Unintended Consequences of Work Space Design

Is your office making you unproductive? According the Wall Street Journal and the study they reference, yes.

I’ve lived through this lub-dub cycle a couple of times in my career. More “open” and “collaborative” workspaces is one of the mythic magic potions managers believe will spur a company’s culture into producing stellar growth.

The problem is…it doesn’t work.

In my experience, people will find ways to get some privacy and these days, there are a lot more options to do that. They’ll camp out in a meeting room or go find a quiet corner at the local coffee shop. 

They get less done at work since open spaces create more opportunities for interruptions. I use to sit with two work mates in a tight space. We noticed that when two of us were there, we talked much less than when all three was there. Like Metcalfe’s Network Law, the third person in the network increased the odds that we’d happen upon conversations one or the other would find interesting. 

Often a conversation might start between A and B, then C would find something said to be interesting and jump in. A might even drop out because he found the subject uninteresting. But, having C there, made it more likely that the conversation would continue. 

Beliefs in office layout schemes does produce growth for office furniture makers and moving companies, though.

Additionally, the guests in the Harvard Business Review podcast from April even say that group brainstorming may not be as good or any better than individual concentration.

This, too, is something I have confirmed with my experience where I’ve seen group brainstorming sessions used as domains for folks who like the sound of their own voice. I have, however, seen group brainstorming sessions work well when everyone in the group felt comfortable with each other.

I’m not sure if this would work any better, but what I would like to see work groups within a company have more say in how their space is laid out. There is a lot of resistance to this at most firms, where it is someone’s job to order office furniture and move it. They will argue for efficiency and economies of scale for making larger purchases and never will the benefits of more productivity be weighed against the costs of less efficiency.

Source of evil

My blog received a big boost in traffic this week because, according to commenter Stephen (with minor corrections):

Founder of Crossfit had a talk in which he used rent-seeking as a reference and why that was bad for crossfit and against his business model which he likened to “Striving to excellence instead of striving to make money is a better way to run a business”

He then posted a link to a blog post I wrote in 2011 to distinguish rent-seeking (or as one of the excellent regular commenters here, Mike M, put it, “privilege seeking”) from capitalism. So, I’d like to thank the Founder of CrossFit, thank all who visited Our Dinner Table and thank to all who left a comment to advance the discussion — even those who disagreed with me.

I’m guessing he posted a link for rent-seeking because, as I point out in that blog post, so few people understand what rent-seeking is and the term itself is not intuitive.

Privilege seeking is a more intuitive term. Seeking privileges at the expense of others is about as spot on description as I’ve heard, so far.

Rent-seeking is using government to reduce consumer choices for the benefit of a special interest.

In my 2011 post, I used the sugar tariff as an example of rent-seeking. It works like this: Government adds a tariff to sugar imports, which results in a higher price paid for sugar products in the U.S. by consumers. The higher price benefits domestic sugar farmers who get to charge more since their foreign competitors’ sugar prices includes the tariff.

The objective of my previous post was to highlight that to the extent the tariff allows domestic sugar farmers to charge more, those profits are not earned through capitalism. But, too often folks see that as capitalism. In their eyes, profit and capitalism are almost interchangeable.

I’d like to commend the founder of CrossFit for shunning rent-seeking (it’d be great if he could hook me up with a set of pipe/monkey bars and maybe a small climbing wall for my basement :)). That means his strategy is to attract and retain customers by making their lives better, rather than using government to restrict their alternatives.

As it turns out, I happened to also listen to a Harvard Business Review podcast this week with guest John Mackey, Founder and CEO of Whole Foods Market. He has a new book titled, Conscious Capitalism.

capitalism

capitalism is actually beautiful (Photo credit: wallstalking.org)

In the podcast, Mackey describes his journey from spouting progressive to appreciative capitalist — and it sounds a lot like mine, except I haven’t founded any big companies, yet.

He discovered that how he viewed businesses when he was young — as greedy, singularly focused money-makers — wasn’t all true. He learned that businesses (usually) succeeded by providing something customers value, which is a tremendous overlooked (or perhaps taken for granted) benefit for society. It may be fun to hate on capitalism, but by gosh, don’t take away my iPhone, sort of thing.

But, I think Mackey misses something BIG. While I applaud Mackey and the Founder of CrossFit for eschewing rent-seeking and favoring customer value creation, i.e. for being capitalists, not all businessmen are capitalists.

One thing almost all business people have in common with the rest of us is that they are human. And one thing nearly all economists know about humans is they respond to incentives (though they differ in their beliefs by how much).

