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    How to Create an Exponential Mindset.

    A three dimensional image depicting exponential thinking.  Image credit : Shyam's  Imagination Library

    Digital business models are a bit of a misnomer. It’s not digital technology that defines them; it’s their ability to create exponential value. The music and video industries, for example, weren’t redefined by converting analog to digital formats. Just ask Sony about Minidisc players and Netflix about their DVD business.

    To create exponential value, it’s imperative to first create an exponential mindset. The incremental mindset focuses on making something better, while the exponential mindset is makes something different. Incremental is satisfied with 10%. Exponential is out for 10X.

    In the last century, industrial business models were defined by their use of machines to create increasing returns to scale. Digital business models use network effects to create what Ray Kurzweil describes as accelerating returns to scale. The key difference is that industrial models are linear while digital models are exponential, as shown in the chart below.

    While others have written about how to design exponential strategies and organizations, I want to focus here on how to create an exponential mindset. My work with clients suggests that the incremental mindset is more deeply embedded than we might think. Unless you are conscious and diligent, you can end up with a strategy that looks digital (i.e. uses digital technology) but doesn’t actually operate digitally (i.e. achieves accelerating returns).

    The role of incremental and exponential mindsets vary in each phase of the business journey: launch, grow, and expand.

    Launch: Vision and Uncertainty

    In the launch phase of a business, the team needs to develop and refine the business model. The Lean Startup approach of test, iterate, and pivot is the right thing to do. But you also need the right way to think. Are you thinking about your business incrementally or exponentially?

    The incremental mindset draws a straight line from the present to the future. A “good” incremental business plan enables you to see exactly how you will get from here to there. But exponential models are not straight. They are like a bend in the road that prevents you from seeing around the corner, except in this case the curve goes up.

    Without an exponential mindset, Google would never have created such an ambitious vision as “organizing the world’s information,” Facebook would never have set out to “make the world more open and connected,” and Airbnb to “create a world where all 7 Billion people can Belong Anywhere.” Similarly, a group of innovative organizations in the public sector are out to solve global social issues by achieving “transformative scale.”

    In Maine they have an expression that “You can’t get there from here.” In the launch phase, you need to realize that an exponential strategy has inherent uncertainty. You can’t know what things will look like on the other side of the curve. You can’t draw a straight line from where you are to where you are going. There’s no step-by-step plan. The exponential mindset helps you become comfortable with uncertainty and more ambitious with your vision.

    Take a look at the chart above. In the first part of the build phase, you don’t see a lot of change. It’s not until the second part when the line starts to bend. It’s simply the nature of exponential change. Things happen very slowly before they happen very quickly. If this was the only world we knew, it wouldn’t be a problem. But we were raised with an incremental mindset. So we can’t help but compare the exponential path to the incremental path. And this creates a problem.

    We are accustomed to measuring progress linearly and incrementally. If 30% of the time has gone by, we assume that we should be 30% of the way there. That’s how things work in the physical world when we are traveling to a destination. But exponential models don’t work that way.
    What happens is that businesses run into something I call the “expectation gap,” where the exponential strategy is at greatest risk from the incremental mindset. It’s where many companies abandon the exponential model for the incremental.

    I see this consistently on a micro scale in my own work. My workshops are designed with an exponential mindset to generate new ways of thinking about marketing, culture and strategy. Somewhere around a third of the way into a workshop, the leader invariably says something like “so when are we going to get something done?” The reason is that they are still operating with an incremental mindset. A third of the time has passed, but it seems like they are only 10% of the way to our destination. In fact, most of the progress happens once the curve starts to bend. Invariably by the end of the day the same people are remarking that they can’t believe how much we got done in such a short period of time.

    In your exponential journey, pay attention to when people get the most impatient for results. It’s the point in the chart where there is the largest gap between incremental and exponential paths. This expectation gap is a risk to the business strategy because the impatience can be used by opponents or skeptics to convince stakeholders to jump from the exponential to the incremental. You will have the immediate relief of having “line of sight” once again and see steady progress. But you will also have given up the possibility of accelerating returns and the opportunity to keep up with customers and competitors. The exponential mindset helps you have the courage to persevere and the patience to see it through.

    Grow: Agility and Control

    In the third phase, you have managed the uncertainty of the early days, the impatience of the middle phase, and now you are firmly “in the curve.” Growth is happening faster than you can handle. At this point, the incremental mindset is to try to rein things in and get things under control. But that would be a mistake. To sustain the accelerating returns, you need to shift your mindset about how to mobilize and manage resources.

    The incremental mindset assumes that it takes more inputs to produce more outputs. So as growth starts to accelerate, teams start to look for more resources in proportion to the growth. But the addition of too many people or too many resources can “flood the engine” of growth. You need an exponential mindset to figure out how 1X additional input can create 10X additional output.
    You also need to apply an exponential mindset to how you manage the resources you have. The incremental mindset about management is like creating a line of dominos. Everything needs to be highly coordinated with active oversight to make progress one step at a time. The exponential mindset is like this demonstration with ping pong balls in which things happen in parallel with a focus on the interactions among participants.

    As I’ve written about separately, there is a way to let go without losing control. In the exponential mindset, managers replace control of people with control of principles. The use of doctrine to guide decision-making generates alignment, consistency and empowerment. But most leaders are accustomed to making decisions rather than empowering decisions. The anxiety from a loss of control can easily push companies off the exponential path back onto the incremental path. The exponential mindset helps to grow output faster than input, and empower teams to achieve both alignment and autonomy.

    To summarize, digital business models require a shift from incremental to exponential. At the start, it takes vision and a leap of faith to commit to the unknown. In the early days, it takes courage and patience to build the foundation for growth even when results aren’t yet apparent. When growth kicks in, agility comes from empowering others and letting go without losing control. In all of the stages, the challenge is to “unlearn” familiar ways of thinking and embrace the unfamiliar. But with a shift from the incremental to exponential mindset comes the opportunity for real innovation. 

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    Procrastination comes in many disguises. We might resolve to tackle a task, but find endless reasons to defer it. We might prioritize things we can readily tick off our to-do list—answering emails, say—while leaving the big, complex stuff untouched for another day. We can look and feel busy, while artfully avoiding the tasks that really matter. And when we look at those rolling, long-untouched items at the bottom of our to-do list, we can’t help but feel a little disappointed in ourselves.

    The problem is our brains are programmed to procrastinate. In general, we all tend to struggle with tasks that promise future upside in return for efforts we take now. That’s because it’s easier for our brains to process concrete rather than abstract things, and the immediate hassle is very tangible compared with those unknowable, uncertain future benefits. So the short-term effort easily dominates the long-term upside in our minds—an example of something that behavioral scientists call present bias.

    How can you become less myopic about your elusive tasks? It’s all about rebalancing the cost-benefit analysis: make the benefits of action feel bigger, and the costs of action feel smaller. The reward for doing a pestering task needs to feel larger than the immediate pain of tackling it.

    To make the benefits of action feel bigger and more real:

    Visualize how great it will be to get it done. Researchers have discovered that people are more likely to save for their future retirement if they’re shown digitally aged photographs of themselves. Why? Because it makes their future self feel more real—making the future benefits of saving also feel more weighty. When we apply a lo-fi version of this technique to any task we’ve been avoiding, by taking a moment to paint ourselves a vivid mental picture of the benefits of getting it done, it can sometimes be just enough to get us unstuck. So if there’s a call you’re avoiding or an email you’re putting off, give your brain a helping hand by imagining the virtuous sense of satisfaction you’ll have once it’s done—and perhaps also the look of relief on someone’s face as they get from you what they needed.

    Pre-commit, publicly. Telling people that we’re going to get something done can powerfully amplify the appeal of actually taking action, because our brain’s reward system is so highly responsive to our social standing. Research has found that it matters greatly to us whether we’re respected by others—even by strangers. Most of us don’t want to look foolish or lazy to other people. So by daring to say “I’ll send you the report by the end of the day” we add social benefits to following through on our promise—which can be just enough to nudge us to bite the bullet.

    Confront the downside of inaction. Research has found that we’re strangely averse to properly evaluating the status quo. While we might weigh the pros and cons of doing something new, we far less often consider the pros and cons of not doing that thing. Known as omission bias, this often leads us to ignore some obvious benefits of getting stuff done. Suppose you’re repeatedly putting off the preparation you need to do for an upcoming meeting. You’re tempted by more exciting tasks, so you tell yourself you can do it tomorrow (or the day after). But force yourself to think about the downside of putting it off, and you realize that tomorrow will be too late to get hold of the input you really need from colleagues. If you get moving now, you have half a chance of reaching them in time—so finally, your gears creak into action.

    To make the costs of action feel smaller:

    Identify the first step. Sometimes we’re just daunted by the task we’re avoiding. We might have “learn French” on our to-do list, but who can slot that into the average afternoon? The trick here is to break down big, amorphous tasks into baby steps that don’t feel as effortful. Even better: identify the very smallest first step, something that’s so easy that even your present-biased brain can see that the benefits outweigh the costs of effort. So instead of “learn French” you might decide to “email Nicole to ask advice on learning French.” Achieve that small goal, and you’ll feel more motivated to take the next small step than if you’d continued to beat yourself up about your lack of language skills.

    Tie the first step to a treatWe can make the cost of effort feel even smaller if we link that small step to something we’re actually looking forward to doing. In other words, tie the task that we’re avoiding to something that we’re not avoiding. For example, you might allow yourself to read lowbrow magazines or books when you’re at the gym, because the guilty pleasure helps dilute your brain’s perception of the short-term “cost” of exercising. Likewise, you might muster the self-discipline to complete a slippery task if you promise yourself you’ll do it in a nice café with a favorite drink in hand.

    Remove the hidden blockageSometimes we find ourselves returning to a task repeatedly, still unwilling to take the first step. We hear a little voice in our head saying, “Yeah, good idea, but . . . no.” At this point, we need to ask that voice some questions, to figure out what’s really making it unappealing to take action. This doesn’t necessarily require psychotherapy. Patiently ask yourself a few “why” questions—“why does it feel tough to do this?” and “why’s that?”—and the blockage can surface quite quickly. Often, the issue is that a perfectly noble competing commitment is undermining your motivation. For example, suppose you were finding it hard to stick to an early morning goal-setting routine. A few “whys” might highlight that the challenge stems from your equally strong desire to eat breakfast with your family. Once you’ve made that conflict more explicit, it’s far more likely you’ll find a way to overcome it—perhaps by setting your daily goals the night before, or on your commute into work.

    So the next time you find yourself mystified by your inability to get important tasks done, be kind to yourself. Recognize that your brain needs help if it’s going to be less short-sighted. Try taking at least one step to make the benefits of action loom larger, and one to make the costs of action feel smaller. Your languishing to-do list will thank you. 

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    Executives dream of insulating their companies from all risks, both natural and manmade, making their company’s revenues impervious to the vicissitudes of a capricious world. This is also the implicit goal of most business strategies, achieved through the use of resource control through vertical integration, supplier dominance through buying power, persuasive political influence through lobbying and campaign finance, and of course, good ol’ market monopolies, among other things. The idea is that by gaining control of your destiny, you foster complete commercial independence.
    This dream is popular, but it is, of course, a fallacy. The surprising secret is that dependence, not independence, is the way to protect the organization against risks.

    The concept of resilience offers a window into the fallacy. Like the term “sustainability,” resilience has become a standard at global confabs and — as with sustainability — it is a term that means different things to different people. Experts often talk in terms of personal “psychological resilience,” referring to the ability of individuals to bounce back after being hit with disappointments, shocks, or traumatic events. This is an important perspective, and corporate wellbeing specialists have begun developing resilience practices for workers.

    But a less-understood perspective is “business resilience,” that is, how to ensure your company can continue creating value in the face of disasters, both natural and manmade.

    A good place to learn about business resilience is Indonesia, and a good guide is Karin Reiter, Group Corporate Responsibility Manager at Zurich Insurance Group. I met Karin at the Aspen Institute’s First Mover Summit, and she offered a compelling example.

    “Indonesia is often referred to as supermarket for natural disasters,” explains Reiter, “particularly for flooding.” As an insurer, Zurich had exposure to many companies in Indonesia. One customer in particular experienced a severe flooding event and was heavily damaged. In order to reduce future losses, Zurich risk engineers were called in to recommend how to make the factory more resilient to future shocks. Protective improvements such as moving stocks off of the ground floor and building berms to divert floodwaters were made, which would substantially insulate the factory during the next flooding event.

    Not surprisingly, Indonesia experienced another flood not too much later. This time, however, the factory was protected thanks to the improvements. “So you would expect that the next day the company would be up and running again at full speed,” says Reiter.

    It wasn’t. Instead it stayed shuttered, just like after the last storm.

    But if the company had successfully insulated their facility from a natural disaster risk — an executive’s dream — why were they unable to operate? The reason lies in the secret of business resilience. Resilience is not a condition of any single factory. It is a systems condition. It is a community condition. It is a condition of interdependence, not independence.

    As Reiter explains, “The challenge was that roads were destroyed and employees couldn’t go to work. And they needed to look after saving their own lives, saving their families’ lives. They were really trying to save all their assets within their community.” An insulated fortress factory in the middle of a devastated community turned out to be worthless. The resilience of the company’s operations was dependent on the resilience of the community in which they operated.
    “Look deep into nature,” said Albert Einstein, “and then you will understand everything better.” The secret of resilience can be found in nature. Individual species do not exist in isolation but are part of interdependent ecological webs. Food webs, trophic pyramids, symbiotic mutualisms — all of these relationships are vital to the health and resilience of biological communities. It is the dynamic flow and exchange — as when trees transpire the oxygen needed by animals and the animals respire the carbon dioxide needed by the trees — that makes the biosphere both possible and resilient. The same is true for business.

    And, as in nature, the business relationship requires mutuality. Just as the factory was dependent on the resilience of the community, so was the community dependent on the factory. As Reiter explains, a factory closure “has a huge impact on the communities, because if the employees can’t work, they are no longer able to generate income. If they don’t have an income, they can’t invest in their communities, they can’t pay taxes, they don’t have any savings for their children to be sent to school. If flooding happens frequently, then there’s a cycle of poverty that just continues.” And, of course, as the cycle persists, the disruptions for factories and their supply chains persist.

    Most business leaders would prefer to isolate themselves from worrying about these dependencies. But gone are the days of Ford when a company could vertically integrate and control everything from iron mines to Model-T dealerships. The alternative is to recognize that independence is a chimera and embrace our interdependencies.

    Reproduced from MIT Sloan Management Review

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    Is India Capable of a Surgical Strike in Pakistan Controlled Kashmir?

    On Thursday India claimed it had conducted a “surgical strike” in Pakistan controlled Kashmir across the Line of Control (LoC). Pakistan denied that India carried out a surgical strike and claimed that two of its soldiers were killed in cross border fire.

    “The notion of surgical strike linked to alleged terrorists’ bases is an illusion being deliberately generated by India to create false effects,” the Pakistani military said in a statement.

    India’s director general of military operations, Lt. Gen. Ranbir Singh, publicly announced the strike. He stated, “Based on receiving specific and credible inputs that some terrorist teams had positioned themselves at launch pads along the Line of Control to carry out infiltration and conduct terrorist strikes inside Jammu and Kashmir and in various metros in other states, the Indian army conducted surgical strikes at several of these launch pads to pre-empt infiltration by terrorists.”

    Enjoying this article? Click here to subscribe for full access. Just $5 a month.India has provided few details of the operation but sources indicate that the “surgical strikes” consisted of a heliborne unit and Special Forces that infiltrated the LoC and conducted assaults on seven suspected terrorist launch pads that were two to three km beyond the LoC.

    Throughout the day Pakistan has continued to deny any surgical strike took place. “There has been no surgical strike by India, instead there had been cross border fire initiated and conducted by India which is existential phenomenon,” the Pakistan Army said in a statement.
    A surgical strike operation by Indian forces begs the question of whether Indian forces have the capability to launch such a sophisticated and coordinated attack.

    Surgical strikes can be conducted through airborne or artillery based precision guided strikes or ground force based assaults; both of which require sophisticated intelligence collection, platforms to conduct collections, and surveillance of target sites and objectives.

    India is still on the cusp of building a sophisticated and modernized asymmetrical capability to conduct counterterror operations, while much of its forces are still organized and trained on Cold War models.

    Over the last decade, India has spearheaded efforts to modernize her military to include domestic production of unmanned aerial vehicles (UAVs). Rostum I and Rostum II could provide India with an air platform capable of surgical strikes, long loiter times for target surveillance, and intelligence collection. However, these platforms are still in development and Rostum II just began test trials this summer. India’s drone development program is still in its infancy.

    As for artillery, in 2015, India and BAE finalized contracts for the sale and development of new M777 155 mm howitzer system, capable of firing the new Excalibur GPS guided shell. However, development and production of the artillery system is not slated to begin until 2018.
    India does currently field a Russian GPS guided munition called the Krasnopol, though its precision fire support is within a 30-40 km radius and its accuracy is far less when compared to the new Excalibur shell.

    As far as precision strike missile capability, India has recently acquired the U.S. anti-tank guided missile (ATGM) Hellfire, which has frequently been used for targeting operations by U.S. forces. India is currently producing a domestic ATGM called the Helina, a helicopter launched precision strike missile, though this missile is still undergoing testing.

