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Commitment Competence separates economies

I want to write about this life-changing paper which was brought to my attention by a colleague of mine in previous firm.  Adoption of the ideas there really helped my work life. 

I’ll call the Integrity Factor mentioned in this paper Commitment Competence so there is no confusion with moral connotations of the word Integrity. I’ll cover the personal aspect of this in a later post, but it has occurred to many times that the this Commitment Competence is the single biggest factor that separates successful economies from ones that perennially seem to lag (“emerging”, if you will, in the language of finance or “developing” in the language of the UN).  The lack of commitment competence introduces massive friction into an economy because a contract – verbal or written, is not sacrosanct.

I’ll illustrate with the difference between certain developed countries (like the US) vs an emerging country I know well (but let me not name it).   The thing that really kills the economy is this: In the developed country, when the mechanic says “your care will be ready tomorrow by 5pm”, it will be.  If it gets done earlier, s/he may even call you to say you can pick it up any time from now.  If it looks like it will not be ready tomorrow, S/HE will call YOU proactively (usually, today, not waiting till tomorrow) and tell you something is up – new parts need to be ordered/his employee has fallen sick or something.  In the emerging country, on the other hand,  there are no guarantees that the mechanic will have it ready when you show up at 5 pm tomorrow.   You can only find out at 5 tomorrow if he’s going to say I couldn’t get it done and “it will be ready in another day”.  He would not have called you, which would have been the only way to make you avoid a trip there at 5 pm. If you call at 2 pm tomorrow, he may be annoyed at you for pestering him (if he’s indeed going to get it done by 5) or casually tell you that yeah, he’s not going to get to it for another 2 days  (as if his promise was never meant to be taken seriously) or worst of all – tell you to come by/call at 5pm AT WHICH POINT he’ll tell you “not done yet”

It’s simply this – if one doesn’t respect one’s own word, it’s corrosive to the act of doing business with one. There is a direct link to GDP.    And truth/lie is very much relevant here: for, when a person says “I’ll do it next week” without knowing that s/he can deliver, or being serious about trying hard to make the deadline, it’s a form of lying.  And the person really is using the lie to get you out of his/her face.  And most maddening of all – “I can only do it after Tuesday” – the only thing the person committed to is NOT doing it before Tuesday.  He hasn’t said when he will get it done, which is the one thing the counterparty wants to know.

Of course, it’s not possible to know for sure if this a causal factor or an effect or the economic disparity, but I suspect it’s a cause.  I find this cause much more appealing than the ones people offer like racial differences, religious differences and the nebulous, all-encompassing and information-free term, “culture”.   There are plenty of counter examples to rebut those other factors.

Posted on by Gotamist

And right away, an example where individuals determined the outcome

ENG (1) – ARG (2) in the second semifinal today.

The England-Argentina semi today, in contrast, was about individual brilliance. But this only came into play because both teams were already great as teams.

Messi on the Argentina side was critical for both goals with talented teammates to help convert the opportunities to goals. In the case of Argentina, no special strategy decision had to be made because they were down in the 55th minutes in an elimination match. What choice other than to press and go on full attack? And they did.

But the individual of the day was England’s manager Thomas Tuchel who basically led the Three Lions to a defeat. He determined that with 35 minutes to go, the best strategy was to defend the narrow 1-goal lead, sit bak and not attack, lest it leave an opening in defense – a plan that made sense to nobody else, it seems. A wave of substitutions took out attackers and replaced them with defenders. England formed a wall around their goal and barely left their own penalty box. This freed up Argentina to try again and again with little fear of a counter. Argentina had most of the possession after 55′ (88%, said the folks on TV!).

Everybody knows that you cannot score without ever taking shots and no further explanation is needed for what happened. The thing I wanted to point out, though is that England is also phenomenal as a team. And has plenty of attacking firepower and spirit. But when one leader sets a wrong strategy, he can lead a fantastic team off a cliff, or to an ignominious ending. Yet, they ended the night with no honor, unlike Switzerland’s exit, Cape Verde’s, Egypt’s or Belgium’s. So…talent, great teamwork and good leadership to set the right strategy.

I am reminded today of the tragic incident from 2022 in Uvalde, Texas. A highly capable team, capable individually and capable of perfect coordination, sat around in cowardice when they could have almost certainly pulled off a much more glorious outcome – just following bad decisions of leadership. Of course, these two inciddents are in completely different leagues. One is just a game and the second is a massive national tragedy, but the parallel is that trying to avoid all risk is a losing strategy – suffocating in your own coffin of dishonor.