So, it follows that business people respond to incentives. They make more money when their companies do well. One way to guide their companies to success is through good-ol’ capitalism — providing the customer with products they value enough to buy.

But, another way for business people to make money is through rent-seeking. Whether it’s a sugar tariff that allows you to charge more or a state giving special tax breaks for auto plants to ‘attract jobs’, as government at all levels have gained more power, the value of rent-seeking has increased along with it. As Harry Browne put it:

Government is good at one thing: It knows how to break your legs, hand you a crutch, and say, “See, if it weren’t for the government, you wouldn’t be able to walk.”

You can blame greedy business people who are unlike John Mackey and the CrossFit founder for seeking profits without creating customer value, but you’d be blaming the wrong people. The right people to blame would be us, for letting government out of its cage to sell the power we give it to the highest bidder to do things like transfer $40/year of our money to rich, rent-seeking sugar farmers so they can continue to buy that power…with our money.

Think about that for a second, $40 isn’t much (which is why we’re not picketing in the streets about it). But, wouldn’t you rather use that $40 to buy something you value rather than give it to the sugar farmer so he can use it to keep getting it from you?

That’s a double-whammy. Whammy one: You lose your chance to buy something with that $40 that makes your life better. That value never materializes in society. Whammy two: Some of that money goes to do nothing more than to convince politicians to continue getting it. If you understand that, it shouldn’t be hard to see that shrinking government can help the economy.

What do you mean?

I enjoyed this Harvard Business Review Ideacast (podcast) that was based on the guest, Don Pollotta’s, HBR blog post, I don’t understand what anybody is saying anymore.

I recommend both.  Based on the number of comments to both, others did too.

I always like when someone calls BS on puffed-up language.  Business, politics, journalism and academics are full of it (pun intended).

I love the example he gives about a discussion he had about a “new media company around children in the preschool space.”

He said:  What do you mean?

You know, children in the preschool arena.

He said:  You mean preschoolers?

I’ve had similar experiences with business consultants.  Here’s one experience that sticks in my memory.  The consultant said, “We need to evaluate the efficacy of this action.”  I asked, “What do you mean?”  He said, “You know, the effectiveness of the project.”  I said, “ah, you want to see if it works?”  Yes.

My favorite part of the podcast (about 9 minutes in) Pollotta discusses having the courage to say what you mean. He gives the example of the 50 minute customer service queue where the message “your call is important to us” replays every couple of minutes.  As Pollotta says, “It obviously is not.”  Be authentic.  Have the courage to say, “we don’t have enough resources to handle the call volume and you’re going to have to wait 50 minutes.”  He believes folks will appreciate that.  I agree.

In my line of work, I have to communicate unpopular things sometimes.  I’ve learned that being straightforward works.  They may not like what you have to say, but they usually do appreciate that you didn’t try to “blow smoke up their” you-know-what.  They usually find the honesty refreshing.

I think another purpose of puffed-up language is to hedge what you really mean so that you won’t be pinned down for being wrong.

In my normal course of blog-reading, I come across discussions about New York Times columnist and Nobel economist Paul Krugman’s writings.  Waaaay too much of the discussion is about what Paul Krugman actually meant.  It’s like trying to find Waldo.

If I have to spend that much time trying to figure out what someone actually means, it’s not worth it.  And, I find it an absolute shame that society has bestowed such honors as a Nobel Prize and a New York Times column for writing so unclear that my junior high English teachers would not find it acceptable to even grade.

Good innovation model at Coke

In a September 22 HBR Ideacast (Harvard Business Review’s podcast), Coca-Cola CEO, Muhtar Kent, says this as a side note about innovation at Coke:

…for us, innovation is not only inside the four walls of the company.  We have incubation projects [in] many parts of the world, because we think that the Coca-Cola company and system is too big to have embryonic ides flourish.

So, we have outside [projects], in parts of the world, innovation/incubation projects.

I’ve seen my share of embryonic ideas die.  Some even showed promise.  With some adaptive business folks in charge, they may have grown into something.

But, inside a big company, there are many reasons to say no.  Arnold Kling and Nick Schulz wrote about this in their book, From Poverty to Prosperity, which I wrote about here:

Corporate decisions are made by committees.  In a typical committee, no individual has the power to say “yes” to a new project.  On the other hand, almost every member of a committee has the power to veto a new project.

Observers of organizational behavior have noted that in committees one is more likely to be regarded as intelligent and a good team player by one’s peers by arguing against a new idea than by arguing in favor of it.  Middle managers who fight for new ideas are regarded as troublemakers, even if they succeed in convincing corporations to undertake the projects they propose.

