Behavioral lessons from the great Indian Covid migration

India entered into a complete lockdown on March 25 in response to the Covid-19 pandemic. Since then, we have witnessed the greatest migration of humankind in the Indian subcontinent after Partition. Men, women and children in the millions embarked upon 1,000-mile journeys on foot, pulling their belongings on their shoulders. Hundreds have died in inhuman conditions along these sense-defying treks. Much has been written about the circumstances leading to these suicidal missions but very little analysis has gone into the cognitive and socio-psychological aspects of it. It is imperative to understand the mental processes that led to these self-defeating decisions if we are to avoid repeating history. What were the migrant workers thinking?

Read the rest of the article here:

https://www.forbesindia.com/article/iim-bangalore/behavioral-lessons-from-the-great-indian-covid-migration/60445/1

Why further postponement of JEE and NEET is NOT an option

I am an IITian and a concerned father of a JEE aspirant. I know first-hand the sheer dedication and hard work that goes into preparing for these exams. The lockdown to control the Covid-19 pandemic resulted in the postponement of these exams from the April-May to the July-August timeframe. Now that the Covid numbers are still on the rise, there is a debate on whether the exams should be postponed again. India’s education is facing a trade-off between health and career concerns. I argue that, in the balance, the all India competitive exams like JEE Mains and NEET should NOT be further postponed. There are good reasons for that and I outline them below.

Mental health of students: Students are already under substantial stress due to the uncertainty all around. Any further postponement will lead to increased mental health issues amongst the students potentially leading to disastrous outcomes. The last thing we wish to see is a rise in student suicides. Uncertainty needs to be reduced, not increased by further postponements.

Why postponing won’t work: Let’s be very clear. Covid-19 is here to stay. There is a good chance that cases will not will not go away or even reduce substantially by the end of the year. If we wait for zero cases, the exams, in all likelihood, will not happen this year. The students of this batch across India may lose a year and instead of 15 lakhs there will be 30 lakh students competing for the same number of seats next year.

What about the risk: Covid-19 is definitely a health risk. However, if the right precautions are taken, like social distancing, hand sanitizing, wearing of masks, etc. the risk can be substantially reduced. Evidence from across the world shows that young adults in the 18-40 age group experience a significantly reduced risk of severe infection. Further, we face many risks in everyday life, like road accidents and other infectious diseases. With appropriate measures, and given the trade-offs involved, the coronavirus risk seems to be acceptable in the current circumstances.

Cascading effect: There are several linkages between different exams in the current Indian system. For example, JEE Mains is the qualifying exam for JEE Advanced, the exam for entry into the IITs. JEE Advanced is also used for admissions in the IISERs, IISc and other institutes. IISc also admits top rankers of NEET and JEE Mains. Hence, postponement of any of these exams will lead to a cascading effect, leaving lakhs of students in limbo for indefinite periods of time.

Possible solution: No policy can satisfy everybody in a country as diverse as ours. Policy design should optimize such that the maximum possible numbers are benefitted. Postponement cannot be a solution. Careers of lakhs of students are at stake. Either the exam is held as per schedule with strict guidelines and precautions, or an alternative way of evaluation, which is fair and equitable, is implemented. In the absence of a fair alternative, one can proceed with the exams in July for those who wish to write them now. For those who opt to withdraw, their number of available attempts to appear for the exams can be preserved. To explain, currently students have a maximum of 2 attempts: the year they graduate class 12 and the following year. This can be relaxed for students not writing the exams this year. So, aspirants who graduated class 12 in 2019 will have another attempt in 2021, and those who are graduating in 2020, can sit for the exams in 2021 and 2022. This course of action might well be the only one that caters to both, aspirants who want to appear for the exam amidst the virus and those who want to wait till the pandemic subsides.

Consumer behaviour post-Covid-19 lockdown

Malls are set to open on June 8, more than two months after they were shut down in an unprecedented lockdown in response to the COVID-19 pandemic.  A recent McKinsey report predicts reduced footfalls in the malls due to people staying away from crowds and moving to online platforms.

The challenges of managing inventories and disruptions in manufacturing and supply chains remain. Moreover, these flag-bearers of consumerism will open to the public in a new avatar, with standard operating procedures designed to minimise virus transmission.

Read the rest of the article here:

https://www.businesstoday.in/opinion/columns/coronavirus-lockdown-impact-consumer-behaviour-post-covid-19-shopping-malls/story/406126.html

 

Risk Perception in the COVID era

In a classic experiment done almost 50 years ago, one of two groups of participants was told that they would receive a small electric shock, while the other group was told that there was a 50 per cent chance that they would receive the same shock. The anxiety the participants felt just before the shock was measured using physiological markers such as heart rate and sweating. The surprising result was that both groups were found to be equally stressed.

