Ten interesting things we read this week

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At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, ranging from zeitgeist to futuristic, and encapsulate them in our weekly ‘Ten Interesting Things’ product. Some of the most fascinating topics covered this week are Jobs (Job interview of the future is already here), Education (What straight-A students get wrong), Architecture (Buildings for the deaf and blind), and Success (Podcast: Success strategies from Ray Dalio) among others. Also, we have two articles on India (Why foreign investors are losing interest in India and India Inc.’s new address is a co-working space).

Here are the ten most interesting pieces that we read this week, ended December 28, 2018.

1) The job interview of the future is already here [Source: Financial Times ]
As time changes, so will our habits and other things. And job interviews are no different. McKinsey has come up with an innovative test to screen the possible candidates. A computer test where the applicant needs to play a game, specifically island game, wherein the person needs to figure out how to build a healthy coral reef and other stuff. It turns out that even an outfit that gets about 750,000 job applicants a year, and hires fewer than 1% of them, is not immune from tech disruption. McKinsey’s clients want help in navigating a world of big data and other digital advances, so McKinsey needs to hire more people to do the helping, preferably before they get snapped up by Google or Facebook.

It is now two years since two London Business School academics, Lynda Gratton and Andrew Scott, galvanised thinking about the future of work in their book, The 100-Year Life. They suggested people’s lives would no longer be ruled by the three stages of education, work and retirement. Faced with the need to keep hobbling in to work into their 80s in an age of rising disruption, they would probably have to take a break to retrain and reinvent themselves.

McKinsey’s island game was built for the firm by a US start-up called Imbellus whose 20-something founder, Rebecca Kantar, wants to drastically reshape the way we measure people’s abilities. Ms. Kantar is a Harvard dropout who thinks that in an age of rising automation, people should be tested on how they think, not just what they know and employers need to understand the skills that define human intelligence. A lot of influential people are backing her. Forbes has just ranked her company one of the highest funded start-ups for 2019 by a founder under the age of 30. McKinsey is right to be testing her ideas but it should not stop there. We all need to know how these theories really work in practice.
 
2) Why foreign investors are losing interest in India [Source: Economist ]
Narendra Modi was elected with a thumping majority in May 2014 on his record in Gujarat, a well-run Indian state. Everybody had high hopes from Mr. Modi. But on the bigger stage, the form he showed as a state minister has often deserted him. A recent clash with the central bank, the Reserve Bank of India (RBI), that led to the resignation of its governor, Urjit Patel, is the latest—and most serious—misstep. Soon after Mr. Patel resigned, the rupee fell.

But India under Mr. Modi has been one of the more stable emerging markets. The stock market has seemed to defy gravity, thanks in large part to domestic investors steadily switching from gold and property into shares. That buying has masked the disquiet among foreign investors, who have quietly pulled money from India. The sense that Mr. Modi has blown a good chance to transform India is widespread. The hallmarks of Mr. Modi’s 12 years in Gujarat were ambitious projects run by honest civil servants. He was project-manager-in-chief. According to Reuben Abraham of the IDFC Institute, a think-tank, Mr. Modi excels in this “project mode”. But, a government in project mode will not lift the GDP growth. “You need deeper, systemic reforms,” says Mr. Abraham.

The sales pitch about India’s potential was already wearing thin. “A lot of investors have tuned out,” says Dec Mullarkey of Sun Life Investment Management. The trade dispute between America and China is just one more missed opportunity. A pick-up in foreign direct investment in Indonesia, Vietnam and the Philippines may be a sign that American firms are seeking to reshape supply chains to exclude China. India ought to benefit, too. But its bewildering array of labour laws and scarcity of commercial land hold back its progress as a manufacturing hub. The GST apart, Mr. Modi has done little to change that.

3) What straight-A students get wrong [Source: NY Times ]
We all have come across a top ranker, who cried after results because he/she missed his/her goal by one mark or something like that. Yes, this article talks about how straight-A students need to think differently and spend some time out of books. Academic excellence is not a strong predictor of career excellence. Across industries, research shows that the correlation between grades and job performance is modest in the first year after college and trivial within a handful of years. For example, at Google, once employees are two or three years out of college, their grades have no bearing on their performance.

