Archive for the 'True Measures' Category

Tick, tick, tick, tick

December 14, 2009

Ricky Gervais, creator of the television show The Office, and Andy Rooney both lamented about how much money they have on this evening’s 60 Minutes.  Ricky said that he doesn’t work harder than a lot of other folks, but earns many multiples of their income.  He said that a large part of his success was due to luck.

I agree.  Nassim Taleb, author of the Black Swan and Fooled by Randomness, educated me on how much luck plays in the success of successful people.  As Taleb says, we always hear about the successful people but never about the just as talented people who aren’t as successful because they just haven’t had their lucky break.  Sometimes it’s as simple as meeting the right person at a party.

But, I will give Ricky something, he does have talent.  He makes me laugh.  I enjoy his humor, acting and writing.  Not to say that others aren’t as deserving, but any dollars Ricky has of mine in his pocket were well earned.

Rooney seemed bothered by having more than his share, but comforted by the fact that he doesn’t have as much as others.  He referenced the Forbes 400 list of the richest 400 people as proof.

What bothered me: C’mon guys.  Rather than feel down about being wealthy, celebrate it.  Encourage others.  Tell us how awesome it is that we live in a world where you can follow your dreams, work hard and be rewarded.  Acknowledge, as Ricky did, that there is some luck to it, but one thing is for certain – they wouldn’t have been successful if they hadn’t tried.

And, if you don’t have a dream but can still live a decent, comfortable life as a nurse, engineer, electrician or some other chosen profession, that’s awesome too.  Compared to how people lived a century ago or how people live in other parts of the world (some within a day’s drive for most of us) – we are all rock stars.  That something that we should feel good about it.

We should be asking ourselves why that is.  What are the root causes that allow each of us live better than royalty in the past in exchange for an honest day’s work?  We should want more of that.

They showed an 80s video of Ricky taking a stab at the music business.  Apparently it didn’t work out.  He wasn’t bothered by it.  He seemed to recognize that all things don’t work out, but trying matters.


Get Around It

December 4, 2009

In this column, Larry Elder writes about NPR’s treatment of the climategate story.  I enjoyed the column.  I especially enjoyed these two sentences:

One crosses the line from scientist to advocate when, if faced with conflicting or unexpected data, the scientist tries to get around it rather than to understand it. If data causes a re-examination of previously held assumptions, so be it.

Very well said.  We all need someone to keep us honest, even scientists.  Groupthink is a feedback problem that hides the truth.  The problems that led up to the deadly explosion of the space shuttle Challenger in 1986 was a result of groupthink among NASA scientists and engineers.   Hmmm…


November 20, 2009

I listened to some sports talk radio while stuck in a traffic jam this evening.  The topic of discussion was the University of Kansas head football coach Mark Mangino and the complaints from his players about some comments he made.

Disclosure: I have no clue how Mangino treats his players.  I don’t care much.  He might have said some really bad things.  I don’t know.  But, the quotes I’ve heard so far don’t warrant the attention this is getting.

The show hosts were up-in-arms as they repeated the quotes on the air.  One rule of thumb I have is that if the quotes are repeatable under FCC rules, then it might not be terribly offensive.

Two callers in a row agreed with me.  The callers’ advice to the college football players – toughen up and get over it.  The show hosts thought the callers were way off base.  I tend to agree with the callers.   I strive to treat others with respect.  I think it’s a worthwhile goal.  I don’t see the upside to meanness.

However, I’ve also had a lot of rotten things said to me in my life.  My Mom taught me a very valuable lesson.  Sticks and stones.

The toughest part is that many times, buried in those rotten things was some truth.  That’s when it hurts the most, especially if you are not prepared to hear the truth.  But, I needed to hear it.  I benefited from listening.

The point the callers were trying to make is that with all of the attention given to the sensitivity of how someone says something, we forget that what they are saying might be right.   And sometimes, missing that truth in the message can be costly.


Are You Qualified for that Position?

November 18, 2009

During the 2008 elections, friends thought I was crazy when I told them that I was disappointed in both tickets.  I said the most qualified person for the job of President is the vice-presidential candidate Sarah Palin, because she was the only one with organizational/political leadership experience.  But, I would also say that I thought that she was still not qualified.  I would want her to have more than a few years of leadership experience before promoting her to POTUS.  Give me at least one full term as Governor, maybe two.

I’d typically hear responses like: But McCain or Biden have been Senators for so long.  Or, Barack headed up an well-run campaign.  Thanks for proving my point on McCain and Biden.  Showing up and voting on stuff isn’t organizational leadership experience.  I’ll consider some of their being in the national public eye for so many years, but I’d still rather see them go run something else.  If you want to be POTUS, go run your state for a term or two, or go run a business, military unit or some Federal department.

