More on Diversity and Inclusion

Diversity and Inclusion are words that are normally thrown around by people of a certain persuasion. In fact, they were among the key principles espoused by one of my earlier employers as well (to their credit, some of their diversity and inclusion sessions did a lot of help broaden my worldview).

However, as I’ve argued earlier on this blog, in a lot of cases, arguments on diversity and inclusion are (literally) only skin deep – people go big on diversity of sex, sexuality, skin colour, nationality and so on while giving short shrift to things like diversity of thought, which in my opinion plays a larger role in building a more successful team.

I’ve also mentioned earlier on this blog about how some simple acts of inclusion can go a long way – for example, I’d mentioned about how building a pedestrian walkway, or pedestrian crossing with signals, would help make one of the roads in Bangalore more inclusive towards pedestrians (a class of people the usual proponents of diversity and inclusion don’t care about).

I was reminded of diversity and inclusion when the recent hoopla about messaging apps happened. A number of my contacts said they were leaving WhatsApp and moving to Telegram or Signal. Others said they weren’t going anywhere and were sticking to WhatsApp, and that Facebook’s new privacy rules were nothing new.

From my personal point of view, since I didn’t have a view on this messaging apps issue, the best solution turned out to be “inclusion”.

I’m on all apps. I’m on Signal, and Telegram, and WhatsApp, and iMessage, and good old SMS. However you choose to reach me, I’m there to receive your message and respond to you. In that sense, when you don’t have a strong opinion, the best thing to do is to be inclusive.

Of late I’ve realised it’s the same with language. Since I now work for a company that is headquartered in Gurgaon, a number of colleagues instinctively speak in Hindi. Initially I used to be a bit snobbish, and tell them that my Hindi sucked, and when they spoke Hindi, I would reply in English.

Over time, however, I’ve realised that I’m only being an asshole by refusing to be inclusive. Since I know Hindi (I got more marks in Hindi in Class 10 board exams than I did in English – not that that says anything), I should let the people decide whether I’m worth talking to in Hindi at all. I’ll talk to them in my broken Hindi, and if they think it’s too broken they can choose to switch to a language I’m more comfortable in.

And a week ago, Pranay and Saurabh of the Puliyabaazi podcast asked me if I’m willing to go on their (Hindi) podcast to talk about logical fallacies and “how not to use data”. I immediately accepted, not only because it’s a great podcast to be on (they’re fun to talk to), but it also gives me an opportunity to show off my broken Hindi.

The episode dropped on Thursday. You can listen to it here:

I realised while I was recording that my Hindi has become really rusty, and I found myself struggling for words many times. I also realised after the episode dropped that I don’t even understand what the title means, yet I’ve been happily sharing it around in my office! (a colleague kept asking me if I knew this word and that word, and I realised the answer to all that was no. Yet I had made assumptions and gone on with the podcast – another example of my own “inclusiveness”!)

Henceforth I’m never telling a colleague that I don’t know Hindi. However, if I find that someone overestimates my level of Hindi I might inflict this podcast on them. Even then, if they choose to speak to me in Hindi, so be it! I’m going to make an attempt to be more inclusive, after all.

 

Financial inclusion and cash

Varad Pande and Nirat Bhatnagar have an interesting Op-Ed today in Mint about financial inclusion, and about how financial institutions haven’t been innovative to make products that are suited to the poor, and how better user interface can also drive financial inclusion. I found this example they took rather interesting:

Take, for instance, a daily wager who makes Rs200 on the days she gets work. Work is unpredictable, and expenses too can be volatile, so she has to borrow money for buying vegetables, or to pay the doctor’s fees when her children fall sick. Her real need is for a flexible—small ticket, variable amount, rapid approval—loan product that she can access instantly. Unfortunately, no institutional channel—neither the public sector bank where she has a “no frills” account, nor the MFI that she has previously borrowed from—offers such a product. She ends up borrowing from neighbours, often from the local moneylender.

Now, based on my experience in FinTech, it is not hard to design a loan product for someone whose cash flows are known. The bank statement is nothing but a continuing story of the account holder’s life, and if you can understand the cash flows (both in and out) for a reasonable period of time, it is straightforward to design a loan product that fits that cash flow pattern.

The key thing, however, is that you need to have full information on transactions, in terms of when cash comes in and goes out, what the cash outflow is used for, and all that. And that is where the cash economy is a bit of a bummer.

For a banker who is trying to underwrite, and decide the kind of loan product (and interest rate) to offer to a customer, the customer’s cash transactions obscure information; information that could’ve been used by the bank to design/structure/recommend the appropriate product for the customer.

For the case that Pande and Bhatnagar take, if all inflows and outflows are in cash, there is little beyond the potential borrower’s word that can convince bankers of the borrower’s creditworthiness. And so the potential borrower is excluded from the system.

If, on the other hand, the potential borrower were to have used non-cash means for all her transactions, bankers would have had a full picture of her life, and would have been able to give her an appropriate loan!

In this sense, I think so far financial inclusion has been going on ass-backwards, with most microfinance institutions (MFIs) targeting loans rather than deposits. And with little data to base credit on, it’s resulted in wide credit spreads and interest rates that might be seen as usurious.

Instead, if banks and MFIs had gone the other way, first getting customers to deposit, and then use the bank account for as much of their transactions as possible, it would have been possible to design much better financial products, and include more customers!

The current disruption in the cash economy possibly offers banks and MFIs a good chance to rectify their errors so far!

Why Inclusiveness Matters

I want to take examples of two situations from traffic engineering to demonstrate why inclusion is important, and it is critical that everyone be “taken along” in any grand plan. The usual arguments for inclusion that you find from proponents of schemes such as the NREGS is that if you don’t include, people will riot and cause harm to others. What I want to show is that even if people have non-violent non-disruptive benign intentions, non-inclusion can lead to disaster for the society at large.

