00:00:04
so K we're going to start by talking
00:00:07
about understanding context before we
00:00:09
begin why why does it matter like what
00:00:11
what got you so interested in context in
00:00:14
the first
00:00:15
place so so that's a good good question
00:00:18
um
00:00:21
probably going back to the last century
00:00:25
yes when you were a student at the
00:00:27
harbor Business School
00:00:30
guys last Cur
00:00:31
1990 um I thought it was
00:00:34
89 ' 89 I arrived at Harvard 1990 I made
00:00:37
it to our classroom HS I see okay and um
00:00:41
uh I was sitting in our MBA classroom
00:00:43
and our instructors many of whom are
00:00:45
still our our our colleagues here uh we
00:00:48
talking about you know how do you
00:00:50
motivate people how do you set up a
00:00:51
factory floor how do you design a
00:00:54
compensation contract how do you raise
00:00:56
capital for a company yeah and uh our
00:00:58
family owned a number of Enterprises in
00:01:01
in India and I remember
00:01:03
thinking this ain't going to work yeah
00:01:06
yeah none of this stuff is going to work
00:01:08
it doesn't have a snowball chance in
00:01:09
hell if I go to my factory manager who's
00:01:12
an educated guy and I say you have to
00:01:13
take these options and you know you have
00:01:16
an incentive pay and it's going to pay
00:01:17
off down the road you know Emerging
00:01:20
Markets are volatile places nobody wants
00:01:22
something that's pay paying off down the
00:01:24
road they immediate so just it's a small
00:01:28
example of how I thought thought that
00:01:30
the logic that the instructors were
00:01:31
communicating was eminently sensible
00:01:33
it's just that the application of the
00:01:35
logic to different circumstances gave
00:01:37
you very different action action plans
00:01:39
got it and I began to think that it
00:01:41
would be nice to have a little bit of a
00:01:43
mental map for imagine that you're
00:01:46
somebody who wants to affect change yes
00:01:49
uh you're an entrepreneur you're you're
00:01:50
even a scientist you're a politician
00:01:52
you're an activist um and you show up in
00:01:55
some place and you are naturally drawing
00:01:57
on the repertoire of your own
00:01:59
experiences yes and trying to figure out
00:02:01
what is it that I know from the past
00:02:04
that's likely to work here and what
00:02:06
isn't you ought to have a mental map of
00:02:08
where you are to understand how to do
00:02:11
that mapping of past expertise to
00:02:12
current situation so even if you're not
00:02:14
in a situation like what we find
00:02:16
ourselves in our campus like
00:02:17
multinationals going to a new new
00:02:19
country even if you're locally in a
00:02:21
country and you're applying your
00:02:23
knowledge base to a particular problem
00:02:26
this this lens of a context uh matters
00:02:29
yeah so you know even if you're a you
00:02:32
know a kid in um in in Kinshasa or a kid
00:02:37
in um Rio Rio yeah you are absorbing
00:02:42
content particularly in this day and age
00:02:44
and everybody's connected uh most people
00:02:46
are connected anyway and we we'll
00:02:47
probably get to that um you're absorbing
00:02:50
content from everywhere else how do you
00:02:52
know what you're hearing about from New
00:02:54
York City makes any sense for you you
00:02:57
still need a mental map in most in most
00:02:59
most cases it's implicit got it so what
00:03:02
I was trying to do in my work for the
00:03:04
last several
00:03:07
decades he's
00:03:09
old is a create a toolkit for people to
00:03:13
so that's what we'll talk about got it
00:03:16
great so um I thought one simple way to
00:03:22
um explain this was going back to an
00:03:24
experience I had in the southern Indian
00:03:26
city of what I used to Call Madras which
00:03:30
is now called chenai yes and I just
00:03:32
remember a particular episode when um uh
00:03:36
my family and I arrived there it's a
00:03:38
very hot City yeah um in a you know nice
00:03:41
hotel yeah and uh one of the family
00:03:43
members had some medication and so we