As for Obama, the ‘well-run campaign’ defense is a joke.  A well-run campaign?  Go manage political campaigns.

What was a bigger joke was that people thought I was crazy.

I’ll go back to the NFL head coach test.  You own a team.  You want that team to do well, make fans happy and make money.  Who are you going to hire to run it?

You’re going to look for proven experience.   You’re not going to promote the guy that’s been working in the PR department for two years (and rarely shows up to work to boot) to run your team or the other guy who has been your team’s radio announcer for 20 years.  You’re going to look for proven talent within the college ranks and professional coordinators that have a fair amount of proven, concrete experience.  Guys who can usually provide a concrete list of results and achievements such as, “led offense to highest scoring ranking for 3 out of 5 years.”

Most of us would be more discerning about our choice of head coach than we were about our choice for POTUS.  One party chose glitz (a good speech giver) that provided a historic moment in the history of the country, tempered with a less historic vice-president just-in-case (“Stand Up Chuck!  Let the People See You. What Am I Talking About?”).  The other party chose the guy who had been around for awhile and they thought was well enough liked by the other side to pull some of their votes.

When did the idea that you should have to work hard to prove yourself die in this country?  Oh yeah.  I forgot.  We’re the country that can’t really figure out if a teacher is good quality or not (so we keep them all) and we don’t want to keep score in little leagues anymore.  We graduate illiterate troublemakers so we don’t have to do the hard work of enforcing discipline.

What’s Your Voting Privilege Worth?

October 7, 2009

John Stossel’s column, Transfer Machine, is recommended reading.  Rarely do we think of the misaligned incentives created by transferring wealth between citizens using political power.  Stossel sums it up nicely.  First with a quote from George Bernard Shaw:

The government who robs Peter to pay Paul can always depend on the support of Paul,” George Bernard Shaw once said.

The other way to say this is “It’s like two wolves and sheep voting on what’s for dinner.”

Then Stossel adds this startling paragraph:

The theory of government I was taught says that government provides benefits, primarily security, to the entire population. In return we pay taxes. But lately the government has been a distributor of special privileges, taking money from some and giving it to others. America is now about evenly split between those who pay income taxes and those who consume them.

Suddenly, the two-wolves scenario sounds plausible.  What incentive does someone who receives assistance from government have to vote for people who may take that away?  Better yet, what incentive does the sheep have to stay?

It’ll be interesting to see how this plays out.  The U.S. government has been growing over the last century at the hands of special interests.  Perhaps, when taxpayers become a special interest, by being in the minority, they’ll actually have more power.

Another interesting thought, should you lose your privilege to vote if you accept direct government assistance?  In the private sector, having an economic stake in something you can influence politically is called a conflict of interest.

Of course, this would never fly politically (as in correctness) or logistically.  Would government assistance include Social Security and Medicare, for example?  But, I still find it interesting to think about.  The mere suggestion makes one think about how much they value their voting privileges.

Thomas Sowell – Science vs. Social Thought

June 5, 2009

From Conflict of Visions (p. 231-232, paperback):

…visions of scientific phenomena and visions of society proceed in parallel ways. However, opposing paradigms in science do not persist for centuries, as paradigms derived from the constrained and unconstrained visions [loosely conservative and liberal] have in politics, economics, law and social thought in general. Scientific paradigms tend to succeed each other in history, not coexist through centuries. While still in early states of the development of science, ‘men confronting the same particular phenomena’ might ‘describe and interpret them in different ways.’ But these divergences, according to Kuhn, ‘disappear to a very considerable extent and then apparently once and for all.’ No such process has yet become general in social thought.

The fundamental difference between science and social theory is not at the level of visions, or even paradigms, but at the point where theories produce empirically testable hypotheses. The uncontrollable variations which prevent laboratory experiments with societies prevent the decisive confrontations which shatter particular hypotheses, reverberating backward to shake theories and perhaps even topple paradigms and the visions they embody.

Social thought often masquerades as science.  Wrap an idea in a veneer of science and people are apt to buy it.  Economic, health and global warming are examples of statistical studies and models that are not science because they produce no testable hypotheses and are very prone to bias, mistakes, flaws and misinterpretation.

The June Harvard Business Review, the story Good News for Coffee Addicts provides a good example (thanks to R. Lufberry):

Many people take their coffee with a small dose of guilt, worried that it isn’t good for the body. That’s a holdover from studies done in the 1950s and 1960s showing that coffee drinkers were prone to pancreatic cancer, heart disease, and other woes. These studies failed to account for cigarette smoking, which once went hand in cup with coffee drinking. Since then, the medical community has done a gradual about-face on the health effects of coffee.