    In other words, much of India’s asymmetrical warfare capability is still being developed and tested. The examples above are by no means an exhaustive list but it certainly details a capacity not fully developed by Indian forces.

    Furthermore, a cross border air raid by either heliborne assets or drones would still prove exceedingly difficult as Pakistan boasts an incredibly impressive air defense system. Pakistan controlled Kashmir is a high threat area for shoulder fired surface to air missiles, some of which have found their way into the hands of militant groups. Any air operation over the territory would be under threat from these weapon systems.

    India has released little detail on the operation; however if India in fact carried out a cross border surgical strike on terrorist facilities and not Pakistani military posts, it would be a paradigm shift in India’s war against terrorist and militant organizations. It would also boast the perception that India’s asymmetrical warfare capability is further along than many may perceive.

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    By guiding the design of customer interactions, the principles of behavioral science offer a simple, low-cost route to improved customer satisfaction.

    Service operations seem a natural setting for the ideas of behavioral science. Every year, companies have thousands, even millions, of interactions with human beings—also known as customers. Their perceptions of an interaction, behavioral scientists tell us, are influenced powerfully by considerations such as its sequence of painful and pleasurable experiences. Companies care deeply about the quality of those interactions and invest heavily in effective Web sites and in responsive, simplified call centers.

    Yet the application of behavioral science to service operations seems spotty at best. Its principles have been implemented by relatively few companies, such as the telecommunications business, which found that giving customers some control over their service interactions by allowing them to schedule field service visits at specific times could make them more satisfied, even when they had to wait a week or longer. Many more companies ignore what makes people tick. Banks, for example, often disturb the customer experience by altering the menus on ATMs or the interactive-voice-response (IVR) systems in call centers. They fail to recognize the psychological discomfort customers experience when faced with unexpected changes.

    Likewise, for every restaurant that surrounds a bill’s arrival with a succession of complementary desserts—thereby capitalizing on the customer’s preference for service encounters that end positively—there are a lot of call centers that ignore the importance of a strong finish. Indeed, many companies actively work against one by placing so much emphasis on average handling times that they inadvertently encourage agents to end a call once its main business is complete, leaving customers with memories of brusque treatment.

    It doesn’t have to be this way. Academics such as Professor Richard Chase at the University of Southern California’s Marshall School of Business have used research on how people form opinions about their experiences to design actual services. In a 2001 Harvard Business Review article,1 Chase and his team even laid out principles for managers to consider when designing any customer interaction. Get bad experiences over early, so that customers focus on the more positive subsequent elements of the interaction. Break up pleasure but combine pain for your customers, so that the pleasant parts of the interaction form a stronger part of their recollections. Finish strong, as the final elements of the interaction will stick in the customers’ memory. Give them choice, so they feel more in control of the interaction. And let them stick to their habits rather than force them to endure the discomfort and disorientation of unexpected change.

    Here we review the experience of an insurance company that used those principles to improve its customers’ satisfaction significantly, with no incremental costs or fundamental changes in people or infrastructure. A systematic approach like this one is needed to counteract the natural tendency of service operations to focus on the needs of IT systems and work flows, not to mention the preferences of employees, managers, and service providers, largely ignoring the way customers perceive their service interactions. If companies in a broad range of service industries—including banking, telecommunications, and retailing—applied a rigorous approach, they would reap significant economic benefits, ranging from reduced churn to greater cross-selling to additional customer referrals.

    Setting the stage

    Executives at a leading North American health insurer sought to help patients manage their treatment programs for serious long-term illnesses, such as diabetes or congestive heart failure. Conditions like these are difficult to manage because treatment is often protracted and outcomes can depend on the patients’ willingness to make significant lifestyle changes.

    Patients participating in an experimental health-management program received regular, scheduled calls from a team of nurses over a period of several months. The calls aimed to deliver additional support to patients undergoing long-term treatment, by helping them understand the available options and stick to their treatment regimes, as well as reinforcing lifestyle changes recommended by their doctors. Improved compliance helps insurers too, as better outcomes reduce the overall cost of treatment.

    In the past, the clinical-treatment program for each patient had determined the content of such calls, and the company used what it considered to be a tried-and-true method for managing them. Team members had received guidelines on the objectives of the calls and used a checklist to sequence discussions with customers.

    Behavioral science in action

    To see if this approach could be improved, the company divided the nurses into two groups—approximately 20 in a pilot group and another 20 in a control one—and began applying a behavioral-science lens to the interactions of the former to test different versions of the call structure. Postcall surveys measured the customers’ satisfaction with each call and with the company. Key customer and operational metrics (including sign-up rates) helped estimate the financial impact. The pilot team used behavioral-science principles throughout the interactions.

    1. Get bad experiences over with early

    The team identified difficult issues—for example, the forthcoming lapse of certain insurance benefits or the need to transfer from one facility to another—and moved them to the start of the call. It also set up a later phase built around constructive coaching from the nurses on how to deal with the issues raised earlier. In addition, general questions that were likely to make patients uncomfortable (about current pain levels, smoking habits, eating patterns, and alcohol consumption, for instance) were moved from the end of the call to the beginning.

    2. Break up pleasure and combine pain

    By combining the most challenging elements of a call in its first phase, the health-management team could focus on positive aspects during the rest of it. The team found that patients responded very positively to coaching by nurses, so there was an effort to ensure that coaching on multiple topics was an explicit part of every phase of the call. A nurse might, for example, discuss the next treatment steps, how the patient could take advantage of all covered benefits, and ways of minimizing out-of-pocket expenses. There was also an effort to resolve all possible issues within a call and to transfer it to other groups only as a last resort.

    3. Finish strongly

    The conclusion of the health-management calls was scripted to finish on a positive note by emphasizing the tangible insurance benefits available to patients and, where medically appropriate, the likelihood of a successful outcome to the agreed-upon action plan. At the end of a program lasting several months, with calls taking place every month or so, patients received a final call from their health-management nurse. This call ended by celebrating their progress, reviewing the goals they had met, and summarizing the positive steps they had taken to achieve those goals.

    4. Give customers choice

    The company made an effort to give customers explicit choice on three critical elements: the type of treatment plan, which facilities to visit and which doctors to see, and the timing of future calls. In each area, the nurse was guided to tell the customer, “You have a choice; let me give you some options.” Customers explicitly had the right to make the ultimate decision, though the outcome may have been limited or strongly suggested—for example, “Hospital A is closest to your home, but B is only 15 minutes further away, and it has a specialist unit with a great track record at treating your condition.”

    5. Let customers stick to their habits

    In many situations, it was important for patients to change their lifestyles—say, by eating different foods, consuming less alcohol, or exercising. To encourage patients to make these changes while minimizing the discomfort they generated, nurses introduced them gradually over a series of calls. Dietary changes might be discussed initially, for instance, followed by encouragement to begin exercise. The nurses also tried to reframe the patients’ perceptions of the severity of the changes by comparing them with more unfavorable alternatives: for example, “instead of eliminating your favorite foods altogether, why not just try picking low-fat varieties next time you are in the store.”

    The team also worked to ensure that the calls themselves became a positive habit for the patients. This approach gave them the option of having the same nurse on follow-up and promoted a consistent approach for every call, so that they became used to the interactions.


    The effect of the changes was significant. Patients in the test group reported an average satisfaction level seven percentage points higher than that of patients in the control group—for calls with the same basic content. These patients’ satisfaction levels with the company was on average eight percentage points higher than that of the control group. More important, patients in the test group were on average five percentage points more likely to say that the calls had motivated them to make positive changes in their behavior.

    Notably, the program didn’t significantly affect the company’s costs or change key operational metrics, such as the length of a call or the number of calls a day. Moreover, test group nurses reported an average level of job satisfaction higher than that of the control group nurses. Finally, the impact was rapid. Most of the increase in the satisfaction levels of the test group patients happened within two weeks.

    Many other service industries could benefit from a similar approach. By breaking down frontline transactions and rebuilding them with behavioral and experiential principles, companies could systematically achieve rapid, measurable improvements in customer satisfaction.

    About the author(s)

    John DeVine is a principal in McKinsey’s Miami office, and Keith Gilson is a consultant in the Toronto office.

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    South Africa’s Nedbank is a leader in its market — but to stay in that position, it needed to identify new ways to serve its existing business clientele as well as attract new customers. Its solution: Use the extensive transaction data the bank collects to help customers improve their service.


    In 2015, store managers at BUCO, a hardware retailer with 46 locations across South Africa, had an intuitive feel for whether men or women were their most frequent customers, which locations had the most loyal customers, and from what suburbs the most valuable customers to a given store were coming. That all changed shortly after Judy Gounden, a group marketing executive at BUCO’s parent company, Iliad Africa Ltd., began using Market Edge, a commercial data service provided by Nedbank Group Ltd., South Africa’s fourth-largest bank by market value.

    According to Gounden, Market Edge — which packages credit and debit card information with geolocation, demographic, and other transactional data — enabled new insights into customers’ behaviors that would have been difficult to identify without the new tool. These insights in turn have changed the way the company operates, says Gounden:

    We can now look at card transaction data and say, “On a Wednesday at 9:00 a.m., we had the most card transactions versus any other day in the week, and most of these people are 50 and 60 years old.” That’s our pensioner day. In some geographical regions, we’ve got very high loyalty, and in others, we get new customers constantly, so the tool helps us think about how we market in each region. What’s more, when I told a store manager who believed that most of his business was derived from local residents that, in fact, half of his business was coming from residents that lived in a town 10 kilometers away, his eyes went wide and he said, “How do you know that?” So we shared the data with him. At BUCO’s location in Nelspruit, which is on the Crocodile River in the northeast near Kruger National Park, we learned through the data that a large portion of our clientele was female, so we introduced a Saturday craft workshop featuring chalk paint. It’s the latest craze in do-it-yourself painting. The workshop was a huge hit; it just accelerated the craft area of that business. After that, department sales just skyrocketed. Many stores have replicated this example.

    Chris Wood, head of emerging payments, strategy, and regulation at Nedbank, counts Iliad Africa and BUCO as one of the many success stories for Market Edge since its public launch in July 2015. Wood’s team sold or gave away the tool to 1,500 of Nedbank’s merchant locations. Several large companies, such as Burger King and McDonald’s, were either involved in co-creating the product with Nedbank as part of the pilot or had purchased the tool, demonstrating that it could make a significant business contribution to the bank’s credit and debit card line of business as well as to retail and business banking (RBB), the largest business division within Nedbank Group. The value of Market Edge to Nedbank may derive less from sales of the tool — the typical price is a flat fee of 500 rand per location a month (about $35) — and more from expanding relationships with existing merchant clients and acquiring new customers. (See “Market Edge: Use Cases.”) 

    Nedbank’s Market Edge clients, like Burger King and BUCO, use the tool to analyze potential store locations and drive business into their stores.

    A year after its launch, Wood was convinced that he could build a team to place Market Edge in 90,000 merchants. But there was one big challenge: The current sales force in the card and payments line of business was not yet effective at selling Market Edge, despite concerted training efforts. Nedbank had plans to expand the sales force, but there were many competing priorities and it was unclear whether the bank would support a sales force dedicated to Market Edge.

    Nevertheless, the tool has shown Nedbank the promise of data and analytics as a commercial offering. It is also just one of several ways that the RBB business cluster is using data and analytics to build an edge in its market. “The strategic challenges that we’ve set for ourselves highlight the need to ramp up all of that [data] capability,” says Ciko Thomas, group managing executive of RBB. “We have momentum, but we need to build institutional and organizational capability.”

    View South Africa's Ned Bank Study with videos

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    INSEAD Dean Talks B-School’s Past, Present, Future.

    Times are good for the business school headquartered in the quaint French town of Fontainebleau.
    INSEAD, which brushes up against a national forest about 70 kilometers southeast of Paris, is having a stellar year. Last November, it nabbed the top spot in Poets&Quants’ composite ranking of international schools. In January, INSEAD became the first school not named Harvard, Stanford, Wharton, or London Business School to claim number one in the Financial Times’ global ranking of MBA programs. What’s more, the school has more alumni giving and engagement than ever before, enjoys solid job placement rates despite offering a turbocharged 10-month full-time MBA, and is in the midst of planning a new curriculum that will roll out next September.

    This past Saturday (Oct. 8), Poets&Quants had the opportunity to meet with INSEAD Dean Ilian Mihov in his Fontainebleau office during a massive alumni reunion weekend to discuss his first three years as dean and where he sees the school — and business education as a whole — going. When Mihov took over as dean, he did so with at least three objectives. He wanted to put greater resources into career development, increase fundraising, and build a new curriculum. Three years later, he’s done all three.

    First, Mihov says, INSEAD doubled the budget for career services. This led to increased staff and a new career development center. Students now gain personal career coaches before even starting the program, and more than 180 companies a year trek from around the globe to INSEAD’s Fontainebleau or Singapore campuses. Next, efforts to increase alumni engagement and giving have paid off handsomely. Five years ago, INSEAD raised about €4.7 million ($5.2 million). This past academic year, the school set a goal of €16.5 million ($18.2 million)— and ended up with nearly €24 million ($26.4 million). Meanwhile, Mihov says, alumni attendance at events on campus is up 25%.

    Finally, after a lengthy process that was spearheaded by a five-member faculty committee and included input from recruiters, alumni, and current students, the school will roll out a completely revised curriculum for next September’s incoming class. Highlights will include a personalized leadership development program, a cluster of required courses focused on business and society, and, Mihov says, deeper self-reflection and character building.


    To keep the upward momentum moving, Mihov says INSEAD must continue to fundraise so it can compete for the best students and professors. Currently, about 20% of INSEAD students receive scholarships, well below the near 50% level at Harvard Business School where the average annual student grant is $37,000. Mihov wants to get closer to HBS’ 50%. “I think that everybody is fighting for two things. One is students, and the other is faculty,” he says. “So the toughest challenge for us is to keep INSEAD an attractive proposition in this competitive environment.”

    To be sure, INSEAD has tapped into two of the most saturated markets for MBA applicants. For the past five years, the largest nationalities represented have been from the U.S. and India. Each country has comprised 9% to 12% of the school’s cohort, which is enough for the highest conglomerate from one country. The school regularly enrolls students from more than 80 countries each year and has an alumni base that spans 170 countries. According to Mihov, U.S. applicants are higher than ever before. But to break deeper into the robust U.S. applicant market, Mihov says INSEAD needs to continue to communicate the legitimacy of the one-year MBA — and it needs to innovate.

    In a robust and broad-ranging interview, Mihov discusses in detail the process INSEAD went through to revamp its curriculum, future development of the school’s Abu Dhabi campus, improvements the school needs to make, and why the one-year model involves classroom time equal to or more than a two-year program — among many other topics.

    You’ve now officially been dean for just over three years. What are some of your proudest accomplishments over that time?

    I think there are several key things that we did. At the very beginning, we decided to completely revamp our career services and build a career development center. We more than doubled our budget. We provide the students now with personal career advisers. So when students come to INSEAD, they have somebody who helps them during the year figure out where they want to apply, figure out what they are going to do, preparing them for interviews, preparing them for submitting CVs, recommendation letters — all of these things. Those are some of the technical things, but they also help with the behavioral things like how you behave during the interview. And I think that has a very big impact on how the students feel and the success rates on the reports in terms of matching students with the right employers.

    We also invested a lot in business development — that is, relationships with employers. Today we have more than 180 companies coming to campus recruiting, which is quite significant. That was the first thing I really thought was necessary to do.

    The second thing that I’m very proud of is that we went through a long process of curriculum review. It’s always difficult to build consensus around something. One of our colleagues warned us — he was at another school before coming to INSEAD and was a tenured professor — and he said that there, they went through the same thing and at the end they went back to the same curriculum as before. But in our case, I’m happy that it went very well. We will be implementing the new curriculum for the class that starts in September of 2017.

    We produced a leadership development program so that there is professional coaching, group coaching, and peer coaching during the entire year to make our students more aware about how they make decisions, how they have biases, how to correct those biases, how to behave in teams. It’s a standard coaching exercise. In addition to this, we produced a cluster of business and society courses in our third period. One is political analysis, one is more of a public policy — environmental, sustainability, inequality — all these issues that link business and society and have created some problems in recent years. And the third course is ethics. We had it before as a required course but it was between other courses. Now we put it together in this cluster.

    So there are several changes that I think will improve the program and will make it more effective. We have the students develop not only competencies, but also build and further their character and understanding of themselves. That’s the second thing.

    The third thing is the relationship with the alumni. Today the alumni engagement at INSEAD is the highest ever. In the last year we have seen a 25% increase in the number of alumni coming back for reunions. Last year, we had 3,200 alumni come back for reunion. This is very important. I think it creates a much stronger school in a sense that the students can benefit much more from this relationship with alumni. Our faculty benefit from the relationships and we are trying to build something for the alumni as well, like a platform for continued learning, so they will benefit as well.

    On the fundraising front, we are doing very well. To me, this is one of the most important successes because we have an alumni network that spreads into 170 countries. We have more alumni in more countries than any other business school. So it’s a very powerful network and if we can activate this network and connect it to the school, we can do a lot of new and interesting things.
    And a fourth thing that is also quite interesting is in the digitalization we have moved forward substantially. It’s more relevant for executive education, but we are trying to bring it to the MBA class.

