Management Thoughts - Tenure of a CEO

Should there not be a fixed tenure for CEOs????

This may sound very controversial but in my view it deserves a serious consideration. We are familiar with the Peter Principle which says that one rises to his level of incompetence in the organization. With some alteration in letters, keeping the spirit intact, we can perhaps say:

“Every  CEO moves towards ‘staledom’ in his approach leading the organization to doom; the speed at which he becomes stale depends on his individual personality”

Let me explain what I mean by “Staledom”. When a CEO is new, he is fresh with ideas, bubbling with enthusiasm, has a dream of steering the organization in certain direction to take it to certain level and evolves strategies to achieve his dreams. In the initial phases, he does taste success. Firstly because he would have analyzed the shortcomings of the predecessor and developed plans to overcome them. He gets advantage of starting from a clean state so that he has no hesitation to introduce “course corrections” and he does not have to explain the “U Turn” that he might have taken. Thirdly he would have also come with certain reputation and people might like to cooperate and give him a chance especially if they were fed up with his predecessor. Being new he is also more observant, more open to receive feedbacks and is positive about constructive criticisms. He becomes an enthusiastic learner to prove himself. This urge is very strong in him at the initial phase.

Slowly as he tastes success, he becomes more and more confident about taking decisions independently. If the success continues he starts entertaining an impression that he can do no wrong and a sense of invincibility sets in his psyche. Slowly he becomes autocratic, becomes intolerant to dissenting voices and then on begins his downward journey. Why does this Happen? With time situations change, outlook changes, tastes change, alternative options appear before the people. What works in one era need not work in another era. Therefore the CEOs have to be very sensitive to changing situations – firstly they should sense that situations are changing and then adopt themselves to the new situation. It is human to resist change and difficult to accept change. The past success adds to the problem as successful people get blinded by the successes achieved initially.

May be this is the reason that in US a person cannot stand for election for the third term. His maximum tenure is 8 years. Fresh ideas, new thoughts come up every 8 years if not after 4 years.

This is also perhaps the reason as to why dynasties also do not last for a long period of time. A King either gets thrown out if he loses a war or gets replaced by his son if he dies. In the latter case there is not much change in the way the Kingdom is administered. Of course some bright princes after ascending the throne do bring revolutionary changes but they are exceptions.

We can see many corporate houses where a long tenure has coincided with drop in performance. It also does not mean that by changing the CEOs frequently will keep the organization healthy. When to step down, when to change is difficult to judge but perhaps that is why “the Wise people” are put in the Board to take the “right” decisions.

Pychology of revenge - a viewpoint

Is revenge a natural instinct?

We have been told and advised many a time that anger does no good to the body. To be successful in life, we should control anger and our urge to take revenge. However one will never be able to find a person who has total control over this human emotion. Even though we realize that 'anger' is bad for our health and to take revenge as a corollary of this anger is even worse, we get trapped by these negative emotions. An uncontrolled anger and spirit of revenge could result in increase in our stress level leading to high blood pressure and if neglected could lead to heart attacks/ strokes that  can turn out to be fatal or cripple us permanently. Inspite of being aware of the negative effects of anger, we don’t seem to have any control over it and manifests subconsciously. Some could be good at masking it and some may demonstrate it with ferocity but we have to concede that all of us are afflicted with this weakness. Even great religious leaders who are supposed to have spent their lifetime in meditation, reading and understanding scriptures are not free from this shortcoming. This made me wonder whether ‘God’ has designed our psyche in that fashion. I think got an explanation to this question from a 6 year old child.

This girl along with her mother and other close relatives had come to our house the other day. She was quite active and talkative. To engage her in a conversation, one of us in the group asked her what she wanted to do when she grew old. Pat came the reply, I will get married! It aroused an immediate curiosity in all of us. When asked further as to what will you do after getting married she said without any hesitation that she will have children. That startled us no end. Then what will you do was the next obvious question and she said that I will scold them the way my mother scolds me.

I am not sure whether she is very angry with her mother and was detesting the ‘controls’ the mother was putting on her because she was also very affectionate to her mother in other contexts. But may be because she could not ‘give back’ to her mother in the same coin when she was getting 'rebuked', she thought of having a ‘target’ in her children to satisfy this urge.

