Saturday, April 17, 2010

Working for a paycheck!

Opinion: The story BCG offered me $16,000 not to tell

The city was strange and the society unnerving, but what disturbed me the most about my experience in Dubai was my job as a business consultant.
By Keith Yost
STAFF COLUMNIST
April 9, 2010

The city was strange and the society was unnerving, but what disturbed me most about my Dubai experience was my job as a business consultant for the Boston Consulting Group.

I really had no idea what to expect, going in. In my mind, consulting was about answering business questions through analysis. It was supposed to be Excel sheets and models, sifting through data to discover profit and loss, and helping clients make decisions that would add the most value for themselves, and by extension, society.

It was worrisome to enter a new job without any guarantee that I would be qualified. I assumed BCG would train me, and that as it had been with MIT, intelligence and hard work would prove sufficient. Still, I wondered what I would do if for some reason it turned out that I couldn’t get my head around the analysis? In hindsight, analytical skills should have been the least of my worries.

Stretching reality

The first clue that my mental picture of consulting was off came with “training” in Munich. I expected instruction in Excel programming, data analysis, and business theory. Instead, Munich turned out to be little more than a week long social outing with other recently matriculated consultants and analysts within the BCG’s European branches. We donned name tags, shook hands, and drank often. Classes were fluffy, and mostly consisted of discussion of high-level, almost philosophical topics. I got along well — as both an American and a member of the Dubai office, I was doubly foreign and therefore double the curiosity.

After a pleasant week of pseudo-partying, I returned to Dubai and was assigned to writing case proposals. In the consulting business, it is standard practice for clients to write requests for proposals, describing the question they would like answered. The consulting firm in turn writes a case proposal: We will answer A by having Consultant B do X, Y, and Z. A well written case proposal promises much, but is deliberately vague about what concrete things the consultants will produce.

Case proposals were despised by the rank and file — one had a dozen bosses, unclear objectives, and virtually no coordination with co-workers. But in one sense, the proposals were good practice for real case work. Both involved stretching reality to fit whatever was assumed the client desired.

Despite having no work or research experience outside of MIT, I was regularly advertised to clients as an expert with seemingly years of topical experience relevant to the case. We were so good at rephrasing our credentials that even I was surprised to find in each of my cases, even my very first case, that I was the most senior consultant on the team.

I quickly found out why so little had been invested in developing my Excel-craft. Analytical skills were overrated, for the simple reason that clients usually didn’t know why they had hired us. They sent us vague requests for proposal, we returned vague case proposals, and by the time we were hired, no one was the wiser as to why exactly we were there.

I got the feeling that our clients were simply trying to mimic successful businesses, and that as consultants, our earnings came from having the luck of being included in an elaborate cargo-cult ritual. In any case it fell to us to decide for ourselves what question we had been hired to answer, and as a matter of convenience, we elected to answer questions that we had already answered in the course of previous cases — no sense in doing new work when old work will do. The toolkit I brought with me from MIT was absolute overkill in this environment. Most of my day was spent thinking up and writing PowerPoint slides. Sometimes, I didn’t even need to write them — we had a service in India that could put together pretty good copy if you provided them with a sketch and some instructions.

Burning out

I worked hard at MIT. I routinely took seven to ten classes per semester and filled whatever hours were left in the day with part-time jobs and tutoring. It was a fairly stupid way of going about my education, and I missed out on many of the learning opportunities that MIT offers outside of classes. I don’t recommend what I did to anyone. But as stupid as carrying double course loads was, it had one advantage: After all the long hours I put into MIT, I believed I was invincible. If MIT couldn’t burn me out, nothing else ever could.

It took roughly three months before BCG disproved my “burn-out proof” theory. Putting together PowerPoint slides was easy, the hours were lenient, and the fifth day of every week usually consisting of a leisurely day away from the client site. By all accounts, I should have been coasting through my tasks.

What I learned is that burning out isn’t just about work load, it’s about work load being greater than the motivation to do work. It was relatively easy to drag myself to classes when I thought I was working for my own betterment. It was hard to sit at a laptop and crank out slides when all I seemed to be accomplishing was the transfer of wealth from my client to my company.

I’m a free marketeer. I believe that voluntary exchange is not just a good method of incentivizing people to provide their labor and talents to society, but a robust moral system — goods and services represent tangible benefit to people, market prices represent the true value of goods in society, and wages represent the value that a worker provides to others. Absent negative externalities or monopoly effects, a man receives from the free market what he gives to it, his material worth is a running tally of the net benefit that he has provided to his fellow man. A high income is not only justified, but there is nobility to it.


My moral system is organized around a utilitarian principle of greatest good for the greatest number — that which adds value cannot be wrong. It did not bother me therefore when I was handed consulting reports that had been stolen from our competitors. If the information in those reports would help us improve our client, then who could say we were doing wrong? Like downloading MP3s, it was a victimless crime.

What I could not get my head around was having to force-fit analysis to a conclusion. In one case, the question I was tasked with solving had a clear and unambiguous answer: By my estimate, the client’s plan of action had a net present discounted value of negative one billion dollars. Even after accounting for some degree of error in my reckoning, I could still be sure that theirs was a losing proposition. But the client did not want analysis that contradicted their own, and my manager told me plainly that it was not our place to question what the client wanted.

In theory, it was their money to lose. If they wanted a consulting report that parroted back their pre-determined conclusion, who was I to complain? I did not have any right to dictate that their money be spent differently. And yet, to not speak out was wrong. To destroy a billion dollars is to destroy an almost unimaginable amount of human well-being. Spent carefully on anti-malarial bed nets and medicine, one billion dollars could save a million lives. This was a crime, and failing to try and stop it would be as bad as committing it myself. And if I could not prevent it, then what reason was I being paid such a high salary? How could I justify my income if not by prevailing in situations such as these?