    The curriculum change is something you mentioned quite a bit when you first took over as dean. Can you share any more about what that process was like and any more detail on key improvements within the curriculum that you didn’t already mention?

    Yeah, so, I think what I mentioned already are the most important changes, but I think the process was quite interesting because we did not want to change the curriculum just for the sake of changing it. We wanted to change it to make it relevant for the students and for the recruiters. So we created a committee of five faculty members and then benchmarked against other schools to see what other schools are doing and have been doing, which generated some interesting insights but also we realized, we are not very far from what other schools are doing in many ways.

    Then we talked to students and asked what they expect to see at INSEAD. And there were demands for certain courses. At INSEAD, it is critical to do this every 10 or 15 years because INSEAD is different and our electives are a marketplace. At many other schools, the faculty decides these are the electives that we are going to run and people subscribe. Here, if an elective does not run well, we’ll kill it, and we have a very strict criteria for that. If the elective is successful, we launch a bunch of sections so more people can take it. So as we see the demand, we will change electives. But still, there were some, like digital marketing and media, all of these things we just introduced as a result of this.

    Then we went and talked to alumni and asked what they thought was good and what they found useful over the years, and what they thought was not as good. We heard very clearly that they wished there was a bigger emphasis on leadership development, there was a bit more emphasis on decision making, on reflection, self-awareness, ethical dilemmas, and so on.

    And then we went to recruiters and asked what they need from our students. I think today we are very fortunate that many recruiters are going after our students because of their global nature. So one of the things that they really valued a lot was the global mindset, the diversity of the students coming from all over the world, so they can go back to these countries. Many recruiters need people in Southeast Asia, in Africa, Latin America, and sometimes it’s difficult to convince students who have gone to a top U.S. or European school to go back to their countries. But our students, because of their mindsets, are willing to do that. Last year — the class that just graduated — are placed in 57 countries. And the other thing that recruiters said — and that’s why we introduced it: that they are quite happy with the development of the analytical skills. The program we have is rigorous and comparable to top schools. But they really wanted more emphasis on soft skills. So that’s why we have this leadership development program.

    Speaking of recruiters, you all have students coming from all over the world, many of whom are trying to jump industries, functions, and/or countries and have no traditional internship like in a two-year program, yet you all still have impressive job placement stats. Is this because of the increased resources and communication with recruiters?

    Yeah, we can do this because now we have focused on career development even before they come to INSEAD. It is a 10-month program, there are no internships, but at the same time, even before they come, we have online courses for building their CV and all kinds of videos on how to prepare for career development. And during the year, there are personal career advisers and group career advisers focused on industries. Everybody understands it’s a very short period of time and we really have to do things very quickly. We enlarged the number of advisers because we realized if we want to do it right, it’s not going to happen with the numbers we had before.

    It is impressive how many people switch functions and industry and geography. But obviously the people we take in are very high-quality and the willingness they have to be global and move around is very valuable and valued by companies.

    The other big news coming out of INSEAD recently is obviously the Financial Times ranking. How does getting that number one spot feel and how much do you value rankings?

    I think rankings matter. Rankings are very good feedback for facts and what things are working well and not working well. And the community is really energized by this number-one spot. I think what we learned from the rankings is that because we are placing students in emerging markets, our salaries are growing faster. Or they are going into industries that have high salaries. But on the salary side, INSEAD has been improving.

    The second positive thing that we learned, which was very good, is that our research ranking has increased significantly. To me, this is very important because the school shifted towards research in the 1990s. It was under Dean António Borges. And it was difficult to integrate it into cultures.

    INSEAD was a teaching place. We emphasized teaching quality, I would say more than most of the other schools. And here, it’s not that the dean of faculty says you have to be a good teacher, professors feel the pressure. You have to be good in the classroom. Our students are a little bit older, the average age is 29. They also put more pressure on the faculty to be good in the classroom. So integrating these two cultures was sometimes painful. But today we have the best teachers and many of them are also great researchers. We have created a culture where the research and teaching goes hand-in-hand.

    The reason I think it is very important is because if you think about the disruptions and the biggest threat coming from online, it is famous professors from top schools delivering high-quality material that is basically distributed for free. And right now of course there are issues with MOOCs. But eventually things will improve. The only way we can stay relevant in an environment like this is if you have a school where professors are at the forefront of research in management sciences and so on. So when you go into the classroom, you are not reading the textbook, which you can get on a video or MOOC, but also you are engaging in a discussion where professors are bringing the latest insights from various empirical studies and theories. And that makes a big difference, and I have seen it in many classes at INSEAD. That students and executives realize they learn something they can’t get easily from the video or newspapers.

    For example, I am a macroeconomist and I have had several talks in the past about the economic drought and inequality. And what I was bringing in the classroom were inequality studies that people have published in top academic journals. And sometimes the conclusions from these studies, with the data, was contrary to what you would see in newspapers. And then you realize that you are learning something you cannot learn otherwise. To me, this maintains the competitive edge to the school.

    I think it is very easy to see where we are also weak, in terms of the rankings. We want to increase female participation at INSEAD in the number of MBAs. We have 30% women today, which is still big progress to 10 years ago. But, again, it’s not where we want to be. We have looked into this issue. We are trying to analyze why this is happening. And it is, to a large degree, our geographical distribution of applicants. From the U.S. students, we have 45% of women like most of the U.S. schools. From China, we have 60% women. But from Europe, we have 12% and that’s where we are putting emphasis, in trying to change this.

    So, to me, this is what rankings give. You can try to understand where the investment has paid off — and where we are still weak and need to improve.

    One of the things you mentioned in your interview with Poets&Quants in 2014 was putting a significant emphasis on fundraising. Can you give us some updates on how that is going?

    It’s going very, very well. This data is in the reports, so it’s publicly available, but the new one we are still preparing. If you look at fundraising about five years ago, we raised €4.7 million. But it’s been increasing and the last academic year that we just finished, our objective was to raise €16.5 million. And we ended up with close to €24 million. So we exceeded the target by more than 45%. I think that’s where the school can be, and even higher. Most of the money we raise is for scholarships.

    We also raise money for research. We raise money for career services. The career development center was funded by donations from alumni because they understand this. So it is still a priority. Because, for me, fundraising is about investing in the future of the school — building a better school, ensuring the quality of the students. And that’s certainly working well.

    We’re still not where we want to be in terms of scholarships. We want to go more than double the amount we currently give for scholarships. It’s a very important objective. But things have changed dramatically.

    In that interview you also mentioned INSEAD being the most complicated business school in the world and a logistical nightmare moving students across two or three campuses in a year. Do you still feel that way?

    It is still the most complicated. I said it today at the reunion. Because we are the biggest MBA program in terms of number of students that we put on the market every year. On campus some U.S. schools have more students, but what really matters is how many students you have to help in finding jobs and it’s quite significant. Still, 75% move between campuses. And now we introduced another complication by offering a period in Abu Dhabi. But at the same time, I think that it is worth doing this. This complication is not for its own sake. I think the students that do move between campuses see firsthand the different environment’s globalization. And some of them go to Wharton. So it’s Fontainebleau, Singapore, and Wharton with the Wharton exchange.

    I don’t know if I said this in the previous interview, but I think that if we had not gone to Singapore, INSEAD would not be where it is today.

    Why do you think that?

    Because I think that today we offer a unique opportunity for people who want to think about the world and to experience the two campuses. And we have developed expertise on Asia and Asian companies that otherwise, I don’t think would have developed. It’s very difficult to build cases on China or India or Singapore or Indonesia by sitting in Fontainebleau. You can do it, but it’s not as insightful as when you’re there. Even when you read the newspaper, you see all of the news coming in and you can integrate it into the teaching. I think our students get information about Asia and Europe more than anybody else among the top schools, just because they are in this environment. Of course you teach a lot of other things like globalization and the U.S. and so on, but it’s the environment. We have speakers, forums, field trips, that help them understand the culture and the way people do business in these countries.

    What are some of the most important differences between campuses?

    Let me first start with Abu Dhabi. Abu Dhabi is still in the process of development. We are going to possibly build a new campus in Abu Dhabi. Right now we only have our executive MBA there, which works quite well. And we have executive education. Only one of the MBA classes can go there for two months. We want to develop this going forward with getting more periods in Abu Dhabi. So it’s a very different campus compared to Fontainebleau and Singapore.

    In terms of culture among the students, I think there is no difference between Singapore and Fontainebleau. The composition of the class is the same. It’s true, we have about 200 in Singapore and 300 in Fontainebleau, but the mix of nationalities is very similar. Of course Singapore is an urban campus, so it’s slightly different and people are in the city. Here there is a potential in getting closer to each other because everybody is in Fontainebleau and there is not much else there unless they decide to go to Paris. It’s a very good environment for studying for one year.

    So I think there are slight differences because of this, but at the same time, in terms of culture, students move seamlessly between the two campuses. I have not seen any problems or people from Fontainebleau or Singapore behaving differently.

    How do you think applicants from the U.S. view INSEAD and what would you change about that, if anything?

    That’s a very interesting question because in the last few years, we have seen a rapid increase in the number of applications from the U.S. In fact, today, the biggest group on campus are Americans — 9% of the new class that we just admitted. In the past five years it has been Indians and Americans as the largest groups, but still a minority like everybody else.

    We see now a big increase in applications. I think the number-one ranking has helped people become aware. But I still think it is difficult for some applicants to see the benefit of INSEAD compared to other schools. And there is still skepticism to the one-year program. Academically, there is almost no difference. Because in the U.S., two years is four semesters of three and a half months — so 14 months. And very often you have a day free during the week for career and job search and networking. So basically you have 20% less, so it’s about 11 months of academic work. And at INSEAD, the 10 months are including classes on Saturday. So from an academic point of view, in terms of what you get in the classroom, you get the same thing that you get at other schools. Now, I think that more and more applicants see the one-year MBA as a viable and strong product. I think it was the GMAT data that said more people applied for one-year programs.

    Specifically, from the U.S., we obviously have several things that work against us. The first one is the language requirement. On entry, you need two languages spoken and written at a high level. And on exit, you need a third language. Many students come with three languages already but there are also others that do not. In Europe, most people do have these languages. The education system is different where almost everybody starts with a second language in middle school and a third language by the time you go to university.

    The other thing is that the U.S. has a lot of other great schools, so there are other opportunities. Many applicants are considering the U.S. schools. And the value of INSEAD, we sometimes don’t communicate properly enough. For us, we think that if somebody is looking for having a career in a global economy, working with teams that are very diverse, then INSEAD has a lot to offer — more than most of the U.S. schools. We have today 86 nationalities on campus. We create teams of people that sometimes are from countries that are at war with each other. Because we want to make sure that during this year they learn how to interact in teams with somebody that you may not like. But you still have to work on that team. So we’re trying to develop them as managers or leaders or entrepreneurs with a global perspective. Again, the two-year schools are excellent of course, but still, most people look for jobs in the U.S. Most people end up with jobs in the U.S. It’s still the biggest economy. But it’s just a different position, competitively. We just have to make our story heard, and if somebody wants to have a global perspective, then hopefully they apply to INSEAD.

    Can you give any examples of what you think applicants fail to see about INSEAD?

    I think it’s the global perspective. What is different about INSEAD? Well, the one-year program is obviously different than a two-year program. That’s easy to see. But it’s difficult, for example, to see that, from an academic point of view, it doesn’t make any difference. Because people don’t do the calculation and they see two years as two years, but actually, academically, it’s the same duration.

    We look at the number of hours we have in the classroom and it’s very similar to the top U.S.
    schools. With some we have more, and with others we have less. I have heard this before, that you cannot teach these things in one year. Well, actually you can. And I think that we do. But at the end of the day, the ultimate test is whether students get jobs or not. And our students are placed at top companies around the world. So I think it’s difficult to see that you are not losing anything academically, but you’re gaining this global perspective — this diversity, which is becoming more and more important. It’s difficult to communicate this message sometimes.

    This clearly hasn’t had much influence on job placements, but what can you say for students who are considering INSEAD but are also looking for an internship? The internship is an important aspect for many students entering the two-year model.

    That’s true, but we also take older students. I think for younger students it’s more important that for ones that are at a different level. We have increased the age to 29 for two key reasons. One is that because of the lack of internship, they have to be able to get that job with just the academic side. The second reason is when they come with more experience and knowledge, we give them academically 90% or 100% of what American schools give them. It’s very intensive. And if you have not heard of strategy and you have not done things in business sufficiently for a long period of time, it could be quite confusing. That’s how we’ve tried to compensate with a lack of internship.

    What is the best advice you have for applicants considering INSEAD and other top schools?

    I think the advice is, think about your aspirations, your career, what you want to do. Schools in the U.S., again, have their strengths. We have our strengths. INSEAD has not only the global, which we have discussed, but INSEAD has always been entrepreneurial and has been more so in recent years. If you look at the PitchBook ranking that came out a few weeks back, it’s interesting that our alumni — many of them are outside the U.S. — have managed funds that are comparable to what the top U.S. schools have raised in the past five years. INSEAD is becoming more and more focused on entrepreneurship. But what I think is really important is this self-awareness and leadership development, which will be a thing that is helpful to them throughout their careers. It’s not just about getting a job.

    What are some of the toughest challenges you anticipate facing in the next few years?

    I think that everybody is fighting for two things. One is students and the other is faculty. So the toughest challenge for us is to keep INSEAD an attractive proposition in this competitive environment. To show that the school is continuously innovating and helping students get their jobs. For us, the big issue is that in terms of the amount of money you have to pay for the MBA, we’re still probably the cheapest school in the top 10 — but the amount is still substantial, and the U.S. schools are competing with more scholarships. To me, this is a very big challenge. We are focusing on building a very robust scholarship program. Today 20% of the students receive some form of financial aid. But the idea is to get to 50% at least. And that’s very tough.

    And then for faculty, I don’t think we have that much trouble with maintaining faculty. We have professors that are very productive and engaging. In academic journals, they’ve published more than many of the other top schools. We do have the environment but one of the big risks is if this environment changes and we start losing some of the professors. We’re not there yet, it’s more like a risk, and hopefully we’ll never be there.

    If I think about another risk, obviously digitalization can be something that can come up. And probably some schools are suffering from the availability of online courses. For us, digitalization is a huge benefit. Because now we can take some of the material out and use it as a digital offering before they come to INSEAD, which is what we’re doing with the new curriculum. So we can free up some more time during the year. For us, it will allow us to do things that are value-adding and good for the students. But for challenges, not in the near future, but in the medium turn, it could be companies or organizations that offer some courses or building out a portfolio of courses that will not necessarily replicate an MBA but that could be viewed as a certificate program with five or six courses at the job that I want. That’s possible.

    What are some of the most important lessons you’ve learned as dean?

    I think the number-one lesson is, communication is key. I think communication is key in moments when you need to change something. People need to understand why you are doing it. And the second reason communication is key is, in our case, spreading the word of INSEAD is not where it should be. It’s so interesting that today, even at the reunion when we had 500 people in the room — people that are obviously passionate about their school and are coming back and love the school — but when I show them what the school has done in the last 10 years or so, they are very surprised. If you go year after year surprising people in a positive way, it means, on average, the information you have is not out there. People don’t know what is happening in the school. And that’s something that I’ve learned is very valuable. So we’re focusing now on brand awareness, branding exercises, communication, (and) we’ve started an alumni magazine that gives stories about the school and alumni.

    And it’s interesting that what I’ve learned is, if you try to understand the demands of the students and alumni, if you try to understand what they’re after when they come to INSEAD or when they reconnect to the school, I think you can achieve a lot of great things. I think that we see some of these things happening. And sometimes it’s difficult, what they want. Sometimes it’s not possible. But when you engage in a conversation, then you either convince them it’s not possible or they convince you it is possible. So engaging in conversations and listening is very valuable.

    If you could change one thing about graduate business education, what would it be and why?

    I don’t want to continue to sell our curriculum change, but I think we need to continue to focus more on personal development. About the emotional component in working with other people. About psychological issues. About building character and being aware of what your values are and how you align your decisions with your values. If you build these things at this stage, you will see fewer corporate scandals and fewer issues. Because they will be able to check themselves. I think today, most of the business schools are providing excellent quality in terms of competence building and analytical skills. We have created so many exercises — cases, simulations, and so on — that help them develop these skills, and they are absolutely crucial. They have to be there, no doubt.

    But now I think we also have to increase our focus on character building, awareness, and reflection. And I think that’s not only true for the MBAs. This is something that we learn from executives and now we are bringing it to the MBAs. We see executives make a decision, start implementing, practice, and move on. You never have the time to stop and reflect and look back and say, “OK, I made this decision, we implemented this, that was wrong, that was right, now let me think about how to do the next one to avoid these mistakes.” This reflection on the practice you have had in the past is still a muscle that many people do not train enough.

    Any other final thoughts?

    I would add that to the American applicants that are considering business education, probably the most important thing in the process of decision making is to talk to alumni from different schools. To see how this alum talks about the school. What is positive about the school? This is key. Most alumni will be selling their school, of course, but you have to have the filter to figure out what part of the sales pitch is relevant for you. So I would encourage them to find INSEAD alumni in the U.S. and learn what INSEAD gives.

