How social interlinked systems make an honest player get involved in fixing

We imagine that a fixer is a person who scripts every detail of cricket matches: the toss, wickets, fours and sixes and even the win or loss. We assume that he bribes, coaxes, cajoles and threatens cricketers into following his 'written' script. With his granular knowledge of what is going to happen, he then fixes the odds to favour the book and wins.

But the world of 'crime' is not black and white. It is multi-layered. Prem Panicker's article, quoted below, has brought this out beautifully.

Structure of the system

So the structure of betting system is something like this: Super Punter and Punters at the top, Tier A bookies ( 10-12 in Nos) below them , thousands of Tier B Bookies, based in small and big towns, affiliated to Tier A bookie who in turn work with small gamblers.

The bookies are computerized, with each Tier A bookie having a central repository of all information. Big bets, such as bet over 1 lakh, taken, are  flagged by any bookie in the system. When a flag about a major bet goes up, the Tier A bookie is automatically alerted; in turn, he shares the information with his fellows. By assessing the bet and evaluating it from the information of the punters, the bookie is able to make an educated guess so that he can use the odds in favour of him.

So who are punters and superpunters? These are big celebrities and well known rich people who are part of rich social network of actors, models, cricketers, businessman, advertisers and players. The bookie, who is part of the underworld, is watched by police and CBI. But the punter, such as Vindoo Dara Singh, is not as readily identifiable as such. The punter, too, is a celebrity himself, and has easy access to big parties.

How does the system work

The system works in three steps:

Step 1: Initiation

These punters invite themselves in the parties where cricketer is present. The cricketer - young and drawn from villages and small towns- gets blinded by this glamour and revels at the attention he gets from these celebrities. He likes these parties, because he gets introduced to Bollywood starlets and model, or business man, or important people.

Once the cricketer becomes comfortable with these parties, he is asked innocuous looking information about the composition of team, the strategies, and others. Cricketer shares this without knowing its implications.

Step 2: Grooming

Suddenly one day, the punter shares some gifts with the cricketer with a statement like 'Hey, because of what you told me, I bet big on XYZ happening - so here's a Rolex for you, just a token of my gratitude and thank you so much for helping, you are a true friend.' It is all very jolly, all done with a nudge, a wink, a chuckle. **

The cycle repeats a couple of times, until it is taken for granted by both parties. From then on, it is not even necessary for the punter to meet the cricketer in person - a late phone call before a big game, to ask pertinent questions and gain actionable information, becomes routine, as does the post-game 'gift' - in kind or in sum.**

Almost without knowing it, the cricketer goes beyond merely answering questions, and begins to volunteer information - anything he thinks will give his friend an edge in the betting market. After all, if a nice fellow, a good friend, makes some money off of the underworld, where's the harm?**

Step 3: Instigation

And then, one fine day, a question is asked to extend the boundary. 'Can you bowl a over to give 10 runs?' Or 'Can you manage to get out before reaching the double figure?'

By now, the cricketer is fully primed and ready. For him, extending the boundary is easy because he is just asking another question to himself, 'where's the harm?' What does a bad over, an indiscreet shot, matter if there is a party, a big car, a foreign holiday, or a helicopter trip to his native town, waiting on the other side of it? And who would ever suspect? And so he bowls that short one outside off. The earlier step of grooming has slowly enabled him to 'explain his conscience'.

Summary

Harvard psychologist, Lawrence Kohlberg, believes that our moral reasoning is developed in three levels.   Because of the above mentioned interlinked social systems, most of us get stuck at the second level of morality. Psychologists claim that very few manage to adhere to behave morally: a behaviour by which we resist temptation even when the possibility of detecting and punishment is zero.

Principles of morality are easier to adopt when we have no 'opportunities' and when we are likely to be detected, but they are mighty difficult to adhere when the social systems offer us easy opportunities with no possibility of detection. We blame the cricketers or the politicians or the civil servants who cross the boundary, but we forget that, given the same amount of opportunities we perhaps would have done the same.

