Trade in the ghosts of 1962

“Fifty years have passed since the short but ill-fated war be­tween In­dia and China. The an­niver­sary has al­ready prompted sev­eral mil­i­tary men, diplo­mats and politi­cians to share their views.”

The Pak Banker - - Front Page - Ravi Bhoothalingam

WITH the grow­ing power and influence that In­dia and China ex­er­cise on the world stage, busi­ness peo­ple in both nations must take the lead in vi­su­al­is­ing a new re­la­tion­ship. Fifty years have passed since the short but ill-fated war be­tween In­dia and China. The an­niver­sary has al­ready prompted sev­eral mil­i­tary men, diplo­mats and politi­cians to share their views. This is only nat­u­ral, as they were in­deed the prin­ci­pal ac­tors in that tense drama in the high Hi­malaya. How­ever, a view from a perch less priv­i­leged with in­sider knowl­edge, and more dis­tant from the ac­tion, may also yield some in­sights. It is with that ob­jec­tive that I of­fer these thoughts, viewed from the stand­point of a man­age­ment pro­fes­sional who has been in­volved with busi­ness and in­dus­try for over four decades.

Vic­tory and de­feat, suc­cess and fail­ure, ad­vance and re­treat are all part of the rhythm of life. Busi­ness peo­ple know this all too well since they deal with risk ev­ery day, and feel the re­sults through the ebb and flow of their for­tunes. Risks in busi­ness are man­i­fold. Less than one in 20 of new prod­uct launches, for ex­am­ple, turn out suc­cess­ful. Even smaller is the prob­a­bil­ity of hit­ting on a "block­buster" prod­uct. The best of re­cruit­ment meth­ods, in­ter­view pan­els and psy­cho­log­i­cal tech­niques can­not guar­an­tee that those se­lected as em­ploy­ees will not fall by the way­side later. Yet, risk can­not be evaded as it con­sti­tutes the very lifeblood of en­ter­prise. What is im­por­tant is to learn how to man­age it. A truly ca­pa­ble busi­ness man­ager would demon­strate poise in ad­ver­sity, an abil­ity to study and learn from re­verses, and the avoid­ance of hubris in times of tri­umph.

But can learn­ing from busi­ness re­verses - so dif­fer­ent in mag­ni­tude from the na­tional hu­mil­i­a­tion and tragedy of the Sino-In­dian war - ap­ply to the 1962 case? In­deed, yes, for the dif­fer­ence lies in scale and not in kind. Death through an in­dus­trial ac­ci­dent is no less a tragedy than through com­bat in dis­tant moun­tains. The dis­place­ment of refugees through war and their loss of liveli­hoods are no more wrench­ing than jobs lost through fac­tory clo­sures and bank­rupt­cies. How to ex­pe­ri­ence and learn from de­feat may, there­fore, hold com­mon lessons.

Learn­ing from a set­back is eas­ier said than done. Con­fronting mis­takes is painful, un­pleas­ant and chal­lenges one's self-con­fi­dence. So, cri­tiques of poor per­for­mance of­ten lapse into easy self-jus­ti­fi­ca­tions and ex­cuses, how­ever well dis­guised these may be as as­tute analy­ses. To get to the heart of the mat­ter re­quires open­ness and a will­ing­ness to un­dergo painful in­tro­spec­tion, backed by a de­ter­mi­na­tion to get at the "truth," so that fu­ture gen­er­a­tions might learn from our mis­takes. Have we truly done this with 1962? That our of­fi­cial archives are not openly ac­ces­si­ble pro­vides a dusty and dis­cour­ag­ing an­swer.

Suc­cess­ful en­trepreneurs and well­man­aged com­pa­nies man­age a set­back through analysing both its con­tent and process. In the "con­tent" phase, they dis­tin­guish be­tween two dis­tinct sorts of hu­man er­rors. What we may call "Type I mis­takes" oc­cur when the dis­as­trous event is caused by a lack of knowl­edge or knowhow, or through lapses of mo­ti­va­tion, e.g. care­less­ness, short­cuts, poor ap­pli­ca­tion, etc. The sec­ond type of mis­take - the Type II er­ror - is caused not by short­ages of knowl­edge or mo­ti­va­tion, but by lapses in busi­ness judge­ment. Good busi­ness­men dis­tin­guish be­tween the two types of mis­take even though their con­se­quences may be sim­i­lar.

Those who com­mit the first type of er­ror are cer­tainly taken to task. But, in well-run or­gan­i­sa­tions, their im­me­di­ate su­per­vi­sors are pun­ished more se­verely. For theirs was the re­spon­si­bil­ity to equip the peo­ple in their charge with the skills and the at­ti­tude to do the job well. How­ever, the ap­proach to Type II mis­takes is quite dif­fer­ent. A com­pany that pun­ishes bona fide er­rors of judge­ment will never build a cadre of en­tre­pre­neur­ial man­agers. Still, an in­fi­nite tol­er­ance for well-in­ten­tioned but dis­as­trous de­ci­sions can drive the best en­ter­prise to the wall. A good com­pany ap­proaches this dilemma through care­ful ca­reer plan­ning, grad­u­ally build­ing the risk-tak­ing abil­ity of its peo­ple, whilst lim­it­ing the dam­age at any one time. Yet, it is the "process" stage of this anal­y­sis that is cru­cially im­por­tant. The se­quence of ex­am­in­ing one's er­rors and learn­ing lessons hap­pens in well-run com­pa­nies through a highly cathar­tic method of in­di­vid­ual and group re­flec­tion, some­times mod­er­ated by ex­perts, on what went right and what went wrong. It is a painful ex­pe­ri­ence as it ex­poses oth­ers and one's own fol­lies, omis­sions and at­ti­tudes. This cleans­ing process helps the par­tic­i­pants un­der­stand and ac­cept what went wrong, and to en­er­gise them to rec­tify the er­rors. Even more im­por­tantly, it stim­u­lates a cre­ative search for new direc­tions and new vis­tas. Of­ten, break­throughs hap­pen as a re­sult.

The lit­er­a­ture of busi­ness is re­plete with cases where en­ter­prises that have gone through this cy­cle have rad­i­cally changed their busi­ness model and their strate­gies, at­tain­ing great suc­cess. But so have coun­tries. Take Ger­many af­ter 1945. A shat­tered na­tion re­solved to re­build it­self whilst si­mul­ta­ne­ously shun­ning mil­i­tarism and re­venge.

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