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    What do Arianna Huffington (Huffington Post), Dietrich Mateschitz (Red Bull), Elon Musk (Tesla, SpaceX), and Sergey Brin (Google) have in common? Apart from their success as entrepreneurs, they all share one distinct characteristic: extensive cross-cultural experience. Huffington grew up in Athens and studied in London before starting her career as a politician and media entrepreneur. Mateschitz spent considerable time overseas as a marketing salesman prior to founding Red Bull. Musk migrated from South Africa to the U.S. as young adult. Brin left the Soviet Union with his family after facing growing anti-Semitism and moved to the U.S., where he later cofounded Google.

    Their stories are prominent examples of a widespread pattern. In the U.S., immigrants are almost twice as likely to become entrepreneurs as native-born U.S. citizens. Immigrants represent 27.5% of the countries’ entrepreneurs but only around 13% of the population. Similarly, about one-fourth of all technology and engineering companies started in the U.S. between 2006 and 2012 had at least one immigrant cofounder. And this pattern extends beyond the U.S. — data from the 2012 Global Entrepreneurship Monitor showed that the vast majority of the 69 countries surveyed reported higher entrepreneurial activity among immigrants than among natives, especially in growth-oriented ventures.

    Research has suggested that selection and discrimination effects may be driving this phenomenon. It appears plausible that entrepreneurial individuals are more likely to migrate and that immigration policies in many countries favor highly motivated and capable individuals. Additionally, discrimination against immigrants in labor markets may exert pressure on them to seek self-employment.

    In a recent study, we investigated a different explanation: Cross-cultural experiences may increase individuals’ capabilities to identify promising business ideas. By living in different cultures, they encounter new products, services, customer preferences, and communication strategies, and this exposure may allow the transfer of knowledge about customer problems or solutions from one country to another. By applying this kind of arbitrage, a temporary or permanent migrant can decide to replicate a profitable product or business model available in one country but not in another. Successful companies such as Starbucks (inspired by coffeehouses in Italy) and the German online retailer Zalando (inspired by Zappos) exemplify the potential of this strategy.

    Cross-cultural experiences may also stimulate creativity. Interacting with two or more cultural contexts can help immigrants combine diverse ideas, solutions, and customer problems in order to create something entirely new. This principle is illustrated by the origin story of Red Bull. When Dietrich Mateschitz traveled to Thailand in the 1980s, he observed the popularity of a cheap energizing drink called Krating Daeng among truck drivers and construction workers. Finding that it helped ease his jet lag, he decided to license the product and sell it in Austria under the name Red Bull Energy Drink. Rather than simply importing the product, Mateschitz realized the opportunity to combine the newly obtained knowledge about a product (a drink popular among truck drivers) and the knowledge about his home market (conservative beverages market, growing clubbing scene) into an entirely new business idea. By adapting size, taste, and brand, he created the first energy drink for the alternative clubbing scene — something previously unseen in the Thai and Austrian markets.

    We conducted two experiments to find evidence that these effects can make immigrants more entrepreneurial. First, we analyzed the effects of short-term cross-cultural experiences in a longitudinal field experiment. We tested the entrepreneurial capabilities (i.e., the ability to identify profitable business opportunities) of 128 students before and after a semester of living and studying abroad by asking them to come up with business ideas in the context of media and food retailing. We did the same for a control group of 115 students that continued their studies at their home university.

    The business opportunities they came up with were rated by four venture capitalists and industry experts blind to the source. Results showed a clear pattern (see Figure 1): The group that gained cross-cultural experience received significantly higher VC and expert ratings (+17%) on their business ideas after their semester abroad, while the ratings of the control group’s business ideas actually declined slightly (-3%) at the end of the semester.

    We also conducted a laboratory experiment in which we tested these same effects with a sample that had long-term cross-cultural experiences — 96 migrant entrepreneurs in Austria. We randomly assigned them to two groups. Applying a technique called priming, we asked the experimental group to recall particular experiences while living abroad, thereby activating the memories and associations connected to their cross-cultural experience. The control group was asked to recall neutral experiences that were not related to cross-cultural memories. Both groups were invited to come up with business ideas that were then rated by experts. The business ideas of the group with activated cross-cultural experience were rated significantly higher (27%) by experts than the ideas of the control group.

    In order to better understand this phenomenon, we interviewed all 96 participants after the experiment, asking them to describe how they generated ideas. These interviews were coded independently by two raters. Results showed that many participants had indeed applied knowledge arbitrage (e.g., “Innovative shop concepts such as [name of Asian supermarket chain] are missing in Vienna”) and creative recombination (e.g., “In France, I have seen supermarkets that were so big that all employees were wearing rollerblades….In my concept I also tried to use space as design concept to impress”) to identify profitable business opportunities.

    The finding that cross-cultural experiences increase opportunity recognition capabilities has clear implications for businesses, entrepreneurs, and policy makers. It highlights the value of cross-cultural work experience or a migration experience for entrepreneurs and entrepreneurial companies. Entrepreneurs and managers can actively seek to build such experiences by living abroad and systematically comparing what they observe in other markets. In multinational businesses, human resource management tools such as expatriate assignments or international job rotations can help build opportunity recognition skills. To make these tools even more effective, managers can complement them with entrepreneurship training prior to an international assignment. Furthermore, priming instruments like the ones in our experiments could be used while living abroad and afterward to spur business ideation.

    For companies, ignoring the positive effect of cross-cultural experience on opportunity recognition may be harmful. If expatriates with good ideas receive no chance to exploit them within a company, they might choose to do so outside of it. Previous research has identified that many expatriates choose to leave their organizations soon after finishing an overseas assignment, when they suffer from a lack of promotion opportunities, career counseling, and status. Our results suggest that some of them might do this in order to exploit opportunities to become entrepreneurs.

    Implications of our research also extend to the field of immigration policy. The United Nations estimates that there are over 240 million temporary and permanent migrants and refugees worldwide. Our results help explain the above-average entrepreneurial activity of this group and highlight the positive effects that immigration can have on an economy. We show that migration does not need to be a zero-sum game or a “war for talent,” with migrating entrepreneurs increasing entrepreneurial activity in one country at the expense of another. Instead, migration can help nurture entrepreneurial abilities by fostering the learning and application of cross-cultural knowledge that helps someone identify profitable opportunities.

    Since immigration is increasingly seen by some people as a threat, the insight that more immigration may result in an overall gain in entrepreneurial activity may be a useful reminder of the opportunities associated with migration. It suggests that public money may be better spent on building incubators for migrant entrepreneurs than on building border walls. 

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    A Microsoft perspective from  Brad Smith Microsoft’s president and chief legal officer

    Like so many people across the country, we woke up in Redmond, Washington this morning thinking about yesterday’s election. And like so many Americans, regardless of who we supported through our vote, we strongly share the view that this is a time for the nation to come together. Every president-elect deserves our congratulations, best wishes and support for the country as a whole. The peaceful transition of power has been an enduring and vital part of our democracy for over two centuries, and it remains so today. As a company, Microsoft joins many others in congratulating President-elect Donald J. Trump and Vice President-elect Mike Pence.

    As a company, we also look forward to working with the new administration and Congress on issues of common concern. As we think about the future, we know we don’t have all the answers, but four issues rise near the top as we think about the country and information technology.
    First and foremost, the vote yesterday registered a strong concern about the plight of those who feel left out and left behind.

    In important respects, this concern is understandable. In recent months we’ve been struck by a study from Georgetown University. It shows that a quarter-century of U.S. economic growth under Democrats and Republicans alike has added 35 million net new jobs. But the number of jobs held by Americans with only a high school diploma or less has fallen by 7.3 million. The disparity is striking. The country has experienced a doubling of jobs for Americans with a four-year college degree, while the number of jobs for those with a high school diploma or less has fallen by 13 percent.[1]

    We know we have a lot to learn, but we believe this makes one conclusion abundantly clear:  in a time of rapid change, we need to innovate to promote inclusive economic growth that helps everyone move forward.  This requires a shared responsibility among those in government, across the private sector, and by individuals themselves.

    As we’ve had the opportunity to learn more, we’ve concluded that new technology tools can play an important role.  This was part of the conviction that led Microsoft to decide earlier this year to acquire LinkedIn, a deal that has already been cleared to close by regulators in the United States.  LinkedIn is a good example of what one increasingly sees among both tech companies and tech-based non-profit groups.  New technology services and tools help individuals develop new skills and connect with new jobs.

    As we look to the future, these can better help more people develop so-called middle skills – the types of technical skills that can ensure that those with less than a college degree can not only learn valuable new skills, but obtain the certifications and credentials that will be valuable in the workplace.  And we believe that new data tools such as LinkedIn’s Economic Graph can serve even more cities and states to help those in government match their worker training and economic development resources with the strongest opportunities in the market.  These are but a few of the roles where new technology can help.

    We also believe that these issues represent the next frontier for innovation in public policy.  We’re enthusiastic about new potential initiatives at the federal and state levels that can promote broader education and training, bring labor laws into the 21st century, and ensure portable benefits and a stronger safety net for the tens of millions of Americans that are working part-time, acting as an independent worker, or participating in the expanding tech-based gig economy with companies such as Uber and Lyft.  In short, while the problem is clear, potential solutions are manifold and more than anything, we need to come together to pursue them.

    Second, as a company that does business around the world, we believe there’s a clear opportunity to invest in infrastructure.  As the American Society of Civil Engineers concluded in 2013, our water pipes too often are too old, our highways too often are congested, and our bridges too often are deficient.  We don’t claim to be experts in the field, but we know a traffic jam when we see one, in part because most days around Seattle we sit in one.  It was encouraging to see both presidential nominees endorse new infrastructure investments, and we believe that new data analytics and cloud technologies can contribute to these improvements.  We especially appreciate the role that broadband and computing infrastructure can play in creating broader economic opportunities, perhaps especially in areas of higher rural unemployment.

    Third, as we think societally about these new opportunities to address those who have been left behind, it’s critically important that we appreciate the continuing national strengths that serve the country so well.  We’ve benefited from the opportunity to see so much of this firsthand.  We invest over $12 billion a year in research and development, as much as any other company on the planet, and over 85 percent of this work is done in the United States.  Over a third of our engineers have come from other countries – 157 countries, in fact.  We have employees from every race, ethnic background and religion.  If there’s a language spoken on the planet, there’s a good chance that it’s spoken by an employee at Microsoft.  And we’re committed to promoting not just diversity among all the men and women who work here, but the type of inclusive culture that will enable people to do their best work and pursue rewarding careers.

    We know that this is the only way we’ll fully succeed as a company.  And we believe it’s the only way we’ll fully succeed as a country.

    So while we all need to do more to support those who haven’t moved forward in recent years, we share the conviction that this is a time to bring the entire nation together.  And that means everyone, with an appreciation for the spirit of generosity and mutual respect that has often represented the best of the American spirit.

    Finally, it will remain important for those in government and the tech sector to continue to work together to strike a balance that protects privacy and public safety in what remains a dangerous time.  As this election demonstrated, technology now plays a ubiquitous role in our daily lives.  But people will not use technology they do not trust.

    We’re committed to developing technology that is secure and trusted, both for Americans and for people around the world.  We literally have thousands of employees who make this their focus and priority.  And we know that we’ll benefit from stronger government policies as well.  That’s why we’ve not only advocated for clearer and more modern U.S. laws, but have filed lawsuits four times in the past three years against the current administration, standing up for what we believe are the vital rights of people both here and abroad.  As we’ve won the cases we’ve brought, we’ve been reminded of one of this country’s greatest strengths, its strong Constitution, independent judiciary, and the overarching rule of law.

    Between now and Jan. 20, we’ll all participate in what is perhaps the most defining aspect of our democracy, the peaceful transition of power from one political party to another. Today is a day that finds some Americans celebrating and others commiserating about the electoral result.  But it’s also a day that reminds us of what makes the country special.  It’s a day that provides an opportunity to look beyond disagreements and divides, identify bold solutions to common problems, and find new ways to work together. It’s a good time for all of us to listen and to learn from each other.

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    Here are a few things we know that are wrong with post-high school education in the United States: It’s too expensive; access to quality schools is limited — especially if you’re a nontraditional student or have to pay for it on your own; and, our ideas about college reflect a bygone era. Sara Goldrick-Rab, a professor of higher education policy and sociology at Temple University, may be able to help with some of these challenges. She’s a nationally renowned expert on higher education, and was the lead author of  the Brookings Institution’s 2009 white paper “Transforming America’s Community Colleges,” which significantly influenced President Obama’s American Graduation Initiative. She is also wrote Paying the Price: College Costs, Financial Aid, and the Betrayal of the American Dream. She joined the Knowledge@Wharton Show on Sirius XM channel 111to talk about the broken U.S. college education system.

    An edited version of the transcript of the conversation appears below

    Knowledge@Wharton: You followed the college careers of 3,000 students over six years. What did you learn?

    Sara Goldrick-Rab: A lot, particularly because we didn’t meet these people just one time. We followed them repeatedly over time, and we surveyed them and looked at their administrative records and we talked to them.

    First, we learned how insanely broken the financial aid system is. A lot of folks talk about the FAFSA (Free Application for Federal Student Aid). The FAFSA’s a small American bureaucratic tragedy all its own … and it needs reform. But there are so many issues even after the FAFSA, including that students don’t know that they have to refile that darn form year after year. They don’t know that they have to take a certain number of classes and get a certain number of grades and perform in a certain way for them to be able to keep the money year after year.

    And frankly, the other thing that they don’t know is that the money that’s delivered after the FAFSA is way short of what they will need to be in school. Even people whose families make virtually nothing are faced with having to borrow, and they’re still short. So they don’t make it.

    Knowledge@Wharton: It’s staggering that it’s 2016, and we know young people need college educations as a way to build their careers, yet we have so many things impeding that. These issues have slipped through the cracks time and time and time again.

    “We made a huge mistake. We told people to go to college…. But we failed to pay attention to the financing system.”

    Goldrick-Rab: Look, we made a huge mistake. We told people to go to college. That was the right thing to do. We prioritized education. That was the right thing to do. But we failed to pay attention to the financing system. It’s as if we just thought that someday, everybody would go to college, and we magically wouldn’t have issues paying for it. Of course we have issues paying for it. And it’s from this lack of attention that we’ve gotten ourselves into this serious problem.

    Knowledge@Wharton: I saw the interview you did with Trevor Noah, and you brought up something interesting: We’ve got kids that are going to community college right now who really don’t have a home right now. How does that happen?

    Goldrick-Rab: It happens many different ways. One way is that you go to college and you think you’re going to get enough money not only to cover your tuition and fees, your books and supplies, but your housing costs. And the numbers literally don’t add up. So you say, “Well, I’m going to work even though I took the loans. I’m also going to work.” But you can’t get enough work.

    Employers out there today are not exactly kind to undergraduates. They don’t pay well, and they don’t give them enough hours. The numbers just don’t add up.

    Another way is that, frankly, people from very low-income families are going to college now at higher rates than before. It may have been that they experienced homelessness when they were a high school student, and they know the only way to prevent homelessness in the future is to go to college. It’s just that it keeps happening to them, and we don’t have any resources for them the way that we do when they’re in high school.

    Knowledge@Wharton: What about on-campus housing, which some colleges and universities have. Could that be part of the solution in terms of setting something up to help people out when they’re in this type of situation?

    Goldrick-Rab: Yes, we have to do much better. I think it will probably surprise your listeners though to know that only 13% of undergraduates today live on campus. So for the most part, the campus residency is not the story. Most people are commuting to school, and they live in their local areas. But if we stereotype them and say, “Well, they live with their families, so their families are paying their rent,” we’re flat out wrong. These days, families don’t have enough money to support other adults living in their houses, and they often charge them rent.

    Knowledge@Wharton: What are some of your other concerns?

    Goldrick-Rab: We’ve prioritized this idea that you should be able to choose any kind of college you want. What we haven’t done is very much to ensure that the colleges that you can choose — including using taxpayer-funded dollars — actually are good schools. We have a lot of schools out there that, frankly, are not giving people an education that’s worth anything in the labor market — or any other place. Yet they’re able to accept financial aid and student loans and all these sort of things, and pad their budgets with them, and pay their CEOs well. That needs to stop. That’s something where a consumer ought to be able to say, “If federal dollars are going to that place, I ought to be able to assume it’s a decent place.”

    Knowledge@Wharton: You’re talking about for-profit schools?
    Sponsored Content:

    Goldrick-Rab: Yes, the for-profit schools. And then, there are some private institutions that are not-for-profit as well that are not doing so well. We could raise some questions even about places like where we’re sitting here today — places with very big endowments that, frankly, are still charging a lot. I met a young man the other day who graduated from the Community College of Philadelphia. He’s got no income. He’s on disability. He went back to school at 35 years old. He got his associate degree. He was in the honors program. He was in journalism.

    He did all this great stuff. He got into Penn. Penn sent him a bill for his first year of college, this guy who makes nothing and is on disability; he was offered a package of $42,000 a year. [Tuition plus room and board and books at Penn runs around $67,000 a year, making even that level of a scholarship offer potentially unaffordable]. Something is wrong here when you have an endowment like this. This is a great school. I went to this school. But I think the alumni of places like this ought to be standing up and saying, “We can do better than this.”