Read the rest of the article here:

https://indianexpress.com/article/opinion/india-coronavirus-lockdown-how-framing-the-covid-numbers-changes-individuals-risk-perception-6426819/

Is Rape Contagious? The Ugly Side of Social Proof

It’s barely 4 days since the horrific double-rape murder of the sisters in Badaun, and already several  other gang-rapes of minors have been reported, the latest being in Rajasthan.

The same happened in December of 2012. When the entire nation was reeling in shock at the brutality of the Nirbhaya case, more and more such incidences seem to spring up in the neighbourhoods of the capital itself. With so much public outrage against the perpetrators of violence against women, one would think it would discourage other fence-sitters, waiting to pounce on their victims. Alas, no! In fact, science suggests that it could actually work the other way. The greater the publicity given to such an incident, the greater the likelihood that they’ll be repeated elsewhere.

This phenomenon is called social proof. Psychologist Robert Cialdini defines social proof as: “We view a behaviour as correct in a given situation to the degree that we see others performing it. It somehow, justifies, our action.” A simple example of social proof is when we go to a foreign land with strange ways we tend to copy the behavior of the locals. This reduces our chance of going culturally wrong in ambiguous circumstances. Marketers and advertisers have also used the concept of social proof to sell their products ( after all 9 out of 10 dentists can’t be wrong).

There are many examples of such copying behavior that are not surprising and generally beneficial. However, what is surprising is how deep and powerful the effects of social proof can be, in influencing individual behavior by acting on our subconscious minds.

It has been shown that immediately following highly-publicized suicide stories, the number of people who die in airline and automobile crashes shoots up, sometimes as much as 1000%.  Sociologist David Philips of UCSD demonstrated that immediately following a front-page suicide story, suicide rates increased dramatically in the geographical areas, where the story had been highly publicized. Not only that, there were macabre similarities between the publicized stories and subsequent incidents. For example, stories in which only 1 person commits suicide, results in more 1-person suicides and suicide-murder combos, result in similar multiple deaths. He argues that certain troubled people, who read of another’s suicide, end their lives in imitation. In a morbid illustration of the principal of social proof, these people decide their course of action based on how some other people have acted.

 Philips calls this the ‘Werther Effect’. More than two centuries ago, Goethe published a novel entitled Die Leiden des Jungen Wergters  (‘The Sorrows of Young Werther’) where the young, troubled hero commits suicide at the end. The book had such a profound impact on its readers, that there was a wave of suicides across Europe, resulting in the ban of the book in several countries.

 Is it possible that in the case of rape incidents in India, the same principal of social proof is raising its ugly head? That highly publicized rapes are leading to many others?

The tragedy of our country is that unless there is publicity and public outrage, politicians and law enforcement officers don’t act. The trade-off is that the publicity may well be a hidden cause of other lives being ruined.

Leading in troubled times

Leading in Troubled Times

My article titled “Leading in Troubled Times” appeared in the Indian Management magazine, Feb 2014 issue (see attachment). Reproduced below for easier reading.

That there are business cycles is well known. In the last 100 years, there have been several economic downturns leaving in its wake many shriveled businesses, bankruptcies and nightmares. What are unknown and difficult to predict are the timing, duration and severity of a recession. That makes it is even harder to prepare for the rough and tumble of volatile times, strategically, operationally and psychologically, especially after the euphoria that typically precedes severe economic climates.

In good times, leading is easy. When the Barcelona football team is in form, all decisions by the coach or manager seem to lead to the same result – victory. It is when the chips are down that true leadership mettle comes to the fore. So what can leaders do to better navigate troubled times in order to not only survive but also exploit the environment to their advantage?

To start off, it is vital to confront reality and get out of denial fast. The sooner one detects and accepts the onset of a volatile and challenging economy the better, as it will give the organization a head start in preparing to fight the odds. This, no doubt, requires a lot of courage as it is far easier to brand people who warn of impending danger as party-spoilers rather than reward them. Managers are typically accustomed to identifying major internal issues and addressing them. Adequate attention should be paid to building capability for early identification of threats and opportunities arising out of external events such as technological changes, regulatory changes, shifts in demand drivers, and alterations in the macroeconomic landscape. Rather than leave it to individual managers in ad hoc set-ups, it is better to evolve formal systems to explicitly capture the views of top managers within the organization in order to identify critical emerging issues and feeding this into the strategy making process.