It is very easy to 'explain' the breach of morality to ourselves. One Engineer, whom i know, claims that he never takes money from 'poor farmers'. Another builder claims that he only robs money from 'rich people'.  A police offer claims that he 'takes money' only because he has paid for his 'posting' and so on. Enron and the Accenture cases seem to prove that even well paid corporate executives tend to behave 'immorally', when they see the possibility of detecting their behaviour is zero. So none is spared. neither the civil servants nor the well paid corporate executives. If you are not convinced that breach of moral behaviour is rampant, read this book of Jonathan Macey, The death of corporate reputation.

The act of breach - whether betting or taking money - is not black and white. It does not happen at a single point of time. It is a steady extension of boundary which happens due to the surrounding opportunities of the social system in which we are. And it also happens because our parents unknowingly have not drawn stricter boundaries of rules for us and punished us for breaching those boundaries in our childhood. 

But we can now prevent our children to fall in the same trap? However, are we doing anything about it? 

** I have liberally used this Prem Panicker's article in Times of India to build up the logic. I hope Prem Panicker does not mind it. 

Can one single person change a big system ?

I read this interview of Vinod Rai, the CAG, who is retiring this month. He is one man who has made significant change in the Government system. Some of his comments are very insightful. 1> CAG reports to PAC chairman who is from opposition. In other words, the constitution itself has offered this objectivity to CAG. 2> CAG gives about 235 reports in state legislatures and Parliament - about 65 in Parliament and the balance in the state assemblies. The PAC can't take up all the reports. They pick up a maximum of 10-15 out of 65.  > Audit is a hindsight report. It is meant to point flaws in the process. That is its nature.

When i was reading his accomplishments as CAG, I also remembered how T.N.Seshan changed the entire election process of India. As the Chief Election Commissioner of India he introduced major electoral reforms and redefined the status and visibility of the Election Commission of India. He was largely successful in curbing electoral malpractices in India and his name became synonymous with transparency and efficiency

If you are thinking that it is easier to change the system when one reaches the top, you are wrong. Jim Collins, who has studied 'great' companies of last century, found that the toughest problem for these "great" companies was to ensure that 'right people were picked up as leaders'. The system in most companies somehow 'picks the celebrity CEO's who put themselves ahead of their institution'. Great companies somehow manage to chose ' real leaders who put their institution ahead of themselves'. In short, to survive in such a Government machinery, and then to do what is right for the institution requires a 'miracle'. It does not happen in normal circumstances.

If you think that a man can change the system only when he has 'absolute positional' power, you are again wrong. Here are some examples. You will find people like Sandeep Desai, who is begging in Mumbai locals, to collect money to construct a school at Umarkhed, Maharashtra near Yavatmal. You will meet people like this Orissa collector,Vineel Krishna, who managed to fight terrorism completely bypassing the official system of governance. Or you will find a simple mountaineer like Greg Robertson, who just because of his passion for the Afghans, found out a real solid way to fight terrorism. There are countless examples like this.

But there is something common between the two category of people: People like Seshan and Vinod Rai who seem to have 'positional power' to do anything, and people like Sandeep Desai and Greg Robertson who seem to be operating only from the 'persuasive power' of passion and values.

Systems thinking can help us find how and when a small cause can create a big effect. Systemically, when one man is initiating the change, certain conditions must be met for him to impact a big impact. This big impact happens only when these five conditions are satisfied :

1. Such a man changing the system should be helped by a system that has reached a point of 'inflection'.  Like Vinod Rai  mentions that the society was at the right time to 'accept' his 'active' role in audit which is generally a laid back role. He also mentions that Anna Hazare's anti-corruption drive helped CAG to become central.

2. Such a man must get inadvertent support of the eco-system: Vinod Rai said in his interview that the support of  24/7 media, which we so often criticise for too much of sensationalism, has been central in taking the active role of CAG.

