Thursday, April 23, 2009

Pareto in times of Recession

A close friend of many years was on the phone this morning, almost in tears. Her husband had been behaving strangely of late . He who was meticulous in his attire ( and shaved twice a day) was going out dressed sloppily with an unkempt stubble. He who broke into a rash at the mere suspicion of a cobweb didn't bat an eyelid when a cockroach walked past him. While none of this escaped her notice, she didn't quiz him hoping this phase would have its run and fizzle out. When it didn't show any signs of going away, she broached the subject with him. Her husband admitted to being depressed and the reason for his depression was, hold your breath, the global economic meltdown. Are you going to lose your job, she asked. Not before half the company does, he replied. Will they cut your salary, she asked . No pay hike but no cuts, he replied. Is there a transfer threat, she persisted. Of course not, he tittered. Then why is your chin forever southwards, she demanded to know.


What actually bothered this man was the thought of not creating records at work. You see, up until the global meltdown took India in its stranglehold, he was a star performer, a record creator, a record breaker. But now he was just another executive. The very thought made him a wreck. His wife tried to cheer him up - said look, as Indians go, we are blessed. We have our own house, two healthy, lovely children, good lifestyle and sufficient savings for the future. Even if the recession were to eat us out of home and hearth, we would still have each other and our kids. If nothing else, we'll start tapioca farming in Kerala, she joked. Her husband didn't crack a smile nor did he respond.


She cried over the phone that he cannot see or count his blessings. His happiness, his life's breath is his job. He is happy when his daughter brings home a merit certificate, but happier still when his team lands that huge contract. He smiles when he sees his infant son flip over on his tummy, but he beams when his supplier thumps him on the shoulder. His family does bring him joy, but his happiness comes from his job. And now that very job was letting him down. He actually felt there wasn't much to go on for.


Years back I was told a true story of this hugely successful entrepreneur who was asked to come for a meeting with a bank to finalise a Rs. 20Cr deal . Those days in India there were only two companies providing that particular service, of which his company was deemed the better. The contract was almost his. But he asked for a change of date. The Chairman of the bank demanded the reason. He answered truthfully that the day set for the meeting was his son's birthday and he had promised to be there. The Chairman and his troops went ballistic. Had he asked for a change of date owing to a sudden business trip across the globe or even across the road, they would have understood. But this they didn't. Without further ado, the contract went to the alternate service provider. A loss of Rs. 20Crores. Not a joke. Yet he chose his son's birthday over the crucial meeting. He probably felt that his promise to his son was worth far more than a few crores of rupees. His life was not all about winning contracts, it was also about finding happiness in the happiness of his dear ones.


Of all the theories that make the world tick, there's one that I particularly like - Pareto's Optimality. Pareto's 80/20 Optimality originally stated that 80% of Italy's wealth was with 20% of its population. One could substitute Italy with any other country , county or family and the theory would still hold good. Look at the man in the first story who spent 80% of his time and energy at work while in truth , in reality, that only ever gave him 20% of real happiness. Differently put, his family which could actually complete him, his sense of self, which could contribute to 80% of his happiness was actually receiving only 20% of his attention. In terms of time, the man in the second story also probably spent only 20% on his family, but that 20% was non-negotiable. It was quality time with family which he was unwilling to trade for anything in the world. The 20% which multiplied and returned to him as 80% .

It is a very simple law. Straight forward and in your face. If only you could see it...

Post Script::

Story 1 : Between the time it took me to write this blog and post it, my friend's husband was offered a very generous amount of money by his company in return for his promise to not leave them for four years. The company didn't want to lose one as smart and sincere as him. He came home from the meeting, asked for a second helping of his favourite dessert and demanded to kn0w what the hell that cobweb was doing over that corner. My friend dropped all that she was doing , ran and hugged him and said "Welcome Back".

Story 2: The next year, the bank was back. They realised after a year's trial with the other service provider that our hero's work was the best after all. He bagged the next year's contract, surely without missing his son's birthday!

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