Understanding Context & Trust - Video 1
Summary
TLDRThe transcript discusses the critical importance of understanding context in various situations, drawing from personal experiences and academic insights. It uses the examples of an ice pack in Chennai and the COVID-19 vaccine distribution to illustrate how institutional voids can create challenges and opportunities. The speaker emphasizes the need for a mental map to navigate these voids, adapt to new situations, and leverage them for innovation and problem-solving.
Takeaways
- 🧠 The importance of context: Understanding the context is crucial for applying knowledge effectively and avoiding pitfalls in various situations, such as in business, politics, or social interactions.
- 🏫 Academic realization: The speaker's interest in context was sparked during their time at Harvard Business School, where they realized traditional business theories might not apply universally.
- 🏭 Practical challenges: The speaker contrasts theoretical knowledge with real-world applications, using the example of motivating employees in emerging markets where immediate rewards are preferred over long-term incentives.
- 🗺️ Mental mapping: The need for a mental map to navigate the application of past experiences to new contexts, especially in volatile or unfamiliar environments.
- 🌐 Global connectivity: Even in a globally connected world, individuals need to assess the relevance of external information to their specific context, such as a kid in Kinshasa or Rio.
- 🧊 Ice pack anecdote: The story of trying to find an ice pack in Chennai illustrates the concept of institutional voids and the significant effort required to bridge them in the absence of established solutions.
- 💉 COVID-19 response: The pandemic serves as a modern example of how information asymmetry and institutional voids can affect even highly developed contexts, such as vaccine distribution in Boston.
- 📈 Emergence of institutions: The gradual development of institutions to resolve information problems and verify the veracity of claims, which is essential for transactions and collaboration.
- 🌐 Cross-cultural nuances: The impact of cultural differences and misunderstandings in intercultural exchanges, highlighting the need for context understanding even more in a globalized world.
- 💼 Institutional entrepreneurship: The speaker sees institutional voids as opportunities for creating new organizations, nonprofits, or businesses to fill the gaps and make a positive impact.
- 🌟 High-level impact: The concept of institutional voids and the need for context understanding applies to both small everyday situations and large-scale global issues, such as vaccine equity.
Q & A
Why did the speaker feel that traditional business school teachings wouldn't work in his family's enterprises in India?
-The speaker felt that the teachings lacked applicability in the volatile environment of emerging markets like India, where immediate results were preferred over long-term incentives.
What is the importance of having a mental map for understanding context when trying to affect change?
-A mental map helps individuals, such as entrepreneurs, scientists, politicians, or activists, to assess their past experiences and determine which strategies are likely to work in a new context, thus avoiding pitfalls and identifying opportunities.
Can you explain the concept of 'institutional voids' as mentioned in the transcript?
-Institutional voids refer to the absence of mechanisms or institutions that facilitate information flow, transaction verification, and trust in a market or society, which can lead to difficulties in collaboration and commerce.
How did the speaker's experience in Chennai with needing an ice pack illustrate the importance of understanding context?
-The experience showed that without understanding the local context, such as the absence of ice machines and convenience stores, one could waste significant effort and resources trying to find a solution that would be readily available in a different setting.
What was the role of Gavi, the Vaccine Alliance, in addressing institutional voids during the COVID-19 pandemic?
-Gavi aimed to ensure equity in vaccine distribution, acting as an intermediary to fill the institutional void between the demand for vaccines in poorer countries and the supply from richer nations, thus preventing a situation where only wealthy countries could secure vaccines.
How did the COVID-19 pandemic create a situation analogous to an emerging market?
-The pandemic created uncertainty and a need for new norms and rules for information exchange and transaction verification, similar to what happens in emerging markets, thus necessitating the development of new institutions to manage these challenges.
What is the significance of adjudication mechanisms in the context of institutional voids?
-Adjudication mechanisms are important for verifying the truthfulness of claims and ensuring fair transactions, which is particularly crucial when institutional voids exist, as they help to establish trust and facilitate commerce.
Why did the speaker emphasize the need for a conceptual framework for understanding context?
-The speaker emphasized the need for a conceptual framework to help individuals navigate different contexts effectively, by identifying information asymmetries and institutional voids, and to seize opportunities for change or innovation.
How did the speaker's experience trying to get a vaccine appointment in Boston highlight the challenges of information gaps?