Sit down, shut up

Early on, before I began case work, one manager I befriended gave me some advice. To survive, he told me, I needed to remember The Ratio. 50 percent of the job is nodding your head at whatever is being said. 20 percent is honest work and intelligent thinking. The remaining 30 percent is having the courage to speak up, but the wisdom to shut up when you are saying something that your manager does not want to hear.

I spoke up once. And when it became clear that I would be committing career suicide to press on, I shut up.

With a diligent enough effort, one can morally justify nearly anything. It was clear that the client was going to go forward with their decision regardless of how I acted. How could I be responsible for a foregone conclusion? And if I had no power to change things, then why shouldn’t I take the course of action that lets me keep my job? Who would it benefit for me to give up my paycheck? With my salary, I could make large and regular contributions to Red Cross or Doctors Without Borders — without it I would just be another unemployed bum.

But there is a large difference between telling yourself a story and believing it. Ultimately, the core reason I stayed silent wasn’t altruistic, but selfish. At my salary level, and with my expected advancement path, I could comfortably retire in my thirties. That would mean nearly a full lifetime at my disposal, a solid forty years to find true love and raise a family without distraction. It was the opportunity to travel, to achieve great things, to self-actualize. It was the prospect of living a life free of want and need. Who was I kidding? I wasn’t going to donate half my salary to Red Cross. I was going to deposit it into an index fund and speed off as soon as I was sure there was enough gas in the car.

The conscience is a pesky thing. It was no consolation that I had gotten the moral calculus to work out in my favor. I should have been the most relaxed man on the planet, and yet every day I went back to my hotel room and spent most of my time nervously pacing. I couldn’t sleep at night. I’d fill up a bathtub and scream into it. I couldn’t get over the feeling that this was not how I was supposed to spend my life.

Staying silent was agonizing. Nominally, my job was to provide advice and aid in my client’s decision-making process. In practice, my job consisted of sitting quietly and resisting the urge to dissent. Each day was like a punishment from Greek mythology; with every meeting my liver would grow anew to be eaten again by eagles.

I was reminded of the Milgram experiment. I wanted to quit. I didn’t want to have any hand in this, I didn’t want the responsibility of being the destroyer. But the man in the lab coat was telling me that the experiment must continue. Burnout soon followed.

It wasn’t just that I lost all motivation for my job; it was also that it is much harder than one would expect to do unsound analysis. There is an interesting kabuki dance to be done when crafting figures to fit a conclusion. The conclusion may be wrong, but you still need to make it believable. You still need numbers to fill out your PowerPoint slides, and the numbers need to have enough internal consistency not to throw up red flags at a casual glance. Honest analysis, even when it has weak areas, is easy to defend. If the numbers look fishy, there’s an explanation — you didn’t have direct data on such and such and had to use estimates from another report, or made a reasonable assumption somewhere. But when the numbers actually are fishy, and there’s no underlying logic to defend, you can’t have any rough areas for others to poke at. And when you know everything is fishy, you can’t tell what will look fishy to someone who hasn’t seen any numbers before.

This leads to what I like to call, “Find me a rock” problems. The classic “find me a rock” story is as follows: A manager goes to his engineer one day and asks for a rock. “A rock?” asks the engineer. “Yes, a rock. That isn’t going to be a problem, is it?” replies the manager. The engineer laughs and tells the manager he’ll go pick one up during his lunch break and it will be no problem. After lunch, the manager visits the engineer again and the engineer shows him the rock. The manager looks at it for a moment before telling the engineer, “No, that one won’t work at all. I need a rock.”


“Find me a rock” problems sound dead simple, but in actuality have requirements that are poorly stated or unknown. You never know what you’re looking for; you only know that you’ll know it when you see it.

When you disconnect analysis from reality, it would seem like you are freeing yourself up to do your job any way you like. In actuality, you are exchanging one set of clear objectives and rules for another that is complex and ill-defined. At one point my manager said to me, “Change the numbers, but don’t change the conclusion.” Of course, there’s no trouble in changing the numbers — it’s not as if there was much of a basis for this set of numbers over another — but change them how, and to what? Who knows? Find me a rock.

I don’t know if I’ll ever have kids. Still, when I find myself in a moral quandary, I like to think it through by imagining how I would explain the situation to my future, hypothetical children. What would I say? How would they react? Could I justify my actions as having been in their best interest?

I wasn’t sure at the time, but having had enough free time of late to ponder such questions, I think I’ve come to the conclusion that having a father who can pay for a top-notch education outweighs the disadvantage of being raised by a hypocrite. Sticking with the job for the sake of a paycheck passes the children test.

I was not surprised the day I lost my job. The writing was on the wall. BCG’s management might have been releasing reports claiming countries like Dubai would be islands of stability in the world’s rough financial seas, but to the ground troops, it was obvious the economy was not doing well. From the very beginning of my employment, I hadn’t met a single employee who planned on staying with the company — all of them were scrambling for lifeboats, trying to land cushy jobs with cash-stuffed clients or find their way back to their home countries.

What did surprise me was the offer BCG made to me as I was on the way out the door. In exchange for me signing an agreement, BCG would give me the rough equivalent of $16,000 in UAE dirhams. Much of it looked boilerplate, like any common compromise agreement used in Europe — in return for some money, I would stipulate that I hadn’t been discriminated against on the basis of race or gender, etc.

