journalist, Goleman reported on the brain and behavioral sciences for The New York Times for many years. His 1995 book, Emotional Intelligence (Bantam Books) was on The New York Times bestseller list for a year-and-a-half; with more than 5,000,000 copies in print worldwide in 30 languages, and has been a best seller in many countries.

More about Daniel Goleman

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About Nicholas Negroponte:
A pioneer in the field of computer-aided design, Negroponte was perhaps best known for founding and directing MIT’s Media Lab, which helped drive the multimedia revolution and now houses more than 500 researchers and staff. An original investor in WIRED (and the magazine’s “patron saint”), for five years he penned a column exploring the frontiers of technology — ideas that he expanded into his 1995 best-selling book Being Digital. An angel investor extraordinaire, he’s funded more than 40 startups, and served on the boards of companies such as Motorola and Ambient Devices.

But his latest effort, the One Laptop per Child project, may prove his most ambitious. The organization is manufacturing the XO (the “$100 laptop”), a wireless Internet-enabled, pedal-powered computer costing roughly $100. Negroponte hopes to put millions of these devices in the hands of the children in the developing world by 2010.

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About Kevin Kelly:
Perhaps there is no one better to contemplate the meaning of cultural change — bad? good? too slow? too bold? — than Kevin Kelly, whose life story reads like a treatise on the value of technology. Whether by renouncing all material things save his bicycle (which he then rode 3,000 miles), founding an organization (the All-Species Foundation) to catalog all life on earth, or by touting new gadgets in WIRED, Kelly hasn’t stopped exploring the phenomena of technical and biological creation.

In articles for the Wall Street Journal and the New York Times, among others, he has celebrated scientific breakthroughs, and at the Long Now Foundation, where he serves on the board, he champions projects that look 10,000 years into the future. Today Kelly is at work on a book that asks what appears to be his life’s core question: “How should I think about new technology when it comes along?”

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About A.G. Lafley:
As the CEO of Proctor and Gamble, A.G. Lafley is a world renowned leader in innovation. He began at Proctor and Gamble in 1977, and was chosen as CEO in 2000. He inherited a struggling company that was then and still is adapting to a new global business unit. He saw one of the only ways to get out of trouble was to focus on innovation in his company. A.G. Lafley and Ram Charan have co-written “The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation”.

Read more about A. G. Lafley

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About John Elkington:
Co-founder of SustainAbility in 1987 (Chair from 1995 -2005), and Founding Partner & Director of Volans Ventures, John Elkington is a world authority on corporate responsibility and sustainable development. In 2004, BusinessWeek described him as “a dean of the corporate responsibility movement for three decades.” Established in 1987, SustainAbility advises clients on the risks and opportunities associated with corporate responsibility and sustainable development. Working at the interface between market forces and societal expectations, SustainAbility seeks solutions to social and environmental challenges that deliver long term value. With offices in London, Zurich, New York and Washington, DC and team members representing more than ten nationalities, SustainAbility works with leading companies, NGOs and influencers around the world. Clients include ABN Amro, BP, Coca-Cola, Ford, Microsoft, Nestlé, Nike, Norwich Union, Shell, Swiss Re, Unilever and Wal-Mart. A global network of experts and partners helps SustainAbility to track emerging agendas, evaluate the market implications and engage business and its main stakeholders worldwide.

Read more about John Elkington

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About William C. Taylor:
William C. Taylor is an agenda-setting thinker, writer, and entrepreneur. His new book, Mavericks at Work, has been a New York Times and Wall Street Journal Bestseller. As cofounder of Fast Company, he launched a magazine that earned a passionate following among executives and entrepreneurs. He is an adjunct professor at Babson College and a former associate editor of Harvard Business Review.

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About Michael E. Porter:
Professor Michael E. Porter is the Bishop William Lawrence University Professor, based at Harvard Business School. A University professorship is the highest professional recognition that can be awarded to a Harvard faculty member. In 2001, Harvard Business School and Harvard University jointly created the Institute for Strategy and Competitiveness, dedicated to furthering Professor Porter’s work.

He is a leading authority on competitive strategy, the competitiveness and economic development of nations, states, and regions, and the application of competitive principles to social problems such as health care, the environment, and corporate responsibility. He is generally recognized as the father of the modern strategy field, as has been identified in a variety of rankings and surveys as the world’s most influential thinker on management and competitiveness.

Read more about Michael E. Porter

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About Tom DeLong:
Thomas J. DeLong is the Philip J. Stomberg Professor of Management Practice in the Organizational Behavior area at the Harvard Business School. Before joining the Harvard Faculty, DeLong was Chief Development Officer and Managing Director of Morgan Stanley Group, Inc., where he was responsible for the firm’s human capital and focused on issues of organizational strategy regarding people, organizational change and globalization

DeLong teaches in Harvard’s Leadership Best Practices Program as well as in its Leadership in Professional Service Firms Program. He also chairs the senior leadership program for Novartis and chairs the executive course for educational leaders interested in enhancing teaching through participant centered learning.  In addition, he has taught in various executive education programs in the U.S., Europe, and Asia.

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About Tom Davenport:
Clay Shirky is the author of “Here Comes Everybody”. His consulting focuses on the rising usefulness of decentralized technologies such as peer-to-peer, wireless networks, social software and open-source development. New technologies are enabling new kinds of cooperative structures to flourish as a way of getting things done in business, science, the arts and elsewhere, as an alternative to centralized and institutional structures, which he sees as self-limiting. In his writings and speeches he has argued that “a group is its own worst enemy.” His clients have included Nokia, the Library of Congress and the BBC. Shirky is an adjunct professor in New York University’s graduate Interactive Telecommunications Program, where he teaches course named “Social Weather.”