00:03:46
need an ice back yes and now in the US
00:03:49
what do you do when you need an ice back
00:03:51
you just go to the hotel floor and then
00:03:54
there's there's ice machine so we went
00:03:56
down there's no such thing as an ice
00:03:58
machine we asked for ice B you had no
00:04:00
idea what a pack was what is an ice pack
00:04:02
what is an ice P didn't exist right yeah
00:04:04
you could e go to 7-Eleven or cor go to
00:04:07
CVS or 7-Eleven and get it so there's no
00:04:09
CVS and no 7-Eleven this is now in
00:04:11
the'80s
00:04:13
1980s right so what ensued then um was
00:04:19
you know my probably my dad calling
00:04:22
someone knew yes and someone he knew
00:04:25
saying don't worry Mr Han we'll take
00:04:27
care of this and sending like five five
00:04:29
people wandering around the city looking
00:04:31
for
00:04:33
ice and then making ice pieces and
00:04:36
putting them in an ice bag and bringing
00:04:37
them to the hotel and giving it to us
00:04:39
and I remember thinking uh when I was
00:04:42
trying to communicate the importance of
00:04:44
understanding context to our uh
00:04:47
Executives who are you know activists
00:04:49
and CEOs from all over the world I
00:04:51
remember thinking this is a great way to
00:04:53
explain explain this if you just compute
00:04:57
um the ratio of the value of the I back
00:05:00
to you yes to the amount of expenditure
00:05:04
of effort and time yes um in getting the
00:05:09
ice back right uh that number is
00:05:12
probably I computed going compared to
00:05:14
going to the CVS or corner store and
00:05:16
coming back is like a 1: one yeah right
00:05:18
uh whereas if you computed for chenai in
00:05:21
1980 yes it's like 1 to 10 1 to 20
00:05:24
something like that so you have 20 times
00:05:25
more effort effort to get the same same
00:05:28
functionality of the functionality
00:05:30
yeah and we take it for granted like in
00:05:32
our settings like of course there's ice
00:05:34
packs there's many ways to get ice right
00:05:37
and versus in chai that there was there
00:05:39
was nothing time there it's different
00:05:41
today of course modern city but uh but I
00:05:43
think that makes the point so why don't
00:05:45
we talk about a um a a contemporary
00:05:48
example yeah absolutely I mean we all
00:05:50
live through this covid-19 pandemic
00:05:52
perfect uh and so yeah tell us how this
00:05:55
applies in this in this setting
00:05:58
so one of one of one of the things that
00:06:00
I found uh myself and I think all of us
00:06:02
found ourselves in the same situation
00:06:03
when the pandemic hit um of course we
00:06:06
went through this lockdown period when
00:06:08
everybody was trying to isolate we
00:06:09
didn't know how deadly the the virus was
00:06:12
uh mortality in some cities New York
00:06:13
City Rome was extremely high New Delhi
00:06:16
later on was extremely high um and we
00:06:19
were all worried but after that we had
00:06:21
uh our local friends the Mna colleagues
00:06:25
um and the uh fiser and colleagues in
00:06:28
Germany the the the Turkish German
00:06:31
entrepreneur who came up with the MRNA
00:06:33
vaccine so we had we had a solution so
00:06:36
to speak but the part after that was
00:06:38
sort of interesting because for a long
00:06:40
time almost 2 or 3 months at least in in
00:06:43
in Boston nobody that I knew could
00:06:45
figure out where the vaccine was
00:06:47
available yes right uh of course there
00:06:50
was scarcity there was production
00:06:51
constraints and so on um uh I remember
00:06:54
going to var's websites at late at night
00:06:56
or early in the morning saying like
00:06:58
which which pharmacy has has a vaccine
00:07:00
like can I get an appointment can I get
00:07:02
an appointment um and I wanted a madna
00:07:05
one I didn't want a J&J one you know all
00:07:07
that we didn't know what the efficacy of
00:07:08
the different ones were the MRNA ones
00:07:10
were reputedly better but you knew about
00:07:12
the long-term consequences anyway so
00:07:13
there was an information vacuum uh that