Most of our misery is due to this major weakness. We find extremely difficult to tolerate any insult to our ego – we find difficult to accept our failures and shortcomings. We do not readily give credit to the opponent. If we find the opponent too much for us, we look for a ‘soft target’ whom we can bully and in turn this soft corner will search for a still ‘softer corner’ to bully and it goes on ad infinitum.

I find this behavior strange, interesting and at the same time in a way frightening. I invite your comments on this aspect.

Concept of relativity in understanding ‘Time’

Perhaps not many have paid attention to understand what we mean by ‘Time’. We are all familiar with the practice of mentioning location while indicating time e.g. EST, GMT, IST etc. Here the ‘Time’ is reckoned with regards to relative position of Sun with respect to earth’s rotational axis. Thus in a location where the Sun is rising, the time could be 6AM while there would be locations on earth where the Sun would appear to be setting and there the time would be 6PM. An incident say an earthquake occurring in one place will be recorded to have occurred at different times depending on the relative position of earth with respect to Sun at that location. Thus across the International dateline, there will be a difference of one day. This means if the date on one side of the international dateline is 15 on which my child is born, its birthdate would be either 16 or 14 on the other side of the international dateline depending on whether you have moved towards East or towards West to cross the dateline.

Earth takes approximately 365 days to travel around the Sun, which means the position of the Earth with respect to Sun in the Solar galaxy will be the same in 365 days interval which we term as one year. Instead of taking Sun as the reference point, one can take the position of moon as reference point to ‘measure time’. Some people do follow this system and their year naturally does not match with ‘Solar Year’. A ‘lunar year’ is much shorter than a ‘Solar Year’. We can also have reference some stars for measuring time.

Another interesting question is about our understanding of ‘simultaneity’. What do we mean by saying that the events have occurred simultaneously. Imagine for a moment we are able to see another galaxy similar to our’s where there are people living. Suppose the distance of that place to our place here is such that it takes one year for light to travel to cover the distance. If a child is born at this time today, we can see the birth of the child only after one year since the light would take one year to travel. Thus if we are celebrating the birth of a child here now, in some other place the child would be either one year old or will be born one year later. What it means is that in the absolute terms no two events can be termed as having occurred simultaneously based on our visual observation.

These questions then lead us to realm of metaphysics – what we see is really true or is it just an illusion. If it is an illusion then what is truth. Ancient Philosophers meditated a lot to find answers to these questions. Science perhaps tried to explain this  phenomenon through theory of relativity and to me it has been interesting to observe how Science and Philosophy merged at this point.

Lessons from Life observations

While on the morning walk today, I observed an incident which has puzzled me no end. A bunch of half a dozen stray dogs were strolling along the road in a group. Suddenly they became ferocious and barking loudly ‘charged’ in my direction. However, a little distance down, they stopped infront of a house where a cat with its tail tugged between the legs was sitting. Surprisingly, the dogs mellowed down; barking mildly and wagging their tails, they were just observing the cat from a distance. On the other hand, the cat continued to sit stand still staring at the dogs. After a while, the dogs dispersed from the scene. The site caught my attention and since then I was trying to answer the following questions which came to my mind:

1.       Why the dogs which charged down so ferociously towards the cat did did not attack it but stopped near it and ‘cooled’ down?

2.       Why did the cat which to me appeared to be very nervous with the tail tucked inbetwween the legs did not run away into the house (the cat belonged to that house and it remained still inspite of the landlady who came out listening to the Dogs’ barking ordered the cat to go inside the house?)

For long I was trying to find an explanation to this phenomenon. After churning my mind for hours, I came to following conclusion:

1.       May be the cat was shell shocked and froze to remain in that position out of fear (did not know what to do – virtually paralysed).

2.       However, seeing that the cat has remained still, the Dogs might have concluded that the cat is very bold and is prepared to face its adversaries boldly. This bold posture (as interpreted by the Dogs) must have unnerved them.

The incident as I interpret tells me:

1.       Never betray your nervousness to others. Keeping a bold face can unnerve your adversaries even though you may be trembling inside yourself.

2.       No one wants to confront a strong opponent.  Everyone looks for a soft target.

Don’t we observe these ‘realities’ in everyday life? Even at home we observe this phenomenon – a brother dominating over his younger sister, the husband (or wife) dominating the other depending on who is ‘mentally’ tougher) etc. Similar is the trend in the relationship between the managements and trade unions. A strong society (be it because of social status, power, numerical superiority) tries to dominate the weaker ones.

