Race to the top

Dan Vasella stepped aside from the CEO role at Novartis yesterday to be succeeded by Joe Jimenez, the head of their pharmaceutical business. Along with this, the other person in contention, Joerg Reinhardt, quit the company to look for options elsewhere.

This reminded me of a course we had, on Managing Teams, taught by Henry Moon, this brilliant guy who somehow made everything sound so simple.

In one of the classes he was explaining why CEO salaries are so high. His contention was that the brilliant people at the level below the CEO are the ones that drive any organization and the position of the CEO is like the reward. And they know only one out of many will reach there. Therefore, in order to incentivize everyone to actually fight for the spot and perform at their best, it was important to keep the reward high, just as you would do in a lottery. If the chance of winning is low the reward has to be high to compensate for it.

One of the drawbacks of such a system is that when some one wins, the others in the race generally leave the company, and that is a concern. However, Prof. Moon said that this is inevitable and was necessary to promote fresh blood. He gave the example of GE – when Jeff Immelt became CEO, the others in contention left to head other organizations. When this played out again yesterday, I couldn’t help wondering if there is no other option.

As they say in hindi, “Ek mayan mein do talwar nahi reh sakti.

Louis rocks!!

You know how there are moments in class you would probably never forget about. Well, this was one of them. At first I thought I would post it on the ISB Students’ Blog, but then figured it would be slightly inappropriate for that.

Anyway, we have this absolutely amazing professor, Louis Thomas, who teaches us Economics of Strategy, and was trying to explain how commitment works. It was then when he came up with this example. And after that I haven’t been able to think of a better one. Hats off to you Louis! And Meatloaf makes it even more memorable.

PS: For those who were wondering what baseball was doing in the song, read this. And the song is Paradise by the dashboard lights.

Dead as a doornail!!

The past week has been super hectic, even by ISB standards. I attended an equivalent of at least 18 classes (2 hours each). Read so many cases and papers that my head hurt. And was showered by as much information as can be humanly digested, and then some more.

ISB and Wharton hosted, perhaps a first, joint course on Healthcare Innovation in India. Attended by 30 participants each from ISB and Wharton the course was compressed over two and a half days and talked about all aspects of the healthcare sector in India, from lifesciences to delivery, and from insurance to social investment funds. It was like a crash course, just a little faster.

Though the course was a lot of fun, it was very demanding too, and I spent the entire day today going through motions and somehow dragging myself through it. Almost know how zombies move around.

And have a dunking to attend to at midnight – so no sleep before that. With the placement season coming up, blogging will be sparse, unless of course I get one quickly 😛

PS: Cricket is a wonderful sport. I connected so much with a South African exchange student, talking almost only about cricket. And he was as avid a follower as anyone else, and ’twas a nice long chat with him 🙂