Saturday, October 10, 2015

Delta of Aspiration over Affordability (DAA): A Positive Driver of Socio-Economic Development

Human beings are genetically wired to aspire more than what one can afford. This delta between aspiration and affordability (called DAA, for the purpose of this blog post) is something that causes stress and distress as well as progress and prosperity. People who achieve wisdom and equanimity at an early age are able to understand the positive and negative consequences of such a delta and are able to minimize it largely through a moderation of aspirations. People who achieve growth and prosperity at an early age believe in keeping this delta real and challenging so that they can continue to work towards better living standards. This management of delta tends to be a largely individual matter but great leaders have made, and continue to make, helpful efforts to take the concepts of delta management to the masses. Individuals and leaders, when aligned in their appreciation of DAA, support wealth creation of higher order.

Great sages and philosophers have, from their early years of life, understood the impact of delta on human sorrows and joys. Many of their teachings, therefore, emphasise the need to be less materialistic and more frugal in the approach to life. Even emperors and kings driven to conquests by greed had eventually understood the need for egalitarianism to prevail over capitalism. Modern economies have a different paradigm to contend with. Burgeoning population requires more jobs which means it requires more products and services. This, in turn, requires more investment and more consumption. Even if humans learn to understand philosophically the need to compress the delta of aspiration and affordability with moderation of expectations, the human race is now economically wired to widen the gap with acceleration of expectations. Leaders of corporations and nations can contribute enormously to socio-economic development by leveraging DAA.

Aspiration drivers

Aspiration, in a positive sense, is driven singly or jointly (in any combination) by three factors: knowledge, comparison and capitalism. When one understands what products and services can do to improve life, and seeks to possess them for such reason, knowledge is in play, driving aspiration. When one compares oneself with others possessing products and utilizing services that one does not, one may seek to have them too. In this case, comparison (or benchmarking) drives aspiration. When one is driven by a desire to create and deliver products and services for others to consume, and create wealth in the process, one may be seen to be driven by capitalism. When these three factors operate in combination the drive for aspiration gets accentuated. To manage one’s aspirations in a constructive manner, one has to develop an understanding of which of the factors and in what combination are driving the aspiration.

Aspiration driven by capitalism or comparisons alone will be ineffectual and stressful. Knowledge is an essential driver for aspiration to be converted into achievement. However, only knowledge without a drive for wealth creation would not fulfil potential. Aspirations tend to be often driven by comparisons which may not be bad at all. The race to be among top performers is, in fact, majorly driven by comparisons. However, only when comparisons are fuelled by knowledge and capitalism, aspirations work out to be good for society. Aspirations would be well merited and most effectively converted into achievements when they are driven by a combination of knowledge, comparison and capitalism. Aspirations would be most sustainable when they are also backed by certain degree of introversion; aspiring to develop knowledge to next levels, making comparisons more meaningful and making capitalism work for broader society. 

Achievement enablers

Besides aspiration itself (without which one would not know what to achieve by design), there are three enablers of achievement. These are: competency, collaboration and communication. Intellectual capital and practice based one’s specialization develops unique competencies in people. Competencies make people sought after for their skills and expected contributions to organizations. Competencies, however, require two other factors to translate themselves into achievements: collaboration and communication. Both these factors are indispensable not only for team working but also for individual contribution. An interactive trainer, for example, tends to be not merely competent in his domain but also have the ability to collaborate with his audience and add greater value through multilateral communication.

Typical educational and work systems emphasize individual performance through grades (while in college) and through ratings (while at work). Despite the emphasis on team work, the deeply embedded grading and rating systems act as barriers to development of collaboration and communication. The jettisoning of performance ratings by a few large corporations in recent times is a step in the right direction. The real transformation would, however, occur when achievement is built into all kinds of activities, from daily throughput to annual revenue. Newspaper publishing is a thoughtful example of how every department can achieve something unique and creative on a daily basis, creating a lasting attachment with the readers. Whether it is layout setting, headline making, cartooning, editorial, crossword puzzle or open page, a newspaper of repute knows how to make achievement a daily routine for everyone connected with the newspaper.

Aspiration-affordability delta

Clearly, in a society where aspirations are set high and achievements seek to keep pace with aspirations, despite affordability constraints, progress is possible. India now has several aspirations; from Swachh Bharat to Make in India, and from smart cities to high speed rails. The delta of aspiration over affordability may look formidable, given the billions of dollars of investments required for each of the initiatives and the current levels of resource spend and low achievements in infrastructure building. However, it is the large delta of aspiration over affordability that serves as the driver of superior growth. This works in two ways. Firstly, the higher the aspirations, the greater is the responsibility for achievement. Secondly, even the highest aspirations are achievable if they are unitized and micronized to daily achievement level. At a national level, such aspirations cannot be the responsibility of the Union Government alone; States and people need to collaborate too. Crowd-funding of ideas to qualify as ‘smart cities’ is an example of how aspirations can be channelled in unison across the nation.

At individual level too, the delta of aspiration over affordability drives progress. Students from weaker sections tend to emerge as strong academic achievers when they set for themselves high aspirations. Late former President Dr Abdul Kalam has been a great example of soaring aspirations leading to sterling achievements, overcoming the economic constraints and traditional social systems. Indeed, there have always been several successful leaders who can trace their origins to humble beginnings. The delta of aspiration over achievement never ceases to exist even after certain levels of achievement. The achievers can continue to deploy it to propel themselves to higher trajectories and/or provide the needed emotional and economic support to others to overcome their own deltas. When successful persons participate in activities of social responsibility, they tend to take social aspirations and achievements to higher levels. Clinton Foundation and Gates Foundation, for example, have been demonstrating how private initiatives of this nature can support social equity.

Aspirational planning

Planning is the foundational step for growth. Conventional wisdom of planning in India has been that planning has to be consistent with resources that can be generated. Successive Planning Commissions in India had done a highly responsible job of guiding India’s growth. Many feel that India’s post-independence preoccupation with socialism, licensing and controls was responsible for India’s slow growth. The real reason could lie in the planning model that was moderated growth plans to stay within the resource constraints rather than aspiring to soar beyond them. There are two elements in setting the aspirations. The first is the scale, and the second is the time. Aspirations that are driven by higher scale in smaller timeframes are the most challenging to achieve but also are the most satisfying for the society. Aspirations that have a sound socio-economic logic would be able to generate resources and commitments despite the seemingly large delta of aspiration over achievement.

India’s Pradhan Mantri Jana Dhana Yojana is an example of what aspirational planning can achieve. Announced by the Prime Minister Narendra Modi in his first Independence Day speech on August 15, 2014, and launched on August 28, 2014, Jana Dhana Yojana could achieve a mammoth 18 crore new accounts in just an year with deposits exceeding RS 22,000 crore (USD 3.3 billion), which is indeed an exceptional achievement as the scheme was targeted at economically weaker sections of the society. It is not surprising, therefore, that Prime Minister Narendra Modi, during his recent US visit, took enormous pride in citing Jana Dhana Yojana as an example how India could make things to work exceptionally fast if the Nation put its heart into it. Taking this example as a cue, India at a national level, corporations at enterprise level and the public at individual level must jettison other forms of guided and constrained planning in favour of aspirational planning. This is the only way by which India can take a quantum jump into a future of superlative growth without getting weighed down by concerns of affordability.

Posted by Dr CB Rao on October 9, 2015  

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