The moment there is retaliation, the equation changes – ‘hierarchy’ of ‘dominance’ gets disturbed. Perhaps most of the time the strength is a mere show – a facade and easily challengeable. All want to test the opposite party’s strength and exploit the weaknesses. We hardly find healthy relationship based on equality and mutual respect. Each one tries to ‘pose’ that he is powerful but ‘crumbles’ at the first sign of retaliation. When the homework is thorough and preparation meticulous, our ‘toughness’ will yield positive results. Today’s observation on ‘animal behaviour’ reinforces this belief system of mine.

Solar data and experience of last 45 days on Solar system

Energy meter for daily consumption was installed on 13th April and hourly generation and consumption was recorded from that date onwards. The main observations are:

1. Average daily generation was 6.3kwh. For a 1.5kw solar panel capacity this works out to 4 hours of bright sunshine per day. Average consumption was 4.7kwh/day

2. During this period, the zenith time (i.e. the time when the sun is exactly vertically above – this time is a function of your location and the month of the year) was 12.30pm. This meant that peak generation should be around this time (if the clouds don’t interfere). 

3. The maximum generation rate in this interval was 1.3kw and for a 1.5 kw installed capacity, I think it was a reasonably satisfying results. On two occasions the value was 1.2. Majority of days it was 1.0

4. Even a slight cloud cover perhaps affects the generation as reflected in fluctuation in generation rates in these time intervals.

5. Unfortunately quite a few days were cloudy and hence the average peak generation (between 12 noon to 1pm) was 1kw

6. Cumulative generation for the first half of the day i.e. till 12 noon to 1pm interval was 3.7kwh. With daily generation of 6.3kwh meant that in the second half the generation was 2.6 kwh only. Most days in the evenings especially after 3pm the sky would get a good cloud cover (even though the rain Gods did not shower blessings on us) 

7. We were out of station from 29th onwards for about 5 days and during this period only our fridge was on. Average generation per day during this period was 5.4kwh/day and our consumption was 2.2kwh/day. So the average consumption for a 300 L capacity fridge is around 2kwh/day – which matches with their specifications of approximately 100watts.

8. After our return, the generation has been very low since most of the time the sky is overcast. In the last 10 days that we returned, the generation has fallen to 4.5kwh/day but the consumption was 4.8kwh/day

9. Cumulative units generated since 13th April has been 173kwh and our consumption is 142 units, difference between generation and consumption comes to 31kwh.

10. During this period, 40 units was drawn from the grid out of which in the last 10 days 25 kwh was drawn. So if we add 31 units to 40 units drawn from the grid, the gap increases to 71 units. This comes to more than 3 units per day. This is the energy consumed by the inverter. At the generation level of 6 units a day if the inverter takes 3 units (which comes to 50% of the generation), one has to really get from the manufacturer what is the power requirement for the solar inverters and incorporate into the design. 

11. Our average consumption prior to installation of Solar system was 7 to 8 kwh/day which has dropped to 4.75 units a day. I was wondering how we were able to bring down the consumption by almost 30 to 35%. After looking at the energy consumed by the inverters, I conclude that our earlier UPS must have been consuming 2 to 3 units a day!!!. Now the consumption is metered from the output of the inverter and therefore does not include the inverter load whereas earlier the Board meter was measuring the power supplied to the house hold which included the UPS.

12. I have not worked out the cost of generation yet. I want to assess the monthly generation over longer period to project what will be the yearly generation to estimate the cost of generation.

13. Because of unsteady atmospheric condition i.e. clear sky, partly cloudy, overcast sky etc, it is difficult to correlate generation with previous day’s consumption.

This much for now. Hope you will find these observations interesting.

New learning from 20 days operation of solar power system

It is almost 3 weeks since my system was installed. I have been manually collecting data on the generation and impact of heavy load on the system. Some interesting things have come out.
1.    The generation appears to be heavily influenced by consumption that too consumption at what point of time. If more units are consumed in the first half of the day, generation is generally higher that day.

