What does it take to be a successful Manager?

Reading through the New York Times, I stumbled upon an interesting insight sent by one of the readers. He feels that successful Managers combine four abilities:
- The ability to allocate cash flow for growth. Without growth, little else matters.
- The ability to pick the right people for the operating jobs. Managerial “vision” is largely realized through the people in the critical posts.
- The ability to inspire the troops. Charisma comes in many colours; getting others to be excited about the mission is one of them.
- The ability to be aware of and understand all the moving parts. You don’t need in-depth knowledge of every discipline — accounting, marketing, sales, benefits, taxes and so on — but you need to know enough about each one to ask the right questions.
None of these four are easy, and in combination, they are very hard to find.

Of GNH, SWB, SWLS and HDI

How happy are you? Quite a difficult question to answer, right? You may argue that the answer depends on when and where you are asked the question. You can be happy one instant and not so happy the next. Fair enough. Happiness, therefore, is a very subjective, vague and abstract concept. Many great minds and thinkers have been dwelling on this subject for quite a while and rightly so, the subject has been very elusive. Bhutan too has not been spared. The concept of Gross National Happiness (GNH) has been adopted by the Government in all its development activities. The underlying principle of GNH is that happiness is more important than wealth (measured by Gross Domestic Product or GDP) which is a very valid and cogent assumption. For example, a car accident or a war is good for the economy, isn’t it? More goods and services are demanded/traded leading to an increase in GDP. This should lead to more happiness, right? Not quite so. Does this mean that happiness is inversely proportional to wealth? The more wealth one has, the more unhappy one becomes. This may be an extreme case which, as evident, is not true. Anyways, the fact of the matter is that wealth and happiness are two issues that require a more in-depth understanding.

However, the interesting fact is that some psychologists use the concept of Subjective Well-being (SWB) as a proxy to happiness. Based on research, temporary mood states have only a marginal effect on SWB whilst long term changes and situational factors have a significant effect on SWB. SWB, therefore, is a good proxy to happiness and could be used as an indicator for Bhutan to pursue its goal of GNH . Accordingly, psychologists have formulated an index called the Satisfaction With Life Scale (SWLS) to measure SWB. I guess this is as close as we can get to measure happiness.

A survey was conducted on a global scale across 181 countries wherein countries were ranked based on their SWLS index. The results of the SWLS are interesting. Bhutan ranked eight on this list (Denmark was ranked first and Burundi the last). The results show that SWB correlated most strongly with health (0.7) closely followed by wealth (0.6) and access to basic education (0.6). Upon closer inspection of the correlation variables, one notices the fact that these variables are the very ones used for measuring Human Development index (HDI) of countries by the United Nations Development Program (UNDP). HDI combines the three basic dimensions of life expectancy, literacy and standard of living (GDP per capita) to gauge the level of development of countries.

Health (of SWB) and life expectancy (of HDI) are synonymous. Better health leads to a longer and salubrious life and accordingly a higher life expectancy. Wealth (of SWB) and GDP per capita (of HDI) as well as basic education (of SWB) and literacy (of HDI) are also synonymous.

So there goes! HDI can be used as a proxy for happiness. Have a robust economic policy, provide more health facilities and better education infrastructure to ensure a happy nation.

Educate to eradicate (poverty) - A Bhutanese context

Poverty alleviation is at the heart of our development philosophy. This has probably been the over-riding theme in all our Five Year Plans beginning from the '60s. Although poverty, per se, is difficult to define, many definitions have burgeoned of late – those living on less than $1/$2 a day (World Bank), those not having access to services/amenities (Amartya Sen), those not able to meet a specific nutritional food intake, vulnerable segments of the society, those without a voice, those without any power, etc. However, the fact of the matter is that poverty exists in our country despite its multidimensional facets.