Why? Because academic grades rarely assess qualities like creativity, leadership and teamwork skills, or social, emotional and political intelligence. Yes, straight-A students master cramming information and regurgitating it on exams. But career success is rarely about finding the right solution to a problem — it’s more about finding the right problem to solve. In a study of students who graduated at the top of their class, the education researcher Karen Arnold found that although they usually had successful careers, they rarely reached the upper echelons. “Valedictorians aren’t likely to be the future’s visionaries,” Dr. Arnold explained. “They typically settle into the system instead of shaking it up.”

This might explain why Steve Jobs finished high school with a 2.65 G.P.A., J.K. Rowling graduated from the University of Exeter with roughly a C average, and the Rev. Dr. Martin Luther King Jr. got only one A in his four years at Morehouse. You gain experience coping with failures and setbacks, which builds resilience. So what should the universities, employers and straight-A students do? Universities should make it easier for students to take some intellectual risks. Graduate schools can be clear that they don’t care about the difference between a 3.7 and a 3.9. Employers should make it clear you value skills over straight A’s. Finally, straight-A students should recognize that underachieving in school can prepare you to overachieve in life.

4) Why “many-model thinkers” make better decisions [Source: hbr.org ]
Most of the companies and organisations think in models. Some organisations use models without knowing it. For example, a yield curve, which compares bonds with the same risk profile but different maturity dates, can be considered a model. A hiring rubric is also a kind of model. When you write down the features that make a job candidate worth hiring, you’re creating a model that takes data about the candidate and turns it into a recommendation about whether or not to hire that person. The most sophisticated organisations, from Alphabet to Berkshire Hathaway to the CIA, all use models. In fact, they do something even better: they use many models in combination.

Without models, making sense of data is hard. Data helps describe reality, albeit imperfectly. Though single models can perform well, ensembles of models work even better. That is why the best thinkers, the most accurate predictors, and the most effective design teams use ensembles of models. They are what the author of this piece calls, many-model thinkers. With an ensemble of models, you can make up for the gaps in any one of the models. Constructing the best ensemble of models requires thought and effort. As it turns out, the most accurate ensembles of models do not consist of the highest performing individual models. You should not, therefore, run a horse race among candidate models and choose the four top finishers. Instead, you want to combine diverse models.

But, what should that ensemble look like? Which models does one include, and which does one leave out? The first guideline for building an ensemble is to look for models that focus attention on different parts of a problem or on different processes. Your second model should include different variables. The second guideline borrows the concept of boosting, a technique from machine learning. Ensemble classification algorithms, such as random forest models consist of a collection of simple decision trees. A decision tree classifying potential venture capital investments might say “if the market is large, invest.” In sum, models, like humans, make mistakes because they fail to pay attention to relevant variables or interactions. Many-model thinking overcomes the failures of attention of any one model. It will make you wise.

5) The secret laws of success and status [Source: nature.com ]
In this review of “The Formula: The Universal Laws of Success” by Albert-László Barabási, Mark Buchanan explores the social effects that boost fame and recognition. According to Mark, The Formula is a fun, fast, first-hand account of efforts to use big data to pull back the curtain on our collective dynamics. As Barabási shows, hidden statistical and multiplicative processes have huge consequences in the human world, yet often operate outside our general awareness. Barabási describes how exploiting big data collected from the web, including social media and other digital repositories, is helping researchers to tease out how success and performance actually relate to one another. How it works in general, Barabási suggests, is now becoming clear owing to the emergence from research of a number of simple “laws of success”.

The first is that “performance drives success, but when performance can’t be measured, networks drive success”. With competitive tennis, better athletes win repeatedly, showing superiority. But when judging wine, it’s not easy to find objective means of ranking: repeated blind tastings, even among wine experts, lead to wildly fluctuating outcomes. This results in huge differences in outcome that have nothing at all to do with quality. That phenomenon is the subject of the second law: “Performance is bounded, but success is unbounded.” Take the top 100 wines entered into a competition. Their true differences in quality, for example in clarity or varietal character, are generally small: they’re all produced by top winemakers using similar technology. Yet one wine, because of the amplifying power of social networks, might enjoy orders of magnitude more sales than others.

The third law that Barabási describes is: “Previous success × fitness = future success.” Careful studies, for example, by network scientist Manuel Cebrian or complexity scholar Dashun Wang, have found that it’s possible to identify how much of a product’s popularity depends on its quality or fitness, and how much can be traced to random amplification by network effects. And then there’s the fourth law: “While team success requires diversity and balance, a single individual will receive credit for the group’s achievements.” Analyses of highly successful teams in science or business show that which individuals get the most credit has nothing to do with who actually did the work.