    “Most people are commuting to school… But if we stereotype them and say, ‘Well, they live with their families, so their families are paying their rent,’ we’re flat out wrong.”

    Knowledge@Wharton: We also need to really look at the types of things we’re teaching in some cases. Some of the degrees that kids are going for don’t match up with the real world.

    Goldrick-Rab: Yes, I think this is actually one of the ways in which the new economics of college are changing what college even means. We used to have the freedom to pick what we wanted to major in. Sometimes, people majored in English, and it taught them how to write, it taught them good things, and they went on to do really well in business. That freedom is gone now because of these college prices. Now, we’re going to have 18-year-olds having to ask themselves, “What do I want to be for the rest of my life, so that I get a degree that I can pay off these loans with?”

    That’s going to lead to a lot fewer people who know how to write and do those things, and I think down the road, we’re going to be very upset about it. I think the richness of the variety of majors that students have engaged in, in this country, has been part of why this country has done so well.

    Knowledge@Wharton: The issue of college affordability has been getting discussed in the presidential race, with some candidates suggesting we should find a way to be able to provide free college education at some level, whether it be through community colleges or more broadly. Where do you stand on this issue?

    Goldrick-Rab: I’ve been working very hard on this. I don’t think it’s a pipe dream. I do think it’s a lot more complicated to do it well than people are letting on. The most important thing, though, is that we have a very serious conversation about what we’re going to do finally. Enough talking about it. It’s time for action. And it’s very disturbing that in the recent debates, no mention of college affordability came up. It seems like it might have disappeared from the radar.

    If the next president doesn’t take this head on, then we’re going to have a really serious problem. We’re not going to be able to save our way out of this. No amount of college savings is going to be able to help these families today cover the bills for little kids like those I have.

    Knowledge@Wharton: Only a minority of people in this country who work 30 or 40 years of their life even have enough savings for themselves, let alone enough to try to help put their kid through college.

    Goldrick-Rab: And very few universities provide any benefits for their employees. There’s been a huge change in universities. Most universities are using adjuncts and contingent labor. They’re not providing them with these benefits. When the question comes about educational quality, that’s the question.

    If you’re going to send your kid to school and you’re going to pay for it, you want to have faculty there who are committed and able to spend time with your children, which means a move back to full-time faculty who have something to count on, so that you can have good teachers just like you have in K-12. In a good free-college model, we wouldn’t provide the money to make college free without stipulating that the college receiving that money would provide that kind of educational experience.
    “There’s real food insecurity on our campuses, even while some schools are building sushi bars.”

    Knowledge@Wharton: What surprised you in the data?

    Goldrick-Rab: One of my graduate students came back and she was really upset. And I said, “What’s going on?” And she said, “Well, I asked the question we always ask,” which is a really straightforward, open-ended question: “How’s it going in college?” And the student looked at her and she said, “It’s not going well.” And she said, “What’s your biggest challenge?” She said, “Eating. I don’t have enough food to eat. When other students are eating in the classroom, it distracts me because I’m so hungry. I wish that I had enough to eat so I could focus on learning.” This was staggering to me.

    I went, “Wait, that’s not a textbook issue. That’s not an iPod issue.” So we went out there. I mean, I have to admit being a little skeptical. Maybe she was one person. But I’ve now done about four studies of this question with my team, and this thing is happening. There’s real food insecurity on our campuses, even while some schools are building sushi bars.

    Knowledge@Wharton: How do you correct that?

    Goldrick-Rab: We certainly do have enough food in this country. It’s just how we distribute it and how we price it. Look, we’re sitting in the city of Philadelphia, where every single kid in the city, whether or not their income deserves it, gets a free or reduced price lunch at school. We make sure they have milk, we make sure that they get fed. We don’t do that when they get to college.

    If they transition from one of our city’s high schools to the Community College of Philadelphia, they get cut off. And we’re surprised that they’re not learning?

    Knowledge@Wharton: Why is there this failure to connect one with the other? Do we just assume that once you’ve graduated high school, you can handle yourself? You can run your own life?

    Goldrick-Rab: Perhaps. But I also think it’s because the average person still imagines the average college student as being somebody walking up and down an ivy-covered Locust Walk, essentially. I think they tend to think of them as residential, four-year students with parents who are paying for things. That is not today’s undergraduate. They’re not even kids frankly. Their average age is between 25 and 30 years old when they start college. They’re mainly at community colleges and state universities. These real life things continue to happen to them. And I don’t think we need to say that’s giving away anything to help them. It’s making a good investment so they get an education, and they don’t need our support after they do.

    Knowledge@Wharton: Obviously, we know that there are more and more people who are going out into the workforce first, or starting college, then going to get a job, and then going back later. It’s become more the norm.

    Goldrick-Rab: It has, and I think it’s actually a great thing. This country gives second chances in a way that other countries don’t. And we have made more progress in that way. We don’t say to somebody, “Yeah, you’re 30 years old and it hasn’t happened for you, so your life is over.” We open our doors. That’s a great thing. But we have to actually resource it. This stuff doesn’t come free.

    Knowledge@Wharton: Is it a concern for you that not only is this not really a topic that’s brought up by the presidential candidates, but that we have enough dysfunction in Washington, D.C., that this issue will likely … not really be pushed forward?

    Goldrick-Rab: I’m less pessimistic than I used to be about this, because we have made a ton of progress in the last couple of years. We saw a remarkable thing happen in January 2015 when President Barack Obama got up there and put the words “free” and “college” together in a sentence. That’s never happened before.

    Who thought that was going to happen? Not me — and I actually brought a plan to do that. We’re also talking about living expenses in a way that we never have. We’re talking about the fact that the rules for getting food stamps don’t align with the rules for being in college. We’re having a much more advanced conversation today than we were even two years ago.

    It took 80 years to get free public high school. I think our pace of progress is actually pretty good. What’s important is that we not only focus on things we can get done tomorrow — that’s very short-term thinking. Some of us at least need to be engaged in the long-term battle.

    I don’t know that you will get a free public university bachelor’s degree, or anything like that. But I think in the next 20 to 25 years at the most, we will see free public community college restored.

    Knowledge@Wharton: There are countries that believe that free college education, as a component of their systems, is something that benefits their economy.

    Goldrick-Rab: Most of those countries do things pretty differently than we do. One of those things is, they don’t let everybody go to college. They gate-keep a lot at the secondary level. Germany does this in spades. The tricky part here is that we want to send lots of people to college from all walks of life. We don’t want to have discrimination in who gets to go to college. And we want it to be really affordable. This is something we can do, but we have to give up something. I’m not actually saying money. I’m saying maybe, for example, just as in K-12 education, maybe we just pay for the public sector. That’s a discussion we’ve never had. Maybe we need to have it. Maybe we need to focus our resources on what we can afford to do, and stop prioritizing doing all the things while leaving everybody short.

    Knowledge@Wharton: The problem is, though — and tell me if I’m wrong in this — that we’ve got so many public institutions across this country, that that’s a lot of money to be talking about.

    Goldrick-Rab: If we take all the money we’re spending on the private institutions — you know, this is sacrilege, it gets people really angry, but I think we need to take a hard look and say, “Look, can we afford to keep doing this where we will finance any institution a student has ever wanted to go to? We’ll give them a voucher and they can take that voucher to that school,” even though the taxpayers are financing things that are not necessarily paying off. When this system began, we didn’t have all of those public institutions. We really needed those private institutions. It’s a completely different situation today.

    “I’m less pessimistic than I used to be because we have made a ton of progress in the last couple of years.”

    Knowledge@Wharton: The majority of institutions are providing quality education, and people are getting a good background heading into the real world.

    Goldrick-Rab: Absolutely, and that’s especially true when those institutions get the resources they need to succeed. People can say, “I can’t get my classes at my local community college.” All right. But when you pass a bond referendum, and you stop underfunding the college, and you actually finance the college, people do get the classes they need. This is a pretty straightforward thing. If we’ve put the money that was supposed to be spent in the public sector into the public sector, we would have better completion rates.

    Knowledge@Wharton: How much potential does online learning have to benefit this going forward?
    Goldrick-Rab: I think of online learning as primarily benefiting the people who are pretty advanced already in their education. I would like to see it as an option for people to complete the last year of their bachelor’s degree, for example. Maybe more graduate education should be moved online. But people are quite vulnerable during that first couple of years of higher education, especially if they’ve been out of school for a while. They really do need that face-to-face instruction, or at the very least, a hybrid model that still emphasizes making a connection with your teacher. Teachers matter, and they matter a ton to students. So I would hate to see us fool ourselves into thinking that online is going to replace face-to-face instruction.

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    New Delhi:  Will new notes which replace the demonetised currency find itself in circulation soon? Unlikely, if the capacity of all the currency printing presses in the country is taken into account.

    The latest calculation, based on capacities of the currency printing presses, shows that replenishment would take around six months.

    This is particularly true for the new Rs. 500 notes, whose printing, presumably, started after November 10. Till those are replenished in adequate numbers, the "currency pain" would not go away since Rs. 2,000 notes are difficult to exchange for lower denominations.

    However, enough of the new Rs. 2,000 notes may already have been printed, calculations show.

    The central government had demonetised Rs. 500 and Rs. 1,000 currency notes on November 8, sending the whole nation into a tizzy. Long queues outside banks have been a daily occurrence since then because enough currency notes are not available with them.

    New information gleaned from public sources show that the government may be too optimistic in claiming that "adequate amount" of money would soon be in circulation.

    That's because of the limited capacity of the printing presses in the country for such a sudden, huge job.

    There are four currency presses -- one each in Nashik (Maharashtra), Dewas (Madhya Pradesh), Salboni (West Bengal) and Mysuru (Karnataka).

    The first two are owned by the central government through the Security Printing and Minting Corporation of India Ltd. According to information available in the Finance Ministry's latest annual report, the yearly currency printing capacity of these two presses is around 40 per cent of the total in the country.

    The other two presses -- in Nashik and Dewas -- are part of the Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL), a wholly-owned subsidiary of the Reserve Bank of India (RBI). These two, comprising 60 per cent of the total capacity, can print 16 billion notes in two shifts per year, according to information available on BRBNMPL's website.

    In essence, it means that total capacity in the country would be 26.66 billion notes in two shifts. If all three shifts run, as the government says is happening now, the four presses would be able to print 40 billion notes a year, irrespective of the denomination.

    Now, according to the government, the total money in circulation -- before Rs. 500 and Rs. 1,000 notes were declared illegal -- was Rs. 17.54 lakh crore or Rs. 17,540 billion. Of this, 45 per cent was in Rs. 500 denomination -- equivalent to Rs. 7.89 lakh crore or Rs. 7,890 billion and 39 per cent in Rs. 1,000 notes amounting to Rs. 6.84 lakh crore or Rs. 6,840 billion.

    In other words, there were 15.78 billion notes of Rs. 500 denomination in circulation and 6.84 billion notes of Rs. 1,000.

    But if they are going to print Rs. 2,000 notes equivalent to value of the Rs. 1,000 notes declared illegal, that is, worth Rs. 6.84 lakh crore, they would have to print only half, or 3.42 billion notes.

    If the printing started in early September, as has been claimed by some printing press officials, they would need only a little over two months to meet the full requirement, even at 50 per cent capacity. In other words, they should have printed all the replacement needs of Rs. 2,000 notes till now.

    Further, how long will they need to print Rs. 500 notes, now that the machines would not be printing Rs. 2,000 notes? Assuming an 80 per cent run (remember Rs. 500 and Rs. 1,000 comprised 84 per cent of all currencies), the time taken for the new Rs. 500 notes, which began printing, presumably, on November 10, would be: 5.9 months.

    The rest of the 20 per cent capacity could be used for the lower denomination notes from Rs. 5 to Rs. 100.

    So, by April-end, one would presume, all the new notes would be in circulation. And, of course, the pain would be longer than the 50 days that Prime Minister Narendra Modi has mentioned.

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  • 11/18/16--19:19: Humans Decoded 11-19

  • Humans Decoded

    Lost and Found with “the Most Wondrous Map Ever Produced”

    The year Melinda and I started our foundation, President Bill Clinton convened in the White House some of the world’s great scientists to announce a huge milestone for humanity. Two rival efforts, one led by the National Institutes of Health and the other by a private company, had completed the first draft of the human genome map. “Without a doubt,” Clinton said, “this is the most important, most wondrous map ever produced by humankind.”

    Fast forward 16 years. With little public fanfare, geneticists have reached another super important milestone. While the human genome map gave us the ability to read all three billion letters of our genetic code, we now have the power to edit the human genome as well. Thanks in part to a chance discovery by researchers working to improve yogurt, scientists can now enter human cells, selectively snip out sections of code, and then incorporate new sequences permanently in the genome.

    Scientists have now launched early-stage clinical trials with these new genome-editing tools. These tools are generating a ton of optimism for diagnosing, treating, and curing human disease. Even before researchers successfully complete clinical trials in humans, genome editing will be put to good use in modifying plants and animals—all of which holds big promise for our foundation’s work to alleviate hunger and improve health in poor countries.

    Although I am excited about these advances, we have to approach them with caution. It’s one thing to reprogram the code that runs our computers. Reprogramming the code that runs our species is a very different thing altogether.

    As with any powerful new technology, genome editing will be attractive to people with both good intentions (reducing human suffering) and bad (causing it). Even just with respect to the former, the ethical questions are enormous.

    That is why I am so glad I read The Gene: An Intimate History, by Columbia University cancer doctor and researcher Siddhartha Mukherjee and recently had a chance to chat with him in person. He is the perfect person to guide us through the past, present, and future of genome science.

    I loved Mukherjee’s 2015 TED Talk and his brilliant book about cancer, The Emperor of All Maladies, which won the Pulitzer Prize in 2011. It must really tick off full-time writers that a doctor can win a Pulitzer in his spare time!

    In The Gene, Mukherjee once again shows his gift for making hard science easily accessible. He wrote this book for general audiences, because he knows that it’s not good enough for scientists alone to debate the huge ethical questions that their discoveries provoke. As he emphasized repeatedly in our conversation, determining the proper rules and boundaries for these technologies requires broad public discussion, debate, and consensus.

    Mukherjee makes The Gene accessible in a variety of ways. Like all good science writers, he offers creative metaphors to explain difficult concepts. He is also a beautiful storyteller. He uses that talent to weave in his own family’s history of mental illness, which I found incredibly touching.  And through stories, he introduces us to the key pioneers in genetics—from Gregor Mendel, who repeatedly failed the exam to teach high school science but later ushered in the modern science of genetics, to Francis Collins, the devout Christian motorcycle enthusiast who brilliantly led the public effort to sequence the human genome.

    My favorite part of the book was the final section, “Post-Genome: The Genetics of Fate and Future.” It does a great job bringing into sharp focus the difficult ethical questions that will become increasingly intense.

    Within 10 years, it will be possible for clinicians to use genome editing to help people with diseases caused by a single faulty gene, such as cystic fibrosis—an unquestionably ethical use of this new technology. But what about making the repair in egg or sperm cells to save people from developing these diseases later in life? This form of therapy could be highly effective, but it would mean that children born from these sperm or eggs would pass along their genetically modified genomes to their own children—altering the human germ line and crossing an ethical Rubicon.

    Altering the human germ line is not just a hypothetical possibility. Teams of researchers in China are racing to do so in human embryos. While these researchers are using non-viable embryos, a Swedish developmental biologist recently announced that he is editing healthy, viable human embryos. He says he will not let the edited embryos develop past 14 days, but there’s no telling what other scientists may be planning. “By the time this book is published … the first ‘post-genomic’ human might be on his or her way to being born,” Mukherjee reports.

    As I read The Gene, I came up with long lists of ethical questions of my own. For example, what if a prenatal test told you with a high degree of certainty that your child will have an IQ of 80 unless you do this little edit? What if a private IVF clinic offered its patients a little enhancement to their fertilized embryos to boost children’s likely IQ from high to very high? This could exacerbate inequities that are already a big problem—especially if this technology is available only for wealthy people. What about a series of edits that could dramatically reduce the incidence of disorders on the autism spectrum? Wouldn’t that mean reducing human diversity in dangerous ways—perhaps even eliminating the possibility of a future Alan Turing, the brilliant computer pioneer who helped break Germany’s Enigma code during World War II?

    Technology is amoral. It is neither good nor bad. It is up to all of us—not just scientists, government officials, and people fortunate enough to lead foundations—to think hard about these new technologies and how they should and should not be used. Reading The Gene will get you the point where you can actively engage in that debate.

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    Agra-Lucknow Expressway saw a big-bang inauguration today with the landing of 8 IAF (Indian Air Force) jets on India's longest greenfield expressway!

    Four Mirage 2000s and four Sukhois of the IAF made a terrific and spectacular landing on a select stretch of the Agra-Lucknow expressway, marking a first for the inauguration of a highway in India.
    According to the UPEIDA, the development authority behind the expressway, a 2-km stretch on the Agra-Lucknow Expressway has been built to facilitate landing and take-off of fighter jets in "war-like situations". The exercise is aimed at testing the quality of build of the expressway, and would also go a long way in aiding the Defence Ministry's plan to use highways and expressways as possible landing and take-off strips.