I’ve seen this in action.  For example, I’ve seen projects killed that threatened a powerful leader’s turf (of course, that’s not the reason they made passionate pleas against the project).  Or because the project was a pet idea of previous leadership.  Or, the project didn’t fit into some arbitrary slogan the leader had for running the company (e.g. “We’re in the widget business, not the gidget business”).  I’ve also seen these shutdown just due to impatience.

Because of this, I recommend that companies do just as Coke does, separate innovation from the bureaucratic organization.  In reality, it’s hard to put any new project out of the reach of meddling bureaucrats.

Ultimately, it takes the realization by leadership that few of these projects will succeed, that none will add significantly to next quarter’s earnings (think more like 5 to 10 years) and, most importantly, leadership needs to protect these external projects from the meddling bureaucrats.

Where do jobs come from?

I recommend listening to Rebooting America’s Job Engine, a podcast from Harvard Business Review Ideacast.  The guest, Henry Nothhaft co-wrote a book entitled, Great Again: Revitalizing America’s Entrepreneurial Leadership.

I look forward to reading the book.

Nothhaft says that he and his co-author tried to take a fact-based look at the connection between innovation and job creation.

He says recessions prior to 1990 had recoveries, in terms of employment, of about four months.  Post 90s, employment recovery has been taking longer.

His answer:  Fewer business start-ups are making it out of gestation to grow and add jobs.  He cites Kaufman Foundation study and Census Bureau data that show that all new job creation comes from business startups and that government regulation is “choking off the ability for small companies to start and succeed and create jobs in the U.S.”

One regulation he points out is the Sarbanes Oxley financial regulations.  He believes the costs of the onerous one-size-fits-all approach can be absorbed by larger organizations, but not by smaller organizations.

Some folks will point out some high profile growth stories that have grown large without adding many jobs, like Facebook.  I don’t necessarily buy that hypothesis. 

I believe cases like Facebook do not counter Nothhaft’s story.  It could be that the Facebooks are the only ones with enough momentum to get past the higher regulatory hurdles.

Gervais on Success

Ricky Gervais

Test Marketing

I recommend this 12 minute Harvard Business Review podcast with Ricky Gervais. These are the parts that stuck out for me.

First, he agrees with me about awards.

The awards.  They’re a thrill. But, deep down, I know its only the opinions of a few people and it doesn’t matter whether you win or lose.

I’ve often been amazed at how awards are generally accepted as some great honor, when many times they’re a results of nothing more politics.  If you follow any awards like the Nobel Prize or even the Oscars, ask yourself what you really know about the people making the selection.  How and why is their criteria better than ours’?

Gervais continues on what he thinks is important:

What matters is the work you did. You tried your hardest and you’re proud of it.  You brought something into the world.  That’s the important thing.

I don’t try to please anyone except myself.  And if people like what I do, that’s fantastic.  If they don’t like it, then that’s good too.  If you start to try to water it down or second guess people, you end up with something so safe and homogenized that a lot of people will like, but they won’t love it.

I’ve always wanted to rather do something that really moved a million people then washes over 10 million.

I think that’s an extremely important insight.  Many successful organizations who have established their million fans make the mistake of trying too hard to expand to 10 million to find out that they’ve lost their million fans and aren’t that well liked by the other 9 million people.  I’d rather keep the million and find something else that works for another million.

I like the following because I think many successful people have their collaborators that we hear very little about.  Buffett has Munger, for instance.  Vince has E.

These are the no bullshit people.  That means these guys are tight enough with the Talent that they don’t blow smoke up the Talent’s bohunkus just to earn a spot in the entourage.  And the Talent trusts, values and appreciates their opinion — though they may not always agree.

Gervais explains how his collaboration with Stephen Merchant works.

It helps with two people.  Two heads are better than one.  But, there’s a compromise, which is bad. The best things are a single vision. So, you got to find a single vision between the two of you.

One, it’s luck.  Out of 6 billion people, I bumped into someone who sees eye-to-eye on 90 percent on everything we talk about.

He and Merchant have a golden rule.  One veto and it’s out.  No justification or compromise.  It just goes.

So, what you end up with the compromise is that every second of that thing, you both love it.

I love how Gervais appreciates the luck of finding a good collaborator.  I see so many people who I believe could be much more successful if only that could find those people they hit it off with.

I liked this bit about how he gets his material because it ties in with the experimentation and crowd sourcing themes that I write about on this blog frequently:

The things I work up on my own, it’s an evolution.  It’s a process of natural selection.  So the audience chooses the best bits.  They either laugh or they don’t.

