On May 7, 2021, we had a fascinating webinar by Prof V Raghunathan (Adjunct Professor, Schulich School of Business) who was with IIM Ahmedabad for 20 years and has also held senior level corporate positions in various companies including ING Vysya Bank. Prof Raghunathan has published several books and articles and is a widely acknowledged thought leader. A very articulate speaker, with an amazing command over his domain as well as language, he has a reputation for calling a spade a spade. Prof Raghunathan lived up to his reputation during the webinar which was ably moderated by our Prof R Prasad. Prof Sudhakar Rao introduced Prof Raghunathan and made the concluding remarks.
Prof Raghunathan began by referring to the richness of the Mahabharata. This huge epic, which has evolved over thousands of years helps us to understand complex characters and human psychology, appreciate ethical dilemmas, (greater right vs lesser right and greater wrong vs lesser wrong), handle complex decision-making situations and learn valuable lessons in strategic thinking. The Mahabharata has many management lessons to offer. But where it scores when compared to other similar works, is in the area of game theory. (Game theory is also one of Prof Raghunathan’s favorite topics.)
The Mahabharata and Game Theory
Game theory essentially teaches us that what is good for an individual may not be good at a collective level. Unfortunately, individuals distrust each other and pursue alternatives that lead to sub optimal solutions called the Nash equilibrium. The best way to understand this phenomenon is through a classic situation commonly referred to as the prisoner’s dilemma.
Two bank robbers have been arrested and are being interrogated in separate rooms. The authorities have no other witnesses and can only prove the case if they can convince at least one of the robbers to betray his accomplice and testify to the crime. Each robber can either cooperate with his accomplice and remain silent or defect and testify for the prosecution. If they both co-operate and remain silent, then the authorities will convict them on a lesser charge, leading to one year in jail each. If one testifies and the other does not, then the one who testifies will go free and the other will get three years of jail term. However, if they testify against each other, both will get two years in jail for being partly responsible for the robbery.
The paradox of the prisoner’s dilemma is clear. The robbers can minimize the total jail time if they both co-operate (2 years total), but the incentives that they face individually will always drive them to defect and end up doing the maximum total jail time between the two of them (4 years total).
Applications of game theory can be seen in all walks of life. India and Pakistan will be better off if they do not increase military spending and instead use the money saved for economic development and building the social infrastructure. But for each country, there is an incentive to increase military spending whether or not the other country does so. In one case, the country can be ahead of the other. In the other case, the country can maintain parity. Jumping the red lights at a traffic junction, throwing garbage out of our windows on the road are also good examples. In each case, we would be better off showing restraint. But we have a strong incentive to distrust others and break the rule, mistakenly thinking that we will be better off that way.
What is the connection between the Mahabharata and Game Theory?
Before the great Kurukshetra war is about to start, Arjuna develops serious misgivings about having to kill his kith and kin to win the war. He puts down his weapons and says that the war is not worth fighting. That is when Lord Krishna tells him: Do the right thing. Follow your Dharma. Do not worry about the results. This dialogue is of course the essence of the Bhagavad Gita.
For corporate executives, results orientation is the norm. How can one be indifferent to results? What the Mahabharata teaches us is that when we are obsessed about results, we tend to move towards suboptimal solutions and reach the Nash equilibrium. Thus, we may cut costs (or not make adequate investments) in the short run and hurt the company in the long run. When we follow our dharma, i.e., follow our moral compass, we will become principled even in tough situations. We will have the courage to say no or even walk out, when something wrong is being proposed.
Later during the session, Prof Raghunathan argued with a lot of clarity that the reason for our sad plight today, with 3.5 lakh infections and more than 3500 deaths per day, is that we have forgotten our dharma. Our leaders wanted to achieve results and proclaim their success to the world by winning the West Bengal assembly elections. So, they spent all their time campaigning there. They did not do the right thing, i.e., govern the country. What the country needs today is good governance. Not just in case of the pandemic but in other areas as well. For example, this government came to power on the plank of providing a clean government. But if hospital beds are being cornered by politicians and auctioned off for obscene prices, it only means corruption has not gone away.