2.       If the consumption is high in the later part of the day, more units get generated in the early hours of the next day

3.       These are qualitative observations. After collecting data for some more days, maybe I will attempt to quantitatively establish the relationship (if at all it exists)

4.       In my previous note, I had suggested that the solar panel capacity be dictated by average daily consumption. Now I realize that the peak load also should be factored in for sizing the panel. I find that whenever I start my submersible pump (bore well) the battery voltage drops significantly by 4 to 5 volts and later on continued to drop by almost 0.2 V to 0.3V every minute. My installed solar panels has a capacity of 1.5kwp but the pump consumes more than 2.3kw. Obviously there is more than 1kw deficit between generation and consumption during this period which gets supplemented from energy stored in the battery. This is a heavy drain and I have to be careful in seeing that the battery does not drain out so much that one has to draw power from the grid. So I have been operating the pump in short bursts for 3 to 4 times a day

5.       Going for more panels means more redundant capacity. As such even now I find that the installed solar panels are fully utilized. The moment the batteries are full and there is no consumption the generation stops. One day when we were away from morning till evening, the generation was only 3.3 kwh. Only on three days generation has crossed 7kwh. The rest of the days the generation ranges from 5.5 to 6.5 hovering around 6kwh. May be I am losing a potential of 1 to 1.5 kwh generation daily.

6.       This loss in potential can be arrested if we are able to sell this power to the state grid. This facility is available at present in only a few select location (and I am not lucky enough to be there). If that happens it is likely that the commercial viability will substantially improve. In my next note, I shall let you know what my generation cost is.  Being only an Engineer by profession, the Chartered or cost accountants need to approve my methodology of arriving at the cost. On many occasions during this period I am in a dilemma – certain times I feel that I should be liberal in the consumption of electricity so that generation is not skipped due to ‘saturation’. Other time I feel like restricting the consumption since I have a limited stock from where to draw power from. Either way leads to inefficiency and wastage or idling of resources

7.       If the state can assure 100% power availability to those who set up such power plants and purchase the excess power from them, the need to have a battery backup can also be eliminated. It will then have two advantages. Cost of solar plant will come down by approximately 25% because of elimination of batteries and secondly we will reduce handling of corrosive acids in the batteries and be more eco friendly.

This much for timebeing.

Solar energy for homes

Solar energy as an option for homes

Background

Much has been said about tapping power from renewable sources and Solar and Wind top the list. I was toying with this idea for perhaps more than a year more for academic interest rather than any commercial viability and looking at both wind and solar. Wind option was dropped since the wind velocities where I stay are not that high to generate power to meet daily requirement. Solar also fascinated me because the number of rainy days is very small in my place and therefore the 'blackout periods' expected to be insignificant.

At the very outset let me make it amply clear that if one is looking for Return On Investment (ROI) in conventional way in this project, the returns are dismal to put it mildly (I have invested Rs 2.4 lakhs and save around Rs 1000 of electricity bill every month i.e. a payback around 20 years). However from a very holistic angle and long term sustainability I am convinced that Solar power makes sense. How long can we enjoy paying electricity bills at subsidized rates? As the availability of natural sources like coal and oil decline, the power generation from these sources will increasingly become costlier in tune with laws of economics. Another point to be noted is that if you are in a location where there are long duration of load shedding, frequent and unpredictable power interruptions, breakdowns and perennial shortage all through the year, it makes sense in considering options for solar power.

I was emboldened to invest in this venture (and just not restrict to academic exercise on designing solar power plants and give lectures on advantages of solar power) because my daughter was also quite supportive to back financially (100%) and did not mind if the experiment failed. Few reputed companies that I had approached had quoted around Rs 4.5 lakhs to meet my needs as they perceived. I was however not totally satisfied with their offers. I thought they had over-designed the unit (may be to ensure that there is no complaint from me later on for non-performance or under performance). Even my volunteering to take the blame for deficient performance for giving a configuration which I thought suited me did not elicit encouraging response - perhaps they did not want to risk their reputation and rightly so. I always felt that I should be able to install a power plant meeting my needs for less than Rs 2.5 lakhs. In my scheme I did not put any extra 'fat' in the design. My reasoning was that if condition necessitated increasing the capacity, I could install additional panels and add extra set of batteries. Why spend money now for an 'imaginary shortfall'? The only unit whose capacity cannot be increased by putting additional numbers is the inverter the sizing of which I was liberal.

The quotation of Rs 4.5 lakhs also did not give me comfort to immediately plunge into the project. So I waited for some government incentives to come before taking the plunge. (It is a different matter that nothing came either from the Central Govt or from the State Govt). Meanwhile I shared my idea among my friends here in Nanjangud and two of them showed lot of interest. I thought, three of us pooling together should act as an incentive for prospective supplier to quote an attractive price. Amongst we three, one lives in his farm house where there would be almost no power available for 14 to 16 hours a day and for him an alternate source of power was a dire necessity. In the last week of January he informed me that he has gone ahead and installed a totally stand alone unit for Rs 1.65 lakhs. I was surprised as to how one can get the system for such a low price. I went, saw and frankly I was conquered.