00:07:16
gradually began to be filled in right
00:07:18
and in the absence of information it's
00:07:20
very difficult to transact yes to get
00:07:23
anything done to collaborate right if I
00:07:26
want to work with you on some creative
00:07:27
Enterprise say on shooting this video
00:07:29
first I have to know who you are yeah if
00:07:31
I didn't know who you were then I would
00:07:32
wander around you know effectively
00:07:34
metaphorically wander around and say how
00:07:35
do I find a good interlocutor
00:07:38
intellectual partner a buddy that I can
00:07:40
work with yes uh despite being a
00:07:43
pain he's a
00:07:46
pain um so whether it's collaboration or
00:07:49
transacting right you can think of
00:07:51
getting a vaccine shot as a transaction
00:07:54
right I have a demand for a vaccine
00:07:56
because I'd rather not get covid uh
00:07:58
somebody else is a supply vaccine either
00:08:00
because they doctors or their Pharma
00:08:02
companies or pharmacies Etc so that
00:08:05
information is missing and transactions
00:08:07
almost impossible so one of the purposes
00:08:09
of the mental map um of a conceptual
00:08:12
framework for understanding context is
00:08:15
that you pay attention to these to the
00:08:17
emergence of these institutions that
00:08:19
help you resolve this information
00:08:21
problem got it that's a central thing
00:08:23
got it so let's turn to another aspect
00:08:25
of this vaccine uh business that makes
00:08:27
the point um uh there was also a lot of
00:08:31
misrepresentation and fraud oh yeah
00:08:33
right T leave aside the rampant fraud in
00:08:36
other countries of vaccine being faked
00:08:39
uh but even even in uh Newton
00:08:41
Massachusetts where I live which is a
00:08:43
nice Community leafy green afluent Etc
00:08:46
you had people misrepresenting their
00:08:48
status yes I know that for a fact
00:08:51
misrepresenting the status and saying I
00:08:53
deserve it because I'm compromised uh
00:08:55
and producing something to um because
00:08:58
they wanted to jump the line and make
00:08:59
sure that they got it um and that in
00:09:03
those kinds of situations where you
00:09:04
don't have adjudication mechanisms or
00:09:08
redress mechanisms like how do you judge
00:09:10
the veracity of how do you judge exactly
00:09:11
how do you judge the veracity of a
00:09:13
potential collaborating or transacting
00:09:16
part those mechanisms again began to
00:09:19
emerge over time to police this to make
00:09:22
sure that somebody who says I have a
00:09:23
stock by a vaccine actually had it and
00:09:25
was not misrepresenting it or
00:09:26
equivalently someone who said they
00:09:28
didn't have it but had it was
00:09:30
representing the status correctly all
00:09:32
those mechanisms emerged over a year 2
00:09:35
years something like that it did take
00:09:36
that long um there was a proliferation
00:09:38
as you were saying earlier of websites
00:09:40
Etc so step back for a second uh what
00:09:42
we've just outlined with a very simple
00:09:45
example is in a contemporary situation
00:09:47
of um uh uh of uncertainty triggered by
00:09:53
uh an environmental event the arrival of
00:09:57
this mutated virus that was affecting
00:09:59
humans all over the world uh and the
00:10:02
coroller um uh event of a technological
00:10:06
yes uh achievement the creation of the
00:10:08
MRNA vaccine triggered all this flux and
00:10:11
the institutions that were needed to
00:10:13
ensure that information flowed freely
00:10:16
and that uh people were not
00:10:19
misrepresenting uh their ability or
00:10:21
willingness to engage in discourse and
00:10:24
exchange emerged over time yeah so
00:10:26
what's interesting saying is that even
00:10:28
in highly developed context like Boston
00:10:31
Massachusetts the vaccine literally was
00:10:33
developed a mile away from here where
00:10:34
we're sitting today even in that in that
00:10:37
situation there was information gaps
00:10:39
right and this adjudication Gap like not
00:10:41
knowing how to test whatever whatever