-The experience showed that even in a developed context, information about vaccine availability was scarce and hard to come by, leading to difficulties in fulfilling basic needs like getting vaccinated.
What opportunities do institutional voids present, according to the speaker?
-Institutional voids present opportunities for innovation and entrepreneurship, as they represent areas where new institutions or organizations can be created to fill the gaps and meet unmet needs in the market.
Outlines
🧐 The Importance of Contextual Understanding
The speaker reflects on the significance of understanding context, stemming from their time at Harvard Business School. They highlight the disconnect between theoretical business strategies and real-world applications, particularly in emerging markets. The speaker emphasizes the need for a mental map to align past experiences with current situations to effectively motivate people, set up operations, or design contracts. The example of trying to implement incentive pay in a volatile market is used to illustrate this point, underscoring the necessity of context in decision-making.
🌡 Adapting to Different Contexts: An Indian Experience
The narrative shifts to a personal anecdote set in the southern Indian city of Chennai, formerly known as Madras. The speaker recounts the difficulty of obtaining an ice pack, a simple task in the US but a complex endeavor in 1980s India. This story serves as a metaphor for the broader concept of context, illustrating the vast difference in effort and resources required to achieve the same outcome in different settings. It exemplifies the importance of adapting to local conditions and the inefficiency of applying foreign solutions without considering the local context.
😷 Context in the COVID-19 Pandemic
The speaker discusses the COVID-19 pandemic as a contemporary example of the need for contextual understanding. They describe the initial uncertainty and information vacuum during the lockdown, the development of the mRNA vaccine, and the challenges in accessing it due to scarcity and misinformation. The speaker points out the emergence of institutions and mechanisms to address these issues, such as websites providing vaccine availability information and the role of Gavi, the Vaccine Alliance, in ensuring equitable access to vaccines globally. This highlights the critical role of context in navigating and resolving information asymmetries and institutional gaps.
🏥 Institutional Voids and Opportunities in Context
The final paragraph delves into the concept of institutional voids, the absence of mechanisms that facilitate information flow and transaction verification. The speaker uses the examples of the slow emergence of information and contracting institutions during the vaccine rollout, as well as the role of Gavi in filling the void between demand and supply of vaccines in poorer countries. They argue that recognizing and addressing these voids is crucial for effective collaboration and transaction, and also presents opportunities for innovation and entrepreneurship. The speaker concludes by emphasizing the value of a mental map for context to identify both pitfalls and opportunities in various situations.
Mindmap
Keywords
💡Context
💡Mental Map
💡Institutional Void
💡Scarcity
💡Adjudication Mechanisms
💡Information Asymmetry
💡Emerging Markets
💡Transaction
💡Intercultural Misunderstandings
💡GAVI
💡Opportunities
Highlights
The importance of understanding context in applying business logic to different circumstances.
The speaker's realization during his MBA at Harvard that traditional business strategies may not work in emerging markets.
The need for a mental map to align past experiences with current situations for effective change-making.
The concept of context as a lens for applying knowledge to new problems, regardless of location.
The idea that everyone, even in places like Kinshasa or Rio, needs a mental map to make sense of global content.
The speaker's decades-long work to create a toolkit for understanding context in various situations.
An anecdote about the difficulty of finding an ice pack in Chennai, illustrating the importance of context in problem-solving.
The comparison of the effort required to get an ice pack in Chennai versus the US, highlighting the concept of institutional voids.
How the COVID-19 pandemic created a contemporary example of the need for context understanding in a crisis.
The challenges of vaccine distribution during the pandemic, including information gaps and misrepresentation.
The emergence of institutions to resolve information problems and ensure transaction integrity during the pandemic.
The concept of institutional voids and the need for mechanisms to fill them in various contexts.
The role of Gavi, the Vaccine Alliance, as an intermediary filling an institutional void in global vaccine equity.
The speaker's perspective on institutional voids as both constraints and opportunities for innovation.
The importance of a mental map for navigating and identifying opportunities amidst uncertainty and change.