The proprietor of this party is enthusiastic young man willing to learn and listen. In a way to me it is a startup company which wants to grow and establish its brand. When I gave my details on the power load he came out with a configuration that I had arrived at long time back. What I liked about him is that he is prepared to listen to what you want and supply what you need rather than supply what he wants (may be because he is still to grow - I have always felt that small is beautiful).

The Basics

Now I shall explain the factors that should go into configuring the solar plant. Fundamentally there are three segments in the solar power set up which need to be optimized independently to keep the cost low. By optimization I don’t mean you cut down your comforts but would definitely suggest cut down on luxuries.

A.      Average daily consumption – From our monthly electricity bill, we know average units we consume on a daily basis, e.g. if we consume say 240 to 250 units monthly we can say that the average daily consumption is 8 units. If possible find out how much you can reduce from this consumption if you switch over to LED lights. Lighting load can be reduced by 20% easily with this switch over. Thus if you install 1.5kw panels, on a normal day with sunshine available from say 9Am to 5pm i.e. 8 hours the maximum that you can expect is 1.2kwh. It should be noted that the specifications on the panels is for peak wattage generation i.e. a 250wp panel will generate at its peak 250 watts ('p' after the wattage denotes peak). We should consider not more than 70% of this value available to us for harnessing. Thus taking 70% of peak generation of 1.2kwh we will get 8kwh of energy that day. In my case I have got a max of 7.7 units generation in a day in the last 15 days since the time I am on Solar. Most of the days in the last 15 days, the generation has been around 6.5 units. In these 15 days practically there has been no generation after 3pm since the sky gets overcast with dark clouds (but rains have kept alluding us).

B.      Peak Load – The second component of cost is the inverter. The inverter should meet your peak load. One will have many high power consuming gadgets at home e.g. microwave oven, induction heater, electric geysar, washing machine, grinder/mixer, electric iron, borewell pump, sump pump etc. Estimate how many you need to compulsorily operate simultaneously and which are the ones you can stagger. Think whether when you are operating induction heater, whether you can refrain from using microwave oven, washing machine or starting of the bore well pump. You cannot predict when the Fridge compressor will switch on so let it be like that. Suppose total peak load comes to say 2.5kw from this exercise, go for a 5kw inverter – to take care of any inadvertent starting of gadgets without one’s knowledge exceeding the inverter capacity. Be liberal with inverter capacity sizing since its contribution to cost is the lowest and you cannot increase the capacity of the inverter in modules (like increasing the power generation by installing additional panels and increasing battery back up by adding more number of batteries in future). You will have to replace the inverter with a higher capacity one if there were to be under estimation of peak load requirement.

C.      Battery Backup – Please take the trouble of finding out how many units you consume from 5PM to next day 9AM. Battery capacity should match this requirement. If you can avoid using heavy power consuming items like induction heaters etc in this time interval, you will need less number of batteries and thus incur lower cost. Finish utilization of high power consuming equipments before 3pm.

General

It is advisable to be as accurate as one can be in finding out how much each electrical gadget consumes power. What is written on the name plate may not be reliable (They may be valid under ideal conditions). The nearest analogy is the fuel consumption claimed by the automobile manufacturers. We get much lower mileage than what is indicated in the pamphlets because we don’t drive or operate under ideal conditions. I had bad experience with the bore well pump. The pump claims it has a 1hp motor which ideally should consume 0.75kw but now I find that it consumes more that 2kw i.e. almost near 3hp. So I have landed up in a situation where I have to be very careful as to when I have to start the pump.

There are quite a few other points that I have observed which I shall consolidate and share in due course. If anyone is interested in the ‘calculation’ part of sizing the capacity, most welcome to contact me.

Hope this note gives some idea about the ‘design’ considerations of Solar power system and is comprehensible. For any clarification, never hesitate to contact. Go green, go Solar!!!

My salutations to the Sun God, Albert Einstein who got the Nobel Prize for discovering Photo electric effect and the technologists who developed the photo voltaic cells based on Einstein's discovery.