00:10:43
claims people are making exist right and
00:10:46
so so so even there this is everywhere
00:10:48
this is not just a um an Emerging Market
00:10:51
situation in any kind of a cont C
00:10:53
context you have this kind of
00:10:55
information asymmetries information
00:10:56
missings and knowing what to what how to
00:10:59
uh a lot of our colleagues here um at
00:11:02
Harvard and elsewhere our former
00:11:03
students have developed this idea of
00:11:05
thinking over over the last decades
00:11:08
yes um and one of the things that which
00:11:11
seems obvious in hindsight with this Co
00:11:13
example is that uh any discontinuity
00:11:16
triggers what in effect becomes an
00:11:18
emerging market right because the market
00:11:20
literally has to emerge yeah and what is
00:11:23
a market it's just a set of norms right
00:11:26
and a set of rules for information
00:11:27
exchange and transaction veracity of
00:11:32
representation and that's a fact of life
00:11:34
you walk down the street anywhere it
00:11:36
doesn't have to be Chennai
00:11:38
1980 um or you know Rio a long time ago
00:11:41
it could just as easily be Boston and
00:11:42
London or any place else um it's very
00:11:45
helpful so that's why I think that this
00:11:48
just having a Rough and Ready mental map
00:11:50
of context is so important yeah let me
00:11:52
give you one more example on the uh on
00:11:54
the vaccine situation um even though
00:11:57
we've been talking about uh the the
00:12:01
slowness with which information and
00:12:04
Contracting institutions emerge um so
00:12:07
the absence I refer to as a situation of
00:12:10
an Institutional void it's a bit of a
00:12:12
mouthful but the idea is that that
00:12:14
institution that allows us to have
00:12:16
access to information uh requires some
00:12:19
effort and premeditation and some
00:12:21
economic viability and enough itself and
00:12:22
those take time to establish but when
00:12:25
they're absent we refer to them as as an
00:12:26
absence of void um even though those
00:12:29
voids are everywhere that there is an a
00:12:32
change in the Ambiance they're
00:12:35
particularly severe in developing
00:12:37
countries yeah right and they're
00:12:38
particularly severe in uh shall we say
00:12:42
um uh attempts to exchange things across
00:12:45
countries where there is cultural Nuance
00:12:49
um Intercultural misunderstandings India
00:12:51
versus Pakistan India versus Pakistan
00:12:53
yes I'm of Indian origin he's a
00:12:55
Pakistani origin so we speak different
00:12:58
languages in
00:13:00
each other um related in different
00:13:03
languages yes so one example going back
00:13:06
to the covid situation was uh of course
00:13:10
we knew exactly what was going to happen
00:13:12
right that somebody eventually hopefully
00:13:14
would come up with the vaccine yes and
00:13:15
when that happened there would be
00:13:17
scarcity all this was predicted yes 100%
00:13:20
there would be there would be scarcity
00:13:21
cu the factories would have to be tooled
00:13:22
up production facilities economics Etc
00:13:25
governments would hem and Hall about
00:13:27
putting money into it the political
00:13:29
contestation would ensue you knew that
00:13:30
that was going to happen therefore you
00:13:32
also knew that rich countries would grab
00:13:34
everything yeah right and so um I had
00:13:37
the Good Fortune to make a friend Seth
00:13:39
Berkeley yes um who was the just
00:13:42
recently stepped down as the head of
00:13:43
Gabi yes uh gavi is the it's the French
00:13:47
acronym for World vaccine Alliance in
00:13:49
Geneva yes and gav's purpose gavi was
00:13:52
seeded by Bill Gates uh a very long time
00:13:55
ago 20 plus years ago but the whole idea
00:13:57
was how do you get uh equity in vaccines
00:14:01
yes uh and traditionally of course it
00:14:02
had applied to vaccines that have been
00:14:04
known for a long time but were too
00:14:06
expensive for poor people and so Gabel
00:14:09
and polio all kinds of stuff right um um
00:14:13
Gabi was the entity that got access to