Transcripts
so K we're going to start by talking
about understanding context before we
begin why why does it matter like what
what got you so interested in context in
the first
place so so that's a good good question
um
probably going back to the last century
yes when you were a student at the
harbor Business School
guys last Cur
1990 um I thought it was
89 ' 89 I arrived at Harvard 1990 I made
it to our classroom HS I see okay and um
uh I was sitting in our MBA classroom
and our instructors many of whom are
still our our our colleagues here uh we
talking about you know how do you
motivate people how do you set up a
factory floor how do you design a
compensation contract how do you raise
capital for a company yeah and uh our
family owned a number of Enterprises in
in India and I remember
thinking this ain't going to work yeah
yeah none of this stuff is going to work
it doesn't have a snowball chance in
hell if I go to my factory manager who's
an educated guy and I say you have to
take these options and you know you have
an incentive pay and it's going to pay
off down the road you know Emerging
Markets are volatile places nobody wants
something that's pay paying off down the
road they immediate so just it's a small
example of how I thought thought that
the logic that the instructors were
communicating was eminently sensible
it's just that the application of the
logic to different circumstances gave
you very different action action plans
got it and I began to think that it
would be nice to have a little bit of a
mental map for imagine that you're
somebody who wants to affect change yes
uh you're an entrepreneur you're you're
even a scientist you're a politician
you're an activist um and you show up in
some place and you are naturally drawing
on the repertoire of your own
experiences yes and trying to figure out
what is it that I know from the past
that's likely to work here and what
isn't you ought to have a mental map of
where you are to understand how to do
that mapping of past expertise to
current situation so even if you're not
in a situation like what we find
ourselves in our campus like
multinationals going to a new new
country even if you're locally in a
country and you're applying your
knowledge base to a particular problem
this this lens of a context uh matters
yeah so you know even if you're a you
know a kid in um in in Kinshasa or a kid
in um Rio Rio yeah you are absorbing
content particularly in this day and age
and everybody's connected uh most people
are connected anyway and we we'll
probably get to that um you're absorbing
content from everywhere else how do you
know what you're hearing about from New
York City makes any sense for you you
still need a mental map in most in most
most cases it's implicit got it so what
I was trying to do in my work for the
last several
decades he's
old is a create a toolkit for people to
so that's what we'll talk about got it
great so um I thought one simple way to
um explain this was going back to an
experience I had in the southern Indian
city of what I used to Call Madras which
is now called chenai yes and I just
remember a particular episode when um uh
my family and I arrived there it's a
very hot City yeah um in a you know nice
hotel yeah and uh one of the family
members had some medication and so we
need an ice back yes and now in the US
what do you do when you need an ice back
you just go to the hotel floor and then
there's there's ice machine so we went
down there's no such thing as an ice
machine we asked for ice B you had no
idea what a pack was what is an ice pack
what is an ice P didn't exist right yeah
you could e go to 7-Eleven or cor go to
CVS or 7-Eleven and get it so there's no
CVS and no 7-Eleven this is now in
the'80s
1980s right so what ensued then um was
you know my probably my dad calling
someone knew yes and someone he knew
saying don't worry Mr Han we'll take
care of this and sending like five five
people wandering around the city looking
for
ice and then making ice pieces and
putting them in an ice bag and bringing
them to the hotel and giving it to us
and I remember thinking uh when I was
trying to communicate the importance of
understanding context to our uh
Executives who are you know activists
and CEOs from all over the world I
remember thinking this is a great way to
explain explain this if you just compute
um the ratio of the value of the I back
to you yes to the amount of expenditure
of effort and time yes um in getting the
ice back right uh that number is
probably I computed going compared to
going to the CVS or corner store and
coming back is like a 1: one yeah right
uh whereas if you computed for chenai in
1980 yes it's like 1 to 10 1 to 20
something like that so you have 20 times
more effort effort to get the same same
functionality of the functionality
yeah and we take it for granted like in
our settings like of course there's ice
packs there's many ways to get ice right
and versus in chai that there was there
was nothing time there it's different
today of course modern city but uh but I
think that makes the point so why don't
we talk about a um a a contemporary
example yeah absolutely I mean we all
live through this covid-19 pandemic
perfect uh and so yeah tell us how this
applies in this in this setting
so one of one of one of the things that
I found uh myself and I think all of us
found ourselves in the same situation
when the pandemic hit um of course we
went through this lockdown period when
everybody was trying to isolate we
didn't know how deadly the the virus was