Of course, practicing Dharma is not easy. Thus, we are attempted to bribe ourselves out of trouble when we are caught by the police for a traffic violation. There is a price we have to pay when upholding our principles. We must have the mental stamina to stay the course and not give up too quickly. Prof Raghunathan expressed his disappointment (based on his interviews of students seeking admission to IIM Ahmedabad) at seeing even young people being “practical” and taking short cuts instead of being principled.
Why can’t we be more straightforward?
The Mahabharata has many characters who are far from straightforward and are plotting all the time. Unlike animals, we human beings, by our very nature, are complex. It is difficult for us to be simple and straightforward. We often find it difficult to reveal our inner self. But we can always try to move in this direction even if we do not quite reach the destination. We can also try to elevate ourselves and achieve self-actualization. Unfortunately, we spend too much time making money that there is little time left for achieving self-actualization.
Learning and Out of the box thinking
When we read a book with a closed mindset, our learning will be limited. But if we read with an open mindset, we can learn much more and become more creative in the way we do things. The Mahabharata is rich in human emotions and complex situations. If we read the book with an open mind, (and ignore some points which are beyond our comprehension, instead of trying to read too much into them), there are many lessons to take away both for B School students and professors. We (teachers and students) can mine our own insights by reading this epic carefully. For example, teachers should be inclusive and treat all students equally and not be like Dronacharya, at least in the manner in which he treated Ekalavya. There are many good books on the Mahabharata written by KM Munshi, C Rajagopalachari, SP Singh and Gurcharan Das. By reading them, we can get deeper insights into the human psyche and better appreciate the principles of sound management.
On coping with COVID related stress
Working from home has its own challenges. Think of a 35-year-old executive staying with his spouse, children and parents. In addition to the stress of working, there is also the anxiety of losing the job. For example, with talk of reducing school tuition fees in view of the online mode of education, revenues may shrink for schools. And many non-teaching staff and even some teachers are in danger of losing their jobs.
But adverse situations bring out the best in us. We must stop worrying about what we do not have or what we may lose and instead be grateful for what we have today. We must dig deep into ourselves and find our inner strength. We have an opportunity to reimagine and rediscover ourselves. We have time for reflection. We have an opportunity to learn household duties such as cooking and appreciate the role of the home maker.
Lockdown or no lockdown is not an easy decision to make. The vulnerable can suffer a lot if they lose the opportunity to move around and earn wages. At the same time, the pandemic has to be contained. So, these decisions have to be taken carefully, with a lot of deliberation and empathy and not impulsively, in a tearing hurry (like we did last year).
Calling it quits
In many companies, there are founders who have built the company and been around for a very long time. They are like Bhishma in Mahabharata. They find it difficult to agree with what is going on and yet do not want to exit.
Prof Raghunathan agreed that in the corporate world, there are many such examples. Think of the Infosys founders, Verghese Kurien and Ratan Tata.
Even as they age, many company founders find it difficult to let go. They strongly disagree with the policies of the new generation of leaders. It is easy to argue that these veterans must give up and move on. But if we had created something like that, would we have moved on? The enthusiasm of the youth often discounts the wisdom of the old. There should be a transparent dialogue and a spirit of give and take. The elders need to give and the new generation needs to take. The elders should realize that they have served their time and will be out of the organization shortly. The new generation should try to leverage the experience and insights of the elders before they withdraw completely from the affairs of the company. Disagreements and conflicts are not bad in themselves. They do have the potential to lead to better solutions provided each side appreciates the other side and accepts that their heart is in the right place.
How to become a CEO
There is no short cut to success in our career. We have to work hard. Intelligence alone does not take us far. Most of us have average IQ levels. If we work hard and with a lot of focus, we will become more lucky and new doors will open for us. As we work hard and the results start to show, the difference between intelligence and hard work also gets obliterated.
Life is probabilistic and not deterministic. We can improve the odds of success by working hard. Quite a few of the Noble Laureates studied in unknown colleges. That implies they were not necessarily the best students in school. But they demonstrated humility, willingness to learn and worked hard. That is how they made it to the top of their field.
The job of a CEO does carry a lot of prestige. The compensation can also be very attractive. But the challenges should not be underestimated. The pressure is high and the responsibilities are wide ranging. One well known, former CEO was arrested because one of the drivers of the company molested and killed a lady passenger.
If there is one takeaway from this session it is: Follow your dharma.
If we do that, we can beat the Nash equilibrium.