3. Such a man requires huge amount of effort to overcome the large inertia of a system:  Be it Greg Robertson, or any other's effort, such a person requires to put in huge amount of initial effort to make the change 'sustainable'. This person requires unusual amount of resolve, and that too for a large number of years, to push ahead despite seeing no positive feedback for years. It requires much more than passion. It requires smart use of the eco-system.

4. Such a person must make smart use of eco-system to initiate and sustain the change: If you have seen the slow dying of the anti-corruption drive of Anna Hazare's campaign, despite its initial huge public attention it could garner, you will realise the importance of this fourth point. For instance, if Anna Hazare's group could have made smart use of "CAG's PAC 200 plus reports", it could have sustained its change effort for a far more longer time.

5. Such a person should be smart enough to break the big 'elephant' ( system) to eat it in pieces: Any system, by its nature, is huge. It cannot be tackled at one time. One has to be smart enough to bifurcate the problem into manageable chunks. Here is one attempt to show how corruption elephant could have been bifurcated by Anna Hazare's team.

Without satisfying these five conditions, if someone tries to change the system, he is bound to fail. Only passion, values are not enough to make the change happen. Thoughtless action and Actionless thought are both impotent in making any change happen. Both are required. Or a miracle is required. 

How to measure the progress of non-profits?

Here is an interesting article on a way of measuring the progress of non-profits. This article also describes the efforts that are being taken to create an industry based standards for measuring the progress.The two organisations that are involved in creating such standards are Sustainability Accounting standards Board and International Integrating Reporting Council.

More importantly, it describes the four simple steps that one can take to create a Report card of Non profits

1. Identify the social issues to Target ( say, Education to Underprivileged children)
2. Make a Business Case ( How to target it and how to measure it)
3. Track Progress ( Measure the progress by tracking the metrics)
4. Reassess the concept and identify new values ( Find new ways to Educate Underprivileged children)

If you are interested in funding a NGO, please ensure if it has gone through these four steps.

We have created hurdles in making social innovation happen

Dan Pallotta, an active fund raiser, talks about the five factors that together have successfully blocked the growth of social innovations through Non-profits ( I like to call NGOs as non-profits) It is a very good summary of how our systems ( that are good in some other area like business) have impacted the growth of non-profits and how the lack of growth of non-profits is impacting us as humanity.

The five factors that affect the growth of Non-profit organisations are poor compensation in Non-profits, Non-use of advertising as compared to business, non-encouragement in taking the risk, the time expectations  of achieving the result and the 'inaccessibility of market like stock market' to drive the growth of Non-profits. He highlights the small looking factor of compensation so vividly which makes me repeat it. The difference in compensation of a 10-year MBA working in business and non-profits is almost 5 times ( 84000 US $ as compared to 400,000 US $). Because of this difference, it is far more beneficial for a smart professional to work in business and donate every year 1,00,000 US $ to charities, instead of working in charities. Plus he gets more 'satisfaction' through another source. Because he funds charity, he sits on the Board of charities, while the person who is working for charities 'reports' to him. What would you do, if you are a smart professional? Would you utilise your brains to work for a charity or donate your money to a charity?

More importantly, Dan Pallotta highlights our invisible and unsaid beliefs about charities that have more powerful influence on the growth of non-profits. For instance,

• our belief that we must not spend money on advertising for non-profits is stopping us to increase the 'wallet share' of individuals and therefore grow non-profits. Non profits business are stuck. 
• Or, for businesses, we allow them enough time to show results such as when Amazon could wait for 6 years to make profits. But for non-profits, we want everything to start producing results from year 1. 
• Or we willingly give money to businesses for managing their business ( through overheads), but we want non profits to have very little 'overheads'.  

It is really shocking to see the hurdles that we have created in making non-profits work and grow.

More importantly, we need social businesses as much as need profit-businesses. Social businesses, which deals in invisible commodity like compassion, love, care, help also needs to flourish. But, like business, these commodities have no market. However, as human beings, we need both - money and love - together to build our lives. But we are creating our own hurdles that have stopped the growth of these invisible and invaluable commodities. Isn't it therefore surprising that we do not get both at one place?