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A star team beats a team of stars

Spain 2 – France 0 in the World Cup Semifinal today

Billed as “the final before the final,” Tuesday’s World Cup semi-final at Dallas Stadium promised a collision of two juggernauts. Instead, it delivered a lesson. France arrived with perhaps the most dazzling collection of individual attacking talent in world football — Kylian Mbappé playing some of the best soccer of his career, his eight goals tying Lionel Messi atop the Golden Boot race — flanked by Dembélé, Olise, and the precocious Doué. Spain arrived with something rarer and more valuable: a team. The 2-0 result was less an upset than a demonstration that integration beats talent accumulation.

The distinction was visible in every phase. Spain’s opener came in the 22nd minute, when Lamine Yamal drew a foul from Digne in the box, and Mikel Oyarzabal calmly dispatched the penalty. Yet even that flash of individual brilliance was the product of collective machinery: Yamal received the ball in dangerous positions because, as one passage of play late in the match showed, Merino, Pedri, and Cucurella worked in concert to keep possession and feed it to him on the right.

The second goal was pure “system football”. In the 58th minute, Pedro Porro — a right-back, played a give-and-go with Dani Olmo before side-footing past France’s goalie Maignan. A one-two between a fullback and a playmaker, executed at speed in the final third, is the signature of players who understand each other’s movements instinctively. It’s a goal a “team of stars” rarely scores, because it requires trust in the pass rather than faith in the dribble.

Meanwhile, France’s galaxy of forwards was reduced to noise. Spain’s defense restricted Mbappé, Olise, Dembélé, and Doué to just 0.3 expected goals from ten shots — a suffocation achieved not by one great defender but by eleven players compressing space as a unit. In the 38th minute, coordinated high pressure forced a giveaway, and tight one-touch play between Yamal and Olmo nearly set up Fabián Ruiz at the near post. On both attack and defense, Spain acted collectively.

France’s response revealed the weakness of the individualist model. Deschamps shuffled his stars — Koné for Rabiot at halftime, then Doué for Barcola in the 57th minute — and a minute after that second change, Spain scored again. When your plan is “get the ball to the great players,” an opponent who removes those players from the game removes the plan entirely. Spain, by contrast, has now conceded only one goal in six matches — cohesion as a tournament-long identity, not a one-game mood.

I myself find France’s attacking style quite a bit more exciting to watch than Spain’s possession-style, sometimes called “death by a thousand passes” (sometimes, to audiences too, not just opposing teams). However, being exciting is different from getting the job (winning) done. Somewhat related are the words of John W. Gardner, a former US Secretary of Health, Education and Welfare, “The world loves talent, but pays off on character”. In this case, we’re talking about team character, not personal integrity, of course.

This isn’t to say Spain lacks stars. It has them, and a deep bench of them too. But the character of the team is such that even their global stars know that moving the team forward is how they achieve success. Take Lamine Yamal as an example. He is a fantastic goal scorer, but has scored only one goal in this tournament, against Saudi in a group stage match. Does that mean he isn’t having a good tournament? Far from it! He has made huge contributions. The talented teen makes some important plays, draws defenders and draws fouls, such as the one that set up penalty today – an opportunity that few would have created. He also performed some excellent defensive work in the last quarter*.

Spain heads to Sunday’s final in New Jersey sixteen years after winning its first World Cup — who doesn’t remember 2010, another vintage defined by collective identity and a year that made tiki-taka a household term globally? The lesson from Dallas carries beyond soccer: extraordinary individuals make a roster; a genuinely integrated team, where everyone enables and amplifies every other player, is a cut above other teams, i.e., a superstar team.

Notes: * – we can start referring to quarters now… hydration breaks are here for good, unfortunately.

— Meanwhile, the leading goal scorer, Mikel Oyarzabal is from Real Sociedad, a great club team in Spain, no doubt, but not at the eliteness of Barcelona and Real Madrid. Perhaps there is a parable here about not focusing on recruiting for your team/workforce from the most elite schools. But I’ll refrain from developing that theme here. After all, the theme here is that individual goal scoring records ought not be the focus.

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New dads, ease up!

Research has shown that the hardest year of the career of a number of men is the year following the birth of their first child.  The instinct to protect and provide has kicked in,  Most agree that, in retrospect it wasn’t necessary.

“For the first year or so, all that babies need are diapers, onesies and a lot of love” – observed one of my colleagues, correctly.  Not a lot of extra money.

But it’s not more money for the first year but for life, for funding the college etc, one might think. 