My current workplace is at Embassy Golf Links on Inner Ring Road (between Koramangala and Domlur). Approaching from the Koramangala side, one needs to take a u-turn at the old airport road in order to access the complex. And the story of my first two weeks in office has been that it takes 25 minutes to get from home to the other side of the road, and another 25 minutes to take the U-turn and get on the right side of the road. Some quick and dirty analysis of the bottlenecks tells me that the problem is not with the design of the Airport Road flyover (as many would suspect). It’s much simpler.

A common error in traffic planning is that the planners fail to take into account pedestrians. Pedestrians are not counted as “traffic” and are assumed to somehow get on with their lives while the cars and bikes zip by or crawl in the traffic. Because of this, not enough facilities are made for pedestrians – for them to walk, for them to cross the road, etc. thus forcing jaywalking.

If you look at the area on inner ring road around the airport road flyover, you will notice that the biggest problem is pedestrians. No, pedestrians are not a problem, the problem is lack of facilities for pedestrians which forces them  to jaywalk. So every handful of metres on the road, you’ll notice a handful of pedestrians holding across their arms and trying to wade through the traffic, thus significantly slowing down the traffic. It is because these pedestrians were not included in the original traffic plan that the whole system has failed. So we see that even though the pedestrians mean no harm to others, they are inadvertently causing harm to society at large. And it’s still not too late – a couple of overhead crossing bridges can be installed which should make life peaceful again.

Coming to the second issue – public transport. Last monday the Vijaya Karnataka had done a feature on the Bangalore Metropolitan Transport Corporation (BMTC) and had carried out a scathing attack for not doing enough for the common man. I just skimmed through the article and the central idea was that public transport is essentially meant for the poor and downtrodden who can’t access any other kind of transport, and so the BMTC’s focus on higher-end buses (Vajra and Suvarna) is doing a lot of harm for the mango person who still has to go in highly crowded buses.

What the writer of the article fails to notice, or chooses not to notice, is the substitution effect. Give a poor man a comfortable bus, and you will take one cycle or scooter off the road. Give the rich man a seat in a comfortable bus, and you will take a car off the road. And taking cars off the road means that everyone now gets to travel faster – both the remaining cars as well as the buses – carrying both the rich and poor. Thus it is probably more pareto-optimal to put an extra high-end bus on the road rather than an ordinary bus (though of course we need enough of the latter).

One major bane of public transport planning in India (and abroad) has been the assumption that public transport is for the poor, and excluding the rich out of the equation. Not finding decent public transport option, the rich has thus gravitated to using one-passenger cars which have had a disastrous effect on traffic in general. And it is only now that cities are taking an inclusive approach and planning public transport for everyone, and you see various cities putting in place high-end buses. Given the secular growth in cities and in traffic, it is probably not possible for us to do an analysis as to what would’ve happened without high-end buses, but I’m sure we are better off with these rather than without these.

So the moral of the story is that when you are planning (regardless of whether you are the government, or a corporate, or the head of a family), you will need to take into account all possible stakeholders, including those outside the system being designed. Only then will the design be efficient.

Studs and Fighters and Form

It’s been a long time since I wrote about the Studs and Fighters framework. I had overdosed on it a few months back, when I’d put some 3 posts in 4 days or something, but that was when I was hajaar enthu about corporate affairs.

It’s been almost two months since I quit my last job, and in this period, among other things I’ve lost all enthu for anything corporate. I don’t find Dilbert funny anymore. I usually just put well left to the office-politics posts that some of my friends on Google Reader share. And since the S&F theory was mainly meant to deal with corporate situations, that too has gone to the backburner.

I was thinking about Mitchell Johnson’s inclusion in the Aussie team in the Third Test. Given how badly he has been bowling all tour, and given that Stuart Clark hasn’t been bowling badly at all, it seems like a surprising selection. But dig deeper, and employ my favourite framework, and you’ll know why he’s still in the team.

It seems like Johnson is a stud bowler (as I’d remarked earlier, Test match bowling in general is stud). And the theory goes that form matters so much less for the stud. This is mainly because studs are significantly more inconsistent than fighters, which makes forecasting one data point based on historical data a nightmare. This also means that the last few data points say much less about a stud’s next data point than they do for a fighter’s case.

All that a stud needs to do to make amends for his hitherto bad form is to come up with one, or maybe a handful of moments of inspiration/insight. And that can happen any time. In fact, theory says that it is more likely to happen when the stud is defocussed on what needs to be done.

So even in the first couple of Tests, you could see Johnson occasionally coming up with the totally awesome delivery, which would produce wickets. Most of the time he was crap, but the occasional moments of brilliance were enough for him to make an impact. So the thinking in persisting with him is that sooner or later, he will produce enough moments of brilliance in a game that no one will look at all the crap he has bowled, and even that the moments of brilliance can push up his confidence which can lead to less crap.

This kind of thinking doesn’t apply to a traditional fighter, who isn’t capable of that “moment of brilliance”. He usually relies on consistency, and accuracy, and process to do what he needs to do. For the fighter, it has to be a steady rise from one “form situation” to another. And so persisting with the fighter doesn’t make sense. So for example, if Mike Hussey continues batting in the same way as he has been this series, there is a case of sending him to domestic cricket.

The problem with a lot of fighters is that they refuse to acknowledge the existence of studs and treat them too as fighters (on the other hand, most studs understand the existence of fighters). And this treatment of studs (assuming they are fighters) can have disastrous effects.