00:14:17
those vaccines at concessional rates so
00:14:18
in effect Gabi was an intermediary yes
00:14:21
right was filling an Institutional void
00:14:24
between demand uh from poorer countries
00:14:27
and poorer people for vaccines and
00:14:30
supply of vaccines in generally richer
00:14:33
richer countries um so what I'm trying
00:14:35
to illustrate is that you can think
00:14:37
about the ice pack example in chenai as
00:14:39
a very tiny daily uh example of where an
00:14:43
institution matters you can't find the
00:14:45
information or you can think at this
00:14:46
abstract high futin level yes of Gabi
00:14:50
you know organizing contracts between
00:14:52
heads of state in different places it
00:14:54
doesn't matter at the end of the day you
00:14:55
just go back to The Primitives that's
00:14:57
that's why I like being an academic is
00:14:59
that you can cut to the chase very
00:15:00
quickly what's really going on and then
00:15:03
if you have the predisposition as we
00:15:06
do you can use that to hopefully make
00:15:08
some good changes so if I can summarize
00:15:10
the what I'm hearing is like look in any
00:15:13
kind of a situation any kind of a new
00:15:15
situation new uncertainties there will
00:15:17
be a need for information often
00:15:19
information is missing and even as the
00:15:21
information becomes available there's
00:15:23
going to be this need to say like which
00:15:24
is what kind of information do we really
00:15:26
believe and trust because it'll be
00:15:28
competing interest
00:15:30
after and so that creates this void that
00:15:32
creates this void and so you need in
00:15:34
order for the transactions to take place
00:15:36
me to buy the vaccine for me to get the
00:15:38
ice pack we need some kind of like a
00:15:41
mechanism some kind of a some kind of a
00:15:44
an organization that can fill that void
00:15:47
right that that Gap and that's where the
00:15:49
so you you both examine the
00:15:51
institutional voids that may exist in
00:15:52
markets and then say what are the
00:15:54
different ways in which those could be
00:15:55
filled precisely so in a highend setting
00:15:58
like the
00:16:00
comes in funded by Bill Gates trying to
00:16:02
solve the vaccine access problem but
00:16:04
then in a in a very simple ice pack
00:16:07
example you can imagine you know some
00:16:09
entrepreneur saying you know lots of
00:16:11
Western tourists are coming to our cting
00:16:13
we need they need ice for some reason
00:16:16
about to be made there about to be made
00:16:18
about to be made so let's create the ice
00:16:19
pack company yeah these strange people
00:16:21
coming to Chennai who are white not me
00:16:23
of course but but who white people and
00:16:25
they kind of w around they need ice
00:16:26
because they're not used to this heat um
00:16:29
there's a buck to be made um you know if
00:16:31
I if it's if it costs a rupe in India I
00:16:34
can probably sell it to this guy who has
00:16:36
no idea for five bucks because otherwise
00:16:38
he's going to spend another 50 bucks
00:16:39
trying to get trying to get the ice so
00:16:41
there's a so that actually is a very
00:16:43
important point which is the these
00:16:45
institutional voids are both constraints
00:16:47
on action yes because they might prevent
00:16:50
us from collaborating or consummating
00:16:52
contracts or what have you but there are
00:16:54
also opportunities yes they are so it's
00:16:56
a double-edge sword so I as an
00:16:59
as you know I love starting things
00:17:02
including this thing that we're doing so
00:17:05
uh but I look at this and I say it's
00:17:07
like a kid in a candy store I can I can
00:17:09
build all these organizations and
00:17:10
nonprofits and businesses and so on and
00:17:13
so forth um so again going back to the
00:17:15
basic idea I think uh the reason I'm so
00:17:17
fixated on um um on on developing this
00:17:22
mental map for context is that for me
00:17:25
it's a it's it's a way to both avoid
00:17:28
pitfalls but Al to identify
00:17:29
opportunities fabulous