uh mortality in some cities New York
City Rome was extremely high New Delhi
later on was extremely high um and we
were all worried but after that we had
uh our local friends the Mna colleagues
um and the uh fiser and colleagues in
Germany the the the Turkish German
entrepreneur who came up with the MRNA
vaccine so we had we had a solution so
to speak but the part after that was
sort of interesting because for a long
time almost 2 or 3 months at least in in
in Boston nobody that I knew could
figure out where the vaccine was
available yes right uh of course there
was scarcity there was production
constraints and so on um uh I remember
going to var's websites at late at night
or early in the morning saying like
which which pharmacy has has a vaccine
like can I get an appointment can I get
an appointment um and I wanted a madna
one I didn't want a J&J one you know all
that we didn't know what the efficacy of
the different ones were the MRNA ones
were reputedly better but you knew about
the long-term consequences anyway so
there was an information vacuum uh that
gradually began to be filled in right
and in the absence of information it's
very difficult to transact yes to get
anything done to collaborate right if I
want to work with you on some creative
Enterprise say on shooting this video
first I have to know who you are yeah if
I didn't know who you were then I would
wander around you know effectively
metaphorically wander around and say how
do I find a good interlocutor
intellectual partner a buddy that I can
work with yes uh despite being a
pain he's a
pain um so whether it's collaboration or
transacting right you can think of
getting a vaccine shot as a transaction
right I have a demand for a vaccine
because I'd rather not get covid uh
somebody else is a supply vaccine either
because they doctors or their Pharma
companies or pharmacies Etc so that
information is missing and transactions
almost impossible so one of the purposes
of the mental map um of a conceptual
framework for understanding context is
that you pay attention to these to the
emergence of these institutions that
help you resolve this information
problem got it that's a central thing
got it so let's turn to another aspect
of this vaccine uh business that makes
the point um uh there was also a lot of
misrepresentation and fraud oh yeah
right T leave aside the rampant fraud in
other countries of vaccine being faked
uh but even even in uh Newton
Massachusetts where I live which is a
nice Community leafy green afluent Etc
you had people misrepresenting their
status yes I know that for a fact
misrepresenting the status and saying I
deserve it because I'm compromised uh
and producing something to um because
they wanted to jump the line and make
sure that they got it um and that in
those kinds of situations where you
don't have adjudication mechanisms or
redress mechanisms like how do you judge
the veracity of how do you judge exactly
how do you judge the veracity of a
potential collaborating or transacting
part those mechanisms again began to
emerge over time to police this to make
sure that somebody who says I have a
stock by a vaccine actually had it and
was not misrepresenting it or
equivalently someone who said they
didn't have it but had it was
representing the status correctly all
those mechanisms emerged over a year 2
years something like that it did take
that long um there was a proliferation
as you were saying earlier of websites
Etc so step back for a second uh what
we've just outlined with a very simple
example is in a contemporary situation
of um uh uh of uncertainty triggered by
uh an environmental event the arrival of
this mutated virus that was affecting
humans all over the world uh and the
coroller um uh event of a technological
yes uh achievement the creation of the
MRNA vaccine triggered all this flux and
the institutions that were needed to
ensure that information flowed freely
and that uh people were not
misrepresenting uh their ability or
willingness to engage in discourse and
exchange emerged over time yeah so
what's interesting saying is that even
in highly developed context like Boston
Massachusetts the vaccine literally was
developed a mile away from here where
we're sitting today even in that in that
situation there was information gaps
right and this adjudication Gap like not
knowing how to test whatever whatever
claims people are making exist right and
so so so even there this is everywhere
this is not just a um an Emerging Market
situation in any kind of a cont C
context you have this kind of
information asymmetries information
missings and knowing what to what how to
uh a lot of our colleagues here um at
Harvard and elsewhere our former
students have developed this idea of
thinking over over the last decades
yes um and one of the things that which
seems obvious in hindsight with this Co
example is that uh any discontinuity
triggers what in effect becomes an
emerging market right because the market
literally has to emerge yeah and what is
a market it's just a set of norms right
and a set of rules for information
exchange and transaction veracity of
representation and that's a fact of life
you walk down the street anywhere it
doesn't have to be Chennai
1980 um or you know Rio a long time ago
it could just as easily be Boston and
London or any place else um it's very
helpful so that's why I think that this
just having a Rough and Ready mental map
of context is so important yeah let me
give you one more example on the uh on