One stumbling block to an early warning system is the over-confidence and over-optimism exhibited by managers. Extensive scientific evidence in managerial psychology shows that there is an enduring tendency to overplay the benefits and underplay the costs in the planning of any initiative. This consistently results in massive budget and time overruns. Importantly, an overly rosy view of the future can be detrimental to the organization as it dampens sensitivity to warning signals in the environment. Further, this over-optimism is accentuated by the tendency of organizations to suppress pessimistic opinions and reward optimistic ones. The good thing about optimism is that it breeds enthusiasm and resilience crucial for implementing initiatives and working towards difficult goals. However, it is vital to introduce doses of realism into managerial judgments crucial for planning and forecasting activities. The recommendation is to clearly distinguish between ‘planning’ and ‘doing’ activities, with the former taking on a realistic outlook and the latter an optimistic one. The key to temper over-optimism and adopt a balanced view of the future is to understand its sources, challenge assumptions and generate alternate perspectives.

It is important to understand what fundamentally differentiates tough business environments from good ones. Unless we realize how things are different it would be hard to adapt our decisions and processes to the new realities. Some factors are obvious and get most of the managerial and journalistic attention such as falling demand, credit crunch, bankruptcies and lay-offs. There are others that are less obvious because they are less tangible and below the surface such as the reliability of information, validity of forecasts, sensitivity of business outcomes to quality of decision making, changes in risk perception and risk attitudes and finally the psychological health and motivation of employees. It is vital to consider the effects of these factors on operations, strategy and people functions during economic downturns.

The marginal returns on better decision making is significantly higher during trying times. In a steady economic climate the difference between two courses of action could be a few percentage points of lower growth, a lost contract or losing a star employee. In a volatile environment the difference could be between survival and bankruptcy. The sensitivity of the business to sound decision making is much greater during recessions. This is accentuated by the increased uncertainty and unreliable information that characterizes tough times. Typically, there is a trade-off between speed of decision making and the amount of information and alternative perspectives brought to bear on a decision. In difficult times, it is advisable to trade off a bit of speed for more deliberation by making the decision making process more collaborative. Collaborative decision making ensures that all information and points of view within the organization is accounted for while making difficult choices.

In stable times, decision making is usually an exercise in consensus building with the goal to generate a single view of the future that everyone agrees to. This method is ill equipped to navigate sudden changes in the economy and tends to be anchored in the past. There is a need to incorporate flexibility by considering alternative scenarios including extreme “black swan” events. Forecasts of macro variables should build in confidence intervals. Leaders should be receptive to diverse points of view and especially guard against seeking out only that information which supports their prior hypotheses. Behavioral scientists call this the confirmation bias.

In terms of the budgeting exercise, it is better to reduce the planning cycle from yearly to every six months at most. In volatile markets longer term predictions are likely to be way off. Hence, a single shorter term budget can be adopted with longer term plans contingent on the emerging scenario and trigger events such as demand shocks, commodity prices, cost of short term funds, etc. The idea is that current budgets anchored on past ones with incremental changes are futile when the economic variables are volatile. A better approach is to “zero-base” the budget by considering different industry end-points and working backwards from there. In terms of dealing with strategic issues, the yearly off site strategy building exercise is not enough. There needs to be frequent and open communication amongst the top managers of the various parts of the organization as wells as between the CEO and the board of directors in order to benefit from the expertise and wisdom of the board members.

An enduring finding in the psychology literature is the self-serving attribution bias, which is the tendency of people to assign the reasons of positive outcomes to internal causes like their own skill and knowledge and assign the reasons for negative outcomes to external causes like the situation or bad luck. This human tendency is due to a desire to maintain a positive self-image and results in managers taking undue credit during good times and avoiding due blame during bad times. Leaders need to clearly differentiate between controllable and uncontrollable factors, not only in their strategy formulation but also in the performance management systems. This could have implications in the design of key performance indicators for performance measurement, for example, excluding cost of fuel from cost of airline seat or factoring out exchange rate fluctuations from overseas sales.

Last but definitely not the least, leaders should pay very close attention to the psychological health of the employees. This is an opportunity to build a reputation for being sensitive and employee friendly, an investment which can provide returns many times over once the good times return. The predominant emotion amongst the rank and file during economic downturns is that of fear and insecurity. It is well known that beyond a point these emotions have a detrimental effect on employee morale and productivity. One of the most important things that a leader can do during a crisis is to allay the fears of the employees. Unfortunately, this does not get the importance and attention it deserves from business leaders. The biggest source of stress and fear during a crisis is the ambiguity surrounding the way forward for the organization. People also have an inherent need to understand why something is happening. It helps them make sense of the world and accept the leadership decisions. Leaders need to reduce stress and build trust amongst their subordinates by clear, unambiguous, transparent and honest communication, providing as much objective reasons as possible for their decisions. Leaders can also reduce constant uncertainty and speculation by avoiding multiple rounds of lay-offs. If laying-off employees is unavoidable, then it’s probably best to be done with it in a single round so that the remaining employees can focus on their jobs rather than live in fear.

