Book Review: The Professional by Subroto Bagchi

Author: Subroto Bagchi


Publisher: Penguin Portfolio

Price: 399/-

I generated a lot of respect for Subrto Bagchi, when I read High performance Entrepreneur as a writer in the realm of business and management. My respect for him increased manifolds after reading his story in Go, Kiss The World. Finally when I finished reading The Professional by him, he joined the place up there with the people I idolize, I aspire one day I can be in the same league as them. All this not because of what he has achieved, but the way he has achieved, it is more about the journey and the destination.

I would concentrate on “The Professional” here, the book is the percepts of how to be a perfect working professional. It is what, if I may call a bible for all working professionals people who would like to be professional in their conduct. Subroto Bagchi, has painstakingly illustrated the behavior, conduct and ethics of a professional.

In this world of falling moralities and flimsy loyalties, with likes of Satyam and Lehman rising from the dust and ending there itself, the conduct of a professional can be a grey area. What Bagchi illustrates is the mastering the art of being correct in spirit, not only in legalities. He writes the prescription for a strong and a moral work ethic still providing flexibilities to change organizations and switch loyalty. The examples he has quoted are relevant, inspiring and real life, motivating the professional on how he can follow the ethics and still be successful.

Though I am not sure how mature, the recruitment teams and the HR in the organizations are to value the kind of attitude Bagchi proposes in a professional. More difficult would be judging the professionals who actually live the attitude than mere glib who would try and speak their way to glory without actions. Bagchi, presents a correct and moral world pictures and also claims about the lengths he has gone to make sure these traits are identified and rewarded in his organization, but I have sincere doubts that these kind of model conduct would practically work in Non-Export areas, like government contractors, Builders, and many more agencies which thrive around the corruption in the government.

But still nevertheless, I would say it’s a brilliant book and a must read for all professionals. I would recommend it as a must read especially for the students of professional courses too, to understand the value and relevance of the perfect code of conduct for a professional.

Summary: A great read, very easy and free flowing in the content and message. Relevant, inspiring and still a light read. A must read for everyone.

Rating: 4.5 /5

Book review: Beyond Performance

Before you get worried: no, Scott Keller and Colin Price are not extolling the virtues of amateur dramatics to get you ahead in management. Rather, their book is about looking beyond the individual performances that make up an organisation and trying to understand what makes it flourish collectively. Their big idea boils down to "performance and health". Performance is about delivering financial results right now. Health is about the ability to do it year in, year out. The two things are not the same, and organisations  might have neither, just one or both of these things. There are three principles underlying this theory. The first is that performance and health matter as much as each other, so it is your job as a manager to address both in the decisions you take. The second principle is that you should be managing performance and health today - it's a common error that leaders focus solely on the here and now without equal emphasis on the long-term health of the organisation. The final principle is that nothing changes unless behaviour does. Improvement comes only by getting people to do things differently - and that's where your expertise as a manager will really get tested.

Book Review: The Return of Depression Economics and the Crisis of 2008 by Paul Krugman - a superb big picture guide to the crisis

In Paul Krugman's illuminating work, The Return of Depression Economics and the Crisis of 2008, the financial crisis that continues to play out is explained in surprisingly easy to understand language. He offers readers a history of past financial crises to setup his view of the causes, effects, and possible solutions to our current economic woes. While the title may seem ominous, Krugman maintains a positive, albeit tenuous outlook for the future.

The chief goals of this updated edition, as highlighted in the book's introduction, are to answer three important questions:

How could this catastrophe have happened?

How can the victims recover?

How can we prevent this from happening again?

In reading through his extensive treatise of past financial crises and their commonalities, he does a terrific job in answering the first question. Additionally, his prescription for preventing future calamities of this sort is sensible and built on sound principles. However, the book lacks details in explaining exactly how victims of this round of financial instability are to recover. Overall, the book offers an important and timely look at the nature of financial crises and is likely a timeless exposition on the subject.

Elements of a Financial Crisis

The first four chapters of the book examine major financial crises in varying detail that include the Panic of 1907, the Great Depression, the savings and loan problems of the 1980s, the Latin American Crisis of the mid 1990s, the Asian Flu of the mid to late 1990s, and Japan's Lost Decade. Within these stories, themes emerge that bear striking resemblances to one another. Virtually all involved an attractive story to bring in new capital to fund rapid economic expansion, loose credit, asset bubbles, a loss of confidence, investor biases, currency complications, and of course, the eventual unraveling of the financial system.