But the rest was very clearly a non-disclosure agreement, and it made me uncomfortable. I signed a non-disclosure agreement when I first took the job, but that only covered BCG’s intellectual property and client identities, things that seemed entirely reasonable to protect. This agreement went much further. Not only did it bar me from making any disparaging comments about BCG or my work experience, but I wouldn’t even be allowed to reveal the existence of the non-disclosure agreement itself. The implication was clear: I could either be a cheerleader for BCG or stay silent, but anything else would bring swift legal retribution. When I asked to have the non-disclosure clauses removed, I was told that the agreement was a standard offer to employees, and that its terms were non-negotiable.

As hard as it was to decide whether or not to stay at my job, it was easy to pass up the hush money. Mistake or not, my future hypothetical children deserved to hear their father’s story, and $16,000 did not seem like a lot of money in the grand scheme of things. After rejecting the offer, I enjoyed a full night’s rest.

Saturday, February 27, 2010

J K Rowling Address at Harvard

President Faust, members of the Harvard Corporation and the Board of Overseers, members of the faculty, proud parents, and, above all, graduates.

The first thing I would like to say is ‘thank you.’ Not only has Harvard given me an extraordinary honour, but the weeks of fear and nausea I have endured at the thought of giving this commencement address have made me lose weight. A win-win situation! Now all I have to do is take deep breaths, squint at the red banners and convince myself that I am at the world’s largest Gryffindor reunion.

Delivering a commencement address is a great responsibility; or so I thought until I cast my mind back to my own graduation. The commencement speaker that day was the distinguished British philosopher Baroness Mary Warnock. Reflecting on her speech has helped me enormously in writing this one, because it turns out that I can’t remember a single word she said. This liberating discovery enables me to proceed without any fear that I might inadvertently influence you to abandon promising careers in business, the law or politics for the giddy delights of becoming a gay wizard.

You see? If all you remember in years to come is the ‘gay wizard’ joke, I’ve come out ahead of Baroness Mary Warnock. Achievable goals: the first step to self improvement.

Actually, I have wracked my mind and heart for what I ought to say to you today. I have asked myself what I wish I had known at my own graduation, and what important lessons I have learned in the 21 years that have expired between that day and this.

I have come up with two answers. On this wonderful day when we are gathered together to celebrate your academic success, I have decided to talk to you about the benefits of failure. And as you stand on the threshold of what is sometimes called ‘real life’, I want to extol the crucial importance of imagination.

These may seem quixotic or paradoxical choices, but please bear with me.

Looking back at the 21-year-old that I was at graduation, is a slightly uncomfortable experience for the 42-year-old that she has become. Half my lifetime ago, I was striking an uneasy balance between the ambition I had for myself, and what those closest to me expected of me.

I was convinced that the only thing I wanted to do, ever, was to write novels. However, my parents, both of whom came from impoverished backgrounds and neither of whom had been to college, took the view that my overactive imagination was an amusing personal quirk that would never pay a mortgage, or secure a pension. I know that the irony strikes with the force of a cartoon anvil, now.

So they hoped that I would take a vocational degree; I wanted to study English Literature. A compromise was reached that in retrospect satisfied nobody, and I went up to study Modern Languages. Hardly had my parents’ car rounded the corner at the end of the road than I ditched German and scuttled off down the Classics corridor.

I cannot remember telling my parents that I was studying Classics; they might well have found out for the first time on graduation day. Of all the subjects on this planet, I think they would have been hard put to name one less useful than Greek mythology when it came to securing the keys to an executive bathroom.

I would like to make it clear, in parenthesis, that I do not blame my parents for their point of view. There is an expiry date on blaming your parents for steering you in the wrong direction; the moment you are old enough to take the wheel, responsibility lies with you. What is more, I cannot criticise my parents for hoping that I would never experience poverty. They had been poor themselves, and I have since been poor, and I quite agree with them that it is not an ennobling experience. Poverty entails fear, and stress, and sometimes depression; it means a thousand petty humiliations and hardships. Climbing out of poverty by your own efforts, that is indeed something on which to pride yourself, but poverty itself is romanticised only by fools.

What I feared most for myself at your age was not poverty, but failure.

At your age, in spite of a distinct lack of motivation at university, where I had spent far too long in the coffee bar writing stories, and far too little time at lectures, I had a knack for passing examinations, and that, for years, had been the measure of success in my life and that of my peers.

I am not dull enough to suppose that because you are young, gifted and well-educated, you have never known hardship or heartbreak. Talent and intelligence never yet inoculated anyone against the caprice of the Fates, and I do not for a moment suppose that everyone here has enjoyed an existence of unruffled privilege and contentment.

However, the fact that you are graduating from Harvard suggests that you are not very well-acquainted with failure. You might be driven by a fear of failure quite as much as a desire for success. Indeed, your conception of failure might not be too far from the average person’s idea of success, so high have you already flown.

Ultimately, we all have to decide for ourselves what constitutes failure, but the world is quite eager to give you a set of criteria if you let it. So I think it fair to say that by any conventional measure, a mere seven years after my graduation day, I had failed on an epic scale. An exceptionally short-lived marriage had imploded, and I was jobless, a lone parent, and as poor as it is possible to be in modern Britain, without being homeless. The fears that my parents had had for me, and that I had had for myself, had both come to pass, and by every usual standard, I was the biggest failure I knew.

Now, I am not going to stand here and tell you that failure is fun. That period of my life was a dark one, and I had no idea that there was going to be what the press has since represented as a kind of fairy tale resolution. I had no idea then how far the tunnel extended, and for a long time, any light at the end of it was a hope rather than a reality.

So why do I talk about the benefits of failure? Simply because failure meant a stripping away of the inessential. I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy into finishing the only work that mattered to me. Had I really succeeded at anything else, I might never have found the determination to succeed in the one arena I believed I truly belonged. I was set free, because my greatest fear had been realised, and I was still alive, and I still had a daughter whom I adored, and I had an old typewriter and a big idea. And so rock bottom became the solid foundation on which I rebuilt my life.