True, as children grow up, spending increases.  But so does the income of the parent.  This is through natural progression – people have higher incomes as they age – whatever their field of endeavor is. This happens to increased skill, increased reach or increased reputation – natural causes.

OK, maybe it wasn’t necessary, but what’s the harm?  The harm is that we dads tend to be less present for the ‘lots of love’ that the babies need (don’t compare with the with time you didn’t have the baby – compare with what you think is the ideal amount of time with the baby). And it’s not just the baby – your partner needs you around in an unprecedented way, helping and loving them. And finally, some damage to the father’s own emotional state – the studies found that fathers took most time out of leisure pursuits.

The other harm is to your work life itself, sometimes leading to burnout.  Under pressure, new dads make made moves at their work that they might regret.  People who run businesses might make poor business decisions that they might come to regret later. 

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The power of renunciation

Successful leaders in India have lived in poverty (Gandhi) or are bachelors (Modi).  Others have been wealthy and given it up. Millions of people have followed these leaders in spiritual life or even in political life. No one can be well off and still be a great spiritual leader.  

This is in contrast to the West where leaders are not renunciates.  It might even be a disqualification.  Consider that politicians often have to show a spouse and child to even be electable.  A bachelor has a smaller chance of getting elected and someone who’s celibate is just….strange.

Political leaders can be wealthy in the West and many saints of the church were kings – no such case in India.  No historical king is revered as a saint.  All saints were penniless.

This could be some fundamental difference in world views of the East and the West. 

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Exercise is a lonely endeavor

Those of you who are young adults perhaps don’t relate to this.  After all, for many who do fitness activities or sports, that is self-reported as their main social group (sports club, crossfit class etc). However, as one gets older, is more advanced in their careers, is not single, has children, exercise gets increasingly hard.

It is my finding that there is minimal support from other close stakeholders in your life as you have to find time to exercise from one of three things – work, family or sleep.  The last of these works directly against the gains of exercise. As to the other, your workplace is primarily interested in your work product delivered today and not so much in what you need to do today to ensure that work can continue to be delivered later.  Likewise, every member of your family (if they like you), would rather have you spend time and effort directly on family activities and serving family members directly than on investing in being able to do so in the future.  So, I find that on almost any given day, I, and I alone, am advocating for exercise and everyone else close to me is begrudgingly putting up with it (or complaining in some way).

Everybody appreciates a healthy partner, a healthy family member, a healthy friend, a healthy employee or colleague.  Yet, nobody is willing to cut you some slack from the time they think they are owed to let you put in the sweat for it.  It could be just the usual shortsightedness applied to their own benefit (cake now is better than health in 3 weeks – same idea applied to another’s health) or it could just be blindness to the fact that they are also beneficiaries and seeing the exercise as sheer selfish gain for you.

I remember, as a teenager or a young man, hearing the word “willpower” used in the context of exercise – as in, getting through a physically taxing exercise needs willpower.

Now, of course, I am desperate for exercise and relish every opportunity I have for it.  The exercise of willpower is in only two things – a. Setting aside other things (and the inevitable scathing criticism because of that) to get exercise and b.  Using judgment to make sure I am not getting carried away in making too much time for exercise.

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In a democracy, it’s the wishes of the people that get carried out

That would seem like an obvious and uncontroversial statement, but all too often, when I say something like that, people act like I am a naïve child. I am told it is the agenda of the rich, the white people, the jews, the blacks, the military-industrial complex, the tech billionaires or some other behind-the-scenes “they” who control the government.

Apparently, it is never the wishes of the people that are carried out. I humbly submit that most people, when they make such an analysis, are confusing “what I want” with “what the people want”.  It’s not uncommon to hear supporting evidence like, a) “I didn’t vote for this” b) “I don’t know anybody who supports this” or c) “polls show that a majority of Americans oppose this”.

Let’s set aside c) for a minute.  It should be pretty obvious that a) does not mean that the thing is not supported by the people.  As for b), it could just mean one lives in a bubble or echo chamber.

c) is a bit more complex.  That happens too.

It so happens that the problems facing a government are in very many different dimensions.  Let’s say 15.  But if there are only 2 or 3 major parties, unless individual voters have views that coincide exactly with their party slates, invariably, the 2 parties cannot align with their own voters on all 15 topics. How do the parties choose their positions, then?  They might appeal to what the majority of Americans think.  That let’s them appeal to people currently outside their party.  Or the party might choose to push a position on an issue that aligns with the majority of voters of their own party. Or…they might even choose a position unpopular with even a majority of their own supporters, if that guarantees them the support of a small set of voters for whom the issue is very important if they can be sure that the rest can live with that.  That is, it’s not as important an issue for the others.  These are the cases where they might be accused on “pandering to the base” or “selling out” depending on whether they sided with the radicals or the moderates.