6) How China views the arrest of Huawei’s Meng Wanzhou [Source: The New Yorker ]
Huawei is the largest telecom-equipment manufacturer in the world, and it recently overtook Apple as the second-largest manufacturer of smartphones, after Samsung. But, the company has been in news for something else these days. Meng Wanzhou—who, at 46, was seen as a successor at the firm to her father, Ren Zhengfei, the founder of Huawei—is wanted for extradition to the United States for allegedly conspiring to defraud multiple banks and causing them to violate American sanctions against Iran. Meng’s arrest occurred against the backdrop of the current trade war between the United States and China, which have been lobbing threats of tariffs at each other since July.

Meng’s arrest occurred against the backdrop of the current trade war between the United States and China, which have been lobbing threats of tariffs at each other since July. There is also the ongoing debate about intellectual-property theft; according to a 2017 report by the Office of the United States Trade Representative, “Widespread online piracy and counterfeiting in China’s e-commerce markets cause great losses for U.S. right holders,” to the tune of hundreds of billions of dollars annually. Also, there is the matter of U.S. national security. Washington has long been worried that Chinese telecommunications equipment can be used for intelligence purposes. Founder of Huawei, Ren, was formerly an engineer in the People’s Liberation Army.

Today, the Chinese public is outraged by the arrest of Meng. National pride has been stoked by what the Global Times has termed a “despicable hooliganism” and an “unconscionable” attempt to contain Chinese growth. “Some Western countries are resorting to political means to resist Huawei’s attempts to enter into their markets,” the newspaper claimed, and its editor tweeted that “Arresting Meng Wanzhou is bringing terrorism to state and business competition.”

7) Does it matter where you go to college? [Source: The Atlantic ]
In order to get admission in a good college, every year parents spend loads of money. American parents now spend almost half a billion dollars each year on “independent education consultants,” and that’s not counting the cost of test prep or flights and hotels for campus visits. Does it really matter whether you attend an elite college? Surely it does. Ivy League and equivalent institutions provide more than world-class instruction. They confer a lifetime of assistance from prodigiously connected alumni and a message to all future employers that you’re a rarified talent. About 45% of America’s billionaires and more than half of Forbes’s list of the most powerful people attended schools where incoming freshmen average in the top first percentile of SAT scores.

But what appears obvious may not be true. In November 2002, the Quarterly Journal of Economics published a landmark paper by the economists Stacy Dale and Alan Krueger that reached a startling conclusion. For most students, the salary boost from going to a super-selective school is “generally indistinguishable from zero” after adjusting for student characteristics, such as test scores. Dale and Krueger even found that the average SAT scores of all the schools a student applies to is a more powerful predictor of success than the school that student actually attends. This finding suggests that the talents and ambitions of individual students are worth more than the resources and renown of elite schools. So, you need to stress out about your habits and chill out about college.

Economists from Virginia Tech, Tulane, and the University of Virginia published a new study that reexamines the data in the Dale-Krueger study. Among men, the new study found no relationship between college selectivity and long-term earnings. But for women, “attending a school with a 100-point higher average SAT score” increased earnings by 14% and reduced marriage by 4%. Also, a 2017 study led by the economist Raj Chetty found that lower-income students at an elite school such as Columbia University have a “much higher chance of reaching the top 1% of the earnings distribution” than those at an excellent public university, such as SUNY Stony Brook in Long Island.

So, to round it up, whether elite colleges matter or not depend on who you are. In the big picture, elite colleges don’t seem to do much extra for rich white guys. But if you’re not rich, not white, or not a guy, the elite-college effect is huge. It increases earnings for minorities and low-income students, and it encourages women to delay marriage and work more, even though it doesn’t raise their per-hour wages.

8) Success strategies from a self-made billionaire [Source: tonyrobbins.com ]
In this 2-part (and a bonus) podcast, Tony Robbins sits with Ray Dalio self-made billionaire and founder of Bridgewater Associates, to discuss how he made it big and what were the obstacles he came across. Founded in 1975, Bridgewater has grown to be the largest hedge fund in the world in four decades, managing over 160 billion dollars, and making more money for its investors than any other hedge fund in history.