You might never fail on the scale I did, but some failure in life is inevitable. It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all – in which case, you fail by default.

Failure gave me an inner security that I had never attained by passing examinations. Failure taught me things about myself that I could have learned no other way. I discovered that I had a strong will, and more discipline than I had suspected; I also found out that I had friends whose value was truly above the price of rubies.

The knowledge that you have emerged wiser and stronger from setbacks means that you are, ever after, secure in your ability to survive. You will never truly know yourself, or the strength of your relationships, until both have been tested by adversity. Such knowledge is a true gift, for all that it is painfully won, and it has been worth more than any qualification I ever earned.

So given a Time Turner, I would tell my 21-year-old self that personal happiness lies in knowing that life is not a check-list of acquisition or achievement. Your qualifications, your CV, are not your life, though you will meet many people of my age and older who confuse the two. Life is difficult, and complicated, and beyond anyone’s total control, and the humility to know that will enable you to survive its vicissitudes.

Now you might think that I chose my second theme, the importance of imagination, because of the part it played in rebuilding my life, but that is not wholly so. Though I personally will defend the value of bedtime stories to my last gasp, I have learned to value imagination in a much broader sense. Imagination is not only the uniquely human capacity to envision that which is not, and therefore the fount of all invention and innovation. In its arguably most transformative and revelatory capacity, it is the power that enables us to empathise with humans whose experiences we have never shared.

One of the greatest formative experiences of my life preceded Harry Potter, though it informed much of what I subsequently wrote in those books. This revelation came in the form of one of my earliest day jobs. Though I was sloping off to write stories during my lunch hours, I paid the rent in my early 20s by working at the African research department at Amnesty International’s headquarters in London.

There in my little office I read hastily scribbled letters smuggled out of totalitarian regimes by men and women who were risking imprisonment to inform the outside world of what was happening to them. I saw photographs of those who had disappeared without trace, sent to Amnesty by their desperate families and friends. I read the testimony of torture victims and saw pictures of their injuries. I opened handwritten, eye-witness accounts of summary trials and executions, of kidnappings and rapes.

Many of my co-workers were ex-political prisoners, people who had been displaced from their homes, or fled into exile, because they had the temerity to speak against their governments. Visitors to our offices included those who had come to give information, or to try and find out what had happened to those they had left behind.

I shall never forget the African torture victim, a young man no older than I was at the time, who had become mentally ill after all he had endured in his homeland. He trembled uncontrollably as he spoke into a video camera about the brutality inflicted upon him. He was a foot taller than I was, and seemed as fragile as a child. I was given the job of escorting him back to the Underground Station afterwards, and this man whose life had been shattered by cruelty took my hand with exquisite courtesy, and wished me future happiness.

And as long as I live I shall remember walking along an empty corridor and suddenly hearing, from behind a closed door, a scream of pain and horror such as I have never heard since. The door opened, and the researcher poked out her head and told me to run and make a hot drink for the young man sitting with her. She had just had to give him the news that in retaliation for his own outspokenness against his country’s regime, his mother had been seized and executed.

Every day of my working week in my early 20s I was reminded how incredibly fortunate I was, to live in a country with a democratically elected government, where legal representation and a public trial were the rights of everyone.

Every day, I saw more evidence about the evils humankind will inflict on their fellow humans, to gain or maintain power. I began to have nightmares, literal nightmares, about some of the things I saw, heard, and read.

And yet I also learned more about human goodness at Amnesty International than I had ever known before.

Amnesty mobilises thousands of people who have never been tortured or imprisoned for their beliefs to act on behalf of those who have. The power of human empathy, leading to collective action, saves lives, and frees prisoners. Ordinary people, whose personal well-being and security are assured, join together in huge numbers to save people they do not know, and will never meet. My small participation in that process was one of the most humbling and inspiring experiences of my life.

Unlike any other creature on this planet, humans can learn and understand, without having experienced. They can think themselves into other people’s places.

Of course, this is a power, like my brand of fictional magic, that is morally neutral. One might use such an ability to manipulate, or control, just as much as to understand or sympathise.

And many prefer not to exercise their imaginations at all. They choose to remain comfortably within the bounds of their own experience, never troubling to wonder how it would feel to have been born other than they are. They can refuse to hear screams or to peer inside cages; they can close their minds and hearts to any suffering that does not touch them personally; they can refuse to know.

I might be tempted to envy people who can live that way, except that I do not think they have any fewer nightmares than I do. Choosing to live in narrow spaces leads to a form of mental agoraphobia, and that brings its own terrors. I think the wilfully unimaginative see more monsters. They are often more afraid.

What is more, those who choose not to empathise enable real monsters. For without ever committing an act of outright evil ourselves, we collude with it, through our own apathy.

One of the many things I learned at the end of that Classics corridor down which I ventured at the age of 18, in search of something I could not then define, was this, written by the Greek author Plutarch: What we achieve inwardly will change outer reality.

That is an astonishing statement and yet proven a thousand times every day of our lives. It expresses, in part, our inescapable connection with the outside world, the fact that we touch other people’s lives simply by existing.

But how much more are you, Harvard graduates of 2008, likely to touch other people’s lives? Your intelligence, your capacity for hard work, the education you have earned and received, give you unique status, and unique responsibilities. Even your nationality sets you apart. The great majority of you belong to the world’s only remaining superpower. The way you vote, the way you live, the way you protest, the pressure you bring to bear on your government, has an impact way beyond your borders. That is your privilege, and your burden.

If you choose to use your status and influence to raise your voice on behalf of those who have no voice; if you choose to identify not only with the powerful, but with the powerless; if you retain the ability to imagine yourself into the lives of those who do not have your advantages, then it will not only be your proud families who celebrate your existence, but thousands and millions of people whose reality you have helped change. We do not need magic to change the world, we carry all the power we need inside ourselves already: we have the power to imagine better.