    The Agra-Lucknow expressway is Uttar Pradesh CM Akhilesh Yadav's pet project and his major pitch to showcase his government's focus on development.

    Apart from the stylish inauguration of the expressway, one of India's largest infrastructure projects is noteworthy for many reasons. According to the UP government the 302-km expressway will help cut down the time between Agra and Lucknow to just 3.5 hours, from the current 7 hours. Moreover, the expressway is expected the reduce the road travel time between Delhi and Lucknow to anywhere between 5 to 6 hours!

    The Agra-Lucknow Expressway has a design speed of up to 120 kms per hour. It will have automatic traffic management systems aimed at reducing road accidents and helping even at the time of fog. The six-lane expressway is expandable to 8-lanes.

    Reports suggest that the bridges and underpasses have been made 8-lane to avoid traffic congestion and bottlenecks once the expressway is expanded to 8-lane. The expressway has an 8-lane bridge across the river Ganga. This will connect Kanpur and Unnao.

    The Agra-Lucknow Expressway will be connected to the famous Yamuna Expressway via an Agra Ring Road. This will help provide the requisite connectivity to the national capital of Delhi and NCR areas like Noida.

    According to the UP government, the objective of the Agra-Lucknow Expressway is to ensure development of nearby areas, provide a fast-moving corridor that allows seamless travel, reduce the carbon footprint of vehicles that travel between the two cities, help farmers to expand reach of their products to larger cities, and attract investors in the state.

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    A small shop owner in Kerala shaved off half head and vowed not to grow his hair until Prime Minister Narendra Modi is voted out of power. This is in protest against the demonetisation drive announced by Modi. Here's his heart wrenching story.

    Prime Minister Narendra Modi's overnight demonetisation drive, scrapping of Rs 500 and Rs 1,000 from the financial system of India on November 8, came as a shock to many. It would be wrong to say that the drive hit only those who were hoarding black money. Reports suggest that millions of lower income class people were severely hit by the move; while some struggled to feed their children, others -- daily wage workers -- struggled to get work to meet their daily expenses. There are also people, without bank accounts, who had to let go of liquid money they had saved over the years, working very hard.  

    One such man is 70-year-old Yahiya, Yahikkakka for his customers, who runs a small hotel and tea shop in Kerala's Kollam.

    Dr Ashraf Kadakkal, assistant professor at University of Kerala, made a Facebook post last night about the old man, narrating how the demonetisation drive hit him, and why he shaved off half his head in protest, and why he vowed not to grow his hair until PM Modi is voted out of power.

    Titling his post "Mann Ki Baat from a small hotel owner to a former tea vendor," Ashraf shared the story of Yahikkakka. Here's a close translation of his Facebook post. 

    "My name is Yahiya. Peers call me Yahi, others prefer calling Yahikkakka. I am nearly 70 years old, a native of Kadakkal Mukkunnam in Kerala's Kollam district. I live with my wife and two daughters.
    When I realised I cannot marry off my daughter from what I make from climbing coconut trees and working in farms, I sold everything I had and went to the Gulf. Nothing but a life of suffering awaited me there, a poor, uneducated man. I came back with whatever little I made. With that money, and a bank loan from Kadakkal Co-operative bank, I got my daughter married.

    I found a new way to sustain myself and family by starting this RMS fast food joint.

    I handle the entire hotel myself, from cooking to serving to cleaning. So I chose to wear a nightie. My customers enjoy the tasty beef and chicken fry I serve from 5 PM till midnight, and stay entertained by what they consider a ridiculous attire for a man. Had I been running this store in Gujarat and Madhya Pradesh, I would have been hanged.

    I was living, facing one day at a time, till Prime Minister Modi announced the demonetisation of Rs 500 and Rs 1,000 currency notes.

    I had Rs 23,000 in cash, all in the demonetised notes. I tried my best to get it exchanged from nearby banks, stood in queues for two days. On the second day, blood sugar level dropped and I almost collapsed. Some Good Samaritans helped me to a government hospital.

    Other than the loan account at the co-operative bank, I don't have a bank account. Since all transactions at co-operative banks were frozen, I realised I cannot get it deposited anywhere.
    How many days should I stand in queues to get the money I saved, my money, the money I made working hard for hours straight over the years, deposited?

    When I got home from the hospital, I lit my choolah and burnt the entire Rs 23,000 in it. I then went to a nearby barber shop, shaved off half my already bald head.

    I vow to grow it back only when PM Modiji, the man who, in a jiffy, burnt all my hard work and savings into ashes, is voted out of power and this country is saved.

    This is my pledge and my protest."

    Dr Ashraf ended his Facebook post saying, "Dear Yahikkakka, sorry for treating you like a clown all these years. Your protest is so powerful and meaningful that the bandh the strongest party in our state is conducting tomorrow."

    Talking to India Today, Dr Ashraf said, "Yahikkakka reads newspapers regularly. He has a strong stand on everything. He went to the Gulf selling whatever he had but life was hell there too. He returned to start this thattukada (small fast food joint) where a lot of people come not just to eat but also to listen to his jokes and satirical commentary on current affairs."

    Ashraf also said, "Yahikkakka wears a nightie because he's comfortable in it. He asks why nightie is considered just a womenswear. He does not have an account in any other bank except a co-operative. He tried exchanging his money. When he failed he came home and burnt it and shaved his head."

    Here is Dr. Ashraf's original post in malayam...

    ഒരു (മുൻ) ചായ വില്പനക്കാരനോട്(?) ഒരു തട്ടുകടക്കാരന്റെ 'മൻ കി ബാത്'
    എന്റെ പേര് യഹിയ സമപ്രായക്കാർ യഹി എന്നും മറ്റുള്ളവർയഹിക്കാക്ക എന്നും വിളിക്കും. വയസ്സ് 70 നടുത്തായി, കൊല്ലം ജില്ലയിലെ കടയ്ക്കൽ മുക്കുന്നം സ്വദേശി, ഭാര്യയും രണ്ടു പെണ്മക്കളുമുണ്ട്.തെങ്ങു കയറ്റവും പാടത്തെ പണിയും കൊണ്ട് മക്കളെ കെട്ടിച്ചയക്കാനാവാതെ വന്നപ്പോൾ ഉള്ളതെല്ലാം വിറ്റു പെറുക്കി ഗൾഫിൽ പോയി. പഠിപ്പില്ലാത്ത എനിക്ക് അവിടെ വിധിച്ചിരുന്നത് ആടുജീവിതമാണ്. ഗതിപിടിക്കാതെ വന്നപ്പോൾ നാട്ടിലേക്ക് തന്നെ മടങ്ങി.കയ്യിലുള്ള സമ്പാദ്യവും കടയ്ക്കൽ സഹകരണ ബാങ്കിന്റെ വായ്പയുമെല്ലാം കൊണ്ട് മക്കളെ കെട്ടിച്ചയച്ചു. പുതിയൊരു ജീവിതമാർഗം കണ്ടെത്തിയതാണ് ഈ RMS തട്ടുകട. ഇവിടത്തെ വെപ്പും വിളമ്പുമെല്ലാം ഞാനൊറ്റക്കാണ്‌ ചെയ്യുന്നത്; അതുകൊണ്ടു വേഷം നൈറ്റിയാക്കി. വൈകിട്ട് 5 മുതൽ അർദ്ധരാത്രി വരെ രുചിയൂറുന്ന ബീഫും ചിക്കൻ ഫ്രൈയും എന്റെ 'കോമാളിത്തവും'ആസ്വദിക്കാൻ കടയിൽ ആളുണ്ടാവും. ഗുജറാത്തിലോ മധ്യപ്രദേശിലോ ആയിരുന്നെങ്കിൽ ബീഫിന്റെ പേരിൽ എന്നെ പണ്ടേ കെട്ടിത്തൂക്കിയേനെ. അങ്ങനെ ജീവിതം ഒരുവിധം തള്ളിനീക്കുമ്പോഴാണ് മോദിജീ അങ്ങയുടെ നോട്ടു നിരോധനം വന്നത്. എന്റെ കൈവശം ഉണ്ടായിരുന്ന 23000 രൂപ; എല്ലാം 500 / 1000 നോട്ടുകൾ മാറ്റിയെടുക്കാൻ രണ്ടു ദിവസം ക്യൂവിൽ നിന്നു,രണ്ടാം നാൾ രക്തത്തിൽ പഞ്ചസാരയുടെ അളവ് കുറഞ്ഞു കുഴഞ്ഞു വീഴാറായപ്പോൾ കണ്ടുനിന്നവർ സർക്കാർ ആശുപത്രിയിലാക്കി.സഹകരണ ബാങ്കിലെ പഴയ വായ്പ അക്കൗണ്ടല്ലാതെ ഒരു ബാങ്കിലും എനിക്ക് അക്കൗണ്ടില്ല. അവിടെ ഈ നോട്ടിടപാടു അങ്ങ് നിരോധിച്ചിരിക്കുകയല്ലേ അതുകൊണ്ടു എങ്ങും നിക്ഷേപിക്കാനുമാവില്ല.പാതിരാവരെ പുകയൂതി ഞാനുണ്ടാക്കിയ ഈ പണം മാറ്റിയെടുക്കാൻ എത്ര നാൾ ക്യൂ നിൽക്കണം. ആശുപത്രിയിൽ നിന്നും മടങ്ങിയെത്തിയ ഞാൻ അടുപ്പിൽ തീ കൂട്ടി ആ നോട്ടുകളെല്ലാം അതിലിട്ടു കത്തിച്ചു ചാരമാക്കി, അടുത്തുള്ള ബാർബർ ഷോപ്പിൽ പോയി എന്റെ കഷണ്ടിത്തലയിൽ ഉണ്ടായിരുന്ന മുടി പാതി വടിച്ചിറക്കി. എന്റെ മുഴുവൻ അധ്വാനവും സമ്പാദ്യവും ചാരമാക്കിയ മോദിജീ അങ്ങയെ ജനം എന്ന് താഴെയിറക്കുന്നുവോ ഈ നാടിനു എന്നൊരു മോചനമുണ്ടാവുന്നുവോ അന്ന് മാത്രമേ എന്റെയീ കഷണ്ടിത്തലയിലെ പാതി മുടി പഴയപോലെയാവുകയുള്ളു. ഇത് എന്റെ ശപഥവും പ്രതിഷേധവുമാണ്.
    എന്ന് യഹി എന്ന തട്ടുകടക്കാരൻ
    പ്രിയപ്പെട്ട യഹിക്കാക്കാ അങ്ങയെ ഈ നാൾ വരെ വെറുമൊരു കോമാളിയായി മാത്രം കണ്ടതിനു മാപ്പ്.
    നമ്മുടെ നാട്ടിലെ ഏറ്റവും വലിയ പാർട്ടി നാളെ നടത്തുന്ന ഹർത്താലിനെക്കാൾ എത്രയോ അർത്ഥവത്താണ് അങ്ങയുടെ ഈ പ്രതിഷേധം

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    The Effects of India's Currency Reform? 'Chaos' Say Analysts

    NEW DELHI — The sudden withdrawal of 86 percent of India's currency has left cash in short supply, retail sales stumbling and wholesale markets in turmoil.

    That's just the immediate fallout from Prime Minister Narendra Modi's surprise effort to stamp out corruption by making cash hoards in large denomination bills worthless. But what lies ahead could be even worse, some analysts say.

    "Basically, you've created chaos," said Steve H. Hanke, an applied economist at Johns Hopkins University in Baltimore and a global authority on currency policy. "India is a cash economy. It's not like Europe or the U.S. where everyone is running around with a credit card. That's not the world of India."

    "It doesn't look like this thing was thought through at all," he said.

    Every day or so, soothing assurances about India's overnight currency reform spill from the offices of top government officials.

    "Enough cash is available," Economic Affairs Secretary Shaktikanta Das said Thursday during a nationally televised press conference, as millions of people waited in hours-long lines. A few days earlier, the finance minister urged patience with what he called "a period of inconvenience."
    But the decision to ban India's highest denomination bills, 500 rupee and 1,000 rupee notes worth about $7.50 and $15, goes far beyond an inconvenience.

    India's economy has become one of the world's largest in recent years, but millions of businesses, and hundreds of millions of people, lack bank accounts and use cash to pay for everything from groceries to hospital stays to land purchases.

    The shadow economy — countless transactions hidden from the authorities — is believed to amount to about a quarter of the country's gross domestic product.

    The government used a similar demonetization in the late 1970s. But it failed to curb corruption, and the underground economy has grown immensely larger since then.

    Plenty of Indians do use cash transactions to hide their wealth and avoid taxes — less than 3 percent of the population pays income taxes — and the authorities occasionally arrest businesspeople or corrupt officials with currency hoards that can fill trucks. But plenty more people use cash because of habit, poverty or a lack of easy access to banks.

    So instead of just aiming squarely at wealthy tax dodgers, the demonetization is also hammering the poor, the working-class and small business people whose lives have been turned upside down during the transition to new currency notes.

    Across India, people are waiting in lines that often form hours before banks open and last well into the afternoon, though the government has limited most withdrawals and currency exchanges to a maximum of $30 a day.

    "It is unclear whether this exercise will achieve any lasting results other than having created a national economic crisis, destroying confidence in the national currency and unleashing tremendous suffering for ordinary Indian citizens," Rajiv Biswas, Asia-Pacific chief economist at HIS Global Insight, said in an email.

    "This will have a direct negative effect on retail sales and industrial output during the coming weeks," Biswas said.

    In worst-case scenarios, the effects of demonetization could last for years, driving the country into recession and pushing Indians to keep their wealth in more stable currencies, such as the euro or U.S. dollar.

    "When you don't trust a currency and you don't trust a government you start using foreign currencies," said Hanke. "That's what this is going to do, I think: People will not trust the rupee."
    Raghuram Rajan, the former head of India's central bank and one of the country's most respected economists, warned in 2014 that demonetization programs can easily stumble.

    "It's not that easy to flush out black money," he said after a speech, while he was still the country's top banker. He added, "my sense is that the clever find ways" to get around currency overhauls.
    Rajan has instead suggested better monitoring of financial transactions, such as using government ID cards to track major purchases, and improved tax enforcement.

    Hanke was surprised that India would even try a demonetization program, given that its failure in the 1970s is well-known in currency policy circles.

    "They're usually done in some kind of crisis situation and panic," said Hanke, "and they ultimately have all kinds of negative unintended consequences."

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    Finance minister Arun Jaitley

    • With every passing day, remonetisation process will go on: Jaitley

    • India always honestly tried to improve relations with Pakistan, current PM took a lot of initiatives: Jaitley

    • I think our way of conducting economy was primarily responsible: Jaitley

    • Finance minister says the way things are changing, we can’t defy technology and decision of demonetisation has only accelerated this

    • If you look at the temperament of this country there is always a section which is reluctant to change: Jaitley

    • Demonetisation will make political funding more transparent: Arun Jaitley 

    • Once remonetisation process is completed and GST is implemented, it will have a huge impact on India’s businesses: Jaitley

    • 300,000 people are picked up for tax return scrutiny every year: Jaitley

    • We are still at the cusp of change and therefore many people in India are trying to beat the system. The battle between them and taxman will continue: Jaitley

    • World’s largest democracy is very hush-hush when it comes to political funding, says Jaitley
    • Long term effects of demonetisation are going to be huge: Jaitley

    • India is at a stage that we’ve been the fastest growing economy in the world, says Finance Minister

    • From a developing economy to a developed one, we have come a long way in 70 years: Jaitley

    • We have 23 cr e-wallets in circulation, and it started only one-and-a-half years back: Jaitley

    • 80 crore debit and credit cards in circulation out of which 45 crore are in circulation. Almost 20 crore-wallets: Jaitley

    • The volume of formal trade, volume of business will grow in size: Jaitley

    • One of the advantages of this exercise is that you will reduce the quantum of paper currency: Jaitley

    • The country at large has welcomed the demonetisation decision, says Finance Minister Jaitley

    • Demonetisation had to be a closely guarded secret, says Arun Jaitley

    • If you need to replace 86% of a country’s cash currency, you have to have a substantial part ready: Arun Jaitley

    • Finance minister Arun Jaitley and NDTV Consulting Editor Vikramchandra have taken the stage for the first HTLS session.

    Liza Donnelly, staff cartoonist with the New Yorker, is live-cartooning the sessions during the summit.

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    It is difficult to see major gains from India’s decision to drain out high-value banknotes from the economy, and the move might only force the corrupt to become more careful in the future, Nobel laureate and economist Paul Krugman said on Friday.

    Instead, Krugman said, there will be significant-to-low costs to the so-called demonetisation, although he still saw India as a high-prospect economy.

    Speaking at the 14th HT Leadership Summit, the 63-year-old economist said there was a good case to be made that high denomination banknotes didn’t serve a legitimate purpose.

    “But that did not happen here. High-value notes are not being eliminated. This seems like a one-off attempt to flush out illicit cash,” Krugman said of the government decision to scrap 500-and 1,000-rupee bills to purge the economy of illicit “black money”.

    The government has issued new 500-and 2000-rupee bills, and said it will later bring back new Rs1000 notes as well.

    Krugman, who won the Nobel in 2008 for his work on global trade, said while he could understand the motivation for demonetisation, the move was “highly disruptive”.