The key thing I want to note, though, is that in none of a), b) or c) do we see any of the powers mentioned in the first paragraph of this essay. Those allegations are simply an easy, intellectually lazy thing to reach for.

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Equality – outcome or access

It is a prevalent view in some quarters that equality is good.  In particular, equality of outcome. And a lot of energy is expended on reducing inequality.  And the measures are generally some statistic out of a CDF of income over the population. Such as the Gini coefficient or “the top 1% of the population makes X% of the money” etc.

One of the necessary conditions of a growing and innovating economy is inequality and the opportunity to make more money than others, a lot more money even.  So, the SJW program of trying to eliminate inequality entirely is actually an obstacle to growth.  

Does that mean there can be no social justice along when there is growth? No. Just that equality is a poor way to measure social justice.  In particular, most people can agree that equal opportunity or equal access is, in fact, a strong form of social justice.  Of course, this can instantly be attacked by those with a socialist bent as merely a smokescreen for injustice.  “There is never equal access” and “How does one know it’s there, anyway?”

The way to know the presence of equal access is by measuring actual outcomes. There will always be inequality, but if we find that when we slice the population along dimensions of various immutable characteristics – race, gender, location of birth etc, these buckets don’t show a difference, that is actually a fantastic result.   That is statistical equality instead of strong form equality (homogeneity).  To use a metaphor that the left actually loves in the context of immigration – we’d love to see a salad bowl (different parts of the big bowl look alike though different square inches may look different) rather than a smoothie which actually has forced complete equality.

One of the dimensions on which NOT to slice the population is something like deciles of income.  There will invariably be difference in even the fairest societies. To stick with the salad analogy, that would be creating a curve where all the spinach pieces are one side, followed by the cherry tomatoes, followed by the apple chunks etc.  Obviously, different parts of this curve will look very different even though the salad was well mixed in its original state.  If you use such a curve, the only solution is the smoothie.  And that will kill the economy – a topic for another day.

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Three things learned at work

Having been in some kind of workplace for decades, I have learned that one needs to be excellent towards the people who works with one, to paraphrase Bill and Ted. Here are three:

The first one is well known, and here I am merely confirming that I have found it true experientially: If you are a boss, manager or owner, then if you value an employee, then you have to be proactive in making sure they are happy, productive, successful, feel safe and having a meaningful work life.  If you don’t you stand a good chance of losing that employee.

The second one is less well known: If you are employee and you appreciate your boss, then you have be proactive in making sure they are productive, successful and finding the workplace a good place for them.  A different version of this is well known to even (and maybe especially) cynics – make sure you keep your boss happy.  But this conventional wisdom is centered you.  If the boss is happy with you, then they will not fire you. And maybe arrange for higher pay and promotions for you.  But what I’m talking about is different. It applies to senior folks that you actually appreciate.  Help them so that they stay. 

And the last is one that people think least about: If you appreciate a peer, try to create conditions so that they stay and don’t leave or get forced out.  Because they are not in your chain of command, it is easy to think that there is little you can do or need to do.  The peer sinks or swims based on their competence.  But that’s not quite true.  You are part of their environment and you contribute towards making it a desirable one or a poisonous one.

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Why majorities go with the right and minorities with the left..

As a general statement, of course, not individuals. Before writing, let me cite some examples. In some societies, some demographic divisions are also political fault lines. For example, in the US, race is a factor. In India, religion is (and a note for casual Western pundits – no, it’s not caste).

And one finds the phenomenon that the economic right (similar policies across countries) are aligned with the majority while the economic left is aligned with the minorities. Locally, this might be mistaken for the a certain religion being aligned with the right. But adherents of the same religion, where in a minority, tend to go with the left.

The reason fundamentally lies in approaches to growth vs. inequality. Minorities have a real historical experience of having power and wealth captured away from them and the entire society’s growth is less of a concern to them than reducing how much they lag behind. Leftism, with its promise of equality is an attractive proposition. Lack of growth is not a real threat if you actually believe that the country’s GDP growth is going to mean nothing to you.

The majority, on the other hand, would like the country to grow economically. Both because they have greater confidence that this will translate to their personal gain and because they might not as personally take much issue with minorities being left behind. Growth first, is the main call and the demands of leftists and minorities are seen as annoying or even the very thing that is holding the country back from greatness.

There you have it!