Among these, the most disconcerting is the role that confidence plays in feeding a financial crisis. As Krugman explains, this is a four step, circular process that acts as a feedback loop into a microphone – the sound of feedback grows until it becomes an unbearable screech. The confidence loop is described as follows:

Begin with confidence

Feeding the financial markets

Feeding the real economy

Then, back again to confidence

Perhaps the most interesting aspect of this phenomenon is the fact that it works in both directions. To fuel economic booms, participants in the economy have a great deal of confidence, so much so that during economic expansion, large bets are placed on the prospects of continued success. However, a financial crisis begins with a seemingly small change that chips away at confidence, eventually turning into a pit of panic.

These facts are explained in detail through the historical accounts given by Krugman. In each case, there was a spark that moved confidence to ever greater heights, only to have it all come crashing down. This process leaves a kind of stain on the minds of investors, policymakers, and everyday people alike. As illustrated with Japan's Lost Decade or the Great Depression, confidence, once lost, can be difficult to regain.

The Power of Speculators

Of course, where these surges and eventual collapses in confidence occur, the power of speculators can be found on full display. As Krugman outlines, speculators often go by the name of 'hedge funds', but these profiteers rarely do much in the way of hedging. Rather, they are fully engaged in turning a profit wherever opportunities exist and at whatever the social costs may be. In the cases of Latin America and Southeast Asia, hedge funds played an important role in the rapid descent of these financial markets and economies.

The basic strategy of hedge funds is to exploit markets by shorting safer assets and then buying long in riskier assets. However, when a market is ripe for a financial crisis, these speculators will engineer trades that will shake the stability of a country's financial markets with currency being a prime target. In each of the cases outlined by Krugman, hedge fund managers leveraged positions up to 100 to 1 in an effort to devalue a target nation's currency. Indeed, they created windfall profits for themselves in virtually every instance.

Unfortunately for those living in targeted countries, speculators' profits meant an enormous amount of economic pain. As a singular example, Argentina's currency lost 70% of its value due, in part, to the role of hedge funds. This devaluation caused a great deal of pain and hardship for Argentinians, but social costs are irrelevant to profiteers.

Regulatory Blindness

This brings into focus the question of regulation. If hedge funds offer no social value (or in this case, create social harm), how can they be allowed to operate so freely? The answer to this question is hedge funds are largely unregulated and take great care to stay away from the watchful eyes of regulators. With free reign to operate as they please, these speculators can wreak havoc around the world without fear of any serious repercussions.

As disheartening as this may be, hedge funds are not alone in taking advantage of regulatory blindness. Krugman skillfully parallels the so-called shadow banking system with the operations of hedge funds. In both cases, profits were the motivation, leverage was used at mind boggling levels, each engaged in some form of risk arbitrage, and in the end, both created widespread financial destruction. The only difference between them is hedge funds profited from the downward spiral while once venerable companies like Lehman Brothers collapsed.

This is where Krugman does a superlative job in writing. It would require many volumes of text to fully explain the shadow banking system and the complex schemes and instruments used, but Krugman gives the right level of detail so readers can understand how the world was blindsided by a banking system that few knew existed. At one point, he estimated that the traditional banking system had $6 trillion in assets while the shadow banking system accounted for another $4 trillion. It is almost unimaginable that a banking system with $4 trillion was completely unregulated.

The World, Blindsided

High finance is littered with very intelligent people, but left unchecked, a financial train wreck is the inevitable outcome. Just as hedge funds had laid waste to Southeast Asia and Latin America in the latter half of the 1990s, so too did the shadow banking system – only this time, it was not confined to a region, but became a global calamity that few saw coming.

Drawing on the themes of financial crises past, this current wave of panic bore a striking resemblance to all its predecessors. Profit was available, leverage multiplied profits, a bubble popped, confidence was shaken, and finally, disaster. The only difference was that this crisis had its roots in the United States, a previously unthinkable possibility.