Sowell provides another example from economics where a critic (bias) of the theory that wage controls reduced employment sent surveys to “hundreds of employers, asking how they had acted or would act, under various possible conditions involving wage rates.  Most employers did not indicate in their replies that they would react by firing workers” and the critic considered this disproof of the economic theory.

But, as Sowell points out, the economic theory was whether wage controls reduce employment, “not whether this takes the particular form of (1) individual employer decisions [or answers reported on a survey that may not even represent what they would truly do] to lay off workers; (2) the bankruptcy of marginal firms; (3) a reduction in the number of new firms entering the industry; or (4) a decline in sales and employment as cost increases are passed on to the consumer.”

In other words, the critic’s test of the theory was flawed.

Thanks to Russell Roberts of Cafe Hayek for sparking the idea of this post by providing a link to this excellent video:

True Measures: Night at the Museum Edition

June 1, 2009

I was nearly the last person in the U.S. to see Night at the Museum.  Very entertaining.  I saw an interesting true measure at the end.

Spoiler alert:  If you haven’t seen it yet, what I write below gives some of the ending away.  But, since I was the last guy to see it, I’m not worried.

At the end of the movie, the director of the money-losing museum sees the news reports of the overnight antics around the museum and promptly fires Ben Stiller’s character, the night watchman. 

Ben and the museum director leave his office and walk into the museum’s foyer which is full of people drawn by the news reports.  The musuem director promptly returns Ben’s character to duty after seeing the impact the free and interesting publicity had on attendance.

The museum director was confronted with a true measure and made a good choice.  He didn’t like the way Ben’s character did his job, but it appeared to be working for the benefit of the museum.  As director he had financial responsibility for the museum and overcame his personal dislike for the good of the museum.  Despite the museum director’s unlikeable portrayal, this was a good sign the right man had the job.  Great ending for Hollywood.

In the real world true measures are rarely as visible (e.g. people visiting the museum) and too often personal preference gets in the way of a good choice. In my career, many times I’ve seen leaders let valuable people leave because they couldn’t overcome their personal preferences, or maybe they couldn’t see the correct true measures

Either way, I haven’t seen any of the leaders who let that happen achieve great success in terms of typical business true measures such as business expansion.  Such people are typically skilled at politicking their way to status and obfuscating their own true measures, until they’re found out.

True Measures: Thomas Sowell

May 28, 2009

Thomas Sowell’s Random Thoughts columns are always entertaining.  Read it here.  I like this paragraph:

Just days after Colin Powell informed us that the American people were willing to pay higher taxes in order to get government services– and that Republicans therefore needed to stop their opposition to taxes– California voters resoundingly defeated a bill to raise taxes in order to pay for the many government services in that liberal state.

Many seem to spend a good deal of time convincing us of the truth, but have trouble coping when the truth is different than they perceived.

True Measures: A.G. Lafley

May 21, 2009

In A.G. Lafley’s, head of Procter & Gamble article about the four things only a CEO  (see this post) can do, he defined two critical moments of truth for customers.

First, when the customer chooses P&G product over all others in the store; and second, when she or a family member uses the product and it delivers a delightful and memorable experience – or not.

He changed the focus of his organization from satisfying internal processes to finding out how they could win the “consumer value equation” at these two moments.  This meant P&G employees got out of the office and lived with consumers for days to observe and think of new products or product modifications that might be useful.  He replaced paintings from local artists at headquarters with photos of consumers in the two moments of truth.

True Measures: Would You Buy It? Edition

May 20, 2009

A local news programs has a “We Try It Before You Buy It” segment.  They buy a new product, ask someone to test it out and report on what they liked and disliked.

The segment ends by asking the tester whether they would buy the product or not.  Like Reichheld’s question (would you recommend us to a friend?), this is a simple, effective measure of truth.

Often, product testers seem to like the product but then say they would not buy it.

Deciding to buy is a value judgment where we instinctively weigh the benefits of what we get against the value of what we give up.

Many people assume the value judgment is simply weighing the product benefits against its price, but there’s much more to it.  There may be several factors that are as important or more important than price.

What’s interesting is that most people can’t articulate these other factors.  They may only be vaguely aware of them.  I figured this out by thinking about my own buying decisions.

F or example, I wondered why I usually buy gas from a station further from my house (station 1)  than a station that I would normally prefer (station 2).  The answer wasn’t price, since the price was always the same at both stations.

There are two factors that cause me to go to station 1.  First, due to traffic patterns, station 1 is safer for me to get to.  Second, I’m cheap and health conscious and I found that I would tend to buy more junk from station 2.  Going to station 1 solved that problem.

How I value what I receive in exchange for everything I give up to get it (not just price) is called value proposition.  Very few people understand it.  Very few managers understand it.  Some do.   I like to invest in companies with managers who do.