    But could such an exogenous shock transform behaviour? “I would be happy to be proven wrong. There could be some permanent change in behaviour. People will be more careful and sophisticated in laundering their money in the future,” he said.

    Krugman said Indian economy, to him, looked like “China with a 15-20 year-old lag”.

    “It has reserves of entrepreneurial rigour, reserves of educated people, wide use of English, and unlike China, it has not hit the demographic wall. It has a lot of potential.”

    Watch | What Paul Krugman thinks is the Change India Needs

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    Does your data have a purpose? If not, you’re spinning your wheels. Here’s how to discover one and then translate it into action.
    The data-analytics revolution now under way has the potential to transform how companies organize, operate, manage talent, and create value. That’s starting to happen in a few companies—typically ones that are reaping major rewards from their data—but it’s far from the norm. There’s a simple reason: CEOs and other top executives, the only people who can drive the broader business changes needed to fully exploit advanced analytics, tend to avoid getting dragged into the esoteric “weeds.” On one level, this is understandable. The complexity of the methodologies, the increasing importance of machine learning, and the sheer scale of the data sets make it tempting for senior leaders to “leave it to the experts.”

    But that’s also a mistake. Advanced data analytics is a quintessential business matter. That means the CEO and other top executives must be able to clearly articulate its purpose and then translate it into action—not just in an analytics department, but throughout the organization where the insights will be used.

    This article describes eight critical elements contributing to clarity of purpose and an ability to act. We’re convinced that leaders with strong intuition about both don’t just become better equipped to “kick the tires” on their analytics efforts. They can also more capably address many of the critical and complementary top-management challenges facing them: the need to ground even the highest analytical aspirations in traditional business principles, the importance of deploying a range of tools and employing the right personnel, and the necessity of applying hard metrics and asking hard questions. All that, in turn, boosts the odds of improving corporate performance through analytics.

    After all, performance—not pristine data sets, interesting patterns, or killer algorithms—is ultimately the point. Advanced data analytics is a means to an end. It’s a discriminating tool to identify, and then implement, a value-driving answer. And you’re much likelier to land on a meaningful one if you’re clear on the purpose of your data (which we address in this article’s first four principles) and the uses you’ll be putting your data to (our focus in the next four). That answer will of course look different in different companies, industries, and geographies, whose relative sophistication with advanced data analytics is all over the map. Whatever your starting point, though, the insights unleashed by analytics should be at the core of your organization’s approach to define and improve performance continually as competitive dynamics evolve. Otherwise, you’re not making advanced analytics work for you.

    ‘Purpose-driven’ data

    “Better performance” will mean different things to different companies. And it will mean that different types of data should be isolated, aggregated, and analyzed depending upon the specific use case. Sometimes, data points are hard to find, and, certainly, not all data points are equal. But it’s the data points that help meet your specific purpose that have the most value.

    Ask the right questions

    The precise question your organization should ask depends on your best-informed priorities. Clarity is essential. Examples of good questions include “how can we reduce costs?” or “how can we increase revenues?” Even better are questions that drill further down: “How can we improve the productivity of each member of our team?” “How can we improve the quality of outcomes for patients?” “How can we radically speed our time to market for product development?” Think about how you can align important functions and domains with your most important use cases. Iterate through to actual business examples, and probe to where the value lies. In the real world of hard constraints on funds and time, analytic exercises rarely pay off for vaguer questions such as “what patterns do the data points show?”

    One large financial company erred by embarking on just that sort of open-ended exercise: it sought to collect as much data as possible and then see what turned up. When findings emerged that were marginally interesting but monetarily insignificant, the team refocused. With strong C-suite support, it first defined a clear purpose statement aimed at reducing time in product development and then assigned a specific unit of measure to that purpose, focused on the rate of customer adoption. A sharper focus helped the company introduce successful products for two market segments. Similarly, another organization we know plunged into data analytics by first creating a “data lake.” It spent an inordinate amount of time (years, in fact) to make the data pristine but invested hardly any thought in determining what the use cases should be. Management has since begun to clarify its most pressing issues. But the world is rarely patient.

    Had these organizations put the question horse before the data-collection cart, they surely would have achieved an impact sooner, even if only portions of the data were ready to be mined. For example, a prominent automotive company focused immediately on the foundational question of how to improve its profits. It then bore down to recognize that the greatest opportunity would be to decrease the development time (and with it the costs) incurred in aligning its design and engineering functions. Once the company had identified that key focus point, it proceeded to unlock deep insights from ten years of R&D history—which resulted in remarkably improved development times and, in turn, higher profits.

    Think really small . . . and very big

    The smallest edge can make the biggest difference. Consider the remarkable photograph below from the 1896 Olympics, taken at the starting line of the 100-meter dash. Only one of the runners, Thomas Burke, crouched in the now-standard four-point stance. The race began in the next moment, and 12 seconds later Burke took the gold; the time saved by his stance helped him do it. Today, sprinters start in this way as a matter of course—a good analogy for the business world, where rivals adopt best practices rapidly and competitive advantages are difficult to sustain.

    The variety of stances among runners in the 100-meter sprint at the first modern Olympic Games, held in Athens in 1896, is surprising to the modern viewer. Thomas Burke (second from left) is the only runner in the crouched stance—considered best practice today—an advantage that helped him win one of his two gold medals at the Games.

    The good news is that intelligent players can still improve their performance and spurt back into the lead. Easy fixes are unlikely, but companies can identify small points of difference to amplify and exploit. The impact of “big data” analytics is often manifested by thousands—or more—of incrementally small improvements. If an organization can atomize a single process into its smallest parts and implement advances where possible, the payoffs can be profound. And if an organization can systematically combine small improvements across bigger, multiple processes, the payoff can be exponential.

    Just about everything businesses do can be broken down into component parts. GE embeds sensors in its aircraft engines to track each part of their performance in real time, allowing for quicker adjustments and greatly reducing maintenance downtime. But if that sounds like the frontier of high tech (and it is), consider consumer packaged goods. We know a leading CPG company that sought to increase margins on one of its well-known breakfast brands. It deconstructed the entire manufacturing process into sequential increments and then, with advanced analytics, scrutinized each of them to see where it could unlock value. In this case, the answer was found in the oven: adjusting the baking temperature by a tiny fraction not only made the product taste better but also made production less expensive. The proof was in the eating—and in an improved P&L.

    When a series of processes can be decoupled, analyzed, and resynched together in a system that is more universe than atom, the results can be even more powerful. A large steel manufacturer used various analytics techniques to study critical stages of its business model, including demand planning and forecasting, procurement, and inventory management. In each process, it isolated critical value drivers and scaled back or eliminated previously undiscovered inefficiencies, for savings of about 5 to 10 percent. Those gains, which rested on hundreds of small improvements made possible by data analytics, proliferated when the manufacturer was able to tie its processes together and transmit information across each stage in near real time. By rationalizing an end-to-end system linking demand planning all the way through inventory management, the manufacturer realized savings approaching 50 percent—hundreds of millions of dollars in all.

    Embrace taboos

    Beware the phrase “garbage in, garbage out”; the mantra has become so embedded in business thinking that it sometimes prevents insights from coming to light. In reality, useful data points come in different shapes and sizes—and are often latent within the organization, in the form of free-text maintenance reports or PowerPoint presentations, among multiple examples. Too frequently, however, quantitative teams disregard inputs because the quality is poor, inconsistent, or dated and dismiss imperfect information because it doesn’t feel like “data.”

    But we can achieve sharper conclusions if we make use of fuzzier stuff. In day-to-day life—when one is not creating, reading, or responding to an Excel model—even the most hard-core “quant” processes a great deal of qualitative information, much of it soft and seemingly taboo for data analytics—in a nonbinary way. We understand that there are very few sure things; we weigh probabilities, contemplate upsides, and take subtle hints into account. Think about approaching a supermarket queue, for example. Do you always go to register four? Or do you notice that, today, one worker seems more efficient, one customer seems to be holding cash instead of a credit card, one cashier does not have an assistant to help with bagging, and one shopping cart has items that will need to be weighed and wrapped separately? All this is soft “intel,” to be sure, and some of the data points are stronger than others. But you’d probably consider each of them and more when you decided where to wheel your cart. Just because line four moved fastest the last few times doesn’t mean it will move fastest today.

    In fact, while hard and historical data points are valuable, they have their limits. One company we know experienced them after instituting a robust investment-approval process. Understandably mindful of squandering capital resources, management insisted that it would finance no new products without waiting for historical, provable information to support a projected ROI. Unfortunately, this rigor resulted in overly long launch periods—so long that the company kept mistiming the market. It was only after relaxing the data constraints to include softer inputs such as industry forecasts, predictions from product experts, and social-media commentary that the company was able to get a more accurate feel for current market conditions and time its product launches accordingly.
    Of course, Twitter feeds are not the same as telematics. But just because information may be incomplete, based on conjecture, or notably biased does not mean that it should be treated as “garbage.” Soft information does have value. Sometimes, it may even be essential, especially when people try to “connect the dots” between more exact inputs or make a best guess for the emerging future.

    To optimize available information in an intelligent, nuanced way, companies should strive to build a strong data provenance model that identifies the source of every input and scores its reliability, which may improve or degrade over time. Recording the quality of data—and the methodologies used to determine it—is not only a matter of transparency but also a form of risk management. All companies compete under uncertainty, and sometimes the data underlying a key decision may be less certain than one would like. A well-constructed provenance model can stress-test the confidence for a go/no-go decision and help management decide when to invest in improving a critical data set.

    Connect the dots

    Insights often live at the boundaries. Just as considering soft data can reveal new insights, combining one’s sources of information can make those insights sharper still. Too often, organizations drill down on a single data set in isolation but fail to consider what different data sets convey in conjunction. For example, HR may have thorough employee-performance data; operations, comprehensive information about specific assets; and finance, pages of backup behind a P&L. Examining each cache of information carefully is certainly useful. But additional untapped value may be nestled in the gullies among separate data sets.

    One industrial company provides an instructive example. The core business used a state-of-the-art machine that could undertake multiple processes. It also cost millions of dollars per unit, and the company had bought hundreds of them—an investment of billions. The machines provided best-in-class performance data, and the company could, and did, measure how each unit functioned over time. It would not be a stretch to say that keeping the machines up and running was critical to the company’s success.

    Even so, the machines required longer and more costly repairs than management had expected, and every hour of downtime affected the bottom line. Although a very capable analytics team embedded in operations sifted through the asset data meticulously, it could not find a credible cause for the breakdowns. Then, when the performance results were considered in conjunction with information provided by HR, the reason for the subpar output became clear: machines were missing their scheduled maintenance checks because the personnel responsible were absent at critical times. Payment incentives, not equipment specifications, were the real root cause. A simple fix solved the problem, but it became apparent only when different data sets were examined together.

    From outputs to action

    One visual that comes to mind in the case of the preceding industrial company is that of a Venn Diagram: when you look at 2 data sets side by side, a key insight becomes clear through the overlap. And when you consider 50 data sets, the insights are even more powerful—if the quest for diverse data doesn’t create overwhelming complexity that actually inhibits the use of analytics. To avoid this problem, leaders should push their organizations to take a multifaceted approach in analyzing data. If analyses are run in silos, if the outputs do not work under real-world conditions, or, perhaps worst of all, if the conclusions would work but sit unused, the analytics exercise has failed.

    Run loops, not lines

    Data analytics needs a purpose and a plan. But as the saying goes, “no battle plan ever survives contact with the enemy.” To that, we’d add another military insight—the OODA loop, first conceived by US colonel John Boyd: the decision cycle of observe, orient, decide, and act. Victory, Boyd posited, often resulted from the way decisions are made; the side that reacts to situations more quickly and processes new information more accurately should prevail. The decision process, in other words, is a loop or—more correctly—a dynamic series of loops (exhibit).

    Best-in-class organizations adopt this approach to their competitive advantage. Google, for one, insistently makes data-focused decisions, builds consumer feedback into solutions, and rapidly iterates products that people not only use but love. A loops-not-lines approach works just as well outside of Silicon Valley. We know of a global pharmaceutical company, for instance, that tracks and monitors its data to identify key patterns, moves rapidly to intervene when data points suggest that a process may move off track, and refines its feedback loop to speed new medications through trials. And a consumer-electronics OEM moved quickly from collecting data to “doing the math” with an iterative, hypothesis-driven modeling cycle. It first created an interim data architecture, building three “insights factories” that could generate actionable recommendations for its highest-priority use cases, and then incorporated feedback in parallel. All of this enabled its early pilots to deliver quick, largely self-funding results.

    Digitized data points are now speeding up feedback cycles. By using advanced algorithms and machine learning that improves with the analysis of every new input, organizations can run loops that are faster and better. But while machine learning very much has its place in any analytics tool kit, it is not the only tool to use, nor do we expect it to supplant all other analyses. We’ve mentioned circular Venn Diagrams; people more partial to three-sided shapes might prefer the term “triangulate.” But the concept is essentially the same: to arrive at a more robust answer, use a variety of analytics techniques and combine them in different ways.

    In our experience, even organizations that have built state-of-the-art machine-learning algorithms and use automated looping will benefit from comparing their results against a humble univariate or multivariate analysis. The best loops, in fact, involve people and machines. A dynamic, multipronged decision process will outperform any single algorithm—no matter how advanced—by testing, iterating, and monitoring the way the quality of data improves or degrades; incorporating new data points as they become available; and making it possible to respond intelligently as events unfold.

    Make your output usable—and beautiful

    While the best algorithms can work wonders, they can’t speak for themselves in boardrooms. And data scientists too often fall short in articulating what they’ve done. That’s hardly surprising; companies hiring for technical roles rightly prioritize quantitative expertise over presentation skills. But mind the gap, or face the consequences. One world-class manufacturer we know employed a team that developed a brilliant algorithm for the options pricing of R&D projects. The data points were meticulously parsed, the analyses were intelligent and robust, and the answers were essentially correct. But the organization’s decision makers found the end product somewhat complicated and didn’t use it.

    We’re all human after all, and appearances matter. That’s why a beautiful interface will get you a longer look than a detailed computation with an uneven personality. That’s also why the elegant, intuitive usability of products like the iPhone or the Nest thermostat is making its way into the enterprise. Analytics should be consumable, and best-in-class organizations now include designers on their core analytics teams. We’ve found that workers throughout an organization will respond better to interfaces that make key findings clear and that draw users in.

    Build a multiskilled team

    Drawing your users in—and tapping the capabilities of different individuals across your organization to do so—is essential. Analytics is a team sport. Decisions about which analyses to employ, what data sources to mine, and how to present the findings are matters of human judgment.

    Assembling a great team is a bit like creating a gourmet delight—you need a mix of fine ingredients and a dash of passion. Key team members include data scientists, who help develop and apply complex analytical methods; engineers with skills in areas such as microservices, data integration, and distributed computing; cloud and data architects to provide technical and systemwide insights; and user-interface developers and creative designers to ensure that products are visually beautiful and intuitively useful. You also need “translators”—men and women who connect the disciplines of IT and data analytics with business decisions and management.

    In our experience—and, we expect, in yours as well—the demand for people with the necessary capabilities decidedly outstrips the supply. We’ve also seen that simply throwing money at the problem by paying a premium for a cadre of new employees typically doesn’t work. What does is a combination: a few strategic hires, generally more senior people to help lead an analytics group; in some cases, strategic acquisitions or partnerships with small data-analytics service firms; and, especially, recruiting and reskilling current employees with quantitative backgrounds to join in-house analytics teams.

    We’re familiar with several financial institutions and a large industrial company that pursued some version of these paths to build best-in-class advanced data-analytics groups. A key element of each organization’s success was understanding both the limits that any one individual can be expected to contribute and the potential that an engaged team with complementary talents can collectively achieve. On occasion, one can find “rainbow unicorn” employees who embody most or all of the needed capabilities. It’s a better bet, though, to build a collaborative team comprising people who collectively have all the necessary skills.

    That starts, of course, with people at the “point of the spear”—those who actively parse through the data points and conduct the hard analytics. Over time, however, we expect that organizations will move to a model in which people across functions use analytics as part of their daily activities. Already, the characteristics of promising data-minded employees are not hard to see: they are curious thinkers who can focus on detail, get energized by ambiguity, display openness to diverse opinions and a willingness to iterate together to produce insights that make sense, and are committed to real-world outcomes. That last point is critical because your company is not supposed to be running some cool science experiment (however cool the analytics may be) in isolation. You and your employees are striving to discover practicable insights—and to ensure that the insights are used.

    Make adoption your deliverable

    Culture makes adoption possible. And from the moment your organization embarks on its analytics journey, it should be clear to everyone that math, data, and even design are not enough: the real power comes from adoption. An algorithm should not be a point solution—companies must embed analytics in the operating models of real-world processes and day-to-day work flows. Bill Klem, the legendary baseball umpire, famously said, “It ain’t nothin’ until I call it.” Data analytics ain’t nothin’ until you use it.

    We’ve seen too many unfortunate instances that serve as cautionary tales—from detailed (and expensive) seismology forecasts that team foremen didn’t use to brilliant (and amazingly accurate) flight-system indicators that airplane pilots ignored. In one particularly striking case, a company we know had seemingly pulled everything together: it had a clearly defined mission to increase top-line growth, robust data sources intelligently weighted and mined, stellar analytics, and insightful conclusions on cross-selling opportunities. There was even an elegant interface in the form of pop-ups that would appear on the screen of call-center representatives, automatically triggered by voice-recognition software, to prompt certain products, based on what the customer was saying in real time. Utterly brilliant—except the representatives kept closing the pop-up windows and ignoring the prompts. Their pay depended more on getting through calls quickly and less on the number and type of products they sold.