the vaccine situation um even though
we've been talking about uh the the
slowness with which information and
Contracting institutions emerge um so
the absence I refer to as a situation of
an Institutional void it's a bit of a
mouthful but the idea is that that
institution that allows us to have
access to information uh requires some
effort and premeditation and some
economic viability and enough itself and
those take time to establish but when
they're absent we refer to them as as an
absence of void um even though those
voids are everywhere that there is an a
change in the Ambiance they're
particularly severe in developing
countries yeah right and they're
particularly severe in uh shall we say
um uh attempts to exchange things across
countries where there is cultural Nuance
um Intercultural misunderstandings India
versus Pakistan India versus Pakistan
yes I'm of Indian origin he's a
Pakistani origin so we speak different
languages in
each other um related in different
languages yes so one example going back
to the covid situation was uh of course
we knew exactly what was going to happen
right that somebody eventually hopefully
would come up with the vaccine yes and
when that happened there would be
scarcity all this was predicted yes 100%
there would be there would be scarcity
cu the factories would have to be tooled
up production facilities economics Etc
governments would hem and Hall about
putting money into it the political
contestation would ensue you knew that
that was going to happen therefore you
also knew that rich countries would grab
everything yeah right and so um I had
the Good Fortune to make a friend Seth
Berkeley yes um who was the just
recently stepped down as the head of
Gabi yes uh gavi is the it's the French
acronym for World vaccine Alliance in
Geneva yes and gav's purpose gavi was
seeded by Bill Gates uh a very long time
ago 20 plus years ago but the whole idea
was how do you get uh equity in vaccines
yes uh and traditionally of course it
had applied to vaccines that have been
known for a long time but were too
expensive for poor people and so Gabel
and polio all kinds of stuff right um um
Gabi was the entity that got access to
those vaccines at concessional rates so
in effect Gabi was an intermediary yes
right was filling an Institutional void
between demand uh from poorer countries
and poorer people for vaccines and
supply of vaccines in generally richer
richer countries um so what I'm trying
to illustrate is that you can think
about the ice pack example in chenai as
a very tiny daily uh example of where an
institution matters you can't find the
information or you can think at this
abstract high futin level yes of Gabi
you know organizing contracts between
heads of state in different places it
doesn't matter at the end of the day you
just go back to The Primitives that's
that's why I like being an academic is
that you can cut to the chase very
quickly what's really going on and then
if you have the predisposition as we
do you can use that to hopefully make
some good changes so if I can summarize
the what I'm hearing is like look in any
kind of a situation any kind of a new
situation new uncertainties there will
be a need for information often
information is missing and even as the
information becomes available there's
going to be this need to say like which
is what kind of information do we really
believe and trust because it'll be
competing interest
after and so that creates this void that
creates this void and so you need in
order for the transactions to take place
me to buy the vaccine for me to get the
ice pack we need some kind of like a
mechanism some kind of a some kind of a
an organization that can fill that void
right that that Gap and that's where the
so you you both examine the
institutional voids that may exist in
markets and then say what are the
different ways in which those could be
filled precisely so in a highend setting
like the
comes in funded by Bill Gates trying to
solve the vaccine access problem but
then in a in a very simple ice pack
example you can imagine you know some
entrepreneur saying you know lots of
Western tourists are coming to our cting
we need they need ice for some reason
about to be made there about to be made
about to be made so let's create the ice
pack company yeah these strange people
coming to Chennai who are white not me
of course but but who white people and
they kind of w around they need ice
because they're not used to this heat um
there's a buck to be made um you know if
I if it's if it costs a rupe in India I
can probably sell it to this guy who has
no idea for five bucks because otherwise
he's going to spend another 50 bucks
trying to get trying to get the ice so
there's a so that actually is a very
important point which is the these
institutional voids are both constraints
on action yes because they might prevent
us from collaborating or consummating
contracts or what have you but there are
also opportunities yes they are so it's
a double-edge sword so I as an
as you know I love starting things
including this thing that we're doing so
uh but I look at this and I say it's
like a kid in a candy store I can I can
build all these organizations and
nonprofits and businesses and so on and
so forth um so again going back to the
basic idea I think uh the reason I'm so
fixated on um um on on developing this
mental map for context is that for me
it's a it's it's a way to both avoid
pitfalls but Al to identify
opportunities fabulous
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