Corporate Lessons from ancient tales - part 2

The second story goes like this - In a town there lived a small time businessman who was doing poorly in business and therefore was in dire financial strait. That businessman prayed to the God and that night he had a dream that a monk had come to visit his house, but instead of entertaining his guest, he took a stick and hit the monk on the head. Immediately the monk fell down and got converted to a heap of gold.

In the morning when he woke up he was still deliberating on the significance of his dream when his barber came for his daily shave. Just then there was a knock on the door and when the person opened the door, a monk came inside. Just then he remembered about his dream, took a rod and hit the monk on head. The monk fell flat and immediately there was a heap of gold coins in his place. The businessman gave his barber some gold and sworn him to secrecy.

But this incident dishevelled the barber. He too went hom and began thinking, if by hitting a monk he gets so many gold coins, I too can hit a very large number of monks and get even more gold. So the very next day he invited all the local monks to his house for a ceremony. As soon as the monks began pouring in, he took a rod and began hitting them. One after the other innocent victims lay wounded or dead in a pool of blood but there was no gold. The local people saw this and they took the barber by force to the king. The king being just asked him the reason for such a "barbarism". The barber by then was helf dead with fear, he squarely blamed the businessman for his predicament. The king called for the businessman and heard the entire incident from him.

After hearing the businessman's story the king turned to the barber and said, "You did not try to realize the full context and yet you emulated his action, resulting in so much bloodshed, you should get capital punishment for your extreme impulsiveness".

Whats the moral of this story? We all realize that to make any sound decision and implement the same (i.e. take some action), we must understand the whole context, think holistically and then only take steps. We must never be impulsive, must not emulate something done elsewhere just because it has yielded result there. For instance in manufacturing industries its a fad to implement lean philosophy and just in time, just because some competitor has done the same and got success. But without careful context analysis, deliberation and going for a holistic understanding of the situational differences, it is often suicidal to adopt a "me too" approach. The fact is that many manufacturing industries, in their haste to adopt lean principles, ignore several aspects and only implement some of them, like just in time principle, thereby shifting the entire inventory from its premise to vendor's premise, or to the regional warehouse. Thus inventory still exists in supply chain resulting in waste, and management tears its hair in understanding what went wrong despite implementing lean principles.

There are plenty of such examples and therefore wisdom, which seems simple and common sense at first glance may not even be remembered in practice. And that is why Lehman brothers and AIGs go bankrupt.