As the largest economy in the world, many believed that the problems of subprime mortgages could be contained. In fact, Treasury Secretary Paulson issued just such a statement in September of 2007. As it turns out, his assessment of the size and scope of the problem was terribly off the mark.

Once the subprime crisis was in full swing, a crisis of confidence developed. The shadow banking system – largely dependent on borrowings between banks – began to show signs of great duress. With rapidly falling confidence in financial institutions, companies attempted to deleverage quickly, selling off assets and abandoning loans to other institutions. This compounded the problem, following the same cycle of confidence degradation that all financial crises share. The net result was the deepest recession in a generation.

The Return of Depression Economics

It is at this point that Krugman offers some advice on what must be done to move out of recession or at minimum, avert a depression. His recommendation for the immediate future is to get credit flowing again and to prop up spending by any means necessary. In addition, he believes that depression economics must be used and that policy should focus on demand side macroeconomics. Outside of the immediate needs, Krugman proposes global, coordinated financial reforms for any financial institution or market that meets a very plain definition: anything that needs to be rescued in a financial crisis must be regulated.

The Answers

What were the answers to Krugman's three important questions? The catastrophe was hatched in a $4 trillion unregulated market and eventually collapsed under a downward spiral of confidence. This crisis had victims in all corners of the globe, but there is no clear path towards recovery. The flow of credit and fiscal stimulus are good starting points, but much more will be needed. Finally, to prevent another crisis of this magnitude, regulation will play an important role, but it would be foolish to believe that this will be the last.

Left with Wanting

The Return of Depression Economics and the Crisis of 2008 is a fantastic work that can be easily comprehended by anyone with a basic understanding of economics. However, the book leaves the reader wanting a more detailed proposal for what must be done to repair the damage created by this crisis. With respect to Krugman's call for a return to depression economics, greater elaboration on what this would look like is needed. In the end, this is a book that richly rewards the reader, but could have been improved with an extra chapter to expand on some of the potential solutions – solutions that likely have not been seen in many, many years.

Chetan Bhagat's "What Young India Wants" - A Preview

Once again veteran writer Chetan Bhagat is all set to stir the minds of the young readers with his first non-fictional novel "What Young India Wants". The book will be released on August 15.

The book with the tagline of “Selected Essays and Columns” will be considered as the masterpiece for the readers, who are associated with social, administrative, and political spheres in India. 

The 208-page novel highlights some issues like suicide of youth and corruption, which are affecting all aspects of life of people of India. It focuses on the dirty politics, which is rupturing our nation. 

Through the book, the writer has discussed all the negative aspects of the political and social systems in insightful manner. He has asked hard questions, demanded answers and presented solutions for a better, more prosperous India.

"What Young India Wants" by Chetan Bhagat is going to be awarded as the best work he has ever produced. The book is now available for pre-order at various online bookstores.

Chetan Bhagat is a household name in India with his books like "Five Point Someone", "One Night @ the Call Center", "The 3 Mistakes of My Life", "2 States: The Story of My Marriage", and "Revolution 2020".

Hot, Flat and Crowded

The peripatetic columnist has made himself a major interpreter of the confusing world we inhabit. He travels to the farthest reaches, interviews everyone from peasants to chief executives and expresses big ideas in clear and memorable prose. While pettifogging academics (a select few of whom he favors) complain that his catchy phrases and anecdotes sometimes obscure deeper analysis, by and large Friedman gets the big issues right.

Almost a decade ago, in The Lexus and the Olive Tree, he celebrated the arrival of "globalization." Three years ago, in The World is Flat, he warned that borders, oceans and distance no longer protect us from the information revolution that is leveling the global economic playing field and relocating our jobs. Now he updates and expands this diagnosis by showing how population growth, climate change and the expansion of the world's middle class are producing a planet that is "hot, flat, and crowded." Unchecked, these trends will produce dangerous instability; but Friedman remains guardedly optimistic that we can stave off this nightmare, particularly if the United States changes its wasteful energy habits. In this important book, Friedman says we can survive, even prosper, by going green.