I am nearly finished. I have one last hope for you, which is something that I already had at 21. The friends with whom I sat on graduation day have been my friends for life. They are my children’s godparents, the people to whom I’ve been able to turn in times of trouble, people who have been kind enough not to sue me when I took their names for Death Eaters. At our graduation we were bound by enormous affection, by our shared experience of a time that could never come again, and, of course, by the knowledge that we held certain photographic evidence that would be exceptionally valuable if any of us ran for Prime Minister.

So today, I wish you nothing better than similar friendships. And tomorrow, I hope that even if you remember not a single word of mine, you remember those of Seneca, another of those old Romans I met when I fled down the Classics corridor, in retreat from career ladders, in search of ancient wisdom:

As is a tale, so is life: not how long it is, but how good it is, is what matters.
I wish you all very good lives.

Thank you very much.

Sunday, January 24, 2010

Branson speak

The past year was one of the toughest I can remember for business. Confidence fell off a cliff, and fear and gloom seemed to dominate the financial world. Now at the start of 2010, the first signs of confidence are coming back. China, Brazil, India and Australia are growing again and the world’s stock markets have bounced back in the main.


Sometimes I’m accused of being too optimistic—the natural entrepreneur’s enthusiasm often gets the better of me! But at Virgin, we have seen some of those signs: People are booking plane and train tickets earlier; they are reserving this summer holidays; customers are upgrading their cable accounts, and our health-club business is growing around the world.
So what do I think will happen this year and what opportunities are there for budding entrepreneurs?

Frustratingly for those looking for an easy answer or formula, there isn’t one. There is no substitute in business for actually running a business. Throughout my career, I have made decisions using my instinct, but I have also worked very hard at making those decisions work. As I look back, a few key patterns keep re-emerging.

First, you need to surround yourself with trusted and talented people. Setting up businesses takes an enormous amount of time and energy. It is easier to make the big commitments when you are surrounded by people you trust and like. Keeping my many good chief executive officers and managing directors happy—and finding new ones to start the next ventures—is one of my full-time jobs.

Then you need to ensure that your business or idea has a place in the market and a product or service that is different enough to attract customers. At Virgin we stick to a simple checklist. Our businesses need to be innovative, maintain a certain quality, be value for money and have a sense of fun. They also tend to focus on customer service, and we like to be the customer’s champion, bringing simplicity and transparency to many businesses.

Timing is also important. If I could start again, I would set up more businesses during recessions when almost everything costs 50-90% less than it’s worth during the good times. Often a lot of highly skilled staff are on the market and the competition—existing big businesses—have their eyes focused internally, on their own operations and issues. Such a climate is the perfect time for young, enthusiastic and nimble companies to set themselves up and thrive. This is one of those times.

During the recession of the 1970s, we expanded Virgin Records. In the early 1990s, we expanded Virgin Atlantic, as established rival airlines were recovering from recession and the Gulf War. Without the legacy issues of a large existing operation and high cost base, Atlantic was able to buy new and more efficient planes and open exciting routes.

Similar opportunities exist today for new businesses in sectors as diverse as food manufacturing and recruitment, renewable energy and even space.

People often blame economic conditions or the lack of finance from the banks as the key reasons for the failure of more small businesses to thrive. Surely, banks need to keep credit flowing to emerging companies and governments need to hold down the bureaucracy and red tape—but, mainly, entrepreneurs need to take responsibility and keep driving their businesses on. A good business idea needs hard work, determination (and a little luck) to succeed.

Many would-be entrepreneurs give up too soon. You have to overcome early adversity. The inaugural flight of Virgin Atlantic almost brought the group down. We had worked like mad for six months to get the first flight off from London to Newark and it had been a resounding success—fuelled in part by 70 crates of champagne. On my return to London, I was met by our then bank manager sitting on the steps of my house. He had come to tell me that my bank was not able to extend my overdraft to help finance the new airline.

Instead, if we went over our overdraft limit of £3 million (around Rs22.5 crore), the bank would have bounced our cheques. This was almost certain doom for an airline. As soon as people heard that we had no credit, they would stop supplying food and fuel. Passengers wouldn’t buy tickets. I had to move fast. Over the weekend, I pulled in money from our overseas businesses to shore up the bank account and, as soon as I could, I changed banks.

It was a sobering lesson. It taught me that a good entrepreneur looks for solutions, not excuses. We’ve been doing that as a group ever since. You always have to protect the downside of your ventures.

So get out there and start up those businesses in 2010. As the old Chinese adage goes, fortunes are made in good times; empires are built out of tough times.

Wednesday, January 20, 2010

an insightful success story

Full of Beans: How a Classically Trained Chef Reinvented Fast Food
Published: January 20, 2010 in Knowledge@Wharton

It's a classic variation of the American success story: An aspiring entrepreneur starts a hole-in-the-wall restaurant serving food that's quick and unpretentious. Pretty soon, he starts a second restaurant, and then a third. Investors flock to the company, attracted to the owner's relentlessly perfectionist style. Before long, identical versions of that hole-in-the-wall have popped up in food courts and strip malls all across the country. And it's only a matter of time before this simple fast-food joint decides to take on the world.

On one level, that story describes the career of Steve Ells, who in 1993 founded a burrito restaurant in Denver that he called Chipotle Mexican Grill. Today, that restaurant is a publicly traded company with $1.3 billion in revenues from some 900 restaurants across North America. On November 14, 2009, Ells formally announced plans for the first European Chipotle, on London's Charing Cross Road, set to open next April.In January, Chipotle announced that it was also scouting potential locations in France and Germany.