So, if I do something that isn’t funny, they don’t laugh and it doesn’t survive.

If I say something that is funny, it’s funny every time.

What you’re left with at the end of a series of gigs is a survival of the fittest.  It’s the best gene pool that I could come up with.

So, I’ve got a room full of 10,000 collaborators and critics.

I’ve found the same thing with business presentations.  The best presentation I do on a new subject is about the fifth time I’ve presented the material, because I try a variety of things to illustrate a point and I keep the stuff that worked in presentations one through four and drop the stuff that didn’t.  And it works.

That’s why it’s always good to find practice audiences, have a keen eye for body language and learn how to cull out honest feedback.

Finally, on dealing with the fact not everything is for everybody and his inspiration.

I just do things that make me laugh and I always think that if I do something that genuinely makes me laugh, with no ulterior motive other than ‘that’s funny’, then there will be someone else in the world that finds it as funny as me.

And with 6 billion people in the world, there’s probably quite a few people who find it as funny as me.

And, that’ll do for me. That really will do.

Failure

Here’s a nice article on failure on the Harvard Business Review website, called The Missing Market for Failure by Joshua Gans (thanks to Tim Harford‘s tweet).

I’m not sure a market for failure is nearly as important as simply gaining a better understanding that failure is necessary and normal and is not bad.

We live in a trial-and-error world.  We really don’t know if something will work until we try. It’s disappointing that we stigmatize failure so.

I think this goes back to Salman Khan’s insights on education in this post.   In school, we punish experimentation and failure.  I agree. That’s where the negative stigma on failure starts.  If you don’t ace a test at a specific snapshot in time, you’re deemed “slow kid” as Khan points out.

I’ve seen enough things that I thought would fail prove me wrong.  Enough so, that I try to keep an open mind and realize that what I think doesn’t matter much.  What matters is if it really works or not.

Even with the things that don’t work, I often find that the reasons for failure were reasons that nobody guessed upfront and we all learned valuable lessons in the process of trying.

We often look at successful people and assume they have a perfect record.  But that’s a rare (if non-existent) case.  What differentiates them the most from you and I is an ability to accept failure, learn from it, brush it off, laugh at it and move onto the next thing.

They don’t let it define them.  They treat failure as a feedback, plain and simple.

Third time’s a charm

I had one of those third time’s a charm moments this week.

1st Time: On his blog, Idiot’s Collective, Aaron McKenzie asks What Would It Take to Change Your Mind?

I started this blog to catalog the things that changed my mind over the years.  I soon learned that was too narrow of a scope for a blog to hold my interest, but it is still a question and topic that intrigues me.

I suggested that changing your mind takes a willingness to consider that you may be wrong.  That allows you to more fairly consider the merits of the conflicting evidence.

Aaron wrote in response:

…it helps if we don’t go around expecting to always convert others to our way of thinking. Rather, if we try to understand more deeply why others believe what they believe, we might find ourselves persuaded…

I agree.  I have found it to be productive to approach a subject by trying to prove myself wrong.  In the process, I learn a great deal.  Aaron also wrote:

The strident evangelist in all of us has a way of coming out when our views are challenged.

I agree with that too.  It takes practice and patience to contain that.

2nd Time: On February 9th, Aaron asked in regards to her position on vaccinations, What Would Change Jenny McCarthy’s Mind? He posted a video of Penn Jillette discussing Ms. McCarthy’s belief that vaccinations cause autism given evidence that one of the key studies that supported this link was fraudulent.  As Jillette describes, rather than admit that she needs to reconsider her position, “she doubles down.

For more on the story about the fraudulent vaccination study, I recommend this EconTalk podcast (whose host is exceptional at taking the non-evangelical approach) from January 31.

When I’m having a hard time changing my mind in the face of evidence that runs counter to my mental model, I try to remember Steven Landsburg’s advice.   It’s helpful.

3rd Time: I found validation for Penn, Aaron and myself in a Harvard Business Review Ideacast (i.e. podcast) called The Persuasive Power of Uncertainty.  Guest Zachary Tormala discusses research into how folks respond to people who display some uncertainty in their positions and those that display confidence.

They believe they found that experts with some self-expressed uncertainty in their position are more persuasive.   This finding lines up with my experience.

They also believe that they found that non-experts with high certainty are more persuasive.  I’m not so sure about that one.  I think there are other factors to consider.

On both findings though, I’m always skeptical of research — even the research that supports my beliefs.  I’ve seen too many false positives in my day.

But, I found the podcast interesting, worth a listen and coincidentally tied in with my other two encounters with the subject of changing minds this week — rounding out my third time’s a charm.