    When everyone pulls together, though, and incentives are aligned, the results can be remarkable. For example, one aerospace firm needed to evaluate a range of R&D options for its next-generation products but faced major technological, market, and regulatory challenges that made any outcome uncertain. Some technology choices seemed to offer safer bets in light of historical results, and other, high-potential opportunities appeared to be emerging but were as yet unproved. Coupled with an industry trajectory that appeared to be shifting from a product- to service-centric model, the range of potential paths and complex “pros” and “cons” required a series of dynamic—and, of course, accurate—decisions.

    By framing the right questions, stress-testing the options, and, not least, communicating the trade-offs with an elegant, interactive visual model that design skills made beautiful and usable, the organization discovered that increasing investment along one R&D path would actually keep three technology options open for a longer period. This bought the company enough time to see which way the technology would evolve and avoided the worst-case outcome of being locked into a very expensive, and very wrong, choice. One executive likened the resulting flexibility to “the choice of betting on a horse at the beginning of the race or, for a premium, being able to bet on a horse halfway through the race.”

    It’s not a coincidence that this happy ending concluded as the initiative had begun: with senior management’s engagement. In our experience, the best day-one indicator for a successful data-analytics program is not the quality of data at hand, or even the skill-level of personnel in house, but the commitment of company leadership. It takes a C-suite perspective to help identify key business questions, foster collaboration across functions, align incentives, and insist that insights be used. Advanced data analytics is wonderful, but your organization should not be working merely to put an advanced-analytics initiative in place. The very point, after all, is to put analytics to work for you.

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    The largest village promotion programme in the country encompassing digitisation of transactions & commercial activities in villages, vocational training and credit facility to help villagers earn a sustainable livelihood

    • 10,000 underprivileged villagers will receive free vocational training within 100 days.

    • The ambitious project is inspired by the success of India’s first digital village created by ICICI Bank at Akodara in Sabarkantha district, Gujarat last year.

    Mumbai: ICICI Bank, India’s largest private sector bank by consolidated assets, announced that it will transform 100 villages into ‘ICICI Digital Villages’ in as many days. The announcement is a part of the bank’s continuing effort to provide digital ecosystem across the country, including rural India, in the wake of demonetisation of high value currencies

    These villages, which will be spread across the length and breadth of the country, will enable villagers to use digital channels for banking and payments transactions. There, villagers will be able to open bank accounts using Aadhar-based e-KYC and make cashless payments to retail stores through a unique SMS/USSD-based mobile solution. Additionally, ICICI Bank in association with ICICI Foundation for Inclusive Growth (ICICI Foundation), the CSR arm of the ICICI Group, will impart vocational training to nearly 10,000 underprivileged villagers, especially women, to help them earn a sustainable livelihood. The bank will also extend credit facilities to the trained villagers in a bid to boost self-employment opportunities in the villages.

    This is the largest village promotion programme in the country encompassing digitisation of transactions & commercial activities, vocational training and credit facility to help villagers earn a sustainable livelihood.

    Ms. Chanda Kochhar, MD & CEO, ICICI Bank said,“ICICI Bank continues to be a catalyst to accelerate development in our country. We strongly feel that technology can play an important role in putting development on a fast lane. By leveraging technology, we converted Akodara in Gujarat from a village to India’s first digital village last year.

    Its success motivates us to scale up the initiative a big way—we will now convert 100 villages across the country into digital villages. We will create a cashless ecosystem at these villages, provide vocational training to 10,000 villagers in first 100 days and offer them credit linkages so that the villagers can start their own business ventures. I am confident that this large project will contribute significantly to the Hon’ble Prime Minister’s vision of a Digital India.”

    All these ICICI Digital Villages will have three dimensions.

    The first dimension is to enhance access to seamless and digital banking. In order to do so:
    • ICICI Bank will use tablet-based banking and Aadhar-based e-KYC to help villagers open accounts in few hours without submitting physical documents. All adults in the villages will have saving accounts, which will be linked to Aadhar to enable direct transfer of government benefits into these accounts. There will be dedicated branch and ATM of ICICI Bank to service these accounts.

    • The bank will provide a unique SMS & USSD based mobile service which will facilitate the villagers to transfer funds, receive alerts & statements and make payments to retail stores by using their mobile phones. This SMS banking will be available in regional languages and will function on basic mobile phones. The Bank will also set up end-toend merchant infrastructure that will enable the retailers at the village to accept mobile based payments.

    • The bank will also create a cashless, digital payment ecosystem for the predominant commercial activity of these villages. For example, at Akodara, it has created an end-toend measuring, tracking and payment solution for the milk cooperative society and its members for sale of milk. This will be replicated in the upcoming ICICI Digital Villages too. Additionally, activities like payments to farmers from mandis and payment from farmers to labourers among others, will be brought under digital payment ecosystem. The bank will also set up Point-of-Sale (POS) machines at seed and fertiliser outlets for cashless transactions using Rupay cards.

    The second dimension of the initiative is to impart livelihood training to the villagers. For that:
    • ICICI Foundation will impart training under its ‘ICICI Academy for Skills – Rural Initiative’ programme at these 100 villages. It will train 100 people in each village, especially women within as many days. Any underprivileged villager, in the age bracket of 18 to 40 years, is eligible to get the training free of cost. The skill training will be offered in a range of disciplines, which will be identified based on the local economy around a particular village. The list of the disciplines includes agriculture, dairy & vermicomposting, agriculture equipment repair, hand embroidery, dress designing and sandstone cutting & finishing among others. These trainings will be of a duration of up to 30 days.

    • ICICI Bank and ICICI Foundation will enable the trained villagers to be self-employed while continuing to reside at their villages. They will also provide assistance for selling of product/services through their market linkages in the local and nearby catchment areas

    The third dimension of the initiative is to provide credit linkages to enhance livelihood opportunities. The key elements are:
    • ICICI Bank will facilitate formation of Self Help Groups (SHGs) and offer loans to the members. Additionally, ICICI Bank will also extend credit facilities to the trained villagers in the form of Kisan credit cards, two wheeler loans and farm equipment loans among others.

    • The bank will sanction and disburse these loans using tablets at the door step of the villagers and SHGs, thus helping them to save time and effort to travel to a nodal branch.

    This initiative of Digital Villages is yet another key infrastructural development initiative of the bank. ICICI Bank has played a key role in the development of infrastructure in India over the last two decades. It has financed the creation of substantial power generation capacity, including India's largest private sector hydro power project; ports; roads and highways; airports,including India's first greenfield airport and its largest airport modernisation project; and the roll-out of pan-India telecom networks. Its role in infrastructure has gone beyond that of a financier to assist the government in the development of policies for the sector.

    ICICI Bank services its large customer base through a multi-channel delivery network of branches, ATMs , call center, internet banking (, mobile banking, banking on Facebook & Twitter and ‘PocketsbyICICIBank’ the country’s first digital bank on mobile.

    About ICICI Bank:‘ICICI Bank Ltd (NYSE:IBN) is India’s largest private sector bank by consolidated assets. The Bank’s consolidated total assets stood at US$ 144.7 billion at September 30, 2016. ICICI Bank's subsidiaries include India's leading private sector insurance, asset management and securities brokerage companies, and among the country’s largest private equity firms. It is present across 17 countries, including India.

    About ICICI Foundation For Inclusive Growth (ICICI Foundation): It was founded by the ICICI Group in early 2008, with a view to carry forward and build upon ICICI Group's legacy of promoting inclusive growth. ICICI Foundation seeks to promote inclusive growth in India by contributing to the key enablers required for widespread participation in economic opportunities in the country. Through focused initiatives in the identified areas including primary healthcare, elementary education, skill development and sustainable livelihood and financial inclusion, ICICI Foundation is working towards building capabilities and developing innovative models that can be replicated and scaled up in future. ICICI Academy for Skills operates under the aegis of ICICI Foundation.

    Except for the historical information contained herein, statements in this release, which contain words or phrases such as 'will', 'would', etc., and similar expressions or variations of such expressions may constitute 'forward looking statements'.

    These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to obtain statutory and regulatory approvals and to successfully implement our strategy, future levels of non-performing loans, our growth and expansion in business,the adequacy of our allowance for credit losses, technological implementation and changes, the actual growth in demand for banking products and services, investment income, cash flow projections, our exposure to market risks as well as other risks detailed in the reports filed by us with the United States Securities and Exchange Commission.

    ICICI Bank undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. All reference to interest rates, penalties and other terms and conditions for any products and services described herein are correct as of the date of the release of this document and are subject to change without notice.

    The information in this document reflects prevailing conditions and our views as of this date, all of which is expressed without any responsibility on our part and is subject to change. In preparing this document, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. ICICI Bank and the "I man" logo are the trademarks and property of ICICI Bank. Any reference to the time of delivery or other service levels is only indicative and should not be construed to refer to any commitment by us. The information contained in this document is directed to and for the use of the addressee only and is for the purpose of general circulation only.

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    Even for Donald Trump, the distance is still fun to think about, up here in his penthouse 600 ft. in the sky, where it’s hard to make out the regular people below. The ice skaters swarming Central Park’s Wollman Rink look like old-television static, and the Fifth Avenue holiday shoppers could be mites in a gutter. To even see this view, elevator operators, who spend their days standing in place, must push a button marked 66–68, announcing all three floors of Trump’s princely pad. Inside, staff members wear cloth slipcovers on their shoes, so as not to scuff the shiny marble or stain the plush cream carpets.

    This is, in short, not a natural place to refine the common touch. It’s gilded and gaudy, a dreamscape of faded tapestry, antique clocks and fresco-style ceiling murals of gym-rat Greek gods. The throw pillows carry the Trump shield, and the paper napkins are monogrammed with the family name. His closest neighbors, at least at this altitude, are an international set of billionaire moguls who have decided to stash their money at One57 and 432 Park, the two newest skyscrapers to remake midtown Manhattan. There is no tight-knit community in the sky, no paperboy or postman, no bowling over brews after work.

    Photograph by Nadav Kander for TIME

    Photograph by Nadav Kander for TIMEPresident-elect Donald Trump photographed at his penthouse on the 66th floor of Trump Tower in New York City on Nov. 28.
    Ande here Trump resides, under dripping crystal, with diamond cuff links, as the President-elect of the United States of America. The Secret Service agents milling about prove that it really happened, this election result few saw coming. Hulking and serious, they gingerly try to stay on the marble, avoiding the carpets with their uncovered shoes. On his wife Melania’s desk, next to books of Gianni Versace’s fashions and Elizabeth Taylor’s jewelry, a new volume sits front and center: The White House: Its Historic Furnishings and First Families.

    For all of Trump’s public life, tastemakers and intellectuals have dismissed him as a vulgarian and carnival barker, a showman with big flash and little substance. But what those critics never understood was that their disdain gave him strength. For years, he fed off the disrespect and used it to grab more tabloid headlines, to connect to common people. Now he has upended the leadership of both major political parties and effectively shifted the political direction of the international order. He will soon command history’s most lethal military, along with economic levers that can change the lives of billions. And the people he has to thank are those he calls “the forgotten,” millions of American voters who get paid by the hour in shoes that will never touch these carpets—working folk, regular Janes and Joes, the dots in the distance.

    It’s a topic Trump wants to discuss as he settles down in his dining room, with its two-story ceiling and marble table the length of a horseshoe pitch: the winning margins he achieved in West Virginia coal country, the rally crowds that swelled on Election Day, what he calls that “interesting thing,” the contradiction at the core of his appeal. “What amazes a lot of people is that I’m sitting in an apartment the likes of which nobody’s ever seen,” the next President says, smiling. “And yet I represent the workers of the world.”

    The late Fidel Castro would probably spit out his cigar if he heard that one—a billionaire who branded excess claiming the slogans of the proletariat. But Trump doesn’t care. “I’m representing them, and they love me and I love them,” he continues, talking about the people of Wisconsin, Michigan, Ohio and Pennsylvania, the struggling Rust Belt necklace around the Great Lakes that delivered his victory. “And here we sit, in very different circumstances.”

    The Last, Greatest Deal

    For nearly 17 months on the campaign trail, Trump did what no American politician had attempted in a generation, with defiant flair. Instead of painting a bright vision for a unified future, he magnified the divisions of the present, inspiring new levels of anger and fear within his country. Whatever you think of the man, this much is undeniable: he uncovered an opportunity others didn’t believe existed, the last, greatest deal for a 21st century salesman. The national press, the late-night comics, the elected leaders, the donors, the corporate chiefs and a sitting President who prematurely dropped his mic—they all believed he was just taking the country for a ride.

    The starting point for his success, which can be measured with just tens of thousands of votes, was the most obvious recipe in politics. He identified the central issue motivating the American electorate and then convinced a plurality of the voters in the states that mattered that he was the best person to bring change. “The greatest jobs theft in the history of the world” was his cause, “I alone can fix it” his unlikely selling point, “great again” his rallying cry.
    Nadav Kander for TIME
    Nadav Kander for TIMEPresident-elect Trump in the living room of his three-story penthouse on the 66th floor of Trump Tower in New York City on Nov. 28

    Since the bungled Iraq War faded into the rearview mirror, there has been only one defining issue in American presidential politics, spanning party and ideology. It’s the reason Massachusetts Senator Elizabeth Warren thunders that “the system is rigged” by the banks, and Vermont’s Bernie Sanders got so much traction denouncing the greed of “millionaires and billionaires.” It’s what Marco Rubio meant when he said, “We are losing the American Dream,” and why Jeb Bush claimed everyone has a “right to rise.”

    President Barack Obama identified it early, back in 2005, as a newly elected Senator delivering a commencement speech at tiny Knox College in Galesburg, Ill. Obama’s hymn to “the forgotten” was his ticket to the White House. “You know what this new challenge is. You’ve seen it,” he said. “The fact that when you drive by the old Maytag plant around lunchtime, no one walks out anymore … It’s as if someone changed the rules in the middle of the game and no one bothered to tell these folks.”

    As Obama explained it, the American promise was being put up on cinder blocks, buttressed by massive economic forces. His vow, repeated in his final 30-minute-long television ad in 2008, was change for the struggling, help for those who needed it, security for the ones who felt themselves slipping. Four years later, he would return to the same playbook to defeat Mitt Romney, casting the Republican nominee as an obtuse private-equity moneybags aiming to bankrupt Detroit. A quote pulled from a focus group—”I’m working harder and falling behind”—became the watchwords of Obama’s 2012 re-elect, hung on walls and placed atop PowerPoints. He had identified the issue, and as long as his name was on the ballot, no one could beat him.

    But Obama never fully delivered the prosperity he promised. There was certainly help on the margins, slowing cost growth for health care and providing insurance to millions, for example. He started some pilot projects for manufacturing hubs, increased incomes marginally in the past couple of years and led the nation to recover from a vicious recession, with the federal government directly creating or saving millions of jobs. An unemployment rate that peaked at 10% in October 2009 has been halved to 4.6% now, at the end of his term. But the great weather systems of global change continued under his watch. Ultimately, he grew resigned to the fact that there was only so much he could do in office.

    The most recently available data tells the remarkable story: between 2001 and 2012, the median incomes of households headed by people without college degrees—nearly two-thirds of all homes—fell as they aged, according to research by Robert Shapiro, an economist who advised Bill Clinton’s 1992 campaign. As American productivity and gross domestic product grew in the first decade of the new century, median wages for all Americans broke away, effectively flatlining. Most Americans making less than the median income, but not so little as to qualify for poverty benefits, suffered income losses of about 5% between 2007 and 2013, according to research by Branko Milanovic, a former World Bank economist.

    If you lived in the nation’s great cities or held a college degree, you probably didn’t feel the full fury of these forces. Average income declines for top earners were closer to 1% during the postrecession years. Global change is tricky that way. It enriches those in the developed world who can handle bits and bytes, create something new or sell their work at a distance. And it elevates the fortunes of the global poor, largely in Asia, pushing about a billion people from poverty into the beginnings of a new China-led middle class.

    But for the working men and women of developed countries, many of whom had made good livings in the 20th century, the price of others’ success could be seen all around, in peeling house paint and closed storefronts, in towns that went belly-up when one of the two big employers closed shop. The pressures pushed across the Atlantic Ocean. The size of the middle classes, as measured by those who earn 25% above or below the median income, dropped in the U.S. from the 1980s to 2013. It also dropped in Spain and Germany, the Netherlands and the U.K. It is no accident that all those countries now find themselves in the midst of political upheaval as well.

    The reasons for the shifts are more complex than the simple offshoring of manufacturing plants to Mexico or China. Global trade and new technology also pressure wages on jobs beyond the assembly line. When combined with rising health-insurance costs and incessant shareholder demands, companies found themselves unable or unwilling to give raises. Automation also accelerated as factories turned to robots, checkout lines retooled with self-operated terminals, and engineers developed self-driving trucks and taxis. Political gridlock in Washington, and the mild austerity it created, weighed everything down.

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