But, as he made clear in a November Wharton Leadership Lecture, Ells is not your average chain-restaurant tycoon, a Colonel Sanders in trendy eyewear. And the chain he founded is not your average fast-food behemoth. As such, it provides a case study in whether a firm can thrive even as it spends extra money to honor a set of non-economic values. Ells believes the answer is yes.

"Chipotle now buys more naturally-raised meat -- antibiotic-free and no growth hormones, and fed an all-vegetarian diet -- than any other restaurant company in the world," he said. "I'm very proud of that, and it's more sustainable than the mass-produced commodity way." The chain has also begun buying organic beans and trying to source vegetables locally in-season. "All of a sudden I find myself with this team of 25,000 Chipotle employees who are excited about feeding people really good, sustainably raised food."

According to Ells, "We have an opportunity to change the way people think about fast food, which is what most people in this country eat." Much of it, he said, is based on the Ray Kroc model and the standard set by McDonald's. "Now we have a business model that's based on spending more for sustainably raised foods, and also making a very handsome profit and providing real growth opportunities."

A graduate of the famous Culinary Institute of America, Ells never meant to re-invent fast food. Quite the contrary: Having trained in classical French cooking and apprenticed at nationally celebrated gastronomic landmarks like San Francisco's celebrated Stars restaurant, his goal was to start his own white-tablecloth, haute-cuisine palace. But restaurant start-ups are costly and risky. So he decided to move home to Denver and open a local version of the cheap, tasty taquerias that he had loved in California. The plan was to use Chipotle as a cash cow to fund the "real" restaurant he dreamed about.

That didn't happen. Opened in an 800-square-foot former ice cream shop, Chipotle was an instant hit, making $30,000 a month. A rave newspaper review followed. The reviewer "said things like, 'Everything has depth and character, nuance, layers and layers of flavor,' describing it like it was some fine restaurant," even though the dish in question was an oversized burrito that came wrapped in tinfoil, Ells noted. "After that, there was not only a line, but a line out the door. We ran out of food."

Precision Cooking

Using cash flow and a loan from his father, Ells opened a second Chipotle, which "blew away the first." Despite his good fortune, Ells said, he actually felt guilty: He wanted to be a legendary chef, not a hustling fast-food entrepreneur. "So it was like, 'Okay, I'm going to start just one more, and then I'll start a real restaurant.'" But the chain's growth kept putting that off. Eventually Ells chalked up Chipotle's success to the fact that, unwittingly, he had been treating it like a real restaurant all along.

"Every single customer who came through that door was precious," he stated. "I had to give them a very special experience. I had a small crew. I taught them how to cook. I taught them how to grill the chicken just right and how to make beans -- you have to toast the cumin seeds until they just start smoking a little bit, and then grind them in the mortar and pestle -- and how to chop garlic so it doesn't oxidize, so you get a nice, fresh garlicky flavor.... It was very precise. We're cooking burritos and tacos here, but I was applying the classical French chef mentality that I had learned in cooking school. I would throw things and yell, and I had a temper. It was really quite a scene."

Ells, whose chain was on track to add roughly 120 new restaurants in 2009, says he is "opening three real restaurants a week, sometimes four." The Chipotles that have spread out from Denver still look a lot like the first store, right down to the simple corrugated metal surfaces that Ells installed back when he was doing his own manual labor. It's been a lot trickier, though, to maintain his fastidious French chef-style control over ingredients and techniques.

Much of his disdain for "mass-commodity" ingredients is a question of personal values. Once he became a big enough buyer of pork, he asked to see the facility the meat came from. "It really is terrifying," he said. "There's so much exploitation that I witnessed there, not only from the animal-protection point of view." He was also disturbed by the environmental consequences of the waste run-off from the facility -- and the public-health implications of having a pork supply kept on low-dose antibiotics to ward off diseases that could spread in industrial confinement.

"I knew at that moment I did not want my success to be based on this kind of exploitation," he said. "So we started buying all naturally-raised meat." But it wasn't just a question of being humane. His initial curiosity about the meat supply was actually prompted by the fact that he was unimpressed with the quality. By switching sources, he said, he wound up with a product that, to customers, just tasted better.

Ells' status as the anti-Ray Kroc is not without its ironies. As Chipotle began to take off and Ells began looking for sources of capital beyond family and cash flow, he wound up doing business with a certain global hamburger chain that was looking to invest in new business: McDonald's. Following an initial investment in 1998, the company held a majority stake as of 2001. By the time McDonald's divested, in 2006, Chipotle had 540 stores -- up from 18 when they first linked arms.

Lords of the Rings

"Culturally, Chipotle and McDonald's are just worlds apart," Ells noted, joking that his casually-dressed office staff referred to visiting McDonald's bigwigs as "the rings" because of the jewelry on the men's fingers. But he described the relationship as productive. "They really liked what I was doing," he said, recounting how he took executives into his kitchens and commissaries to show them cooking procedures that must have looked extraordinarily cumbersome to a firm accustomed to taking an industrial approach to flavor. One of them, Ells recalled, said the young Chipotle founder reminded him of Kroc.

The firms decided to part ways in 2006, Ells said, because McDonald's was eager to focus on its core business. And Ells was happy he no longer had to navigate the contrasting corporate cultures. "We just didn't see eye to eye," he said. Chipotle went public in an IPO that saw its share price double in one day -- the second-best restaurant IPO of all time. McDonald's, Ells added, ultimately made $1.2 billion after putting some $360 million into the chain.

Among the major differences with the golden arches: McDonald's wanted Chipotle to follow its franchise model. Ells -- ever the detail-obsessed chef -- resisted. "We wanted to own the economic model. You franchise if you want money and people. We had plenty of money for our growth rate, and we had great people." Ultimately, he decided, the firm was going to grow the way he wanted.