An economic crisis is an opportunity to take a pause, clear the mind, introspect and reinvent oneself, much like what an inspired football team does during the half-time break. This is a time when competitors are weak and there is dense fog all around. With the right steps, it is possible to emerge ahead of the competition once the structural changes in the economy have taken effect and the fog has lifted. During good times, companies have a tendency to put on adipose in the middle, accumulate a lot of overhead and clutter. A recession is a perfect opportunity to cut out the waste and find new efficiencies without raising too many hackles. This is also the best time to buy assets from distressed companies at bargain basement prices and convert them to sources of competitive advantage on the economic upturn. There is nothing like a crisis to bring out the innovative best in designing new products, processes and systems, ready to take off as the economy recovers. Fedex began operations in April, 1973 when jet fuel prices were sky-rocketing, Microsoft started in the recession of 1975, and Fortune magazine was launched by Henry Luce in Feb 1930 just months after the Great Crash.

Raghuram Rajan on corruption…

Today RBI guv, Raghuram Rajan, made a comment on corruption broadly reflecting my previous post.

‘In an apparent reference to Aam Aadmi Party, which has made anti-corruption its core philosophy, Dr Rajan said, “There seems to be belief on the good man’s theory…all you need is to put a good man in that place (and everything will be fine).

“I think, recent events have suggested that this is little difficult. Clearly, corruption is the result of many complex forces coming together,” Dr Rajan said.’

http://profit.ndtv.com/news/nation/article-role-of-serendipity-and-raghuram-rajans-journey-to-mint-street-380333?pfrom=home-otherstories

Grey Squares on the Political Chessboard

People have an innate need to look for reasons for other people’s actions and reasons for the consequences of those actions. This attribution can be either internal, “He won because he has great skills,” or external, “He won because his opponent was weak.” Internal attributions assign the cause of an outcome to the internal traits and values of a person, while external attributions assign the cause to the specific circumstances of the situation, the environment or just plain luck.

One of the enduring findings in psychology, termed the Fundamental Attribution Error (FAE) is that we are heavily biased towards assigning internal causes for outcomes of other people’s actions. In other words, we grossly underestimate the causal effects of external situational factors in human behaviour. This human tendency is relevant in the ongoing debate on corruption in India and the resounding success of the Aam Aadmi Party in the recently concluded elections in Delhi. At an approximation, there is a corruption divide in the country. On one side are the perpetrators of corruption, people asking for bribes, and on the other side are the victims of corruption, the common man running from pillar to post and increasingly taking to the streets to protest against the perpetrators. The corrupt are painted pitch black by the “innocent” victims who paint themselves white while taking the moral high ground. FAE predicts that the reality is not as black and white as a chessboard.

Let me explain. Because people underestimate the influence of the situation and overestimate the influence of internal traits, the perpetrators are painted blacker than they actually are. In other words, if the “white” and “innocent” victims were to cross the divide and find themselves in the circumstances of the perpetrators, with the associated temptations, the power, and the peer pressure, will they become like the perpetrators? Very likely. Of course, individuals differ, but in a macro statistical sense, this is almost a certainty.

Personally, I welcome AAP’s success and wish them well. However, it must also be noted that AAP is largely a party of victims. The moral and ethical variance in Indian society is overestimated and it remains to be seen what hue the party representatives take once the influence of the system starts taking shape. AAP’s Kejriwal has appealed to “honest” people to join and work for the party. It is easy to be “honest” as a victim.

The real test of a person is to remain honest amidst the onslaught of the {adjective} Indian public systems. {I failed to find an adjective reflecting my true opinion}. These are the kind of people who are the true heroes.

Freedom!

My first post! Feels liberating.

Thus far, I have written only academic papers, where every little statement that means anything, however inconsequential, however hair splitting, needs to be supported with references to past work, all the time making sure that egos are kept intact. You should know that academic researchers, like me, are easily hurt. I love my research, don’t get me wrong, but I must admit that it is energy sapping not to be able to say that the Sun rises in the east and just move on. Yes, the freedom to write something and not give a damn is exhilarating!

I shall write about my research, about human behavior, about how we make important decisions in our lives and more. I shall comment on current issues that catch my fancy, especially if what I know about human behavior can add any new insights to the analysis. I shall try not to be like the small coterie of all knowing ‘pundits’ that populate ‘expert’ panels on national TV these days (but no promises). I have noticed that the range of commentators on national TV is considerably narrower than the range of issues that face the world. These days, writing about call center juveniles can make one an expert on issues ranging from national defense to rural family planning. I think they invite the same people, no matter what the issue is, simply because they have their phone numbers on speed dial. Well, they have a show to run and they do the best they can. I just do my best not to watch. Allows me time to attempt a blog.

Stay tuned for an idea I want to try out to reduce supply side corruption which, I hope, will turn out to be more than just lip service.