Of course, rousing a full-bellied nation, groggy from decades of energy overconsumption, is no small task. As the current election debate reminds us, the United States has proven inept at developing a serious energy strategy. Our approach, says one expert quoted by Friedman, is "the sum of all lobbies"; we have energy politics rather than energy policy. In the aftermath of 9/11, George W. Bush ignored calls by Friedman and others for a "USA Patriot Tax" of $1 per gallon on gasoline. Instead, the president offered tax cuts and urged us to shop. Rather than stimulating the economy to move toward fuel-efficient vehicles and renewable energy, we became more dependent on China to finance our deficit and Saudi Arabia to fill our gas tanks. Americans wound up paying even more for gas in 2008, but we enabled OPEC to be the tax collector instead of using the revenues ourselves. Friedman calls this a "No Mullah Left Behind" policy and quotes former CIA director Jim Woolsey: "We are funding the rope for the hanging of ourselves."

Friedman believes we need to become "green hawks," turning conservation and cleaner energy into a winning strategy in many different arenas, including the military. ("Nothing," he writes, "will make you a believer in distributed solar power faster than having responsibility for trucking fuel across Iraq.") We should stop defining our current era as "post-Cold War," he says, and see it as an "Energy-Climate Era" marked by five major problems: growing demand for scarcer supplies, massive transfer of wealth to petrodictators, disruptive climate change, poor have-nots falling behind, and an accelerating loss of bio-diversity. A green strategy is not simply about generating electric power, it is a new way of generating national power.

Incremental change will not be enough. The three-time Pulitzer Prize-winning writer for the New York Times scoffs at the kind of magazine articles that list "205 Easy Ways to Save the Earth." In the 1990s, global carbon dioxide emissions rose 1.1 percent annually, and many nations (not including the United States) signed the Kyoto Protocol to try to curb those emissions. But from 2000 to 2006, growth in CO2emissions tripled to 3 percent per year.

Friedman cites an estimate by Royal Dutch Shell that it typically takes 25 years for a new form of energy to capture 1 percent of the world market. Shell predicts that if we do things right, renewable energy will provide 30 percent of global needs by 2050, but fossil fuels will still provide 55 percent. Friedman says we need to do better than that. "Carbon neutral" is not ambitious enough; companies and institutions should seek a "carbon advantage" over rivals. This will require innovations in clean energy; greater energy efficiency (including the use of information technology to create smart grids and smart buildings); and a new ethic of conservation. Friedman argues that rather than costing too much, such initiatives can create investment opportunities, new jobs and global leadership for the U.S. economy. Here one wishes he had provided more evidence from some of the pettifogging academic economists.

Friedman is skeptical of treaties, and he argues that "a truly green America would be more valuable than fifty Kyoto Protocols. Emulation is always more effective than compulsion." He makes a good case that "outgreening" other countries would contribute to America's soft power as well as our hard power. "We are still the city on the hill for many Chinese," he notes, "even though they hate what we've done at times at the top of the hill." But the problem of China could overshadow what we do at home. In 2007, China surpassed the United States as the world's leading emitter of carbon dioxide. Chinese argue that on a per capita basis each of their citizens is responsible for only one-fifth the emissions of an American, and that developing countries should not have to cut back until they reach rich countries' CO2levels. This is a formula for global disaster. As Friedman says, "Mother Nature isn't into fair. All she knows is hard science and raw math."

China uses coal, a particularly CO2-intensive fuel, for 70 percent of its commercial energy supply, while coal accounts for a third of America's total energy. China builds more than one new coal-fired power plant each week. Coal is cheap and widely available in China, which is important as the country scrambles for energy resources to keep its many energy-intensive industries running. But Friedman does not deal with the issue of cleaner coal in China, and no amount of renewable energy in America will solve the problem. At the rate China is growing, a Chinese switch to renewables will come too late.

What can the United States do about this security threat? The bombs, bullets and embargos of traditional security policy are irrelevant. A 2007 report from the International Energy Agency urged a cooperative approach to helping China and India become more energy efficient. In other words, to promote our own security, the United States and other rich countries may have to forge a partnership with China, India and others to develop a full range of creative ideas, technologies and policies to prevent dangerous climate change. This requires a reframing of what we think of as national security and a more inclusive strategy than we have had in the past. If we finally move in that direction, Friedman will deserve some of the credit. ·

Book Review by Joseph S. Nye Jr. is University Distinguished Service Professor at Harvard and author, most recently, of "The Powers to Lead."