As someone with no particular business background, Ells has surrounded himself with seasoned pros, although he prefers not to hire top executives with a chain-restaurant background for fear that too much conventional wisdom will seep into the corporation. Four years ago, for example, Ells brought in as co-CEO an old friend named Montgomery F. Moran, whom he describes as an incredible leader of people. "He's a trial lawyer. And he said, 'Steve, I don't know anything about the restaurant business. I can't do this.' And I'm like, 'Perfect.... I don't want another seasoned fast-food executive.' In fact, I don't want any of them. I want them to think differently about things. This was one of my big mistakes during the McDonald's years: I let some of that [attitude] come into the organization.... We're very proud of doing things on our own terms."

One of the favorite innovations with Moran, Ells said, is something called the "restaurateur" program, under which Chipotle managers are designated restaurateurs, a status that comes with significant possible financial benefits. To be a restaurateur, a manager has to have a perfect store -- including a top-notch staff. "Every single person on the staff has to be somehow inspired and have characteristics that you can't teach: infectious enthusiasm, honesty, clean, presentable, good hygiene, fun to talk to, great eye contact, the kind of stuff you look for in a friend," he said.

The result, he added, was that turnover went up as managers looked to rid themselves of subpar staffers who might keep them from becoming a restaurateur. In addition, restaurateurs get a $10,000 bonus whenever one of their staff becomes a store manager. "We want them to assemble a team of high performers," he said. "The fast food business is plagued with people who are generally low performers.... No fast-food chain fires staff. They're like: 'Please! Come work!'" Chipotle, with a reputation for better pay than many chains, according to Ells, is also in a better position to replace entry-level staff who have been pushed out. "Chipotle has been built on word-of-mouth primarily, and I think we have developed a good bond with a lot of our customers." He said that sort of reputation could be extended through social media and a style that reflected Chipotle's unpretentious stores.

The son of a pharmaceutical executive, Ells grew up in Colorado and studied art history at the University of Colorado before switching gears and going to culinary school. He still lives in Denver, where Chipotle is headquartered. And, he says, he still loves a good burrito.

The Chipotle model -- with its better ingredients, better staffers and slightly higher prices -- is the wave of the future, Ells states, mostly because it matches the health, taste and philosophical priorities of the modern market. "We had a period of extraordinary, double digit same-store growth. I think it's a testament to what people want to eat. I'm hoping that more companies use Chipotle's model: Good food and not having preservatives or artificial [ingredients].... I hope it displaces the stuff that's based on exploitation, not only of the land and animals, but of people's taste buds and health."

Monday, December 14, 2009

totd!

giving up was not a choice then. I did not. I survived to see this day.

these are not the best of times either. giving up is still not a choice.

it will never be.

Saturday, May 30, 2009

conversation with the Alchemist!

MIND SET
IN CONVERSATION WITH THE ALCHEMIST
The creative process must be revered as a spiritual search, says Paulo Coelho, one of the world’s bestknown authors. His quest straddled the conventional pilgrimage and hippiedom. But the answer was to be found in a basic humanity and social entrepreneurship, he tells Bachi Karkaria

Where do get your spiritual underpinnings? How much of this influences the way you are and the way you write? How much of Paulo Coelho, the man, and Paulo Coelho, the writer, can be attributed to your Roman Catholic upbringing?
I grew up, like almost all Brazilians, in a strictly Catholic family. Later, at the age of rebellion, I doubted Catholicism, and felt that I must try something new. Then I became a hippie. During this time, I travelled a lot, met people of different backgrounds, and learnt different paths to come closer to spirituality. After I did a pilgrimage to Santiago de Compostela, I returned to the Catholic faith – just because it is in my blood, not because it is the best religion. I am a Catholic, but I don’t think you can put God in a church.
In the end, all religions tend to point to the same light. In between the light and us, sometimes there are too many rules. Some of these rules are important, other should not blind us or diminish the intensity of this light, the soul of the world.
You write a book once every three years. Do you
spend the intervening time on researching the book or doing other things? For instance, how long did you take to pick up all the details of the film and fashion world which make your latest, The Winner Stands
Alone, almost a work of faction?
Regarding the creative process, I only allow myself to write every two years because I feel that I’ve gathered enough emotional energy to come up with a story. Every time that I write a new book, I am experiencing the sensations of death and rebirth. When I write, I am a woman. I get pregnant from life, and I don’t know what the baby will look like.
My pregnancy cycle is what takes two years. During this time I don’t take notes, I don’t make plans. The only thing that I know is that life put inside me a seed that will grow when time comes. Then, when the time comes, I sit and write. Every creative act demands a respect for mystery, and I respect the mystery, without trying to understand it. For my latest book, The Winner Stands Alone, I was inspired by the Cannes Film Festival that I attend every year. There I had the possibility to understand the “behind-the-scenes” mechanism of the movie and fashion industries.
You’ve described yourself as an
“internet junkie”. Is that a hip term
or just New Age egotism?
An internet junkie is neither a hip term of a new age egotistical thing – it’s just a realization. I spend hours in front of the computer surfing the web and chatting with friends and readers.
To what do you attribute the huge success of The
Alchemist? (At 67 languages, it holds the Guinness
record for being the world’s most-translated book). Given this, are you weighed down by its baggage?
I really don't know why my characters are so popular in different parts of the world and in different cultures. I don’t have a ready-made formula to apply when I embark on a new book, but I’m always controlled by many elements: discipline, compassion and a sincere eagerness to understand myself. When I start a new book, I try to approach myself from a different angle. In The Alchemist, for example, I was trying to explain to myself what writing meant to me. The way I found to do this was through a metaphor.
In Eleven Minutes, I started with the question of why sexuality is considered one of the major issues in life. But I had my doubts. And that’s why the hero asks if it's true that the world could revolve around 11 minutes. In The Zahir, there is a kind of a snapshot of my present moment as a famous writer. In The Winner Stands Alone, I wanted to explore the world of fashion and unravel why we tend to adopt dreams that are not our own so easily.
What difference does a book, even one that has sold millions of copies and is the most translated, make to the scheme of things?
First, I think you should define “the scheme of things” — what for you is the scheme of things.
For me, the scheme of things is to share my soul through writing. Books have always made a lot of difference in my world. They set me free when all those around me said that life had to be in a certain way and not in another. They enabled me to dream when all around me was trying to lure me to the great illusion of “security”.
For some people, music holds this sacred place, for others, medicine or gardening or cooking or religion… At the end of the day, the great scheme of things is the consequence of every individual choice.
In India, even mainstream media is obsessed with
celebrity culture, and the public, while pretending to be snobbish about it, laps it up. What does this say about a society more interested in the divorce of a
distant singer called Madonna than in the poverty it sees under its nose? Do you think “celebrification” is seen as part of a nation’s entry into the Big League?
I am not here to judge the priorities of any given society. What I don’t understand in your question is the correlation between “celebrification” and “Big League Nations”. I don’t see how buying gossip magazines may raise the GDP of a country…
Furthermore, I don’t subscribe to the view that there are “Big League Nations” and “Minor League ones”. I grant that there are huge disparities but I think there is also an international community (despite the constant effort of the media to diminish this reality) that thinks and operates beyond this simplistic way of seeing the world. Not mentioning the string of social entrepreneurs that actively work towards a better equilibrium inside their societies.
Rio de Janeiro, like many big Indian cities, is undergoing major change, physical and social. Which of
these disturbs you and which do you celebrate?
In today’s world, disparities cross every single city (may it be in Brazil, India, the US or Europe). So in regards to the changes we see in all great cities of the world, I would say that:

• What disturbs me the most is the violence — which is the consequence of a profound rift in society: when those who are at its base are denied their intrinsic dignity.

• What I celebrate is the constant battle of the warriors of light that work without rest to shorten the disparities.
I met in the 90’s a mother and a daughter who were taking care of underprivileged children in a slum next to my house in Rio. They firmly believed that by granting these children chances they were changing the spiralling-down dynamic of poverty. I decided to join them in their fight to bring hope and change to these children and their families. The project today, called Solar Meninos da Luz, grants to more than 450 children education and many extra-curricular activities.
I think that changes start at the individual level and slowly tend to gain a social one: at my level, I’m trying to make a difference and this in my eyes, is reason enough for celebration

Saturday, March 7, 2009

the will chair!

SHE GIVES YOGA LESSONS ON HER ‘WILL’ CHAIR



Paralysed below waist in an accident, Pragya Ghildial didn’t lose hope. She is a yoga instructor and counsellor for paralytic patients at Indian Spinal Injuries Centre


She is a yoga instructor and peer counsellor for paralytic patients at the Indian Spinal Injuries Centre (ISIC) in Vasant Kunj. She also teaches yoga as well as meditation to other able-bodied people. But what sets 26-year-old Pragya Ghildial apart is that she does all of this sitting in her wheelchair. Pragya was completely paralysed, below the waist, following a near fatal road accident four years ago. It was a careless swerve by a car at Preet Vihar in May 2005 that changed Pragya's life forever. The yoga instructor, who was riding her scooter, was dragged by the car for about 10 feet before the driver realized something was under the wheels.
What followed was post-traumatic shock, anxiety, flashbacks, erratic bowel movements, hypertension, and two major surgeries to repair her lower spinal cord. And eventually, Pragya was left completely paralysed below the waist - a medical condition called paraplegia.
''The wheels of the car went over my lower back. But since there was no external bleeding, I wasn't aware of the gravity of the injury. My case was referred to ISIC and after a month I learnt I was permanently disabled,'' says Pragya.
After studying yoga at the Vivekananda Ashram in Bangalore in 2002, Pragya started her own yoga studio at Mayur Vihar in 2003. In fact, she was to appear for her final year examination just two days after the incident.
''I soon realized my wheelchair was actually my 'will' chair and learnt basic and advanced wheelchair skills from my mentor and physiotherapist Dr Arun Sodhi, who then became a role model. He encouraged me to take charge of my life and continue with what I was doing before the accident. I started teaching meditation and pranayama (breathing exercises) to patients. Yoga is still my passion. Earlier, I used my whole body for it, now I use half my body,'' she says. For the patients at ISIC, Pragya is an angel. Her counselling and yoga classes have helped them tremendously to overcome depression and even gather strength in their limbs. Seventeen-yearold Deepali has parapalasis and has been admitted at ISIC for the past five months. She had a tumour in the spine, which was removed recently, and is paralysed waist down. However, she thoroughly enjoys Pragya's classes. ''Didi keeps cracking jokes and makes us laugh. She pushes us to do different 'asans' which are not very easy at times. Despite being on the wheelchair she does all the exercises, so we also try harder,'' adds Deepali.
Dr Asha Madan has been Pragya's student for four months. An able-bodied person, Madan regularly comes to the centre for her husband, who recently suffered a stroke leaving his right arm and leg paralysed. ''Yoga gives me strength to cope with my husband's stroke. She teaches beautifully and is very patient. She demonstrates all the leg movements with her fingers,'' said Madan.
Pragya's now learning to drive from peer sports instructor Rajiv Virat, who himself on the wheelchair, suffers from multiple sclerosis. He is marathon champion, a lawn tennis player and drives to the centre every day. ''Sports is an integral part of rehabilitation for a person on the wheelchair. Learning yoga from Pragya has also helped me,'' says Virat.