According to the Poverty Analysis Report -2007 (National Statistical Bureau and Department of Planning), the Total Poverty Line (TPL) has been computed at Nu. 1,096.94 per person per month. Accordingly, any household or person under the TPL is classified as living in poverty. As per this report, 23.2% of our population (with a margin of error of 1.5% and a confidence level of 95%) live in poverty (Quite a stark revelation - this means that about one in every four Bhutanese lives in poverty). This figure was 31.7% in 2004 (based on Poverty Analysis Report -2004). Although we are showing signs of improvement on this front, we still have a long way to go to eradicate it altogether.

The question that immediately pops to one’s mind is how to eradicate/alleviate poverty? What are the factors that account for this? Will constructing more roads alleviate it? Will a national electrification project help? Will an open economic policy help? I was mulling over this and so I did a multiple regression analysis to at least better understand this esoteric subject. I’ve extracted most of the data from the Poverty Analysis Report – 2007, the Annual Information Bulletin of the Ministry of Works and Human Settlement and the Bhutan Living Standard Survey – 2007. Incidence of poverty (for the various Dzongkhags in %) was taken as the dependent variable and three variables (total road length in km in each Dzongkhag, the total literacy rate in each Dzongkhag and the % of electrified households in each Dzongkhag) were taken as the independent variables.

The result of the regression analysis shows that of the three independent variables, there is a direct inverse co-relation between literacy rate and poverty (i.e. higher the literacy rate, lower is the incidence of poverty). The other two variables (electrification and roads) do not have any impact at all on poverty (at least statistically).

The R square of the model is about 29% with a significant F value of 0.0165. Accordingly, this model is quite sound at least mathematically. To see the EXCEL sheet, click on this link - http://d01.megashares.com/dl/a02de26/Poverty corelation analysis.xlsx. The model hinges on the veracity of the data as it could be a GIGO (Garbage in, Garbage out) phenomenon so we need to be quite cautious before we jump to any conclusions.

However, the model just goes to bolster our tacit understanding that education plays a key role in the development process. Let us therefore earnestly promote education and literacy so that Bhutan is poverty free, if not in the near future, at least in the long run.

Viable surface transport plan for Thimphu

With the increase in the marginal propensity to spend by the Bhutanese population (especially by the middle class segment) supplemented by the phenomenon of Global consumerism (more buying options for products and services available in the market), the transport sector is Bhutan is likely to take a severe brunt.

Of all the places in Bhutan, it seems only tenable that Thimphu is going to be severely hit, if not now, in the very near future.

For example, there are 22,218 vehicles in Thimphu alone (out of which 14,272 are light vehicles)(http://www.kuenselonline.com/modules.php?name=News&file=article&sid=11030) with a total of 395.4 kms of motorable road (MoWHS' Annual Information Bulletin 2006). Out of this total, Thimphu has 111 kms of national highway, 90.2 kms of feeder roads, 71.4 kms of urban roads, 18.9 kms of farm roads and 103.9 kms of forest roads.

Assuming that all or most of these vehicles are concentrated in the urban areas, this translates into 1 vehicle for every 3 meters of urban roads. Literally, this means that if the total number of vehicles in Thimphu are lined up on the road (in urban areas), they would be lined up bumper to bumper. (wouldn't it be quite a sight!!!).
Think of it!!

I'm pretty sure that the growth in the road length falls far short (or rather pales) in comparison to the growth in vehicle imports each year. What this is going to do to the traffic on our roads is anyone's guess.

The drain on the economy in terms of foreign currency outflow for purchase of vehicles is one thing but the more pressing issue is the long term leakage from the economy arising from fuel imports. Last year we, imported close to Nu. 2.6 billion in fuel (about 5% of the GDP). This is only going to increase with more and more cars/vehicles being imported into the country (fuelled by cheaper cars, increased competition amongst the car manufacturers, increase in the marginal propensity to spend, etc)

How do we combat this major threat? Is a sound surface transport master-plan going to address this? Will the introduction of a better/more/convenient public transportation service/system address this?

Let's mull over this.