Tony also discusses the evolution of Ray’s career, the catastrophic mistakes he made that almost destroyed everything he built, and how the lowest points in his life taught him his biggest lessons. You’ll also hear Tony and Ray discuss their personal beliefs about creating a successful and productive workplace culture, and why everyone should strive to create a meritocracy and invoke “radical honesty” in their lives.

And in the second part, Ray talks about the behavioural pattern of a typical investor, speculation around digital currency and Bitcoin, visualizing a future and seeing the gap and how creating principles facilitates decision-making, among others. Even after that if your hunger isn’t satisfied, then there’s a bonus podcast where they discuss how to create an extraordinary life, the science of achievement, effective execution, the art of fulfillment, and Tony’s 6-step process for decision-making. Will the two collaborate in the future for a book? Only time will tell.

9) The rise of buildings for the deaf and blind [Source: Economist ]
We can see and feel the buildings around us, but what about those who are deaf and blind? Architects are now thinking about them too. In 1991, Al Pacino spent three days at the Selis Manor learning how to be blind for his role in the film “Scent of a Woman”. But if he were to visit the manor now he would leave with a profoundly different impression of how tenants interact with the building. In 2016, a team of designers renovated the complex with structural, textural, and olfactory updates, not just visual ones. The update is part of a broader trend towards multisensory architecture: work which considers a building’s acoustics, lighting, tactility and smell. A number of firms have started to prioritise the needs of people with a wide range of sensory abilities. In doing so, they embrace vision’s neglected sibling senses in their blueprints.

About 466mn people worldwide have significant hearing problems and 36mn are blind. According an American study from 2016, fully 94% of those between the ages of 57-85 had some kind of sensory disability, and most suffered from impairments to at least two of the five senses. Designers are now trying to catch up. Chris Downey, a blind architect who contributed to the Selis Manor renovation, was invited in 2015 to consult for Grimshaw Architects, a British company. The firm was designing a sustainability pavilion, which is currently under construction, for the World Expo 2020 in Dubai. Mr. Downey would walk his fingers across embossed lines on blueprints, just as he imagined visitors might later walk their feet through the pavilion, says Augustine Savage, a Grimshaw designer.

The beauty you can stroke or sniff will be a boon not just to the blind and deaf. Until Mr. Downey was 45 years old, he had near perfect vision, but surgery to remove a brain tumour took his eyesight, too. Ten years later, he has come to realise that sight is the “most detached sense we have”. Smelling, hearing, feeling, tasting: these are more multifarious, in some ways more profound. By thinking about these senses in buildings, Mr. Downey believes the result is “a richer, more delightful environment for everyone”. 

10) India Inc.’s new address is a co-working space [Source: Livemint ]
Today, traditional office spaces are a passé. What’s trending is the co-working culture. Many conglomerates and MNCs are moving out of their traditional office set-ups, triggering the next surge in their popularity. DXC Technologies (formerly HP Enterprise Business) moved into WeWork’s brand new Goregaon facility in Mumbai in July. A part of the Tata company Jaguar Land Rover’s team works from WeWork in Mumbai’s Bandra Kurla Complex (BKC), and, in March, the company took up 180 seats at Smartworks in Pune. One of Google’s many teams works out of Awfis in Gurugram while Amazon India has a team of 16 at Smartworks in Pune.

The question that arises is why are these companies getting into the co-working space culture? And the answer is “Time and money”. Creating new spaces or expanding facilities, especially if they are setting up new teams or departments, take a lot of time and money. In a co-working space, you can set-up in 30 minutes. “IndiaMART was trying to build a new product and a team of 25 needed a strategic environment. To set up a new office would have taken us weeks, if not months. We were able to set up and start work within 30 minutes,” says Brijesh Agrawal, co-founder, IndiaMART, which has its own office in Noida, Uttar Pradesh. They moved into 91 Springboard’s facility in December.

“In a traditional office space, business owners need to deal with landlords, contractors, brokers, security deposit, lock-in period and other legal and technical issues. This process is extremely time-consuming and takes six-eight months from the time they start looking till the time they move in,” says Karan Virwani, chief WeWork executive officer, WeWork India. He also says that “When you’re in a traditional environment in a large organisation, you’re in a silo. It’s the same boss, same friends and same conversation. There is no room for dynamism. The idea of an open, communicative, barrier-less office culture is finally catching up on this side of the economic ecosystem.”